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Report n°1: The new constraints of urban development

Urban development, an opportunity to be seized?

The term urban development has negative associations. And yet, it should be considered as an opportunity since wealth is concentrated in cities, particularly large ones. In all countries, the same kind of curve can be observed: per capita income rises in line with the size of the city.

 It is interesting to calculate the GDP of the world's largest cities. It is often used to characterise a country whereas the size of the population is often used to characterise a city. The results are shown in the table below.

Tokyo

 1440

France

1429

New York 1050

China

1064

Los Angeles 620

Brazil

607

Paris 510

India

471

Chicago 400

Australia

394

London 280-500    
Osaka, San Francisco 380

Netherlands

365

Washington 310

Sub-Saharan Africa

313

Boston 260

Russia

250

Hong Kong 180

Turkey

200

Seoul, Toronto, Mexico 150

Indonesia

150

Sao Paulo 110

Greece

112

Singapore 100

Egypt

100

Bangkok, Istanbul 60

Pakistan

65

Shanghai 50

Peru

54

Cairo 33

Morocco

36

Manila 25

Vietnam

26

Jakarta 16

Tunisia

20

Dollar conversions performed as per World Bank recommendations.

This data represents the production of cities at market prices and therefore represents a certain level of purchasing power. It is remarkable to note the contrast between the large number of studies conducted into countries compared to the few concerning cities. This study is therefore of great interest since it relates the wealth created to a territory. It enables recognition of the city as player and a place of political responsibility. Ten or fifteen years ago, developmental aid was anti-urban. For the past seven or eight years there has been a trend demonstrating that a pre-requisite for the development of a country is the development of its cities and no longer development of the countryside alone.

We might consider why incomes are higher in cities. There is a widespread but mistaken assumption that cities exploit the countryside. In France, for instance, the notion that the provinces fund public transport in the Paris region is utterly wrong. The explanation can be best understood by means of the following chart.

It can be seen that there is a transfer from the wealthiest regions to the poorest ones even though the contributions are regressive and expenditure is higher in the cities. Therefore,

incomes are higher in cities because productivity is higher. For instance, productivity in Paris (in the broadest sense, i.e. the Ile de France region) is 35% to 45% higher than in the provinces. It can also be pointed out that, far from exploiting the countryside, urban areas help increase the productivity of the hinterlands, and that the closer an agricultural area is to a city the higher its productivity.