{forthcoming in Oldfield, S. and Parnell, S. (2014): Handbook on Cities in the Global

South, London: Routledge}

THE URBANIZATION-DEVELOPMENT NEXUS IN THE BRICS1

Ivan Turok

Linking the process of urbanization to forces that can propel

economic and social development is one of the major challenges

of the 21st Century (Beall et al. 2010). The problem arises

because the urban population of low- and middle-income

countries is predicted to double from two to four billion

between 2000 and 2030 (World Bank 2013). The United Nations

reinforces the point: ‘Virtually all of the expected growth in

the world population (until 2050) will be concentrated in the

urban areas of the less developed regions’ (United Nations

Population Division (UNPD 2012: 3). With 42 per cent of the

world’s current population, the BRICS will be major

contributors to this phenomenon.

There is already considerable evidence from countries such as

India, Brazil and South Africa that large-scale urbanization

without growth and development can cause enormous social

dislocation and intractable problems in overcrowded

settlements lacking basic services (Martine et al. 2008; UN-

Habitat 2010). If and when the population influx fails to gain1 The BRICS is an alliance of Brazil, Russia, India, China and South Africaformed in 2009. The chapter draws on a collaborative research project onUrbanization in the BRICS that was part-funded by the UNFPA and UK Aid (seeMcGranahan and Martine, forthcoming). Considerable thanks are due to GordonMcGranahan and George Martine for their support and advice on many of theissues discussed in the chapter.

1

a foothold in urban labour markets, escalating hardship and

frustration in marginalised communities is likely to spark

social disorder and conflict (Saunders 2010). This is why

about three-quarters of governments in developing countries

are concerned about urbanization and have policies to reduce

rural-urban migration (UNPD 2012).

Yet history shows that in most regions of the world,

urbanization has also been accompanied by human ingenuity,

higher productivity and greater economic dynamism, although

these benefits have often been less conspicuous and slower to

materialize than the social and environmental costs (Jacobs

1984; Hall 1998; World Bank 2009; Glaeser 2011). Over time

buoyant urban economies generate rising employment, higher

living standards, better designed built environments and more

taxes to pay for improved public infrastructure and community

facilities. China’s recent experience epitomizes this process

in some respects and explains why urbanization is now seen as

vital to economic development and a national priority to

bolster flagging domestic growth and rebalance the economy by

strengthening consumer demand (Miller 2012).

A key question for research and policy is whether the very

existence of fast-expanding urban populations in contemporary

conditions of the global south helps to spur economic

progress, or whether migration is little more than a

consequence of the opportunities available in cities. In other

words, does the process of urbanization in and of itself have

2

‘transformative power’ (UNPD 2012: 1)? The answer to this

question has an important bearing on whether urban policy has

an economic rationale. If it does, then efforts to stem

migration could both impede economic progress and exclude

sections of the population from the opportunities this

creates. If it doesn’t, urban policy is essentially

unproductive and concerned with the distribution of benefits

and burdens between urban and rural areas. Similarly, if

urbanisation is mainly an effect or outcome of uneven economic

development, then it is likely to create all kinds of problems

for governments if it outpaces the creation of urban jobs and

livelihoods. Excessive urbanisation could even undermine the

very basis of prosperity.

The purpose of this chapter is to examine the contribution of

urbanization and associated policies to inclusive economic

development in leading nations of the global south. The BRICS

is a grouping of fast-growing, middle-income, emerging powers

to rival Europe and North America. They accounted for almost

half (47 per cent) of the growth in world output between 2000

and 2010, while their share of global production increased

from a sixth (17 per cent) to a quarter (26 per cent)

(McGranahan and Martine forthcoming). With four of the ten

largest economies in the world, what these states say and do

is increasingly important – for urbanization as well as for

many other international concerns.

3

One of the goals of the BRICS is to chart a new paradigm for

world development to challenge the hegemony of the global

north and its prevailing model of lightly-regulated

capitalism. The new paradigm is ill-defined at present, and

its implications for urbanization and economic inclusion are

quite uncertain. The BRICS group is diverse, yet they also

share features in common, including their resilience to the

recent global downturn, or at least its moderated impact. They

all recognize the need to shift their development paths in

more equitable and environmentally sustainable directions,

although they do not necessarily associate this with

urbanization. The chapter argues that urban growth is not

automatically or inevitably a progressive force because the

negative effects can outweigh the positive, but with careful

advance planning and investment in appropriate infrastructure

it can contribute to fairer and more durable development.

The first section outlines the conceptual issues surrounding

the relationship between urbanization and development,

followed by a summary of the global evidence. The next section

considers recent patterns of urbanization and development in

the BRICS, followed by their experience of policies to deter

migration. Subsequent sections consider each country in turn,

before the conclusion draws the threads together in arguing

that urbanization can strengthen national economies through

concentration, efficient infrastructure and functional spatial

forms.

4

THE URBANIZATION-DEVELOPMENT NEXUS

Urbanization has been closely associated with economic growth

and human progress in the north.2 Historically, the rising

share of the population living in cities and towns was

accompanied by higher incomes and broader improvements in

people’s lives (Jacobs 1984; Hall 1998). Urbanization was

bound up with the transition from predominantly agricultural

economies to more advanced industrial and service economies,

linked to an increasing division of labour and occupational

specialization. Economic progress benefited from more people

living in cities to stimulate consumer demand, supply labour,

and support mutual learning and creativity. It also generated

the resources and spurred the civic leadership to upgrade

urban infrastructure and improve the spatial arrangement of

towns and cities (Briggs 1968; Hunt 2004). The challenges of

managing urbanization forced major technological advances in

engineering, design and planning of the built environment.

Greater efficiency and rising prosperity were the outcomes of

what was on the whole a virtuous circle.

An unresolved question from historical experience is how

important urbanization was as a driver of economic

development? Was it a prime-mover or more of an enabling

2 Urbanization is defined as the net shift of population and economicactivity from rural areas to towns and cities. This is different from theurban population growth, which reflects natural growth (births minusdeaths) as well as the rural-urban shift. The level of urbanization is theproportion of the population living in urban areas. The urbanizationprocess can take different forms. It can be concentrated in a few largecities or spread across a range of cities and towns. Within each city itcan take the form of compact physical development or urban sprawl andfragmentation.

5

condition? Similarly, did urbanization always and inevitably

stimulate growth, or were other conditions necessary for this

relationship to hold? These questions are critical in thinking

about the implications for the south, where urbanization is

occurring on an unprecedented scale and more rapidly than it

did in the north. The socio-economic and environmental

consequences for the whole world are therefore far more

significant. These issues have been the focus of increasing

research in recent years, although many question-marks remain.

In theory there are good reasons for thinking that

urbanization should contribute to economic development

(Duranton and Puga 2004; World Bank 2009; Glaeser 2011).

First, concentrations of population in close proximity create

markets for firms that are more efficient to supply because of

the economies of scale and savings in transport costs. Second,

there is a large and expanding workforce for firms to choose

from, enabling them to match their specific skill requirements

better. Third, larger concentrations of firms mean bigger

markets for suppliers and service providers, hence greater

specialization, choice and competition between them. Fourth,

bigger cities can bear the costs of more sophisticated

infrastructure and logistics, including ports, airports,

universities and telecoms for external connectivity. Finally,

economic concentration intensifies the flow of ideas and

information between firms, leading to greater creativity and

ingenuity. Positive feedback loops mean there are dynamic

effects at work that go beyond one-off efficiency gains. A

6

self-reinforcing, cumulative process attracts mobile capital

and talent, generates more varied and superior products, and

locks-in more durable forms of development through continuous

adaptation, upgrading and innovation. These advantages of urban growth are counteracted by several

negative externalities. Rising congestion and overloaded

infrastructure increase business costs and may require firms

to invest in their own power supplies, water systems and

transport services. Large cities tend to have higher property

and living costs because of the competition for space, which

can reduce business competitiveness and deter investment.

Uncontrolled urban expansion increases air pollution, damages

ecosystems and reduces the quality of life for workers with a

choice of where to live. These drawbacks increase as cities

expand, especially if the form of physical development is

haphazard and poorer communities are concentrated in

overcrowded and squalid living conditions. It is particularly

hard for city governments to accommodate the pressures

generated by rapidly-growing mega-cities and avoid

dysfunctional outcomes. WHAT DOES THE EVIDENCE SUGGEST?

There is a growing body of research that has tried to quantify

the advantages of urbanization. This is difficult because of

the complexities of disentangling the particular urban effects

from other influences on economic growth, and uncertainties

about timescales, variations between sectors and feedback

7

effects. Studies have adopted different measures and

techniques, which makes it difficult to reconcile their

findings. One of the simplest methods is to compare the

prosperity of different countries with their level of

urbanization, measured by the proportion of the population

living in urban areas. Many results suggest that there is a

broad statistical relationship – more urbanized countries tend

to be more developed (UN-Habitat 2010). Henderson (2010)

confirmed a strong correlation between urbanization and

average income in 2004 for a large group of countries around

the world. Yet the spread of observations around the line of

best fit was wide, indicating that other factors are also

involved. In addition, a statistical association does not mean

a causal connection, let alone specify the direction of

causation, since there may be more influential forces at work

that are not included in the correlation.

As an aside, another important feature of such correlations is

that they are non-linear. In other words, the rate of

urbanization is most rapid in countries with the lowest levels

of economic development. These countries can least afford to

invest in the infrastructure required to facilitate orderly

urban development and to avoid the bottlenecks and resource

constraints that may obstruct economic growth. It is little

consolation to explain to the poorest countries facing the

greatest social dislocation that everything will turn out

right within a generation or two.

8

A range of more sophisticated econometric studies in the north

has sought to quantify the benefits of agglomeration. They use

different variables to capture the effects and different

modelling approaches, so their findings are diverse (Eberts

and McMillen 1999; Duranton and Puga 2004; Turok and

McGranahan 2013). Many conclude that cities do offer economic

advantages although they are not as big as often suggested by

agglomeration theory or urban policy proponents. A useful

review of the evidence concluded that the productivity gains

from doubling the size of a city are between three and eight

per cent (Rosenthal and Strange 2004). A subsequent review

concluded that the variation is even greater because local and

national contexts are so different (Melo et al 2009).

Many studies conclude that there are different kinds of

agglomeration effect (Duranton and Puga 2004). Some emphasize

that the advantages stem primarily from industrial diversity

because this confers adaptability. The opposite applies in a

second group of studies, where the greatest benefits come from

firms clustering within the same industry (Melo et al 2009). A

third set of studies emphasize the importance of amenities and

the quality of life in supporting the growth of consumption-

based sectors, such as entertainment, hospitality, tourism and

the creative industries (Glaeser 2011).

These contrasting findings indicate that one cannot make

simple generalisations about the strength of agglomeration

economies. There is no realistic prospect of finding universal

9

laws governing the urbanization-development relationship.

Context is bound to be crucial, including (i) the form of

urban growth (e.g. highly concentrated or dispersed), and (ii)

the role of government policy (e.g. in enabling more

functional forms of development through infrastructure

investment). Fast-growing cities in low- and middle-income

countries are bound to be more vulnerable to the diseconomies

of agglomeration because it is harder to finance the

infrastructure required to avoid this.

EVIDENCE FROM THE BRICS

There have been few quantitative studies of agglomeration

economies in the BRICS and other developing countries (Overman

and Venables 2010). This is a serious gap in the evidence

base, given where mass urbanization is clearly happening. In

the absence of a detailed analysis, a simple descriptive

exercise can yield some useful insights. Figure 1 shows the

relationship between urbanization and national economic

progress (defined as GDP per capita) for the five BRICS

countries at two points in time, 1985 and 2011. It draws on

the World Development Indicators database and shows a

consistent positive relationship for all five countries – they

all became more urbanized and more prosperous over this

period. This suggests that there is some connection between

urbanization and development, although it is variable in

strength, even among this small sample.

10

{insert figure 1 around here}

Another important point from Figure 1 is that Russia, Brazil

and South Africa were already quite urbanized by the 1980s,

whereas China and India were still predominantly rural.

Russia, Brazil and South Africa had experienced substantial

urbanization alongside industrialization for at least half a

century before the 1980s. India’s rate of urbanization began

to accelerate in the 1980s, whereas China’s really took off

during this decade.

China has experienced by far the greatest increase in

prosperity since the 1980s, with average incomes rising nine-

fold from USD 290 per capita in 1985 to USD 2,640 in 2011 (in

constant 2000 prices). Urbanization more than doubled from 23

to 52 per cent. Around three-quarters of the urban population

growth was driven by migration rather than natural change.

China’s progress has been spectacular, described by Joseph

Stiglitz as ‘probably the most remarkable economic

transformation in history … Never before has the world seen

such sustained growth … (and) so much poverty reduction’

(2006). The country seems to have benefited enormously from

its urban transition. Average incomes in Chinese cities are

also related to city size (OECD 2013). GDP per capita in the

25 largest cities, for instance, is double the level of the

cities that make up the 100-125th size band.

11

India also experienced substantial economic progress, with

average incomes rising more than three-fold from USD 264 per

capita to USD 838 (in constant 2000 prices). Its level of

urbanization increased from 24 to 31 per cent. The pace and

extent of economic development and urbanization in India was

broadly in line with other Asian countries, although India

started from a lower base (Turok 2013). India experienced

nothing like China’s all-round transformation, although there

was considerable improvement.

Brazil and Russia both had much higher levels of urbanization

and development to begin with in the 1980s. Brazil continued

to urbanize and prosper, while Russia stagnated. This was a

traumatic period covering the collapse of the Soviet Union,

the forced transition to a market economy and the subsequent

gradual recovery. Average incomes barely rose from USD 2,700

per capita to USD 3,050 (in constant 2000 prices), while the

level of urbanization increased very slightly from 72 to 74

per cent.3 Meanwhile, average incomes in Brazil rose by nearly

50 per cent from USD 3,300 per capita to USD 4,800 (in

constant 2000 prices). Its level of urbanization increased

from 70 to 85 per cent. Brazil’s trajectory has been broadly

in line with that of other Latin American countries.

In contrast, South Africa started from a relatively prosperous

position on a par with Brazil (in terms of average incomes),

but experienced far less economic dynamism subsequently. This

3 Russia’s experience is not discussed further in the chapter because of the book’s focus on the global South.

12

period also covered a dramatic political transition to

democracy. Average incomes in South Africa rose by only 17 per

cent from USD 3,260 per capita to USD 3,830 (in constant 2000

prices). The level of urbanization increased with the demise

of apartheid from 49 to 62 per cent. South Africa has not

benefited from its urban transition like most Asian and Latin

American countries (Turok 2013). Local conditions seem to have

inhibited the development of its city economies. A more detailed, qualitative analysis drawing on other

evidence and research is needed to get behind these important

patterns. We consider China’s urban transformation first.

CHINA’S PURPOSEFUL URBANIZATION

China has the largest population in the world and the second

largest economy. Its explosive urban surge in the last 30

years is linked to its dramatic economic transition from an

agrarian to an industrial society (Miller 2012; CSCIEAS 2012).

The government has played a key role in shaping this

trajectory. Until the late-1970s urbanization was resisted in

favour of rural development, especially during the Cultural

Revolution of 1966-76. During this period the urban population

was growing by less than five million a year, compared with 20

million a year in the last decade. Urbanization accelerated

after the economic reforms of 1978, when the fierce anti-urban

policy was relaxed. China’s efforts to industrialize during

the 1980s were still strongly rural, and quite unlike the

13

subsequent city-focussed growth (McGranahan et al

forthcoming).

Farmers were given more responsibility for their agricultural

produce to increase output and efficiency. Many small

enterprises were established to support mechanisation and to

process the crops and livestock. This spurred rural

industrialization and migration towards towns and small cities

(McGranahan et al forthcoming). An explicit policy objective

after 1979 was to support industry in smaller cities so they

could transform the countryside (OECD 2013). Another long-

standing objective was to constrain the growth of large cities

by building satellite cities around them. These now form the

basis of clusters of cities with tens of millions of people

within each one (CSCIEAS 2012).

The government pursued a highly effective combination of

vision and pragmatism whereby particular locations and

enterprises showing the greatest potential were given extra

support. Special economic zones sited in undeveloped coastal

regions offered big incentives to attract foreign investment

and export-led industrialisation. Obligatory linkages with

local suppliers meant valuable spinoffs from the transfer of

technology and managerial skills. These early achievements

encouraged other territories in the south-east to be opened-

up, and by the 1990s these billowing coastal cities were

China’s main economic engines. They were magnets for vast

flows of domestic migration and investment which depressed

14

labour costs and fuelled the growth machine. Incomes have

risen more rapidly in these cities than elsewhere as a result

of higher productivity, strengthening further migration

(Webster 2011; OECD 2013).

The government recognized, rewarded and sought to replicate

success by steering resources to selected regions and

continually innovating institutions (McGranahan et al

forthcoming). Additional powers and responsibilities were

devolved to local governments to incentivize economic

development. Smaller municipalities were merged to create

larger and more capable entities, and to give cities more

control over surrounding land for development. The

expropriation of agricultural land and its conversion to

industrial and residential uses has been a key feature of

China’s urban growth engine. The uplift in land values and

growing tax revenues from industry have financed urban

infrastructure, facilitated catalytic construction schemes and

helped city marketing efforts through flagship projects

(McGranahan et al forthcoming). Larger cities also have powers

to issue bonds to fund new roads, water and other

infrastructure. China’s current five-year plan explicitly

calls for more urbanization and supports the emergence of

mega-cities (Miller 2012; CSCIEAS 2012). The theory of

agglomeration economies is described as “the objective law of

urban development” (CSCIEAS 2012: viii).

15

The land conversion process has been highly controversial,

contributing to inefficient land uses, road-oriented

development and environmental degradation (Johnson 2013). It

has also been a source of property speculation among

developers, a black market in land, corruption in

municipalities and much illegal construction (Miller 2012).

Ambiguous property rights have been manipulated to secure land

from rural collectives and peasant farmers in order to sell it

for development. National rules have encouraged this by

enabling municipalities to retain most of the proceeds. The

process has become so important to China’s growth trajectory

that central government has sought to gain greater control

over it in order to boost or cool the economy as required. For

example, a law was introduced in 1999 to slow down the

rezoning of agricultural land for urban development (OECD

2013). There has also been growing resistance from below among

displaced farmers forced make way for redevelopment, prompting

counter-efforts to strengthen their property rights (Johnson

2013).

Nevertheless, rapid urban growth has been supported by fast-

track regulatory procedures, an absence of public

participation, and unprecedented levels of investment in

infrastructure, real estate and other fixed capital. China

spends about 50 per cent of its GDP on such investment,

including roads, power generation, railways, dams, ports,

telecoms, factories, office buildings and housing. This is

‘the highest share in recorded history. During their great

16

booms in the 1960s and 1970s, Japan and South Korea never

topped 40 per cent’ (Leonhardt 2010). External observers have

warned of the risks of over-development and property bubbles.

However, the incessant demand from an expanding real economy

and massive household growth have averted this (Miller 2012).

Although China’s urban development machine has delivered

impressive growth, certain groups have been excluded from the

benefits. A household registration system (hukou) was

introduced in the Mao era to control urbanisation. The permits

have been eased to allow temporary migration, but these groups

don’t enjoy the same rights to schools, health facilities and

social services. The policy reduces the cost to municipalities

while meeting industry’s demand for cheap labour. Rising

prices in the booming cities also make housing unaffordable

for poor migrants. Some farmers have received flats in high

rise complexes to compensate for losing their land. Other

migrant workers live in shared accommodation and hostels

provided by their employers. Many migrants leave their

families behind, which limits their children’s education,

health and overall life chances (OECD 2013). Their second-

class status means insecurity and lower disposable incomes

than those with proper homes and social protection, who spend

more on consumer durables (Miller 2012). Therefore the hukou

system hinders the rebalancing of the economy as well as being

unfair and divisive. Reform is beginning to happen, but it is

complicated because migrants might have to surrender land

17

rights in their rural areas and the possibility of having a

second child, which is prohibited in urban areas.

Another source of growing social inequality and associated

political tensions is the spatial disparity between cities in

the coastal belt and inland regions (Webster 2011). The

government’s has recently extended the special support

available to the coastal cities to the interior and begun to

invest heavily in roads, high speed railways and other

connecting infrastructure in ‘logistics corridors’ (CSCIEAS

2012). There are some signs of firms moving inland to access

cheaper labour, but it is obviously too soon to say whether

inland cities will be able to narrow the gap.

Environmental concerns have also moved up the political

agenda, following decades of ecological damage and pollution

to air and water courses from unrestrained industrialisation,

dirty energy generation and rising car ownership. Chinese

cities tend to be reasonably compact, but vast industrial

parks make inefficient use of land, reflecting the frantic

industrial development efforts of municipalities. Measures are

being taken to reduce the carbon footprint and increase energy

security, including major investment in renewable energy,

public transport, green buildings and experimental green

cities (CSCIEAS 2012). Severe congestion in the big cities is

another reason for the growing emphasis on urban subways and

other public transport.

18

In summary, China’s experience over the last three decades

illustrates the economic forces that can be unleashed by

urbanization. Aggressive investment in infrastructure and land

development have complemented rapid industrialisation,

resulting in major increases in productivity, jobs and living

standards. Rural-urban migration has fuelled the process by

providing a continuous stream of workers to replenish the

workforce. Urban policy has been geared above-all to fostering

economic growth, with less concern for social equity and

environmental sustainability. This is changing as the

government seeks to rebalance the economy and stimulate

domestic consumption. Consumer-driven growth will be led by

the major cities and influenced by the extent to which migrant

households gain greater security, become more integrated

socially, and adjust from savers to spenders. This also

implies a new kind of urban growth, based on creating more

liveable and inclusive cities.

INDIA’S RELUCTANT URBANIZATION

India has the tenth largest economy in the world, and the

second largest population. Its colonial history and complex

religious, caste, ethnic and territorial divisions left a

legacy after World War 2 of a backward economy, poor transport

system and inefficient state bureaucracy. The colonial

priority given to agricultural exports, mineral extraction and

revenue transfers to the UK meant limited investment in

manufacturing and infrastructure. Public facilities were

19

concentrated in a few leading port cities that catered for the

privileged few (Kundu forthcoming). Cities were segregated

into two parts – indigenous and European – to reduce the

spread of infectious diseases and impact of social unrest

(Chaplin 2011). Slum clearance was the preferred way of

tackling overcrowded and insanitary neighbourhoods, with

little compensation for the resettlement of displaced

communities.

Independence in 1947 brought important political changes and

greater public investment in heavy industries, lagging regions

and connecting infrastructure. The state began to play a

growing role in the ownership and control of leading sectors

and corporations, and promoting import substitution to

increase self-reliance. Yet widespread inefficiencies meant

little improvement in economic performance or living

standards. Meanwhile, urban populations were growing strongly,

mainly through natural change. Poverty remained very high

because of poor urban growth management and under-resourced

municipalities (Chaplin 2011). The provision of agricultural

subsidies and support for improved farming practices gave some

backing to impoverished rural areas.

Major economic reforms were introduced around 1991 to reduce

protections for domestic industries from foreign competition

and to privatize nationalized entities. The objectives were to

attract foreign investment, encourage domestic competition and

increase global trade through exports. These and other policy

20

changes, such as financial liberalization, helped to

accelerate economic growth to between five and nine per cent a

year over the following two decades. Growth has been strongest

in the major cities, especially Delhi, Mumbai and Kolkata,

where it has fostered a new middle class. This has spawned the

expansion of consumer goods and services (such as retailing

and hospitality) and new consumption practices and lifestyles

(Fernandes 2004). ‘Global city’ aspirations have also

influenced urban planning (Dupont 2011), although the

government has been reluctant to divert resources towards the

big cities. For example, Bangalore has secured an important

position in the global IT industry, upgrading from call

centres and back office work to higher value-added services,

software programming, research and development (Van Riemsdijk

2013).

India’s urbanization has also been oriented towards large

cities because of the lure of jobs, but compounding the

problems of concentrated poverty and squalid living conditions

(Kundu forthcoming). Some of the physical growth has spilled

over into satellite towns which may in due course become part

of the metropolitan area as municipal boundaries expand. Large

factories, call centres and other enterprises are often

established beyond municipal limits because of environmental

restrictions within the city and special economic zones

established outside. Poorer migrants build shelters nearby to

try and find jobs or commute into the central city. Business

owners, managers and engineers generally live in the central

21

city (or in new suburban gated complexes) and commute to

peripheral workplaces along rapid transport corridors.

Low income residents are often displaced by urban growth,

ending up in outlying squatter settlements. Meanwhile,

residents’ associations and NGOs formed by upper- and middle-

income groups have succeeded in exploiting participatory forms

of local governance to pursue their own interests and oppose

national slum upgrading programmes (Chakrabarti 2008; Kundu

2011). Transparency has improved as a result of this

decentralisation of power, but at the expense of essential

services for the poor (Chaplin 2011). Different levels of

amenities are provided depending on peoples’ ability to pay,

and little effort is made to expand the supply of affordable

housing (McDuie-Ra 2013). Public spending on slum improvement

has tended to decline and exclusionary practices such as

evictions have increased, partly to ‘cleanse’ the cities of

slums and enhance their image among investors (Dupont 2011).

The chief concerns of residents’ associations in middle- and

upper-income areas are security, improved amenities and

privatisation and enclosure of public spaces, shopping malls

and residential areas. They seek to sanitize their

neighbourhoods by removing encroachments, squatters and

informal enterprises seen as threats to their health and

safety (Fernandes 2004; Kundu 2011). The outcome is a more

general anti-urbanization stance and exclusion of poor

communities, reinforced by India’s entrenched social

22

stratification, high levels of destitution, and enduring

infrastructure deficiencies (Kundu forthcoming). McDuie-Ra

(2013) describes the discrimination against and harassment of

migrants seeking housing and work opportunities in Delhi’s

call centres and shopping malls. There is little apparent

understanding of, or sympathy for, the needs of poor migrant

families for shelter, livelihoods and better living

conditions.

The problems are compounded by government policies that seem

to ignore the economic potential of urbanization. There have

been many attempts to stem migration flows, both through overt

urban restrictions and policies to skew economic support to

rural regions. Some are indirect, such as inferior public

services and inadequate police protection for migrants

experiencing hostile attacks. Recent national development

plans recognize the value of large cities, but they also

criticize the concentrated pattern of growth. Instead they

talk about promoting spatially-balanced urbanization through

satellite towns, small towns and new townships. Nonetheless,

India has never had a coherent urban development policy,

despite the deterioration in environmental conditions (Chaplin

2011).

A major infrastructure programme was launched in the mid-

2000s, called the Jawaharlal Nehru National Urban Renewal

Mission. It aimed to streamline local government in 63 cities

in order to expedite improved water supply, sanitation, sewage

23

treatment, roads and flyovers. Yet there was no provision to

improve facilities in low income areas where services are

unaffordable (Kundu forthcoming). A subsequent initiative

called Rajiv Awas Yojana was launched in 2009 with more of a

pro-poor emphasis (Chaplin 2011). Both programmes suffer from

under-spending and illustrate deep dilemmas about how state

support should be distributed between different cities and

towns. The largest cities are best equipped to leverage

additional public, private and global finance, but supporting

the smaller cities may help to avoid the excesses of growth

concentrated in a few mega-cities.

A difficulty with recent economic trends in India is that the

leading sectors are not strongly labour absorbing or do not

generate the scale of multiplier effects of manufacturing.

Service industries such as IT, banking, media, publishing and

hospitality also employ few manual workers. Consequently, the

employment intensity of India’s recent growth has lagged

behind its GDP performance, unlike China’s vigorous

industrialisation and employment growth. Some observers blame

India’s high levels of unemployment and informal employment on

long-standing labour regulations which inhibit recruitment

(Van Riemsdijk 2013).

There could be at least another 400 million people in India’s

workforce by 2050, over and above the current 500 million.

Agriculture and related activities currently provide a

subsistence living to about 220 million. These sectors cannot

24

absorb the additional labour without further reducing existing

low incomes. India will have to undergo a major economic

transition to secondary and tertiary industries, hand-in-hand

with mass urbanisation (Kundu forthcoming). The country’s

future prosperity and stability depends on how this occurs.

The larger cities could become more inclusive and absorb more

people (Kundu forthcoming). Careful forward planning,

industrialisation and provision of cheap housing and services

could provide channels for social mobility, skills acquisition

and consumer demand to help broaden India’s economic dynamism.

Public health and environmental programmes need to shift from

crisis management towards preventative and pro-active measures

that benefit all sections of society (Chaplin 2011). Such

measures are resisted by urban elites, whose political power

has grown with economic success. However, excluding millions

of people in the countryside while a wealthy minority enjoys

an exclusive urban lifestyle is a recipe for conflict. India’s

economy has shown its strong growth potential, but its urban

policies will influence whether this is sustained and

diversified over time to benefit the many.

To sum up, India’s far-reaching economic changes over the last

two decades have improved living standards for many people.

However, employment has lagged behind output growth and

urbanization remains low and exclusive by international

standards. The drive for global competitiveness and foreign

investment is somewhat narrow considering the country’s

25

demographic pressures and inability of rural areas to absorb

many more people with viable livelihoods. It seems that the

cities will need to become both more productive and more

inclusive if they are to make a fuller contribution to

national development in the years ahead.

BRAZIL’S CARELESS URBANIZATION

Brazil urbanized earlier than the other BRICS (particularly

between 1940 and 1980) and has continued since then, albeit at

a slower rate (Martine and McGranahan forthcoming). The

country has prospered over the last two decades, partly

through strong global demand for its commodities and

substantial state support via cheap credit for ‘national

champions’, i.e. large private and state-controlled companies

in sectors such as oil, iron ore, agro-processing and aircraft

manufacturing (Leahy 2013). It now has the seventh largest

economy in the world, and the fifth largest population. Brazil

illustrates how urbanization and industrialization tend to

proceed hand-in-hand, rather like China.

The country has gained an international reputation for

innovation in urban design, planning and governance since the

advent of democracy in 1985. A new approach towards cities was

signposted by a chapter on urban policy written into the new

constitution. The urban agenda has been driven by strong

social movements and professionals working for municipalities

and universities in housing, planning, architecture,

26

engineering and law (Fernandes 2011; Rolnik 2011). Previous

regimes consistently tried to resist urbanization. Their

failure to prepare contributed to severe transport congestion

and the infamous favelas that cover the hillsides with

overcrowded, unplanned and unsafe settlements. Intense poverty

and environmental hazards persist for these communities,

despite sustained economic growth.

Brazil’s early settlement pattern was shaped by Portuguese

colonial rule between the 15th and 19th centuries. Their main

objective was to exploit the country’s natural resources and

foodstuffs. An extractive agricultural and mineral economy was

developed, with port towns and cities created as gateways into

the hinterland and transhipment points for getting the produce

back to Europe (Martine and McGranahan forthcoming).

A new source of urban dynamism emerged during the late 19th

century with the commercialisation of coffee production in São

Paulo state, leading to a growth axis emerging to Rio de

Janeiro. Import-substituting industrialization was the

catalyst for rapid urbanization, especially after the coffee

economy crashed in 1929 with the Great Depression. The

country’s population was growing rapidly during the inter-War

years through falling mortality. Serious international debts,

balance of payments problems and difficulties in importing

supplies forced the state to invest in industrial production.

This initiated a powerful, self-reinforcing dynamic of

urbanization and industrialization focused on the major

27

cities, and bolstered by the entrepreneurialism of the

domestic and international migrant communities (Martine and

McGranahan forthcoming; Feler and Henderson 2011).

Wartime production boosted import substitution further and the

state intervened extensively to develop the transport and

communication sectors with a view to creating an integrated

national market for domestic producers. Central planning was

strengthened, major roads constructed and substantial

assistance given to develop car manufacturing with its strong

backward and forward linkages. Following a military takeover

in 1964, the new regime tried to modernize agriculture through

incentives favouring large farms. Mechanisation boosted demand

for the machinery and chemical fertilizers produced in cities,

but displaced millions of small-scale farmers and farm

workers. Frontier areas in the Amazon region were opened up to

absorb agricultural migrants, and even here new towns and

cities thrived (Martine and McGranahan forthcoming).

The number of towns and cities in Brazil with over 20,000

residents grew from 59 in 1940 to 867 in 2010. This coincided

with growing concentration in larger cities. Between 2000 and

2010, one-million-plus cities accounted for 54 per cent of

urban population growth. This is now slowing down, for three

reasons: fertility decline, economic difficulties, and

industrial dispersal from São Paulo towards less-congested

regions (Martine and McGranahan forthcoming).

28

Brazil’s urbanization occurred despite the opposition of most

political regimes. It was resisted because of the

administrative, social and environmental problems it was

thought to create, but denial simply worsened conditions. The

negativity peaked during the most rapid urbanization period

between 1950 and 1980. Yet it was fuelled by the state’s own

industrial and agricultural policies (Feler and Henderson

2011). During the 1960s explicit measures were taken to stem

the process, ranging from roadblocks to fiscal incentives.

Regional planning initiatives tried to reduce migratory

pressures by stimulating activity in outlying regions. When

migration continued, the government tried to curb urban growth

by restricting or removing the unplanned slums, or depriving

them of basic services.

Failure to prepare for population growth damaged the cities’

ability to expand in a sensible manner. It was particularly

harmful for the poor majority who had to fend for themselves

in tight housing markets with scarce land available. They were

forced to build makeshift shelters wherever they could on

steep slopes, areas prone to flooding and other precarious

locations. Some informal settlements were reasonably central

but many were on the city outskirts with little prospect of

securing public services. Environmental and social problems

have accumulated and dwellings have been consolidated, leaving

a complicated legacy to be addressed through a mixture of

upgrading, renewal and redevelopment.

29

Since 1985 the government has emphasized participation and

decentralization. Problems are to be resolved through dialogue

rather than diktat. Urban reform has moved up the political

agenda and is central to making democracy real and reducing

inequality. A 2001 law called the Statute of the City

established the foundations and was followed by the creation

of a Ministry of Cities in 2003. Bottom-up urban planning and

participatory decision-making are encouraged through all sorts

of public forums. Landowners and other powerful groups have to

defend their interests in public rather than behind closed

doors, and municipalities have to balance different

considerations more carefully in regulating development

(Fernandes 2011). Meanwhile, legal reforms have given low-

income citizens greater rights to the property they occupy,

which will improve their security and assets.

In practice, progress in integrating informal settlements and

improving living conditions has been patchy and sometimes

slow. This is partly because local plans take time to

formulated and implemented, the solutions are not

straightforward, financial resources are constrained, and the

politics are complicated with many disputes over the use of

land (Fernandes 2011; Rolnik 2011). A proactive approach to

providing housing for the poor is still unusual, and migrants

encounter persistent resistance when trying to settle in

particular cities or neighbourhoods. Meanwhile, national

government has introduced a range of important education and

30

social welfare reforms that have already had a measurable

impact on inequality.

Participatory budgeting is another feature of democratic urban

management. Civil society is directly involved in defining

priorities for municipal spending in more than 200 cities.

Porto Alegre is the most famous, following the election of a

mayor from the Workers’ Party in 1989 (who later became the

first Minister of Cities). Part of the municipal budget is put

up for local negotiation with social movements and citizens.

They discuss local needs and priorities in 16 districts every

year. Decentralization has also fostered greater creativity

and experimentation in urban design. For example, imaginative

new affordable housing is being built in the large Heliopolis

favela of São Paulo, along with new public spaces and schools

to transform the area. A broader culture of institutional

learning and capacity building is being established by

sustained state support for independent bodies such as the

Brazilian Institute of Municipal Administration (IBAM) and the

Curitiba Institute of Urban Planning and Research. The

Ministry of Cities is also tasked with strengthening municipal

capabilities. A National Council of Cities engages diverse

stakeholders in discussing national urban policy.

Of course Brazil’s urban problems remain formidable and it is

premature to expect major achievements. Democratic efficacy

depends on an organized civil society and informed citizens,

which emerge slowly given the legacy. The capacity of

31

different groups to advocate their interests is very variable,

as in India. Historic backlogs in urban infrastructure and

housing are very costly to address. The government has been

criticized in some quarters for providing excessive support

for national champions and insufficient investment in

transport and other economic and social infrastructure (Leahy

2013). This may be why Brazilian urban economies have been

under-performing in recent years in the face of tough

international competition (Martine and McGranahan

forthcoming). Other factors may include high levels of crime,

informality, under-funded municipalities and inadequately

regulated land markets.

In summary, state-sponsored industrialisation in Brazil drove

a long-term process of urbanization. Persistent efforts to

resist urban population growth made little difference, except

to create an exclusionary form of urbanization. Poor

communities were forced to occupy precarious locations and

live in cramped conditions without public services. Belated

efforts to manage urban growth more strategically and redesign

the built environment on more inclusionary principles are

inevitably more complicated and costly, implying that social

and environmental problems will probably persist for several

decades to come. Since the 1990s urban planning has been taken

much more seriously, reflected in a range of important social,

environmental, legal, transport and design innovations. The

impact of these deserve to be monitored closely by the

international community.

32

SOUTH AFRICA’S CONTESTED URBANIZATION

South Africa is one of the most urbanized countries in Africa,

with the largest economy. Industrialization was the driving

force behind urbanization, in China, India and Brazil. The

catalyst was a mining boom in the late 19th century that

continued through most of the 20th century. South African

urbanization has been affected by similar destructive

influences to those in Brazil and India, albeit in a more

extreme form because of overt discrimination. It was

forcefully resisted under the apartheid political regime at

enormous human and social cost. Apartheid also skewed the

built form in distinctive ways, leaving fractured cities with

dense poverty traps on the outskirts. There is a continuing

legacy of inequality, informality, infrastructure backlogs and

transport congestion, which hamper progress to this day.

Urbanization has been controversial for over a century, posing

dilemmas for successive governments and resulting in wide-

ranging interventions, initially to accelerate it and later to

control it. In the late 19th and early 20th centuries, a stark

form of racially-segregated urban development was instituted.

This reflected industry’s insatiable appetite for cheap

migrant labour, alongside political nervousness among the

white elite about black urbanisation (Wilson 1972).

The need to assemble a large workforce had profound

ramifications (Yudelman 1984). It transformed South Africa

33

from a patchwork of agrarian states to a unified industrial

nation with a strong political centre in the early 20th

century. Gold mining was the mainstay of the economy for

decades, and almost the only source of export revenues. The

mining boom stimulated other industries, such as chemicals,

civil and mechanical engineering, and banking (Harrison and

Zack 2012). Growing rural-urban migration, gold exports and

increasing urban demand for rural produce prompted major

investment in the country’s transport and communications

infrastructure to link the ports and surging inland towns and

cities.

Large population shifts were essential to the mining boom.

Early on, most labour came from neighbouring autonomous

African states on a temporary basis, establishing a pattern of

‘circular’ migration. Companies introduced large residential

compounds or hostels to keep migrant workers on site for

control and to prevent poaching. These closed complexes

offered food, accommodation and cheap beer, but were also

notorious for disease, malnutrition and cramped conditions.

The mineral revolution also had a big impact on political

developments. In order to secure a regular flow of workers to

the mines, the colonial government began to annex neighbouring

African states and introduce rural taxes to coerce migration.

The Anglo-Boer War in 1899-1902 can also be traced to the

mining boom and the British desire to remove potential threats

to mineral exports and facilitate industrial expansion. Mining

34

had a profound impact on social relations and lay behind the

draconian apartheid system of legalized racial discrimination

and subjugation. This shaped urban patterns for a century

through various forms of social and spatial engineering (Turok

forthcoming).

The political desire of white leaders to restrict migration

came into increasing conflict with the economic imperative for

additional cheap labour. The system of transient migrant

labour was a compromise, with black workers forced to bear the

costs of spatial dislocation. It benefited the mining

companies because workers’ families were left in the rural

areas to carry on farming, which moderated their wage

requirements and housing costs (Wilson 1972). Companies could

also adjust their workforce in line with changing production

needs more easily than if they were permanent employees. The

essential features of the migrant labour system persist today

and were partly responsible for the Marikana disaster in 2012.

During the first half of the 20th century a series of laws

were passed that restricted urban development and denied land

and citizenship rights to blacks in urban areas. Their aim was

racial separation and containment of an ‘undesirable tide’ of

black urban migration (Maylam 1990). But mining and

industrialization were exerting an irresistible pull on rural

migration, which stoked political nervousness among the white

elite. After the Second World War, these sentiments prevailed

and draconian controls were imposed to suppress black

35

urbanization in order to sustain white lifestyles and

political domination.

A suite of new laws began to entrench segregation by

compelling people to live in different places classified by

race. Residential areas were separated by physical barriers

(‘buffer zones’ and freeways) and laid out in ways that

permitted military control in the event of unrest. The

resulting disconnect between jobs and homes was worsened by

economic restrictions preventing blacks from starting

enterprises within the cities. Poor public transport meant

long and costly journeys to work. Strict influx controls

criminalized peoples’ efforts to secure livelihoods and

created a hostile climate of surveillance and intimidation.

Although the restrictions did not halt urbanization, they

slowed it down, particularly during the height of apartheid in

the 1960s and 1970s (Turok forthcoming).

South African cities now have low population densities in

central and suburban locations and high densities on the

periphery. This distorted urban form has harmful human and

environmental consequences. It creates poverty traps on the

periphery and favours road-based transport. Cities remain the

dominant centres of economic activity, but they are not

performing to their potential or reaping the benefits of

agglomeration because of their inefficiency and infrastructure

constraints (Msulwa and Turok 2012). A modelling exercise

found that ‘over 10 years, a sprawling city will cost R57

36

billion more than a compact city, equal to 1.4% of projected

GDP’ (Financial and Fiscal Commission 2011: 3).

The post-1994 democratic government recognizes the problems of

a fragmented urban form, but its interventions have been too

short-term and sector-specific to initiate change. Spatial

planning has struggled to rebuild its reputation, having been

an instrument of apartheid. Some pro-poor policies (such as

the way in which public transport is subsidized) have

reinforced people’s exclusion by subsidising the cost of

living on the periphery, rather than supporting better

location decisions (Turok 2013). ‘Service delivery’ has become

the dominant narrative across government, implying the roll-

out of separate housing, electricity, water and other

programmes run by different departments. They respond to where

the population is growing, which tends to be where there is

cheap or leftover land available, rather than planning ahead

based on a vision of more integrated, functional and

productive cities. The practical effect has been to perpetuate

inherited spatial patterns of segregation and exclusion rather

than to reshape them.

With the demise of apartheid, repressive controls were

withdrawn and urbanization rates recovered. The government now

seeks to treat cities, towns and rural areas even-handedly, in

line with the constitutional principle of equity. There is no

explicit policy either to support or discourage migration,

because of its sensitivity and perceived negative effects on

37

both sending and receiving areas. This neutral stance has

generally avoided the serious social damage of the past, but

little has been done positively to transform the legacy of

urban segregation. Similarly, the pursuit of economic

development in cities is less vigorous than in many other

countries. Ambivalence about urbanization also translates into

a reactive and somewhat indifferent approach towards informal

settlements and backyard shacks (Huchzermeyer 2011).

South Africa’s experience since 1994 holds important lessons

for other urbanizing countries. It shows how formulating

progressive policies and passing laws are not enough to

initiate integrated urban development and harness the

potential of urbanization. Broad policy aspirations and

sectoral programmes need to be translated into concrete city-

level strategies set within a long-term vision of a better

future. Such strategies need to engage local communities, the

private sector and other stakeholders in order to channel

their energies in common and constructive directions. Brazil’s

experience has been similar, except that there is more urban

creativity and experimentation, economic conditions have been

more favourable, and inequality has been addressed more

systematically.

A broader lesson is that the processes of urbanization and

industrialisation are politically mediated and may not

automatically improve the livelihoods of migrants. People

moving to cities may have to organize themselves to press for

38

well-located land on which to settle, better living conditions

and skills to access to labour markets. Constitutional rights

for the poor can promote their cause, especially if backed by

political will and government resources to meet their basic

needs. Equally important are determined city-level leadership

and investment plans that manage urban development more

effectively, boost jobs and livelihoods, and work with

communities to improve their well-being.

CONCLUSION

Countries in the south can learn useful lessons about the

relationship between economic development, poverty reduction

and urbanization from the BRICS nations. The contribution of

urbanization to the overall transformation of these countries

is not widely appreciated. The role played by their

governments in managing the urban transition is also crucial.

Each nation faced great dislocation as they urbanized,

especially when they tried to resist the process, or when

people were steered towards unsuitable locations. In addition,

the comparison provides examples of how urbanization can

strengthen national economies through concentration and

efficient spatial forms. It seems that carefully planned urban

growth can strengthen prosperity and well-being. Finally, the

BRICS experience indicates the importance of steering urban

development onto a more compact and sustainable path because

of the damage caused to the natural environment by negligence.

39

The question posed at the outset was whether urbanization

helps to spur economic progress. From the evidence assembled

the answer is that there appears to be a close relationship

between urbanization and development, but it is not automatic

or linear. A variety of other conditions seem to be important

in influencing the extent to which urbanization raises living

standards. Industrialization proved significant in creating

the kinds of jobs required by less-skilled rural migrants, and

in generating multiplier effects on a scale required to

constitute an engine of growth. The role of the state was also

significant – potentially positive but also damaging if

decisions are dominated by narrow sectional interests. China

and Brazil show the state’s catalytic role in

industrialisation and income generation, but also problems of

inertia and inflexibility if it inhibits adaptation and

diversification to shifting conditions.

The role of city government deserves fuller treatment than has

been possible here. There is evidence that municipalities are

more responsive to changing realities on the ground than

national authorities, particularly for managing the built

environment. The availability of well-located, serviced land

to accommodate physical growth seems to influence whether

urbanization is functional for development, illustrated by

China’s urban growth machine. When the functions of land-use

planning and infrastructure are neglected, the social and

environmental costs of haphazard urban development are

considerable, as shown by South Africa, Brazil and India.

40

Democratic government can reduce the risks of exclusionary

urban policies, but it needs to be backed by effective powers

and resources to influence stubborn spatial patterns. Serious

gaps in knowledge mean there is a major research agenda for

exploring how the imperative of economic development relates

to processes of inclusive and sustainable urbanization in

different contexts of the global south.

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48

1985 2011GDP per

capita

(constant

2000 US$)

Share of

urban

population

%

GDP per

capita

(constant

2000 US$)

Share of

urban

population

%

Brazil 3334 69.86 4803 84.6South

Africa 3262 49.37 3825 61.98China 290 22.87 2640 51.77India 264 24.34 838 31.29Russia 2700 72 3050 74Figure 1: The relationship between urbanization and

development in the BRICS

80 800 80000

15

30

45

60

75

90

GDP per Capita, constant 2000 US$

share of urban population,%

South Africa

Brazil

Russia

China

India

49

50