Competitive Cities Knowledge Base Appendices to Six Case Studies of Economically Successful Cities The World Bank 2015 1 Contents Case Study 1: Bucaramanga, Colombia.......................................................................................... 4 Case Study 2: Coimbatore, India .................................................................................................. 56 Case Study 3: Kigali Rwanda ..................................................................................................... 113 Case Study 4: Gaziantep, Turkey................................................................................................ 140 Case Study 5: Changsha, China .................................................................................................. 211 Case Study 6: Tangier, Morocco ................................................................................................ 253 2 Disclaimer: The case studies in this series are focused solely on what specific cities did well that subsequently contributed to high rates of economic growth during a particular period. These case studies should not be mistaken for investment climate reports, as the constraints, problems and flaws of cities are not covered. Studies should also not be considered an exhaustive list of all of the factors that contributed to growth in a city; because while some external or national level factors are highlighted, the studies were not intended to document or list every contributing factor. The studies focus on the local economic development actors within a city and address what these actors did well. Particular attention was paid to initiatives that were uncommon and/or carried out in a unique manner that could be of interest or assistance to other cities. 3 Case Study 1: Bucaramanga, Colombia Bucaramanga, Colombia: A Metropolitan Economy Reinvents Itself 4 Contents Case Study 1: Bucaramanga, Colombia.......................................................................................... 4 Introduction ................................................................................................................................. 7 Executive Summary .................................................................................................................... 9 National Context ....................................................................................................................... 13 Local Context ............................................................................................................................ 16 Analysis..................................................................................................................................... 25 Factors of Competitiveness ................................................................................................... 25 Lessons for Other Cities............................................................................................................ 30 Appendices ................................................................................................................................ 33 5 Bucaramanga, Colombia, April 2014. 6 Introduction This case study of the economic success of the Colombian city of Bucaramanga marks the first in a series of World Bank case studies of successful metropolitan economies around the world. The Bank’s Competitive Cities Knowledge Base (CCKB) project aims to provide city leaders with the tools and knowledge for the successful formulation and implementation of effective economic development strategies at the city level. No single case study will provide a recipe for success for other city leaders, but each case study in the series will offer insights and strategies for cities faced with similar conditions, factors, and challenges. The CCKB team has conducted one case study of an economically successful city in each world region; Bucaramanga has been selected to represent the Latin America and Caribbean (LAC) region. Bucaramanga is a landlocked, mid-sized city in an upper-middle income country, still recovering from decades of political instability and economic dislocation wrought by violence. Yet over the past decade, Bucaramanga has had one of the best performing metropolitan economies in the Americas in terms of GDP and employment growth, exceeding the growth of both the Colombian economy as a whole, and that of comparable cities in its region. Its surrounding Department of Santander is modestly endowed in natural resources, primarily oil, yet it is by no means a petro-state with an economy reliant on extractives. Faced with the challenges of globalization, Bucaramanga has helped its firms compete and succeed in the global marketplace, and in the process gradually been transitioning to a post-industrial economic structure. Bucaramanga also provides an example of proactive economic development initiatives largely led by the local private sector, but including other key participants in a citywide “growth coalition”, such as local and regional government agencies, the chamber of commerce and industry associations (sector guilds), other private-sector actors (e.g. the oil company Ecopetrol), and representatives of academia. Understanding not just what Bucaramanga did, but more importantly exactly how it did it, is the centerpiece of this analysis, and what makes it most interesting to decision-makers in other cities around the world. This case study is based on primary and secondary research by the Bank’s Competitive Cities Knowledge Base team, including two weeks spent in Colombia, in March and April, 2014, interviewing government officials in the national capital, Bogota, and in Bucaramanga itself, as well as members of the city’s business community. The report also incorporates Bank staff feedback received at an internal review event in Washington, DC, in June 2014. This report was prepared by Alexandra Cech and Z. Joe Kulenovic, with input and suggestions from the broader CCKB team. The co-TTLs of the CCKB project are Austin Kilroy and Megha 7 Mukim. Overall guidance on the project has been provided by Stefano Negri, Sameh Wahba, and Somik Lall as senior advisors. 8 Executive Summary Bucaramanga 1 provides an example of a successful transition to a post-industrial economy by a landlocked, mid-sized city in an upper-middle-income country, in which the private sector has played a leading role . Bucaramanga managed to turn an existential threat – the erosion of its traditional economic base – into an opportunity to reinvent itself, becoming a globally-competitive city with the fastest rates of GDP and job growth in Colombia, and one of the fastest in the Western Hemisphere. According to present growth trends, Bucaramanga may well be on track to become a high-income metropolitan economy within the next decade. In the early and mid-2000s, Bucaramanga’s economy was still heavily dependent on traditional manufacturing industries like garments, footwear, and agricultural products, largely made by small firms with low capital stock and limited export capabilities. While the Colombian market remained relatively closed, such a model was viable and supported numerous local jobs. However, with China’s accession to the WTO, Colombia’s conclusion of several free trade agreements with partner countries, and other market-opening measures, Bucaramanga’s small firms found themselves unable to compete. While public safety and security in Colombia were gradually improving during this period, the movement of people and goods within the country still presented numerous challenges, not helped by the fact that there are no railroads, or by the country’s famously rugged topography. How exactly did Bucaramanga address the acute challenges presented by globalization, market liberalization, and ever-fiercer competition? In 2006, the Bucaramanga Chamber of Commerce convened leaders of Santander’s business community, academia, municipal and departmental government, labor unions, and local officials of national agencies to discuss the economic challenges besetting their region, and try to devise some concrete solutions. Breaking out into multiple working groups, this forum worked to identify the region’s key economic and developmental priority areas, assess the general growth potential of individual industry sectors, 1 A note about geographic coverage in this report – unless otherwise specified, “Bucaramanga” refers to the entire Bucaramanga Metropolitan Area ( Area Metropolitana de Bucaramanga – AMB), which consists of four municipalities, each with its own mayor and local government structure: Bucaramanga, Floridablanca, Piedecusta, and Girón. Bucaramanga is the capital of Santander Department, one of 32 in Colombia. AMB accounts for approximately 54% of Santander’s population, and an even higher share of its economic output, as well as 95% of its non-oil manufacturing activity. Outside of AMB, the only other sizeable city economy in Santander is Barrancabermeja, site of one of Colombia’s two oil refineries and thus heavily reliant on the oil industry. Many of the strategies and interventions analyzed in this report were undertaken at the departmental level, not the municipal or metropolitan. Wherever an intervention was limited to only a specific municipality, this will be clearly specified in the report. 9 discuss the institutional composition of a new Regional Competitiveness Commission (RCC, or Santander Competitivo ), and nominate prominent local individuals to serve on it. Once established, Santander Competitivo