The World Class City Concept and its Repercussions on Urban Planning for Cities in the Asia Pacific Region

(The contents of this paper are drawn from my personal experiences of working or being associated with programmes and projects in a number of Asian cities over the last two and a half decades and with their planners, academics, students, politicians and NGO and CBO representatives. Many of these programmes and projects were supported by IFIs and bilateral development agencies and most of the references in the paper are from authors known personally to me.)

Introduction

The welfare state model in Europe was born out of an uneasy reconciliation between capitalism and its opponents. Its principles were adopted by most of the newly independent countries (who did not belong to the Soviet block) in the post-Second World War period. The ethos of the model survived because of the division of the world into socialist and capitalist entities and because of the presence of a revolutionary China and a militarily powerful Soviet Union in the UN’s Security Council. In these circumstances a global market economy was simply not possible. The collapse of the Soviet Union and the repercussions of the failure of the Cultural Revolution in China changed all this and in political terms capitalism came to dominate the world.

As a result, we are governed today by three global institutions. They determine global politics, culture, finance and development and as such most national development policies and concepts as well. These institutions are all undemocratic in nature and hence their decisions and policies cannot be changed through existing rules, regulations and procedures that determine their functioning. These institutions are: one, the UN which is controlled by five members of the Security Council who won the Second World War and who can individually veto any decision of the UN General Assembly; two, the International Monitory Fund (IMF) and World Bank, which function on the basis of one dollar one vote; and three, the World Trade Organisation (WTO) which was born out of the G-7 green room negotiations that led to the creation of GATT and is controlled by the G-8.

Collectively these organisations have promoted what has come to be known as the “free market” economy, the most important aspect of which is the freedom of capital to move across national borders and seek investment wherever it can multiply. The structural adjustment process, which most poorer countries had to undergo in the decade of the 90’s, facilitated the growth of the free market economy and helped in this process. Structural adjustment demanded from national governments the regulating of then balance of payment and returning loans taken from the IFIs. To make this possible countries undergoing structural adjustment agreed to remove subsidies on health, education and housing; increase taxation on utilities; sell their industrial and real assets to the private, national or international corporate sector; and remove restrictions on imports and exports. The resulting national economic crunch meant that the poorer countries could not invest, and in many cases even subsidise, infrastructure projects and these had to be built by the international or national corporate sector through international tendering. As a result, there has been a big boom of international companies bidding for these projects. The Build-Operate-Transfer (BOT) and the Build-Operate-Own (BOO) processes were invented to make infrastructure development possible through this system. Both systems produce infrastructure at more than twice the cost of government produced infrastructure and in addition national governments have to give sovereign guarantees for the investment made by the investors.

A whole new terminology and concepts has been developed to support the market economy. Concepts such as “it is not the business of the state to do business”, “cities are the engines of growth”, “direct foreign investment”, and the concept of linking economic well being with GDP growth have had a major impact on national policies of Asian countries. In search of growth and DFI, they have invested in a big way in the creation of industrial zones (instead of in their people) and accepted the concept of “corporate” farming. India is one of the emerging economic giants who have followed these policies since the mid-1990’s. As a result, its economic growth in the last decade has varied between 7 and 9 per cent. However, it is estimated that as a result of the creation of 500 Special Economic Zones (for attracting Direct Foreign Investment (DFI) and corporate farming (both promoted by the World Bank for GDP growth) about 400 million people would willingly or unwillingly be forced to move from rural to urban areas by 2015.¹ This is twice the population of the United Kingdom, France and Germany put together. This process is also being promoted in other Asian counties and is in many cases being resisted by the farmers.² It is replacing food crops by cash crops and in the process increasing the cost and shortage of food; creating agricultural refugees; and making the state vulnerable to corporate sector pressures and interests.³

To promote DFI, the three undemocratic global institutions have also promoted the decentralisation of governance systems, giving considerable power to local level institutions. Increasingly this power is being used for accessing DFI and identifying projects independently of the provincial or central governments. It is too early to evaluate this process. Maybe an audit after one more decade will help us decide as to the benefits of the system – at present it is a mixed bag.⁴

IFI pushed political reforms and deregulations have also had a major impact on property markets and have reshaped the politics of land development. Trading across borders in gold and contraband goods is no longer lucrative. As a result, the gangs and mafias involved in these underworld activities have become involved in the real estate business and linked up with their underworld partners abroad for this purpose. This has skewed the land market and promoted massive speculation.⁵ The process has been further facilitated by regional conflicts, increasingly porous borders (both for capital and individuals) and the narcotic trade. All this has introduced an element of violence and targeted killings and kidnappings of opponents, rivals and social activists in the land and real estate sector.⁶

The state in almost all cases has responded to these market pressures and made land available for development through landuse conversions, new development schemes and the bulldozing of informal settlements.⁷ NGOs and CBOs who have challenged this process have faced two constraints (apart from their own internal organisational weaknesses and culture); one an unsympathetic international media and the other an absence of laws to prevent environmentally and socially inappropriate land conversions. Even where such laws do exist, rules, regulations and procedures and institutions to implement them are often missing. As a result, courts often deliver judgements that promote inequity, poverty and social fragmentation.⁸ Media too is increasing being controlled by the global giants, who promote the new paradigm, and Richard Mindoch has predicted that very soon there will only be three global media grants and his company will be one of them. In 1983 there were over 50 such corporations. By 2002 they had fallen to nine.⁹ National medias, where journalists and the intellectuals are fighting for reform and justice, are responsive to social and environmental issues but their owners are subject to both state and corporate sector pressures that they cannot resist.¹⁰

Poverty in the countries who did not have the means to respond positively to the free market, has increased and the rich-poor divide has increased in all cases. The most damaging aspect of this divide is promoted by the privatisation of education. This is introducing two systems of education, private for the rich and public for the poor, and has very serious long term repercussions.¹¹ To rectify this increasing divide, the IFIs have promoted the concept of safety nets for the poor for which loans are being provided and the role of NGOs in these programmes is being encouraged. Safety nets are serving a very small percentage of the effected population and NGO involvement with big funds available to them is adversely affecting NGO culture and its relationship with development policies and poor communities.¹² Loans for infrastructure projects have also increased, especially for road projects. There is an increasing questioning of these loans and aid programmes and the projects they promote by civil society organisations in the South.¹³ There is evidence that shows that most of the projects are either failures or unsustainable, expensive and that much (in some cases most) of the loans go back to the north in the shape of technical assistance, overheads and contractors’ profits promoted by the concept of international tenders.¹⁴