Urbanization: The Big Picture

By Anjum Altaf

Anyone wanting to understand urbanization needs to get past two major misunderstandings.

First, urbanization is not about individual cities – neither solving their problems nor enhancing their potential for growth. The end result of urbanization is indeed an increase in the population of cities but the term itself refers to the movement of people from rural to urban locations.

But which urban locations do (or should) people move to? That is a more important question.  What are the choices that exist and what determines the attractiveness of one location over another? Should public policy attempt to influence the spatial distribution of population by altering the attractiveness of different types of locations?

Second, the pattern of urbanization is not predetermined. People move primarily to seek work and therefore any change in the distribution of employment opportunities should alter the pattern of migration. Different industrial or economic policies should lead to different patterns of urbanization.

For example, an export-oriented industrial policy favors coastal locations; one based on high-end services might best be centered in big cities; labor-intensive manufacturing for the domestic market is suited to medium-sized cities; a big agro-industrial push strengthens the role of small towns.

It should be obvious that urbanization cannot be divorced from a discussion of industrial policy. But what exactly is our industrial policy and what role does it envisage for the various categories of urban locations – the big, medium, and small-sized cities and towns? Never having considered this explicitly, we have unplanned urbanization with suboptimal results – the big cities are overwhelmed with the influx of people and the majority of medium and small-sized cities are stagnant.

Eighty percent of Pakistan’s population lived in rural areas in 1950 when the economy was dominated by agriculture. Industrialization began to draw people into cities primarily because urban wages exceeded rural wages and better access to services added to the attraction.

The structural transformation of an economy – the transition from agriculture to industry – is accompanied by urbanization because most industry is located in cities. South Korea and Pakistan shared the same level of urbanization in 1950 but the structural transformation in the former is complete – in 2010, 80 percent of its population was urban.

The structural transformation in Pakistan and India has remained stunted by contrast – by 2010, only about 40 percent of their populations were urban according to official statistics, the consequences reflected in their much lower living standards compared to South Korea.

The stunted transformation in the subcontinent is both a source of opportunity and a cause of concern: the former, because the majority of the population is yet to migrate and therefore their choice of locations can be influenced by intelligent policy interventions; the latter, because there is little serious thinking on industrial policy that will influence people’s choices over locations.

The concern is compounded by the fact that arrested industrialization does not forestall urbanization. There might be no positive incentive to migrate but if rural poverty deepens desperate people would be pushed into cities. Such a poverty push has swelled a number of megacities in Africa. A similar push drives the export of labor from many regions in South Asia skipping domestic locations and moving directly to employment-generating cities abroad.

Poverty-driven urbanization is a consequence of weak industrialization. Employment shifts directly from agriculture to low-level services in informal sectors. The results are visible in slums in the big cities.

Healthy urbanization is not possible without industrialization whose policy parameters impact the choice of locations. This connection is ignored in the subcontinent. When challenged, policymakers are likely to argue that economics ought to be left to the free market which would best determine the locations of jobs and people would move accordingly.

This is contrary to experience. God did not create markets, human beings did. Almost all major markets in the subcontinent are outcomes of public sector investments (railways, canals, roads, villages) made by the British for objectives that are hardly relevant today. Opening up the Pakistan-India border or linking Kashgar to Gwadar would strengthen some markets and create others where none existed before. Each would affect the choice of destinations for rural migrants.

This raises a policy question: Where should jobs be located to yield an urbanization pattern that makes people better off? The question assumes that policy makers have a free hand in choosing locations and types of jobs. Unfortunately, that is not the case –one cannot, for example, relocate an impoverished farmer and expect him or her to adapt seamlessly to modern industry in a mega-city.

The reason is simple. Pakistan and India have not invested adequately in the health, education and skills of their rural citizens. Weak social and labor policies have severely limited the ambit of industrial and urbanization alternatives. Abstract theory might suggest that mega-cities are the most efficient engines of economic growth but with the existing endowment of human capital one might just end up with a transfer of rural poverty to urban locations.

The more realistic question is to ask what kinds of urbanization patterns are compatible with existing socioeconomic conditions. Should an informed policy favor rural industrialization? Should there be a phase of skill enhancement through agro-industrial development in small towns? Should medium-sized cities serve as intermediaries in a staged urban-industrial strategy?

These longer-term perspectives may appear suboptimal from the viewpoint of abstract growth theory but economists tend to forget that life is real and not abstract – one can only assume away reality at great cost to human beings.

The key takeaway is the following: Cities are not going to drive growth; rather, different types of growth will energize different types of cities – provided there has been adequate investment in human and physical capital.

Anjum Altaf is Dean of the School of Humanities and Social Sciences at the Lahore University of Management Sciences. This op-ed appeared in Dawn on September 3, 2013 and is reproduced here with permission of the author.

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7 Responses to “Urbanization: The Big Picture”

  1. Asad Shah Says:

    My compliments for your excellent article in The Dawn of 3 September 2013. You have outlined the issues very well, both in the historical perspective as well as their implications for South Asia. You have rightly pointed out the links between urbanisation and industrial location, and how a balanced attention could be given to the development of large, medium and small cities. In this context, land management, particularly for urban expansion, and land use/ zoning are also important issues. Another aspect is that out of 24 countries that are expected to continue to urbanise, 23 are located in the developing countries, where the institutions and capabilities to handle the task are inadequate. This calls for a major attention in Pakistan to focus on institutional and capability development ( at the federal, provincial and local levels) to make cities more efficient and productive, while at the same time also ensuring equity, so that rapid growth of urban poverty could be avoided.

    Asad Shah

  2. Jit Bajpai Says:

    I truly enjoyed reading this article. Recently for a study in Rwanda I had faced exactly the same set of issues while designing a road map for their urbanization strategy. Anjum has been eloquent and brief in raising the same set of issues. I will greatly appreciate hearing his views on the following

    •a. What is the path followed by other countries?

    •b. What are the opportunities and risks for a country as urbanization speeds up?

    •c. What is the role of government in planning for urban expansion and managing the economic life of cities?

    •d. What is the appropriate institutional setup to plan and manage urbanization?

    •e. How can we determine what the urban footprint for a country’s cities and towns will be in ten, twenty, and fifty years?

    •f. Should a country establish new cities in addition to expanding existing ones?

    •g. Can a focus on high-quality urbanization speed up the process of reducing a country’s dependence on external aid?

  3. sana Says:

    It’s a nice, precise piece of work but the major issue I’m having with this is: what is so new about this?

    • Anjum Altaf Says:

      Sana: Newspapers and blogs have a wide audience. For some, there will be nothing new in a given piece, for others, almost everything might be new. That is bound to be the case.

  4. Asad Ghafoor Says:

    My concern arises from the fact that attention to these aspects still remains extremely low among the government and the policy commission. The Pakistan growth strategy and Pakistan Vision 2030 do not say much except for what has been said about ‘cities being our future.’ There is no innovation nor any stress complementarity of policies, and small cities are ignored almost completely. Will action then come in a bottom-up fashion, as almost always lasting action has, or will the muscle required for it never be generated. The concern that you raise about megacities due to a poverty push is grave and could well be the case. Some would argue that it is already in the works in Lahore and even more so in Karachi. I believe the article is important in raising this concern and eloquently sums up the major issues that need to be addressed for urbanization in Pakistan.
    Sana, I believe that rather than aiming for novelty, the article is more intended to serve as an important reminder of the all aspects need to be considered for urbanization to deliver on its promise; it won’t work in isolation.

  5. Usama Khawar Says:

    while reading your article my thoughts wandered into David Harvey’s works, particularly his recent book Rebel Cities: From the Right to the City to the Urban Revolution (http://libcom.org/files/Rebel%20Cities-David%20Harvey.pdf). His article “The Right to the City” (http://newleftreview.org/II/53/david-harvey-the-right-to-the-city) that i read some time ago is a good entry point into Harvey.

    Also, I would like to see you comment on Harvey.

  6. Shiraz Hassan Says:

    Sana… The good thing about this op-ed is that (i) it evoke to ponder about the appropriate policy (as it ended up with no of questions) (ii) to continue the discussion and (iii) to get ideas and arguments from professionals and academics for mutual learning and to move forward.

    Every little bit helps. Message in this oped got me (and I am sure many others) to think about an appropriate policy and it is the way to move forward.

    Albeit I am interested in Urban Planning and read articles pertinent to urban issues, this op-ed is a value addition in my knowledge.

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