Death of cities?

Cities spread infection and wealth, both at the same time

In 2011, Harvard economist Edward Glaeser published Triumph of the City: how our greatest invention makes us richer, smarter, greener, healthier, and happier. Contrast Glaeser’s “triumph” with our Covid times: Deaths in London since March have been twice the normal, in New York City four times the normal. Mumbai in mid-July shows deaths around 25 percent higher than usual. Our other hotspots are all large cities: Delhi, Chennai, Ahmedabad, Pune, Indore, and now Bengaluru and Hyderabad. Between them, our top cities account for 80 percent of all reported coronavirus infections in the country.

Meanwhile, a severe and illogical lockdown has destroyed economic growth. A quick calculation says gross domestic product (GDP) declined 30 percent in Q1, the worst performance in our history.  The lockdowns and health-scare in cities have changed how we work. The educated and affluent have been working-from-home, zooming, teaming and meeting in eye-numbing style. The poor and manually-employed, who build the buildings we live in, clean our homes, and deliver our goods, have often been  — shamefully — left unemployed. Ten million migrants have returned home to their villages. And cities are at the heart of the problem.  Half the residents of our most prosperous city, Mumbai, live in slums, with no possibility of social distancing and toilets shared by 80 or more.

Are we seeing the death of the city? Or at least a massive shrinkage? Many would have it so. Uttar Pradesh, having displayed little interest in the well-being of those who had migrated out, has suddenly discovered a great attachment. It will (at a stroke) create employment for people at home, and require out-of-state employers to get the chief minister’s permission before they can hire “his” people. The governments of destination states have swung between extremes.  

Karnataka, under the influence of local builders, attempted to prevent migrants from returning home; Maharashtra says they needn’t return and these jobs should be done by locals. Even some of our more thoughtful observers have called for “a new kind of rural economy”, one that will provide local opportunities for entrepreneurship and employment and remove the need to migrate to far-flung, unhealthy cities.  

These views resonate with a long-held bias — usually held by those happily resident in cities — for the “better” rural life. Here is Ed Glaeser on wealth and the city: “Cities don’t make people poor; they attract poor people…. On average, as the share of a country’s population that is urban rises by 10%, the country’s per capita output increases by 30%.... The awful logic is that because the cities aren’t clean, people should stay in their agricultural huts. This is wrong for both moral and practical reasons”.

Cities are India’s growth dynamo. The one-third of our population that is urban accounts for over two-thirds of our GDP. In other words, our average city resident, including those who dwell in slums and Antilla, produces four times as much as a village resident. The single greatest driver of economic growth in a developing country comes from the movement of people from low-wage occupations to higher-wage occupations. When people marginally employed in agriculture move to cities, the net wage increase is roughly Rs 2 lakh per person per year. The 10 million people who have returned home have seen a dramatic fall in their standard of living — and also wiped off over half a percent of GDP.

Illustration: Binay Sinha

Every society has urbanised as it has modernised; the fact that 70 years after Independence over 70 per cent of our population is still rural, is a statement of failure, of stymied development (the United States, a major agricultural exporter, employs 2 percent of its workforce in agriculture). It says we haven’t provided adequate employment in our cities to move people off the land quickly enough. The most efficient way to double average agricultural income is to halve the 50 per cent of our workforce in agriculture that produces under 15 percent of national output. Improving agricultural productivity and creating other nearby employment opportunities have much potential, as Ashok Gulati and Arun Maira have argued. But our rural under-employment is so massive that we can increase output strongly and still have a hundred million people left over. We need to create, then, over 100 million jobs — and house 100 million more families — in old and new cities and towns.  

Glaeser, again: “In the early 1920s, the New York of slums, tenements, and Gilded Age mansions was transformed into a city of skyscrapers, as builders … erected a hundred thousand new units each year, enabling the city to grow and to stay reasonably affordable….In 1964, Mumbai fixed a maximum floor area ratio of 1.33 in most of the city…. limiting building heights seemed to offer a way to limit urban growth…. [Hong Kong and New York] function because their great height enables a vast number of people to work, and sometimes live, on a tiny sliver of land.  But Mumbai is short, so everyone sits in traffic and pays dearly for space. Height restrictions just force people to crowd into squalid, illegal slums rather than legal apartment buildings…. Only poor policy prevents a long row of fifty story buildings from lining Mumbai’s seafront, much as high-rises adorn Chicago’s lakefront.”

The pandemic and lockdowns have spread unprecedented misery. We will be putting this crisis to good use if it prompts us to do those equally unprecedented things that improve the life of the average Indian. We today have 50 cities with a population above 1 million. Let us undertake the development of 100 great Indian cities — cities that are clean, healthy, and compact places to live and work in. Each city needs massive investment in public infrastructure — to provide clean water and sanitation to every resident, including those who live in slums. And let us debate Glaeser’s proposal for a massive private high-rise building programme in our metros. New York City, Tokyo and Hong Kong have a floor-space index of 15-20 vs Mumbai’s (revised) 3-5. Let us consider, too, the European or Japanese model, of cities connected to small modern towns and suburbs within an easy 30-minute high-speed train-ride into the city. Mumbai could connect Kalyan, New Bombay and Andheri, and Delhi could connect Faridabad, Ghaziabad and Surajkund, filling in the extensive scrubland with high-rises and parks. This combination of a massive construction programme of public infrastructure and private housing could provide just the stimulus needed for our moribund economy to recover and grow at double-digit rates for a decade. Migrants can then come to our cities and modern towns for both economic opportunity and a healthy lifestyle.

ndforbes@forbesmarshall.com. The writer is  co-chairman Forbes Marshall, past president CII, chairman of Centre for Technology Innovation and Economic Research and Ananta Aspen Centre