Thursday, June 29, 2006

ring of change

The Ten Most Dynamic Cities
In this list of cities from key economic regions of the world, even the big names will surprise you.
Newsweek International
July 3-10, 2006 issue


A factory suburb of Delhi, now surrounded by posh high rises.

In old Ghaziabad—20 kilometers outside New Delhi in the north Indian state of Uttar Pradesh—ancient green-and-white three-wheeled Tempos that double as buses career alongside a tangle of bicycle rickshaws, buffalo-drawn wagons and pushcarts. Tiny, no-name manufacturers advertise rubber gaskets, gears, machine tools. You'd never guess Ghaziabad is India's hottest city.

But thanks to skyrocketing real-estate prices in the capital, Ghaziabad is emerging as the next popular address for Delhi-bound commuters. In residential pockets on the outskirts like Indirapuram, posh new developments are sold out. The largest developer, Shipra Estate Ltd., has built 7,000 two-, three- and four-bedroom flats, all of which are already occupied, says Vijay Sundar Raj, manager of sales and marketing. Many of the residents commute to IT jobs in neighboring Noida and Delhi.

Strategically located on the old Grand Trunk Road from Bangladesh to Afghanistan, Ghaziabad was targeted by the state for industrial development in the 1980s. Today the city is home to more than 14,000 small-scale industrial units and larger plants run by giants like Coca-Cola and the International Tobacco Co., which still provide most of the jobs in Ghaziabad proper. For all the new luxury high rises, Ghaziabad today is one of the most heavily industrialized cities in Uttar Pradesh.

The forecasts of rapid population growth, however, have more to do with New Delhi. Despite attempts to bar new industry within the capital, Delhi still creates more new jobs per year than the southern Indian IT centers of Bangalore and Hyderabad. "Delhi is a very big magnet," says S. K. Zaman, a top planner for Uttar Pradesh state, ruefully reflecting on the government's failure to contain the capital's population, which has grown by 50 percent every 10 years for the last half century, and now stands at around 14 million.

Authorities are having more success shifting at least some new growth to the outskirts. New roads, concessionary land prices and other schemes are drawing companies like Samsung, Honda and Siemens to satellite cities like Gurgaon and Noida. With its excellent highway connections to Noida and Delhi, Ghaziabad is starting to reap the benefits. Though it still doesn't have the cachet of Noida, it boasts cheaper land, and the completion this summer of the controversial Tehri Dam should help prevent frequent water and electricity shortages. None too soon. The city is already building a village to host the 2010 Commonwealth Games. And plans for both a new expressway and a second Delhi international airport on the east side of the capital should help put the entire region, Ghaziabad included, on the global map.

—Jason Overdorf

unlikely boomtowns

The last half-century was the age of the megacity. The next will belong to their smaller, humbler urban relations.
By Rana Foroohar
Newsweek International

July 3-10, 2006 issue - Great cities like London, New York and Tokyo loom large in our imaginations. They are the places people still associate with fortune, fame and the future. They can dominate national economies, and politics. The last half century has been their era, as the number of cities with more than 10 million people grew from two to 20, as now famous names like Rio, Mexico City and Mumbai joined the list. But with all respect to the many science-fiction novelists who have envisioned a future of increasingly dominant urban giants, their day is over. The typical growth rate of the population within a megacity has slowed from more than 8 percent in the '80s to less than half that over the last five years, and their number is expected to stagnate in the next quarter century. Instead, the coming years will belong to a smaller, far humbler relation—the Second City.

Within a year or so, more people will live in cities than in the countryside for the first time in human history: the 21st century will be an urban one. But increasingly, the urban core itself is downsizing. Already, half the city dwellers in the world live in metropolises with

less than half-a-million residents. Second Cities—from exurbs to regional hubs, resort towns to provincial capitals—are booming. Between 2000 and 2015, the world's smallest cities (with under 500,000 people) will grow by 23 percent, while the next smallest (1 million to 5 million people) will grow by 27 percent. This trend is the result of seismic shifts, including the global real-estate bubble; increasing international migration; cheaper transport; new technologies, and the fact that the baby-boom generation is reaching retirement age.

This rise of Second Cities is dramatically illustrated by our top-10 list, which encompasses the fastest-growing cities in each of the world's 10 most important economies (following stories). Based on an advance copy of the latest U.N. forecasts for all cities with populations greater than 750,000, the list includes only two major capitals—Moscow and London, which continue to outpace smaller rivals for unique national reasons. All the rest are aspiring middleweights like Toulouse, Munich and Las Vegas, or former unknowns like Florianópolis (Brazil), Ghaziabad (India), Goyang (South Korea) and Fukuoka (Japan), which may not remain unknown for much longer. Boomtowns breed ambitious city fathers, so it's hardly surprising that Toulouse is competing with Paris to host the 2016 Summer Olympics, or that Fukuoka is challenging Tokyo for the same honor.

There are several megatrends that get lost on a top-10 list, however. One is the concentration of fast-growing cities in emerging economies: of the top 150 fastest-growing cities in this size class, the most by far, 55, are in China, followed by an intense boomlet of 12 in Indonesia, and 10 in India. In the developed world, while none make the top 150, metropolises in the United States are growing much faster than those of Europe and Japan. This is due in part to the fact that overall population is declining in those places, but it drives home the relative dynamism of the Asian and American superpowers. The growth cities of the United States and China are growing faster than 2 percent, leading a pack of small cities, while those in Europe are growing at maybe half a percent, and are typically the rare exceptions in nations where most cities are shrinking.

In a way, the emergence of Second Cities has flowed naturally (if unexpectedly) from the earlier success of the megacities. In the 1990s, megalopolises boomed as global markets did. This was particularly true in metropolitan areas with high-tech or "knowledge based" industries like finance—witness the renaissance of New York and London, and the explosion of growth in Shanghai or Hong Kong. Bonuses got bigger, bankers got richer and real-estate prices in the world's most-sought-after cities soared. The result has been the creation of what demographer William Frey of the Washington-based Brookings Institution calls "gated regions"—places like New York, London, Tokyo—in which both the city and many of the surrounding suburbs have become unaffordable for all but the very wealthy.

One reaction to this phenomenon is further sprawl—high prices in the urban core and traditional suburbs drive people to distant exurbs with extreme commutes into big cities. As Frey notes, in the major U.S. metropolitan areas, average commuting times have doubled to about 90 minutes over the last 15 years, making once rural places like Pike County, Pennsylvania, viable dormitories for workers employed in New York. "It's hard to believe, but a place like Las Vegas is now actually a kind of suburb of Los Angeles," says Frey, noting that there are plenty of people who make the six-hour one-way drive a few times a week. And while the extreme commute is a longstanding tradition in Japan, it is spreading to Europe. Brighton, a once seedy beach resort about an hour by train from the capital, is now "London by the Sea," populated by arts and media types. House prices have boomed lately, and the city is now on its way to getting the requisite Frank Gehry landmark building (a futuristic residential tower and sports complex) to herald its success.

Why does one town become a booming Second City while another fails? The answer hinges on whether a community has the wherewithal to exploit the forces pushing people and businesses out of the megacities. One key is excellent transport links, especially to the biggest commercial hubs. Though barely a decade old, Goyang is South Korea's fastest-growing city in part because it is 30 minutes by subway from Seoul. Burgeoning IT hubs outside Delhi like Gurgaon and Noida, for which Ghaziabad serves as a new bedroom community, all sit on good roads into the capital.

Europe's cheap airlines have given new life to any number of provincial capitals, from Glasgow to Bologna. Estate agents estimate that a new Ryanair or easyJet link to a given city can immediately raise property prices in the area by 30 percent or more. In Asia, the number of cheap, short flights between cities is also growing.

Another growth driver for Second Cities is the decentralization of work, driven in large part by new technologies. While more financial deals are done now in big capitals like New York and London than ever before, it's also clear that plenty of jobs in booming service industries like banking, entertainment and high tech are flowing to places like Dubai, Las Vegas, Tallinn, Dalian and Cape Town, all of which international real-estate services firm Jones Lang LaSalle names as "Rising Urban Stars." These places have not only improved their Internet backbones, but often have tech parks and universities that turn out the kinds of talent that populates growth industries.

Consider Montpellier, France, a case study in urban decentralization. Until the 1980s, it was a big Mediterranean village, but one with a strong university, many lovely villas and an IBM manufacturing base. Once the high-speed trains were built, Parisians began pouring in for weekend breaks. Some bought houses, creating a critical mass of middle-class professionals who began taking advantage of flexible working arrangements to do three days in Paris, and two down south. Soon, big companies began looking at the area; a number of medical-technology and electronics firms came to town, and IBM put more investment into service businesses there. To cater to the incoming professionals, the city began building amenities: an opera, a tram line to discourage cars in the city center. The result, says French urban-planning expert Nacima Baron, is that "the city is now full of cosmopolitan businessmen. It's an entirely new town, a new society."

Today it's easier for Second Cities to build self-sustaining economies, independent of megacities, as firms and workers look to avoid the problems of major urban centers. "Economically, after a city reaches a certain size, its productivity starts to fall," notes Mario Pezzini, head of the regional-competitiveness division of the OECD in Paris. He puts the tipping point at about 6 million people, after which real estate costs, travel times, and the occasional chaos (witness the recent Paris riots) "create a situation in which the center of the city may be a great place, but only for the rich, and the outlying areas become harder to live and work in."

Meanwhile, the democratization of the good life—even small towns now have good sourdough bread, international newspapers—means that people no longer have to choose between the culture and chaos of the big city, or the ease and boredom of everything else. Pseudo-European-style café culture is cropping up in American towns like West Palm Beach, and European minicities like Groningen, in the Netherlands, draw millions of tourists with Philippe Starck-designed museums and renovated downtowns. Retiring baby boomers are giving new life (and money) to a host of sun-belt cities in the United States, as well as many Provençal and Tuscan towns.

Immigrants play a big role, too. In places like Las Vegas, they're morphing from cheap labor to a new middle class reshaping the character of the city. In the U.K., hundreds of thousands of Eastern European immigrants have helped galvanize the capital and smaller northern and coastal cities, where workers in agriculture, construction and lower-level service jobs are sorely needed. Ultimately, they are expected to take their earnings home, where they are likely to seek property not in Prague or Warsaw, but in less-expensive Brno or Cracow. That's a big reason Jones Lang LaSalle expects the 60 Central and Eastern European cities with 500,000 or more people to be among the hottest places for corporate relocation in the next few years.

All this means, of course, that second cities won't stay small. Indeed, some countries are actively promoting their growth. China's Go West campaign encourages investment in smaller inland cities. Italy is trying to create tourist hubs of towns close to each other with different yet complementary cultural activities. "The worst-case scenario is that we end up with some national version of New Jersey—an inefficient sprawl with no center," says Frey of Brookings. Already, one has to wonder if all the marketing pressure for Second Cities to pay for iconic buildings or to re-create mock versions of New York's SoHo is a productive use of capital. If one of the biggest drawing cards for Second Cities is unique local flavor, why ape the best-known megacities? Devolution of policymaking power is leaving many lesser cities more free than ever to shape their destinies. To Vegas, Toulouse and company: this is your era. Don't blow it.

With Jason Overdorf in New Delhi

© 2006 Newsweek, Inc.

Tuesday, June 13, 2006

india's maoists step up rebellion

Thursday, June 8, 2006 Page A16
Special to The Globe and Mail

DORNAPAL, INDIA -- Madkam Devi, a pretty 19-year-old in a sari printed with pink flowers, shifted the thin-limbed infant on her hip and gazed into space as she described how she narrowly escaped being hacked to death by Maoist revolutionaries a month ago.

She and 51 other villagers of Manikonta, a village in the central Indian state of Chhattisgarh, had returned to their homes from a government relief camp on April 25 to collect cooking pots, plastic buckets and other household items they had left behind when they made their hurried departure for police protection from the guerrillas. Finding the village deserted, they quickly gathered their belongings and started back to the relief camp. They didn't get far before the Maoists ambushed them.

"Some people panicked and tried to run, but some of the Maoists were wearing uniforms and shouted to us that they were the police, and we shouldn't be afraid," Ms. Devi said.

The Maoists, including about 50 gunmen in uniforms and another 150 irregulars armed with axes and wooden staves, killed two villagers and captured the others, Ms. Devi said. Some were badly beaten, a taste of the treatment the prisoners would receive over the next four days. But the worst was to come. As an example of the fate that awaits villagers who participate in a government-aided people's movement against their rebellion, the Maoists executed 13 of the villagers.

The Maoists -- sometimes called Naxalites, in reference to an armed uprising in the village of Naxalbari in West Bengal, from which the movement began in 1967 -- have maintained a low-level insurrection in India for nearly 40 years, organizing uprisings among landless workers, hijacking trains, mounting frequent attacks on police posts and industrial facilities, and murdering their political opponents. Their rebellion is gaining ground, expanding across 14 eastern and central Indian states, running all the way from the Nepal border in the north to the southern coast, and becoming a major Communist force intent on winning control of the Indian state through military means.

And the war is growing ever more deadly. More than 700 people, 500 of them civilians, were killed in raids, land-mine blasts and other incidents in 2005. Provisional data from the past four months suggest the death toll will be higher in 2006.

The rapid increase in violence has prompted some experts, such as Ajai Sahni of the New Delhi-based Institute for Conflict Management, to warn that the Naxalite insurrection has surpassed separatist terrorists in Kashmir as the largest internal threat to India's ability to govern its vast territory.

India's national and state governments have long refused to acknowledge the seriousness of the problem, because of what it says about their administrations, Mr. Sahni said. "Unlike the Kashmir issue, which we could blame on somebody else, this was entirely indigenous. It pointed to state failures."

The Maoist movement is rooted in the deep impoverishment of rural India. Although India's economy is growing at close to 8 per cent a year, nearly three-quarters of its people live in rural areas that continue to lag far behind the cities, especially in the problem states of north and central India. Just 20 per cent of rural people have access to basic amenities such as running water, compared with 70 per cent in urban areas. And poor nutrition and lack of health care mean that the infant-mortality rate for rural India is nearly 40 per cent higher than in urban areas.

In Chhattisgarh, the lack of local economic progress is obvious despite a huge influx of investment to develop the state's mineral resources. "Mining has been going on for three decades, but the only industry to flourish in the area is prostitution," a spokesman for the Maoists recently told local reporters.

In recent months, the rebel attacks have become more daring. In November, hundreds of Maoists stormed a jail in Bihar, freeing a captured Maoist leader and about half of the facility's 650 inmates. In February, the rebels raided a state-owned mining company in Chhattisgarh, stealing tonnes of explosives for the manufacture of crude bombs.

The violent attack on the villagers of Manikonta signalled a shift in strategy by the guerrillas, who previously had focused attacks on organs of the state. By brutalizing ordinary villagers, the Maoists are taking a dangerous gamble. Historically, they have embraced local causes and won respect, and sometimes support, through hard work and a dogged battle against social injustice and government corruption.

In Chhattisgarh, local observers say that years ago the Maoists forced contractors to pay tribal labourers the wages mandated by the state, rather than skimming from the payroll. They thrashed corrupt officials of the forest department, and forced truant government teachers to show up for their classes in the deep jungle, instead of merely drawing their salaries.

However, Chhattisgarh officials now say that the Maoists more often work to stop projects that would benefit the local poor.

"Contrary to what they [the Maoists] say, Naxalism is not growing, because there is no development in the state," said Chhattisgarh Home Secretary B. K. S. Ray. "Basically, this is a terrorist movement to gain political power through violence. Initially, they may have wanted land reform and equality, but now it's a gang of extortionists, gangsters and killers."

The tribal people of rural India need roads, schools and jobs. But the Maoists are committed to a full-scale Communist upheaval and radical redistribution of wealth, and believe that these incremental gains will never erase the gross inequalities of what they term India's "bourgeois comprador democracy."

"There is no dilution in the ideology," said Mr. Sahni of the Institute of Conflict Management. "There is absolutely no set of economic initiatives on the horizon that can give prosperity, dignity et cetera to 810 million people in rural India."