Case Studies of Economically Successful Cities Alexandra Cech, Drilon Gashi, Luke Jordan Austin Kilroy, Z
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COMPETITIVE CITIES FOR JOBS AND GROWTH COMPANION PAPER 3 Public Disclosure Authorized APPENDICES TO SIX CaSE STUDIES OF ECONOMICALLY SUCCESSFUL CITIES Alexandra Cech, Drilon Gashi, Luke Jordan Austin Kilroy, Z. Joe Kulenovic, Megha Mukim, T. Juni Zhu Public Disclosure Authorized December 2015 3 Public Disclosure Authorized Public Disclosure Authorized 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 con- straints, 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 in- tended 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. 2 TaBLE OF CONTENTS Case Study 1: Bucaramanga, Colombia 5 Case Study 2: Coimbatore, India 37 Case Study 3: Kigali Rwanda 73 Case Study 4: Gaziantep, Turkey 93 Case Study 5: Changsha, China 137 Case Study 6: Tangier, Morocco 165 3 Bucaramanga, Colombia, April 2014 Case Study 1 BUCARAMANGA, COLOMBIA A Metropolitan Economy Reinvents Itself TaBLE OF CONTENTS Introduction 7 Executive Summary 8 National Context 12 Local Context 14 Analysis 18 Factors of Competitiveness 18 Lessons for Other Cities 21 Appendices 23 6 INTRODUCTION his case study of the economic success of the Colom- Bucaramanga also provides an example of proactive economic bian city of Bucaramanga marks the first in a series of development initiatives largely led by the local private sector, TWorld Bank case studies of successful metropolitan but including other key participants in a citywide “growth economies around the world. The Bank’s Competitive Cities coalition”, such as local and regional government agencies, Knowledge Base (CCKB) project aims to provide city leaders the chamber of commerce and industry associations (sec- with the tools and knowledge for the successful formulation tor guilds), other private-sector actors (e.g. the oil company and implementation of effective economic development strat- Ecopetrol), and representatives of academia. Understanding egies at the city level. No single case study will provide a reci- not just what Bucaramanga did, but more importantly exactly pe for success for other city leaders, but each case study in the how it did it, is the centerpiece of this analysis, and what series will offer insights and strategies for cities faced with makes it most interesting to decision-makers in other cities similar conditions, factors, and challenges. The CCKB team around the world. has conducted one case study of an economically successful city in each world region; Bucaramanga has been selected to This case study is based on primary and secondary research represent the Latin America and Caribbean (LAC) region. by the Bank’s Competitive Cities Knowledge Base team, including two weeks spent in Colombia, in March and April, Bucaramanga is a landlocked, mid-sized city in an upper-mid- 2014, interviewing government officials in the national capi- dle income country, still recovering from decades of political tal, Bogota, and in Bucaramanga itself, as well as members of instability and economic dislocation wrought by violence. the city’s business community. The report also incorporates Yet over the past decade, Bucaramanga has had one of the Bank staff feedback received at an internal review event in best performing metropolitan economies in the Americas in Washington, DC, in June 2014. terms of GDP and employment growth, exceeding the growth of both the Colombian economy as a whole, and that of com- This report was prepared by Alexandra Cech and Z. Joe Ku- parable cities in its region. Its surrounding Department of lenovic, with input and suggestions from the broader CCKB Santander is modestly endowed in natural resources, primar- team. The co-TTLs of the CCKB project are Austin Kilroy and ily oil, yet it is by no means a petro-state with an economy Megha Mukim. Overall guidance on the project has been reliant on extractives. Faced with the challenges of globaliza- provided by Stefano Negri, Sameh Wahba, and Somik Lall as tion, Bucaramanga has helped its firms compete and succeed senior advisors. in the global marketplace, and in the process gradually been transitioning to a post-industrial economic structure. 7 EXECUTIVE SUMMARY ucaramanga1 provides an example of a success- How exactly did Bucaramanga address the acute ful transition to a post-industrial economy by challenges presented by globalization, market liber- a landlocked, mid-sized city in an upper-mid- alization, and ever-fiercer competition? In 2006, the Bdle-income country, in which the private sector has Bucaramanga Chamber of Commerce convened leaders of played a leading role. Bucaramanga managed to turn an Santander’s business community, academia, municipal and existential threat – the erosion of its traditional economic departmental government, labor unions, and local officials of base – into an opportunity to reinvent itself, becoming a national agencies to discuss the economic challenges beset- globally-competitive city with the fastest rates of GDP and ting their region, and try to devise some concrete solutions. job growth in Colombia, and one of the fastest in the Western Breaking out into multiple working groups, this forum Hemisphere. According to present growth trends, Bucar- worked to identify the region’s key economic and develop- amanga may well be on track to become a high-income metro- mental priority areas, assess the general growth potential of politan economy within the next decade. individual industry sectors, discuss the institutional compo- sition of a new Regional Competitiveness Commission (RCC, In the early and mid-2000s, Bucaramanga’s economy or Santander Competitivo), and nominate prominent local was still heavily dependent on traditional manufac- individuals to serve on it. turing industries like garments, footwear, and agri- cultural products, largely made by small firms with Once established, Santander Competitivo became the low capital stock and limited export capabilities. driver of proactive economic development initiatives While the Colombian market remained relatively closed, such in the region, and the principal forum for systematic, a model was viable and supported numerous local jobs. How- highly effective public-private dialogue and stake- ever, with China’s accession to the WTO, Colombia’s conclu- holder engagement. With senior officials from govern- sion of several free trade agreements with partner countries, ment, academia, and the private sector all represented on the and other market-opening measures, Bucaramanga’s small RCC, this body had much clout, political weight in Bogota, firms found themselves unable to compete. While public and ability to ensure the effective implementation of strate- safety and security in Colombia were gradually improving gies, despite having no statutory authority2, and no dedicated during this period, the movement of people and goods within funding of its own. Significantly, the RCC could rely on the the country still presented numerous challenges, not helped support of the Bucaramanga Chamber of Commerce, on by the fact that there are no railroads, or by the country’s whose premises it is housed, and in particular on its highly famously rugged topography. capable professional staff, in carrying out its mission. In consultation with various stakeholder groups, in mid-2007 the RCC prepared a Regional Competitive- ness Plan for Santander. Based on robust analytics, the 1 A note about geographic coverage in this report – unless other- plan identified industries likely to be the drivers of Santand- wise specified, “Bucaramanga” refers to the entire Bucaramanga Metropol- itan Area (Area Metropolitana de Bucaramanga – AMB), which consists of er’s future economic growth, and outlined specific measures four municipalities, each with its own mayor and local government struc- needed to aid their development. It also analyzed market ture: 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 2 Santander was a pioneer in this respect; national legislation pro- share of its economic output, as well as 95% of its non-oil manufacturing viding for the establishment of RCCs in all of Colombia’s 32 departments activity. Outside of AMB, the only other sizeable city economy in Santander was subsequently enacted in part modeled on Santander’s experience. How- is Barrancabermeja, site of one of Colombia’s two oil refineries and thus ever, the RCCs are not government entities, and they don’t have large oper- heavily reliant on the oil industry. Many of the strategies and interventions ational budgets. Santander Competitivo’s capacity for action and achieving analyzed in this report were undertaken at the departmental level, not the meaningful results on the ground depends on its ability to influence other municipal or metropolitan. Wherever an intervention was limited