«Cities always want to support each other»
Parag Khanna talks about the irreversible trend of urbanization, and what it means for the world
In early November, Asia Society Switzerland invited author and strategist Parag Khanna and former Berlin mayor Klaus Wowereit to a high-level dialogue on the rise of “city states”. The two experts debated the effects of urbanization, and the growing power of cities in today’s world. Just before the event (literally just — we were in the cab), I asked Parag, whose current book “Connectography” is discussing the rise of cities, some more questions.
Asia Society Switzerland: Why is urbanization even happening? What makes cities so attractive in today’s world?
Parag Khanna: Since the 1950s, the world population has nearly tripled — thanks to peace, stability, and higher life expectancy. And as the world economy liberalized and became more integrated, people began to concentrate and to move to the centers of economic activity, which are of course cities. Today, urbanization is driven by the search for jobs, access to public services, access to more nutritious food and medical care. Cities offer connectivity to global supply chains, to markets, to the internet. I cannot imagine anything reversing the ongoing trend of urbanization (other than major coastal inundations due to climate change).
You call China an empire of “mega-cities”. What do you mean by that?
China is historically very culturally diverse, but contemporary China is also a centrally controlled, hierarchical political regime, where the capital drives all aspects of policy-making with very few exceptions. The manufacturing industries that have made China a superpower need geographic hubs. So Beijing is very actively encouraging urbanization, to the extent that China is now the world’s most rapidly urbanizing country. They are gradually liberalizing each city, with some kind of specialization and division of labor around the respective industries. China is an empire not because it is one center controlling a vast territory, but rather because it is a center that has consciously built up 25 other major urban centers.
One trend you discuss in your book is “devolution”, the effect of regions and cities becoming more autonomous from the nation states they belong to.
Khanna: We have to clarify the concepts of devolution, autonomy, and authority. Devolution is inevitable, and it’s happening everywhere in the world. I call it the “second law of geopolitical thermodynamics”. There’s nothing you can do to stop it. Even the world’s most powerful vertically integrated empire, China, is recognizing devolution and is actively sponsoring it. What places like Kurdistan, South Sudan, Palestine and Scotland have in common is that they embody this devolution. India had 14 provinces at independence — now it has 29.
Devolution usually gives you more authority, so that you’re able to dictate a larger part of your public policy platform. For example, Tony Blair gave Scotland greater authority over education policy, and that helped to keep them inside Great Britain. Autonomy, on the other hand, is everything short of complete independence. Many countries have autonomous regions that have more or less full control over internal policies and policy-making — for example the Basque region in Spain.
In most cases, the real battle is over authority, over the specific things a country governs — taxes, schools, environmental policy, business regulation, subsidies, and so on. Local people should have decision-making authority over local problems because they know best. That doesn’t mean that they should be autonomous, and not be given any federal resources to solve these problems. The federal government still has an interest to maintain a unity of the state, which is precisely why they often support moves towards more local authority.
The counter-piece to devolution is aggregation, and you mention the EU or ASEAN as examples of political entities aggregating on certain issues. Is this trend also happening with cities and metropolitan areas?
Khanna: When there is connectivity between proximate cities, you have enormous improvements in economic value and welfare. The twin cities of Dallas and Fort Worth are building a high-speed rail connection, which will be great for both their economies. A Hyperloop connection between Los Angeles and San Francisco would spur growth in and between both cities. Wherever we see a clustering of cities, we see greater economic value, and more resilient economies that are driven by services, and less by exports, which makes them less vulnerable to global demand shocks.
There is no case I’m aware of where bringing two cities closer together has not benefitted them. That’s even true for Guangzhou and Hong Kong in the Pearl River Delta, even though they nominally belong to different political spheres. Hong Kong may have lost political autonomy since the 1997 handover, but economically, it has gained tremendously from the neighboring cities in the North. Some people say that Shanghai and Shenzhen are displacing Hong Kong — but obviously, Hong Kong continues to grow steadily in terms of its economy and connectivity.
Connectivity also helps cities that are far apart from each other. I call this “diplomacity”, the diplomacy of cities, and it’s a thriving marketplace for ideas. The most famous example is the C40 initiative, a network of mega-cities who collaborate to reduce greenhouse gas emissions. But there are literally hundreds of these inter-cities learning networks.
There are a lot of city rankings out there, and they vary wildly. Which are the most important cities in the world right now in your view?
Khanna: City rankings are too often looking at narrow metrics instead of an integrated picture. Take the size of a city: Lagos in Nigeria is a mega-city with more than 10m people, but it’s not a systemically relevant economic hub in the world. Its economy is far smaller than that of cities of a comparable size. Then there is the economic size: The Chongqing-Chengdu cluster is economically huge, but that doesn’t mean it’s a very livable place. I don’t know many people living in Chongqing who think it’s a wonderful, leafy place. When it comes to the most livable cities, Canada, Australia and Switzerland dominate the rankings — but none of these cities are big!
When it comes to power or influence in the world, one should look at the flow of goods, people and money through a city. There are about 8 cities in the world who dominate here: London and New York; Tokyo, Hong Kong and Singapore; and more recently, Dubai, Los Angeles and maybe San Francisco. Some would argue that Sao Paulo also belongs on this list, and maybe in the future Istanbul, Moscow or Lagos.
The important thing is that these cities are not competing with each other in a zero-sum game. Their first priority is to become more connected to each other, because they all have a lot to gain from that. If you’re Dubai, you don’t fear the rise of Sao Paulo. You really want it to grow, so you can have a lucrative airline connection there. Cities always want to support each other.
If you’re the mayor of a large and fast-growing Asian city, what are your priorities? How do you ensure that your city becomes more livable despite also becoming larger?
Khanna: The growth almost can’t be stopped, because urbanization can’t be stopped. So what you need to become is a collection of livable enclaves or towns. If you are the mayor of Jakarta, the question is how do you turn it into four Jakartas? Instead of one central business district for 30 million people, can you create five — one for services, one for the industry, and so on? Then people will dissipate, and diversify their geography, and not congest and clog the downtown area every day. The solution for a mega-city to become more livable is to become multiple cities at once.
One of the biggest global challenges today is growing inequality. How are urbanization and inequality connected?
Khanna: Urbanization has had two major effects that we have not anticipated. The first one is on demographics: In the 1980s, experts projected that the world population would exceed 15 billion people by 2030. We now know that they were way off — because the rapid urbanization has acted as a very effective birth control. When women move to cities, and get jobs and healthcare, and live in small apartments with their husbands, they can’t have many children.
The second effect urbanization has had is on inequality. We usually blame financial capitalism for it, and say that the 1% have captured all the gains. But even if we never had had financial globalization, urbanization would cause incredibly high inequality, because people in cities earn much higher incomes. The reason there is huge inequality in Indonesia is not because Jakarta is a world financial center with a 1% filled with rich hedge fund traders. It’s simply because of inequality is an inevitable consequence of urbanization.
Instead of inequality, we should focus on poverty. The goal should be to get people who make 1–2 dollars a day to 8 or 10 dollars a day. There is a lot of evidence we can use urbanization and infrastructure to connect disempowered and disenfranchised people to help with that. We’d will still live in a world of extreme inequality, but much less poverty.
A condensed version of this interview has been published on the Asia Society Switzerland website.
