SP:RING 1999 TheNew Chinese Dream PAG E 6 TravelTimes ToWork PAG E 2 6 Public Disclosure Authorized T H E G L O B A L C I T Y M A G A Z I N E 20843 Volume 6, No. 4 Public Disclosure Authorized Public Disclosure Authorized . * .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~p Public Disclosure Authorized U A Gambling.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Ao onthe ; kM^ Economy |flerl°o_ Sidae ||Thisissueof UrbanAgeisfundedby the Federation Wof CanadianMunicipalities (Canadian International DevelopmentAgency), Department for International WHAT IS THE CITY IF NOT THE PEOPLE? Development,UK, the Dutch Ministryof Foreign Whetheror not this pithy line was writ- Affairs, the Swedish International Development ten by William Shakespeare,or by the many other claimants to his oeuvre, the phrase Cooperation Agency and the World Bank. rightly places human achievementat the forefront of city endeavors.So when we talk of Developmentalfunding has been provided by the the city economy in our SpecialReport, that phrase should be redolent of the myriad ManagementProgramme and the World Bank. effortsof all the people who make a city thrive. As our Guest Editor Nigel Harris has l l l described it, the reinvention of the city economy beginswith the decline of the indus- - trial basein the 1970s: manufacturingjobs disappear;recession, decay II lOUdIiIfI ?|Ir2 '( and flight to the suburbs follow; stasis sets in. But then a degree of _ political and fiscaldecentralization givesthe city new powers to tax EDITOR A LsTA FF and spend. City coalitions emerge to promote the city package. Glo- MargaretBergen, Editor-n-Chief balization spawns new service economies, and competition occurs Nick Harrison,Managing Editor betweencities to attract investment and talent. Information becomes AnnabelBiles, AssistantEditor a key commodity.Quality of lifeissues dominate. The resultis trans- BrianNoyes, Pubcaton Design formation and rejuvenation. NitaCongress, Line Editor Elements of this story line will occur in every city determined to PatriciaMoran, Circulation succeed in the zist century. Successfullycompeting on the global stage requires cities EDITORIAL BOARD to gather and analyze reliable information and to understand the extent of their eco- YvesCabannes, Urban Management Programme, Quito,Ecuador nomic assets. JamesH. Carr,Fannie Mae Foundation, The Chinese government is hoping that housing reform will have an anticipated Washington,DC, USA US$ioo billion ripple effect in the economy.Zhu Rongji, the Chinese prime minister, Victor Falkenheim,University of Toronto, pledged to start the processof housing reform on July I, I998. It was hoped that freeing MichaelFishman, Sam Schwartz& Co., state enterprisesfrom the burden of paying for housing would make them more com- New York City, USA petitive, and that liberating the worker from allocatedhousing would improve labor CRandaFouad Urban Management Programme, markets.Everybody would gain. RogerGraef, Films of Record,London, England TedPlafker reports from Beijingthat the processhas beenslowed by the complexity Nigel Harris, University College, London, England of making tens of millions of Chinese into homeowners. There are shortfallsin available NadezhdaKosareva, Institute for UrbanEconomics, capital,nascent mortgage markets and mortgageinsurance that needto bedeveloped, and Charles Landry, Comedia, Stroud, England inheritancelaws that must be written. But quite possiblythe underlyingeconomic Robert H. McNulty, Partners for Livable assumptionsthat propelledthe issueto the forefrontmay have to be reviewed.After all, Communities, Washington, DC, USA assumtinMohamad Machnouk, Eco News Beirut, housing is a social issue. Presumably the system will work more smoothly when it Beirut, Lebanon becomesclear to the Chinesehomeowners what it is theyare buying,how much it will LyndsayNeilson, Centre for DevelopingCities, cost and whetherthey canleave it to theirchildren. nGiovanniPadula, 11Mondo, New YorkCity, USA Wastepickers in BeloHorizonte in southeasternBrazil have organized themselves Jonas Rabinovitch, United Nations Development into an association, automated their factory and begun to celebrate their profession Programme, New York City, USA EmnielWegelin, Institute of Housingand UrbanDevel- throughdance and song.Their annualstreet parade is testamentto an abilityto selltheir opmentStudies, Rotterdam, The Netherlands visionof workwith honor and humor. YuLi, China Academy of Urban Planning and Readthe articleon Hydrabadfrom our Asiacorrespondent, Patralekha Chatterjee. Design, Beijing, China The city is known as "Cyberbad."It is home to Microsoft'ssingle international presence ADVSO RY B OAR D and to thousandsof startupsoftware companies. The issuesshe raises about the wisdom G. Shabbir Cheema, United Nations Development and sustainability of niche marketing a city are worth pondering. JProgramme,NewYorkCity, USA JacquesJobin, International Union of Local Authorities,The Hague,The Netherlands MichaelParkes, European Commission, Brussels,Belgium Bas M. van Noordenne,Ministry of ForeignAffairs, The Hague, The Netherlands REGIONAL EDITIONS BEIJING:Wang Jingxia, Yu Li, Qin Fengxia,Cao Xinxin and Gao Jian, China Academy of Urban UrbanAgeispublished four times a yearand is availableto developingcountry subscribers free of charge.Developed country Planningand Design subscribersare chargedUS$20 annually.Editorial offices are at RoomF4K-256, 1818 H Street,NW, Washington,DC CAIRO:Randa Fouad, UMP Arab States,and 20433, USA.Fax: 202-522-2125. E-mail: Editorial [email protected];Subscriber Services: [email protected]; WagdiRiad, Chief, EnvironmentDepartment, Advertising:[email protected]. Ideas expressed in UrbanAgeare the authors'and do not necessarilyrepresent the Al-AhramNewspaper views of ary one agency or organization. The boundaries, colors, denominations and other information shown on any map do not imply anyjudgment on the partof the WorldBank Groupregarding legal statusof anyterritory or the endorsementor QUITO:Yves Cabannes, Peter Caessonand Richard acceptanceof such boundaries.© 1999 The InternationalBank for Reconstructionand Development,the WorldBank, Huber,UMP LatinAmerica and the Caribbean 1818 H Street,NW, Washington,DC 20433, USA.All rightsreserved. Printed by UnitedLithographics on recycledpaper Moscow:Nadezhda Kosareva and YelenaYelagina, usingsoy-based inks. ISSN1560-0483 Website: http://www.worldbank.org/html/fpd/urban/urb.age/urb.age.htm I Institute for Urban Economics S P R I N G 1 9 9 9/ V L 6, N O . 4 0c N T E N T S T s F a L O e A L T 1f4 A1 G A Z ; S j F E A T U R E S 4 PortoAlegre: Where The Public Controls The Purse Strings BY LUCY CONGER Inspiredby the politicalphilosophy of the former mayor,the peopleof this city are "makingthe decisionsof government."They identifyroads that need to be paved,slums they want upgradedand schoolsthey want built, then ear- mark the funds to constructthem. 6 HomeOwnership-The New Chinese Dream BY TED PLAFKER Clearingthe wayfor tens of millionsof Chineseto becomeproud homeown ers isno easytask. Developing mortgage markets, improving the housingstock and controllingprices are sometimes large obstacles. But successesin suchcities asYantai and Guangzhoushow that the processis working. 10 RichesIn Rags B Y G A BR I ELA BO0YE R Thewaste pickers of BeloHorizonte, Brazil have formed a profitablerecycling associationthat challengesthe stigmanormally associated with theirprofession. 11 S P E C I A L R E P O R T - T H E C I T Y E C O N O M Y "In cities acrossChina, ordinarycitizens dared 12 TheDevastation For Cities ordinary might soon In the post-warera, cities struggled with the loss of theirtraditional industrial to hopethey might soon andmanufacturing bases, escapefrom their cramped andshabby quarters." 14 WhateverHappened To Ports? and 7 Once the coreof the oldcity economy, ports must nowfind waysto innovate. 16 FlyingInto The Sun D E P A R T M E N T S Airportsare gatewaysto newregional and globaleconomies. Metropolitan and regionalgovernments need to plan and manageairport development carefully 2 Newsstand to maximizetheir potential for generating income and employment. 23 PortraitOf A City: 18 A CityOf Traders Hyderabad,India Forboth tradersand consumers,city markets are an essentialpart of dailylife. B Y P AT R A L E K HA C H ATT E R J E E Sprawling,noisy, raucous and cheap,governments often insist on closingthem 26 CityIndicators: Travel Time downor movingthem to the outskirtsof the city. BY CHRISTINE AUCLAIR 20 TradingServices, Not Goods 28 LettersTo The Editor Whether it is writingsoftware programs in Bangaloreor drawingHollywood 29 Review:London, New York, Paris, cartoonsin Manila,new and successfulcity economiesare taking shape. Tokyo.A TransportStudy 22 ThereIs LifeAfter Death BY JERRY LEBO A stumbleis not necessarilya fall,and evencities hit hardestby the lossof tra- ditionaleconomic foundations can find new opportunities ifthey develop their inherentstrengths. 36 UrbanCalendar Spring1999 UrbanAge NEW AAND INDIAREPEALS URBANLAND CEILING ANDREGULATION ACT OCIALIST INDIA enacted the Urban Land Ceilingand Regulation Act (ULCRA) in I976 with the idea of providinghousing to the urban poor. Anyonewho ownedland in excessof gov- ernment-prescribedlimits had to hand it overto the state,which was to redistribute it to the poor. The law applied to all Indian cities with a population above THE DESI G N OF STREETS, buildings and housesmay directly affect the level of crimes 250,ooo. However, the effectwas justthe in a neighborhood-either making it easierfor criminals to operateor discouragingthem-