89861 CITIES WITHOUT CIVIS Sharing Knowledge and Learning from Cities SLUMS No. 7 — 2014 Commercial road in Tenkodogo, Burkina Faso. Photo by Serge Allou The Systems of Secondary Cities: The neglected drivers of urbanising economies Prepared by: Brian Roberts, Land Equity International and Rene Peter Hohmann, Cities Alliance “A city’s prospects—or a town’s— Modern cities are part of a new economic geography which makes them increasingly dependent on fast depend critically on its place within communications, trade, finance, and investment the urban system, national and systems to support their development. However, international.” many parts of the global and national systems of Bruntland Commission, 1987 cities are not benefiting significantly from the ‘new W age’ and economic geography of cities. Most of these e inhabit a world where an increasing are the secondary and small cities of less than a number of people live in cities. As million people. Many of these are struggling to create a result, we are moving toward or retain jobs; have high levels of unemployment; what Shlomo Angel has described and find it difficult to diversify and revitalise their as a “Planet of Cities”1, all of which are becoming economies, retain capital and attract investment. intricately connected to a global system of cities. Others are rapidly growing cities which do not have the capacity to manage urbanisation. Many of these 1 Shlomo, A. et al. (2012) Planet of Cities, Washington: Lincoln Institute for Land face a huge backlog in demand for infrastructure, Policy housing and other essential urban services. The CIVIS series shares knowledge and learning arising from Cities Alliance projects and other activities in slum upgrading and city development strategies. It also serves as a platform for policy dialogue among city development stakeholders, including national and local governments, donors and slum dwellers to impact change in the lives of the urban poor and advance the urban development agenda. www.citiesalliance.org Figure 1: The unrecognised primacy of secondary cities worldwide 1000 900 800 10 million or more 700 Population (in millon) 5 to 10 million 600 500 1 to 5 million 400 500,000 to 1 million 300 Fewer than 500,000 200 100 0 Africa Asia Europe Latin America North and the America Caribbean Source: UNDESA 2011 Urban population, number of cities and percentage of urban population, by size class of settlement, major area and region, 1975-2025, in World Urbanization Prospects, 2011 Revision, United Nations and Social Affairs/Population Division, New York, 2012, pp. 296. http://esa.un.org/unup/pdf/ FINAL-FINAL_REPORT%20WUP2011_Annextables_01Aug2012_Final.pdf Secondary cities are growing the most but with fewer agglomeration and clusters; a system of well- capacities to plan and manage urban development developed, localised supply chains and networks; a and promote employment and economic growth. diversified economic and employment base; and a Due to their sheer growing number, it is systems of broad housing mix. secondary cities, such as cities with fewer than one million inhabitants, that will have a greater influence However, not all secondary cities are the same. upon the future economic development of nations Growing disparities in the economic, physical and and larger geographic regions. social development between systems of cities can be observed. The consequences of this are growing Globally, there are more than 2,400 cities in the world gaps in income, poverty and levels of employment with populations between 150,000 and 5 million which especially between primary and secondary cities. could be loosely described as secondary cities. Nearly Many secondary cities are struggling to raise capital two thirds of these are located in Africa and Asia. and attract investment needed to build infrastructure, Secondary cities range in form and size from 150,000 to productive enterprises and vibrant communities 5 million people and perform a wide range of functions needed to create dynamic economies, improved in national and international systems of cities. livelihoods and jobs. Secondary cities will play an important role as How to enhance the connectivity, efficiency, catalysts and secondary hubs in facilitating the investment generation, and employment in secondary localised production, transportation, transformation, cities to create more dynamic local economies, or transfer of goods, people, trade, information, ensure greater equity and development opportunities, and services between sub-national, metropolitan, and stimulate trade and competition between national, regional, and global systems of cities. They systems of cities are challenges for governments and will likely demonstrate the presence of industry development partners. 2 The Systems of Secondary Cities – The neglected drivers of urbanising economies today can have a population of several million people. Definition of a Secondary City In China, some secondary cities have populations of over five million. These cities are not comparable A secondary city is largely determined by population, size, to secondary cities in Ethiopia, which have urban function, and economic status. Commonly, secondary cities are geographically defined urban jurisdictions or centres populations of less than 200,000. Other authors5 performing vital governance, logistical, and production suggest secondary cities as not so much defined by functions at a sub-national or sub-metropolitan region hierarchy, but as part of an integrated functional level within a system of cities in a country. In some cases, system of national or global system of cities. Angel et their role and functions may expand to a geographic region al., also refer to the satellite cities that make up large or the global realm. The population of secondary cities range between 10-50 % of a country’s largest city, although metropolitan regions as secondary cities. some can be smaller than this. They will likely constitute a sub-national or sub-metropolitan second-tier level of Secondary cities fall into three broad spatial categories: government, acting as centres for public administration and delivery of education, knowledge, health, community, and security services; an industrial centre or development (i) Sub-national cities that are centres of local growth pole; a new national capital; or a large city making government, industry, agriculture, tourism up a cluster of smaller cities in a large metropolitan region. and mining; (ii) City clusters associated with expanded, satellite and new town cities which surround large urban What is a Secondary City? metropolitan regions; and Secondary city is a term most commonly used to (iii) Economic trade corridors that are urban growth describe the second tier, or level, in the hierarchy centres or poles planned or developing along of cities below the primary level. Some countries major transport corridors. (Figure 2 shows have several orders, or levels, of cities. A primary examples of the three typologies of secondary city is defined as “the leading city in its country cities.) or region, disproportionately larger than any others in the urban hierarchy”.2 The definition Many secondary cities, regardless of size, have similar of secondary cities, however, is contextual: it can characteristics and functions. Increasingly, economic relate to population size, administrative area, geography shapes the functions of these cities, rather political, economic, and historical significance of than actual area or population size. The importance a system of cities below the primary order of cities of function has, thus, become of more interest and within a country or geographic region. The term importance in shaping urban policy, planning, and “secondary city” was popularised by Rondinelli3 in development than it has in the past. Population size the 1970s. His definition characterised secondary is a measure of urban scale, but not necessarily an cities as urban settlements with a population of at indicator of the level of significance a city has in the least 100,000 but not including the largest city in new global system of cities. Strategic infrastructure, the country. His research was originally intended to investment, and systems of supply chains servicing help develop policies to stimulate the economies of secondary cities are becoming increasingly linked rural areas surrounding secondary cities. to the scope of local economic activities than scale. This has important implications for urban UN-Habitat defines a secondary city as an urban area managers, officials, and policy makers of secondary generally with a population of 100,000 to 500,000. cities on the way they plan and develop enabling This definition is based on the classification of cities4 environments and strategic infrastructure to support developed in the 1950s. However, a secondary city the development of more competitive cities. 2 Goodall, B. (1987) The Penguin Dictionary of Human Geography, London: Penguin Group 3 Rondinelli, D. A. (1983) Secondary Cities in Developing Countries: Policies for 5 Christaller, W. (1933) Die Zentralen Orte in Süddeutschland, Jena: Gustav Diffusing Urbanization, California: Sage Fischer; Christaller, W. (1966) Central places in southern Germany, New Jersey: 4 Davis, K. (1955) “The origins and growth of urbanization in the world,” Prentice Hall and Hall, P. (2005). “The World’s Urban Systems: A European American Journal of Sociology, vol. 60, no. 5, pp.429-437. Perspective,” Global Urban Development Magazine, vol. 1, no. 1, pp.1-12. www.citiesalliance.org 3 Figure 2: Spatial, scale and functional framework to defining systems of secondary cities Order of City Functional and Market Orientation Supra Mega 10 Metro Meso Micro Mini > 50 m+ m+ 5-10 m 1-5m 0.2-1 m 0.2 m Global Large multiple clusters of high value services and manufacturing engaged in global trade Sub-Global Clusters of services and manufacturing engaged predominantly in regional trade Primary National National government, logistics, services and manufacturing centres Sub-national Sub-national provincial Government, logistics, services and manufacturing centres ary Second District District level Government, services and processing Tertiary Sub-district Resource rural-based service industry centre Source: Land Equity International Primary cities have dominance in global market logistical, and production functions at a sub-national orientation, scope and function. Global primary or sub-metropolitan region level within a system cities are important logistical and market centres and of cities in a country. In some cases, their role and hubs. They contain concentrations of large multiple- functions may expand to a geographic region or the industry clusters and have a command position in global realm. The population of secondary cities global trade and investment. Furthermore, primary ranges between 10-50% of a country’s largest city, hubs are usually capital cities that dominate the although some can be smaller than this. They will national political, administrative, and defence likely constitute a sub-national or sub-metropolitan systems. For small nations, the primary city may have second-tier level of government, acting as centres for a population of only a few hundred thousand people, public administration and provision of education, but they are national centres of governance and the knowledge, health, community, and security services; economic system. Small primary cities certainly do an industrial centre or development growth pole; a not have the political or economic power of mega new national capital; or a large city consisting of a cities, and are relegated to secondary or lower systems cluster of smaller cities in a large metropolitan region. of order in a regional and/or global context. So, the function and integration of secondary cities In seeking to come up with a more contemporary in a system of cities differ considerably. Broadly, there definition for the term secondary city, we must are three characteristics of secondary cities: acknowledge that population size has a significant influence on the classification of secondary 1. The first is a group of secondary cities that cities. However, functionality, specialisation and have a strong growth path and a dynamic competitiveness also affect whether a city has a local economy. These cities are well connected primary or secondary city status. A hybrid definition nationally and internationally in a system of for a secondary city is proposed that integrates size, competitive trade, development, and investment. function, and role within a network of national, These are lead secondary cities and have a strong regional and global system of cities. export focus and an outward orientation. They are the tourist, resource, and star manufacturing A secondary city is largely determined by population, cities, such as Denpasar (Bali, Indonesia), Belo size, function, and economic status. Commonly, Horizonte (Brazil), and Durban (South Africa). secondary cities are geographically defined urban jurisdictions or centres performing vital governance, 4 The Systems of Secondary Cities – The neglected drivers of urbanising economies 2. The second group represents the moderate and are cities in economic decline as they move boomtown economies, driven by migration and into a post-industrial and declining population a diverse range of economic activities servicing phase. Many secondary cities in Europe, North local and national markets. These tend to be larger America, and Japan fall into this category. agricultural and manufacturing cities. The former They are becoming increasingly disadvantaged, often struggle to attract investment and create disconnected, and less able to compete for trade sustainable jobs. The latter are located at the peri- and investment within the national system of urban fringe of large metropolitan cities. Many are cities. These are the forgotten secondary cities. growing rapidly as a result of deindustrialisation In the race for development, they are struggling and the establishment of export-processing zones, to make any headway in lifting their economies, which are the catalyst for their development. Others overcoming poverty, and improving the liveability are also struggling to manage urban development of the environment for residents. and environmental issues. These are the meritocracy economies, which are striving to become more Supporting Growth in Secondary competitive. Many cities in Brazil, China, and India are in this category. Cities: Experiences, Bottlenecks and Policy Options 3. The third group comprises highly depressed cities which include large numbers of urban poor There are significant differences and some similarities people. These are the “laggards”. They fall into two in the way countries approach the development of types. The first are cities experiencing increasing secondary cities. The following important lessons urbanisation, rising poverty, little investment, and and observations are drawn from a Global Study scant formal-sector job creation. Most secondary commissioned by the Cities Alliance on Systems of cities in Africa fall into this group. The second Secondary Cities in five regions and 16 countries. Strategic infrastructure investments in secondary cities need to be linked to Local Economic Development. Photo by Cities Alliance Secretariat www.citiesalliance.org 5 Governance and Decentralisation support the development of a national system of cities, and how public resources should be allocated Most countries have adopted policies to support to support the development of entire urban systems. decentralisation, as well as national and regional Our research shows that countries that implement economic development and urbanisation plans. urbanisation policies to improve the overall However, the success in implementing such policies efficiencies and development of the national system is mixed. In Federal states, where there is a high level of cities, are much more successful in managing of decentralisation and devolution of government urbanisation, city development, and ensuring functions for property, development, taxation, equity between cities than countries that allocate a economic development, community and social disproportionate amount of their public resources to services, such as Australia, USA, and to a lesser extent the development of one or two large cities. Brazil, secondary cities tend to be more dynamic and competitive economies with low socioeconomic Competitiveness of Secondary-Cities disparities between systems of cities. In countries Development where there is a high level of central control and the responsibilities of local governments are limited, Secondary cities must learn how to be more such as Bangladesh, Tanzania, and Venezuela, the competitive, especially if they are to become development disparity between secondary cities successful in engaging in trade and foster local is much higher. The lesson from the Global Study economic development. This does not mean that suggests that the greater the levels of decentralisation, all secondary cities need to be internationally devolution, and autonomy secondary cities have, the competitive, but they must become more nationally more competitive, dynamic, and self-sufficient they competitive.6 Some cities, by virtue of the link they are likely to be. Disparities in the level of development have with the global system of cities and trade, between systems of cities are also significantly less. will always have to focus on being internationally competitive. Others will only need to compete within National Policies on Urbanisation the national league of cities. What is imperative is that laggard cities must focus on enhancing their Some developing countries have a strong anti- governance efficiency and business competitiveness. urbanisation bias or policies and actively try to prevent people migrating to cities. Most of these Countries that seek to measure and encourage greater countries have very low levels of urbanisation. competition between cities, such as Switzerland, There is a strong positive correlation between the and more recently, India and China, are forcing level of urbanisation and economic development. local governments to take measures to enhance Many countries recognise this and have developed city competitiveness and liability to attract jobs and national urban development plans to support greater investment. Some cities, such as Busan (Korea), diversification and a broad mix of city sizes in the Curitiba (Brazil), and Durban (South Africa) have makeup of their urban systems. National physical been very successful in focusing the machinery development plans show the desired pattern of of government to increase the competitiveness of urbanisation and development; however, they cities. Many secondary cities in developing countries are often prepared in isolation to national social- have no understanding of how to become more economic plans. As a result, there is very poor competitive, and national governments do little to linkage of the dependencies between them. There encourage them to do so. Countries that actively is a tendency for a much greater proportion of foster competition and trade between cities have the public resources per capita to end up supporting the most competitive secondary cities. development of the nation’s largest cities, leaving the system of secondary cities under-resourced and lagging well behind in the provision of infrastructure 6 Batty, M., et al. (1995), Cities in competition: productive and sustainable cities for the 21st Century, Melbourne: Longman Australia; Begg, I., (2002) Urban and essential services. There is a poor understanding competitiveness: policies for dynamic cities, Bristol: The Policy Press and Harris, by governments of what resources are needed to N. (2007) “City Competitiveness” World Bank study of competitiveness in four Latin American cities, Washington DC, World Bank. 6 The Systems of Secondary Cities – The neglected drivers of urbanising economies One way of helping secondary cities to enhance have failed in the past. Many developing countries their competitive advantage is through co-operative have demonstrated that the development of growth competition. Ben Hecht, President and CEO of Living poles can provide the catalyst for transforming and Cities, states in his piece “Collaboration is the new developing secondary cities. The focus, however, competition” that cities will not be able to solve their must be on demand-side expansion, by unlocking problems without co-operating. 7 Two good examples the latent underperforming capital tied up in assets, are Glasgow and Edinburgh,8 which are seeking to land, human capital, governance, and tax-revenue co-operate in sharing knowledge, infrastructure, and collection potential, to expand opportunities for services to overcome some of their weaknesses in formal-sector employment and regional investment these areas. in land and housing development, transport, and trade-based construction industries, health, financial, Another good example is the cross-country co- ITC, and education services. operation between Singapore and the secondary cities of Jahor Baru (Malaysia) and Bintan Batam With reforms to domestic capital markets and (Indonesia).9 These cities collaborate on the banking systems, there is high potential to manufacturing and export of products. Each city has collateralise underutilised public and private assets specialised roles in the production of a wide range in secondary cities. This model underpinned of manufactured products, with integrated supply development in Korea and Chinese Taipei. Initiatives chains among the three. The collaboration has given to unlock and develop local-capital markets and the three cities a global competitive advantage in improve economic governance systems are needed the production of chemicals and the manufacture of for developing countries to ensure a more balanced, technology-based equipment. sustainable pattern of urban growth and development - especially in secondary cities. Tapping Into and Developing Latent Capital “There must be a greater Unlocking and capitalising on latent capital is a high focus on supporting priority for South Asia, Sub-Saharan Africa, and Central Latin American countries, where attracting endogenous growth in investment to create sustainable employment is a secondary cities as many major challenge for secondary cities. This cannot be achieved without significant policy reforms at do not have the capacity the central government level. The reforms must or advantages to engage give secondary cities the opportunity and power to capitalise and leverage assets to ensure local land, in exogenous export- property, and financial markets function more orientated growth. New efficiently, effectively and profitably. combinations of exogenous Growth-pole policies are often criticised by economists because governments usually select and endogenous growth the winners and often push supply-side economic strategies are necessary to growth strategies and development models that develop secondary cities in 7 Hecht, B. (2013) “Why Collaboration Is the New Competition”, Harvard Business Review. Retrieved 30 April, 2013, available: http://blogs.hbr.org/ poor regions.” cs/2013/01/collaboration_is_the_new_compe.html. 8 Noone, V. (2007) Collaborate to Compete Glasgow, Edinburgh - Glasgow: Scottish Enterprise. Brian Roberts, Author of the book 9 Toh Mun, H. (2006) “Development in the Indonesia-Malaysia-Singapore Growth Triangle”, East Asian Bureau of Economic Research. Available 30 April Systems of Secondary Cities 2013: http://saber.eaber.org/node/21818 www.citiesalliance.org 7 Rectifying the Imbalances in Systems of Cities The overconcentration of economic output in one (or sometimes two) very large cities also increases the vulnerability of national economies to catastrophic events and shocks, as was the case with the 2011 Bangkok floods. Countries where urban systems appear to be more balanced and efficient are those where there is a wide geographic spread and hierarchy of cities, and there are high levels of connectivity, competition, and trade between them. Rectifying imbalances between systems of cities requires strong national policies directing a higher level of per-capita resources to secondary cities and regions where governments want development to occur. These policies have been successful in countries such as Korea and Australia, and to a lesser extent Brazil, India, and China. It is also important for governments to build upon comparative advantages between secondary cities and the leveraging of resources, so that secondary cities and regions mobilise latent capital to match national government funds for major infrastructure projects in cities, as was initiated by the National Urban Renewal Mission10 in India and the Building Better Cities Programme in Australia.11 Getting Urban Systems Integrated and Flowing Flow systems are perhaps the most important factor in supporting the development of secondary cities in getting urban systems integrated and flowing, and in keeping them going. Urban systems in most secondary cities are poorly integrated, badly designed and therefore weak. Secondary cities need flow systems (material, information, finance, governance, and utilities) capable of supporting supply chains that keep government, business, and communities operating. Urban systems tend to become damaged, rundown or neglected which impedes their operation. No matter how weak these systems are, many are remarkably adaptable and can be patched up to provide a system that operates. Studies have shown that minimal 10 JNNURM (2005) “Toolkits for Reform”, Ministry of Urban Development and Ministry of Urban Employment & Poverty Alleviation, Delhi: Government of India. 11 Auditor General (1996). “Building Better Cities. A joint government approach to urban development”, Melbourne: Victorian Government. 8 The Systems of Secondary Cities – The neglected drivers of urbanising economies expenditure on fixing and maintaining essential urban infrastructure can add 2% to the GDP of economies12 while improving information, logistics, and governance systems can add significantly to improving the productivity and livelihoods of people living in cities. However, the efficiency of urban systems relies on the quantity, quality, level of use, availability of resources, and the governance systems used to plan, develop, operate, and maintain them. Investment in human capital development is the most necessary to improve the integration and flows in urban systems in secondary cities. Responding to the Challenge: The Cities Alliance Country Programmes A good example of Cities Alliance support to secondary cities is its programmatic approach through the Cities Alliance Country Programmes in Uganda, Mozambique, Burkina Faso, Ghana and Vietnam. Country Programmes are longer-term, programmatic approaches, supported by a group of Cities Alliance members, to improve co-operation among national and local governments, urban poor communities, investors and other partners. Country Programmes focus on achieving four main outputs deriving from the Cities Alliance results framework: national policy frameworks, local inclusive strategies, building capacity of cities, and mechanisms to engage citizens. The Country Programme in Uganda, for example, has leveraged US$150 million in financing from the World Bank to develop urban infrastructure and service delivery in 14 Ugandan municipalities. Launched in 2010, the Transforming the Settlements of the Urban Poor in Uganda (TSUPU) Programme is fast becoming recognised within the global community as a best practice example. It has established the importance of alignment at the national, municipal and civil society levels, and has also demonstrated how such alignment brings greater coherence of effort both within government and from its support partners. 12 Kessides, C. (1993) “The Contribution of Infrastructure to Economic Development: A Review of the Experience and Policy Implications”, Report no. Central Market in Kumasi, Ghana. Photo by Cities Alliance Secretariat 213, Washington: World Bank. www.citiesalliance.org 9 Figure 3: Outputs and Activities of Country Programmes Initially focused on five secondary cities (Arua, institutional framework to support the World Bank’s Mbale, Mbarara, Jinja and Kabale), TSUPU US$150 million Uganda Support to Municipal mobilised nearly 14,000 slum dwellers into Infrastructure Development (USMID) project, 303 savings groups, which were federated into expanding TSUPU from five to 14 secondary committees at the settlement and city development cities. The nine new TSUPU towns are Gulu, level. These urban poor organisations worked Lira (Northern Uganda), Soroti, Moroto, Tororo, in partnership with municipalities to identify Entebbe, Masaka, Fort Portal and Hoima. In all of and prioritise projects, and then oversaw their these cities, the TSUPU initiative will help ensure implementation. The projects were financed that the urban poor are actively engaged in planning by small grants from a fund managed by the as citizens with rights and responsibilities. It will municipal government. The practical experience also help ensure effective oversight of government gained through this process provided the upfront budgeting and expenditure. 10 The Systems of Secondary Cities – The neglected drivers of urbanising economies Secondary Cities At a Glance ■■ Population size is still the determining factor ■■ Most are sub-national capital cities in the definition of a secondary city, but in an age responsible for secondary level of government; a of growing competition, trade, and exchanges key manufacturing, primary, or resource-industry between cities globally, the meaning of the term centre or a global centre of cultural, natural, or has changed. A secondary city will likely have a advanced-industry significance. They can also be population or economy ranging in size between major satellite cities forming a cluster of cities in a 10% and 65% of the nation’s largest city. Today, metro-region city. however, it is the function and role that are ■■ The development of inland secondary cities in increasingly defining a secondary city’s status developing regions lags well behind those located within the global system of cities. on coastlines or major river systems. ■■ There are more than 2,400 cities with ■■ There are three broad types of secondary populations of between 150,000 and 5 million that cities economies emerging globally: “leaders”, could be loosely described as secondary cities. “lagging”, and “laggards.” Most fall into the latter More than 60% are located in developing regions category and are located in Sub-Saharan Africa and countries. Many of these cities are struggling and Asia. These cities are mainly driven by with the problems of rapid urbanisation, poverty population growth and consumption. Most are and job creation. poorly managed, have weak infrastructure, poor ■■ Globally, there is a growing gap in levels of communication systems within and between socioeconomic development disparities occurring cities, and are not very competitive. between secondary and primary cities that has a ■■ There must be a greater focus on supporting significant bearing on their capacity to develop endogenous growth in secondary cities since and compete for trade and investment. many do not have the capacity or advantages to ■■ There is very poor data and information engage in exogenous, export-orientated growth. available on the economy, land, finance, New combinations of exogenous and endogenous infrastructure, and governance of secondary growth strategies are necessary to develop cities. This situation is severely affecting cities’ secondary cities in poor regions. capacity to plan and manage urban development ■■ International development agencies are and promote employment and economic growth. showing interest in supporting the development There is an urgent need to support national and of secondary cities because of their importance as regional research centres. hubs and catalysts in unlocking the development potential of sub-national regions. www.citiesalliance.org 11 Most secondary cities are struggling to raise capital and attract investments for basic infrastructure. Photo by Cities Alliance Secretariat info@citiesalliance.org ǀ www.citiesalliance.org knowledge resources ǀ secondary cities ǀ system of secondary cities ǀ national urban policies ǀ growth ǀ urbanisation ǀ endogenous growth ǀ Country Programmes ǀ TSUPU ǀ Uganda Facebook – www.facebook.com/pages/Cities-Alliance Twitter  - www.twitter.com.citiesalliance Flickr – www.flickr.com/photos/citiesalliance