CHAPTER 10

THE TROPICAL CITY IS NO PARADISE

Jakarta, Indonesia’s capital city, routinely wins the dubious honor of having the worst traffic in the world. Jakarta’s policymakers keep trying to combat the city’s daily, hours-long congestion, to little effect. In 1992, when Jakarta had only half its current population and one tenth the current number of vehicles,1 the city introduced carpool lanes on some important thoroughfares. Commonly known as the “3-in-1 policy,”2 it required cars to have at least three passengers.

Jakartans subsequently built an entire economy centered on circumventing the intent of the policy. For example, men, women, and even children would hire themselves out as professional hitchhikers, known as “jockeys,” to serve as an extra body so that cars could travel in the carpool lanes. (Mothers with babies were in especially high demand, as drivers could thus get two extra passengers for the price of one.)

Some of these practices broke the law, but other issues made these business models unacceptable. Schoolchildren guided traffic instead of going to school. Female jockeys were sexually harassed. Newborns and babies were sedated so that drivers wouldn’t have to deal with crying infants. To halt these sometimes hazardous practices, the Jakarta government finally ended the 3-in-1 policy in mid-2016. Traffic immediately rose on the former carpool lanes.

Only a few months after the repeal of the 3-in-1 policy, the new “odd-even license day policy” was introduced.3 Again, this failed as a corrective to Jakarta’s traffic problems. Jakartans acquired multiple fake license plates or just ignored the new law. Richer Jakartans simply bought a second car with a different license plate. (To be fair, Jakarta’s government never declared that the odd-even policy would be the ultimate solution to traffic issues or that it was only a temporary instrument. True success is planned to come in 2019 with the implementation of an electronic road pricing system, which will implement a flexible road pricing program as a replacement for some traffic measures.)

Traffic is not the only negative side-effect of the massive increase in car ownership. Another is the explosion in parking spaces and garages in Jakarta, preventing the land from being used for more socially beneficial purposes, such as housing.

Indonesia’s capital is not the only city with severe traffic problems. As of June 2017, Mexico City, Bangkok, and Jakarta led the TomTom Traffic Index, which measures congestion. All the most congested cites are in the tropics, whose residents spend roughly 400–500 hours per year in traffic.4 And new cities are following in their wake. The South China Morning Post reported that Ho Chi Minh City’s severe growth of traffic congestion and air pollution threatens to turn it into the next Manila or Jakarta.5 And one estimate for the city of Bangalore stated that each year, over ten million people waste six hundred million man-hours due to traffic congestion.6

Furthermore, hundreds of thousands of people die each year on the roads of these tropical cities. According to the World Health Organization, many of these deaths are easily preventable. There is a lack of enforcement of simple government policies and requirements, such as mandatory seat belts and motorcycle helmets.7 As Anucha Setthasathian, the secretary-general of Thailand’s National Institute of Emergency Medicine, explained, more than one out of five emergency patients in Thailand die on their way to the hospital due to delays from traffic jams and uncooperative motorists.8

Finally, there are deaths caused by air pollution—not just from cars but also from surrounding industries and, in the case of cities such as Delhi, from a complex web of causes, including the burning of agricultural waste in the surrounding rural hinterland. In 2016, the World Health Organization estimated that air pollution causes almost 6.5 million premature deaths each year.9 A 2017 study by the Lancet Commission on Pollution and Health found that India and China topped the list for premature deaths from pollution in 2015, at 2.5 million and 1.8 million respectively.10 India’s Supreme Court itself estimated that pollution in New Delhi kills three thousand people every year.11

Cities across East and Southeast Asia have grown tremendously as more people move from the countryside (where there are few economic opportunities as a result of economic policies of neglect) to the city (where there are meant to be many more economic opportunities but dire living conditions). These cities have been unable to expand to accommodate this huge inflow of migrants, yet policymakers allow them to stream in.

The growth of large cities has often been seen as the quickest means of spurring economic development. The theory goes that urbanization brings underutilized people out of the countryside to the city, where they can be put to more productive uses.

Proponents point to the developed world as evidence of this model’s success: rich countries saw growth as people moved from the countryside to the city. But this urbanization occurred over a relatively longer time frame: decades, if not centuries. Rich countries also had the resources to manage the growth of these cities, even as they expanded to enormous sizes.

Poor countries do not have that luxury. The timescale for growth in the developing world is years, not decades. Rich countries would struggle to manage growth at that scale; poor countries have no chance. Nor do poor cities have the infrastructure to provide an adequate standard of living for their exploding populations or to deal efficiently with their externalities (e.g., solid waste, sewage, air pollution, traffic congestion, and so on).

Yet the idea that urbanization must be slowed down, let alone reversed, is not seen in the economic literature. Nevertheless, it is an option that must be seriously considered with the coming global crisis of sustainable development.

This chapter will illustrate the consequences of weak state governance in relation to rapidly growing cities. Policymakers continue to believe that urbanization is an inevitable benefit for their economies, in spite of all the evidence that the developing world’s megacities have serious issues that require drastic measures. Why make something bigger when it is already so bad?

It will also explore possible solutions through greater state management of the economy. City and state governments of developing economies must act now; a hands-off approach will only make some groups better off at the expense of poorer groups and will result in irreversible trends and very expensive solutions. More active governance would enable every resident—in both growing urban economies and in the rural communities “left behind”—to have access to basic needs.

A radical concept for developing countries should be considered: deurbanization, or encouraging people to move out of cramped major urban centers. This would require government investment in the countryside and secondary cities to encourage a more sustainable population distribution across the entire country. I will argue that this would also help reshape the economies of these countries and be part of how we reshape capitalism in the twenty-first century.

In 2009, for the first time in human history, the number of people living in urban areas (3.42 billion) surpassed the number living in rural areas (3.41 billion), according to the UN Department of Economic and Social Affairs.12 Many forecasters project that this trend will continue throughout the twenty-first century. As of 2016, twelve of the world’s fifteen biggest urban areas were Asian.13 In most cases, this news was greeted as inevitable and even as a sign of human prosperity or the path to it. But we need to be bold enough to challenge this unquestioned assumption.

Urban life has been made to appear to be what people want: excitement, bright lights, and modernity. What was justified on an economic basis has been transformed into some inherent part of human desire, combining arguments around growth, wealth, modernity, and innovation. As the narrative goes, cities are the center of modern life. They attract multinational corporations, as cities are big markets for their products. In turn, cities attract the young and talented. These stories are spread by the media, which share success stories of those who made it to the top.

Let us look at why and how urbanization appeals to two different groups: ordinary individuals and government.

Citizens. Modern literature often discusses how cities pull people to them (e.g., offering a reliable income, safety from the natural environment, luxuries, convenience, and even night life), and how people are pushed from rural areas (e.g., droughts, lack of jobs, economic decay, boredom, backbreaking work). Combined, these forces encourage migration from rural to urban areas.

In this narrative, many villagers are cited as saying they want to move to the city for a “higher quality of life.” This is then accepted by many as the reason why urbanization is inevitable. What the narrative does not explore is why a higher quality of life is to be had in cities and not in the rural areas (leaving aside the more philosophical debate about what we mean by a higher quality of life). Most times, it boils down to one thing: lack of jobs. And why? Political neglect rooted in the false belief that urbanization is the mechanism for economic growth and development. An urban lifestyle is synonymous with a higher-paid, less physically demanding job (or often just any job at all) than what is available in rural communities. Urban communities can also sustain higher-quality public and social services, such as education and health care, as well as access to the comforts of modern life—again indicators of public policy neglect of rural areas. Communications networks in rural areas are also far less developed. The density of people in cites means that political and business leaders choose to invest in cities over more sparsely populated rural areas.

Cities are usually a country’s economic hub, which in turn attracts a diverse domestic and international audience. This often makes cities the focal point of a country’s cultural scene as well, as the place where most of a country’s artists, musicians, and writers tend to live. Urban life is connected to success and the modern “meritocracy”: as the famous song about New York City goes, “If I can make it there, I can make it anywhere.”

Governments. For most countries, urban areas are engines of economic growth. They also host a country’s political elites, naturally bringing greater attention to them.

Although estimates vary, cities cover between 1 and 3 percent of the Earth’s surface.14 However, they are now home to roughly 54 percent of all people and drive around 80 percent of the world’s economy. They also contribute to our planet’s pollution by the same share.15 Empirical studies suggest that there is a significant correlation between the rate of urbanization and a country’s per capita productivity.16 However, this tells us nothing about the quality of life for urban residents, the long-term damaging effects on the environment, or the question of whether striving for the highest possible per capita output is the best goal for an economy in the first place. Claims that the best thing for economic productivity is to move people from less productive rural areas to more productive urban areas are not including these important external costs in their calculations.

Cities are of paramount importance to the economic and political elite. Local, regional, and central state governments generate substantial shares of their fiscal revenue from these urban areas, and thus rely heavily on their output. On the spending side, governments can take advantage of economies of scale when they provide public services, although these services are inevitably to address issues created by excessive urbanization, and rarely do so satisfactorily. Thus developing an urban area appears to be much easier than working through many small towns and villages.

Congestion, which I discussed in the opening of this chapter, and inadequate housing, which we will look at here, merely scratch the surface of how rampant urbanization could eventually lead to catastrophic and even irreversible consequences, from air pollution and common homelessness to untreated sewage, increasing urban temperature, and permanently submerged areas.

The rush to urbanize has pushed more and more people to live in very dense urban areas like Mumbai. India’s largest metropolis, with a population of twenty-three million, is one of the world’s most densely populated cities, behind only Dhaka in Bangladesh.

It can be difficult to grasp what the density really feels like. Demographia, the urban consulting firm, noted that “Dhaka’s density is so great that the New York urban area, if as densely populated, would contain one-half billion (500,000,000) residents, more than the combined population of the United States, Canada, and Mexico. Paris would have 130,000,000 residents, approximately the same population as France and the United Kingdom combined.”17

Overpopulation and overcrowding are two of the most prominent concerns for tropical cities. Landlords and property developers subdivide apartments into multiple tiny units, leading to new terms like “shoebox apartment,” “coffin cubicle,” and “cage home” to describe the ever-shrinking living space, even as rents keep increasing.

The city of Hong Kong, for example, has a long-standing and persistent problem with housing affordability. It has consistently been ranked one of the world’s most expensive housing markets, with a “median multiple” of 18 between average home prices and average income. Hong Kong also does not have any minimum standards for living space, which puts downward pressure on home sizes. Property developers sell apartments little bigger than a parking space for millions of Hong Kong dollars, and landlords illegally split single apartments into multiple units. This problem is not unknown—every few months, dire images of “coffin homes” make the rounds on domestic and international media. Yet no action has been taken, as the state is riven with conflict and thus too weak to take action against vested interests.

Dense dwellings, air and noise pollution, contaminated water, poor infrastructure, untreated sewage, traffic congestion, slums, and homelessness are all immensely important problems to solve. But there are some other, less well known downsides of urbanization, especially in tropical regions.

Informal settlers are at much higher risk of harm from

•     Land insecurity. The OECD defines informal settlements as “1. areas where groups of housing units have been constructed on land that the occupants have no legal claim to, or occupy illegally; 2. unplanned settlements and areas where housing is not in compliance with current planning and building regulations (unauthorized housing)”18

Consequently, “squatters” are by their nature perpetually vulnerable to eviction. Governments must come up with solutions to satisfy the accommodation needs of informal settlers living day-to-day without knowing whether they will have a home the next day.

For example, slum dwellers in Lagos—Africa’s largest and fastest-growing city—have been pushed from the fringes by a government campaign to “clean up the slums,” which just so happen to sit on prime waterfront territory. Slum dwellers have since been pushed to live in canoes along the Lagos waterfront, providing even less security from eviction.

•     Damage from natural disasters. Informal settlements are usually at the mercy of natural forces, due to their geographical location. For example, the slums in Rio de Janeiro and Bogotá are constantly at risk from landslides and rainstorms, which can kill hundreds and displace tens of thousands.19 Living by the water’s edge, settlers in Manila, Jakarta, Yangon, and Lagos20 are all threatened by rising sea levels, rainstorms, and floods. In some regions, earthquakes can level settlements to the ground. Unfortunately, governments largely abandon slums to their own devices.

•     Man-made disasters. In densely populated slums, fires are fast spreading and disastrous, such as the blazes that Mumbai’s Dharavi slum experienced regularly. Fire departments can find it difficult to reach the source of the blaze, due to the packed nature of urban slums. Other man-made disasters are related to pollution, such as waste contamination of water sources and spread of diseases.

Slums also serve as a cauldron for criminal activities, such as gang violence, drug consumption, and prostitution. Law enforcement in these areas is usually underfunded and thus insufficient. Inadequate public policing and poor city planning and governance all contribute to the poor circumstances for slum inhabitants.

Sadly, for many men, women, and children seeking prosperity in any fast-growing tropical city, their dreams often end upon arrival. Homelessness or a life in the slums may be inescapable. Soon, there will be more than one billion informal settlers, as the growth of urban poverty outstrips the rural rate.21 The United Nations has estimated that if no action is taken to control the inflow of people, there might be as many as three billion people living in slums by 2050.22

Yet another downside of the city, especially in tropical areas, concerns the “heat island” effect. A heat island is an urban area that is substantially warmer (by 3°C–7°C during the day, and at night even reaching double-digit differences)23 than its surrounding rural areas due to human activities and man-made changes to the environment. Originally, natural fauna or water surfaces would reflect incoming natural energy. But artificial materials, such as asphalt or concrete, trap that heat. Ambient temperatures are also driven up by the activity of millions of people.

As temperatures rise, so does the demand for air conditioning. These units in turn give off their own ambient heat, which calls for yet more air conditioning. This vicious cycle overstresses the power system, leading to frequent electrical blackouts.

Tropical cities with large populations are most likely to be the most severely affected by the heat island effect, as shown by a recent study of nearly seventeen hundred cities globally.24 The urban heat island effect has severe ramifications for nature, wildlife, and people, altering water cycles and water availability, lowering the resilience of environmental systems, and causing health problems in both animals and people. It is thus little wonder that incidences of heat stroke are surging dramatically; India’s National Crime Records Bureau found that there was a 61 percent increase in the number of deaths from heat stroke between 2004 and 2013 compared to the previous decade.25

This unbearable heat is accompanied by the high humidity of the tropics. Simultaneous high temperatures and humidity will slowly make several cities impossible for humans to live in.26

Undoubtedly, cities are vital economic engines for any country. But, from Rio to Lagos, the need to optimize growth and lift millions out of poverty should be on the top of the agenda. Ignoring the downside is easier for officials in the city than seriously thinking about how the city and the hinterland are interconnected, and about the unpopular decisions that would need to be taken to undo the damage of past policies. Policymakers in the tropics must develop the ability to extract less from the hinterland and create a functioning system to correctly price the services of rural areas, such as food production and supplying drinking water, so that these areas can thrive and that cities do not become even larger while being parasitic. Bold leadership will be needed, as these actions will threaten the status quo and those that thrive on it. Only a strong state can withstand such interests and implement policies in the interest of the majority.

As mentioned before, in the West, people moved to cities due to their greater economic opportunities. Urbanization took place incrementally over the course of two hundred years, and on a much smaller scale due to lower populations. Governments and people had time to adjust: legal systems, law enforcement, infrastructure, and the administrative structure grew at rates adequate to the requirements. The growth also took place at a time when the West was the growth engine of the world and had access to resources worldwide due to colonization.

The situation in cities like Jakarta, Manila, Rio, and Lagos is more chaotic than the West had ever seen. Even by the second half of the twentieth century, these urban areas had reached a scale unmatched in Europe or North America (with the possible exception of New York City). Urbanization in the developing world seems to focus on a single city—Lagos, Manila, Jakarta, and so on. These areas experience intense urbanization within a matter of decades, and therefore do not possess the capacity to serve their growing populations, let alone the financial resources (due to inefficient tax systems and collection).

Where will the resources come from to host more than ten million people? City boundaries are pushed ever further to seize more surrounding underdeveloped land without adequate infrastructure or basic services. Cities cannot keep pace with their own growth, and so have a lower quality of life for the majority of their inhabitants.27

Megacities also have widespread effects on rural communities: “brain drain”; resource exploitation; soil erosion; power imbalances; economic instability; loss of culture, knowledge, and traditions; and social tensions. First of all, no city, tropical or not, is self-sustaining. From the raw material to build skyscrapers to the energy needed to keep engines running to the coffee served in thousands of cafés, all are found in rural areas in the hinterland.

Second, by focusing on major urban centers, governments leave rural areas behind. Thus young people in rural areas seeking an education will abandon their hometowns in search of a better life. Yet once awarded with a degree, few return to live where they were brought up. The elderly, young children, the unskilled, and those too poor for education are left behind. This hollows out rural areas and results in the myth-creating narrative of cities as the centers of prosperity and modernity. As the Asian Development Bank explained, “This loss of human capital in the fields of medicine, science, engineering, management, and education can be a major obstacle to economic and social development.”28 Urbanization has a similar effect, albeit domestically. The best and brightest abandon rural areas for the city, leaving little talent in the villages and countryside, thus perpetuating the cycle of poverty and underdevelopment.

There is little time to waste. These urgent problems won’t disappear into thin air, nor will any new technology provide the basic needs that are still not met for over a billion people and billions more who are at the margins. The governments of today’s rapidly growing cities and countries in tropical regions need to drastically rethink and reinvent the future of their cities before the damage is beyond repair. The success of the minority affluent population in cities, who live in much better circumstances, should not be the template for planning the future, as tempting and seductive as that might be. After all, it has become clear that this highconsumption lifestyle is not possible for the majority.

The only institution with enough power, capability, and authority to resolve the issues of urbanization is the state. The next sections describe some ways a strong government can change tack.