William Cobbett, Manager, Cities Alliance, The World Bank
Dr. Robert Hormats, Under Secretary of State for Economic Growth, Energy, and Environment, US Department of State
H.E. Ashok Kumar Mirpuri, Ambassador to the United States, Republic of Singapore
Moderated by Diana Farrell, Director, McKinsey Center for Government, McKinsey & Co.
Explore the other panels from the Global Trends Conference
Read the National Intelligence Council’s Global Trends 2030: Alternative Worlds report
Read the Atlantic Council’s Envisioning 2030: US Strategy for a Post-Western World report
In his opening remarks, Ambassador Mirpuri reflected on the urbanization challenges Singapore has faced, emphasizing the critical role of water security in Singaporean urban design. Dr. Hormats went on to outline the challenges of city governance, noting that cities must create accountability, sustainability, and opportunity for their citizens to thrive in the modern world and that realities of city life mean the relationship between the governed and governors will be much more responsive. Mr. Cobbett then gave an overview of his own work on slums, whose residents usually make up the majority of city growth, and whose interests are usually ignored by city officials. He argued that slum residents were, in fact, the middle class in waiting and preparations to enfranchise and empower them were crucial.
Responding to questions from the audience, the panel spoke on several more issues, including waste management, lessons of past urbanization phases in Latin America and the Caribbean, and interactive planning. Overall, the panel highlighted the idea that a city only goes through its urbanizing phase once, and it is important to get underlying infrastructure and services in place correctly as early as possible to ward off future political and economic hardships.
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DIANA FARRELL: Well, thank you all. And I’m surprised to see such a good showing after that lovely lunch. I thought we’d lose quite a few people. But the topic of this session, as you all know, feeds off of one of the NIC megatrends, which is urbanization. And we’ve all heard all kinds of numbers, but just to kind of put an image to it that always gets to me, we consider that the world is urbanizing at the rate of about 65 million people a year. That’s five new Londons every year or seven new Chicagos every year. That’s the rate of growth.
And the work that the NIC points to, the work that we at McKinsey – at McKinsey Global Institute have done – I remember this – has – if we focus on only the top 600 cities, you get sort of an interesting picture, which is, today, that’s about 20 percent of the world’s population. It accounts for about half of the world GDP. But that concentration is going to continue accelerating and so by 2025 we expect you’ll see a little over 20 percent of the population, but 60 percent of GDP in the top 600 cities.
Now, 10 percent of that will be U.S. cities. But one of the most important things to recognize, and it speaks to many of the conversations that we’ve been having today, is that the geographic center of urbanization is shifting dramatically away from the West so that by 2030 the urban landscape will be a decisively Eastern landscape. A third of the developed market cities, which today are on the top 600 list, will fall off that list altogether and a hundred cities from China alone will come onto that list that aren’t there before.
So complete shift in the center of gravity of urbanization, and of course the urbanization itself. Now, we have a great set of panelists with us today. I’m going to introduce them for a minute. But I thought I’d tee up three themes that I hope they come to in their remarks and I hope we get a chance to touch on because they seem to be particularly important ones on this theme of urbanization.
The first one is around resources for urban growth, referred to this in many cases as green cities of the future and how big is this real opportunity. How much of a strain will this put on critical resources, whether it’s air or land or energy or water or waste disposal systems or otherwise? And how do we think about the opportunities for rethinking cities as green cities in the first place? How much of this is an IT solution? How much of this is a requirement that humans behave differently? So that’d be one theme I’d throw on the table.
The second one is think about the infrastructure requirements of five new Londons a year, seven new Chicagos a year. How do we think about that? Aging cities on the one hand, completely new rural citizens coming into cities for the first time, very different kinds of needs. Will cities be as they’ve always been or will we have very different kinds of cities with very different infrastructure models?
And how vulnerable will these new infrastructures be to some of the discussions that have taken place over the last day or two, whether it’s forces of nature, forces of terrorism or otherwise? What are going to be the key vulnerabilities in these new cities?
Now, finally, I would throw a third theme which is how do we think about the consequences for politics and for governances? So it’ll be the first time that China is an urban state. Sixty percent of the world’s population will be urban in a world – and they’ll be different cities, as I said.
If New York, London and Paris were the must-know cities of the 20th century, will it be Shanghai, Mumbai and Kinshasa that are the must-know cities of the 21st century? Both the centralization, urbanization and the shifts of power, what does that do for thinking about jurisdictions, what does it do for thinking about warfare in urban cities? So let me throw those out. I don’t expect you to touch all of them, but I’ll come back to some of the ones that sound more interesting.
But I would like to introduce this extraordinary panel we have. Immediately to my left is Ambassador Ashok Mirpuri who has joined – come to the U.S. as ambassador earlier this year, but is a longstanding diplomat. He was ambassador to Indonesia from 2006 to 2012, before that the commissioner to Malaysia, before that the commissioner to Australia and before that extraordinary experience in all things that have allowed him to be that kind of state diplomat. And of course he hails from one of the world’s most successful cities. And so I’m sure he’ll have lots to share on all the issues I raised.
Next to me, another person who needs no introduction, Bob Hormats, who’s currently undersecretary of state for economic growth, energy and environment. Bob has been a longtime veteran of many posts in government, if I list them all, we’d be here for most of the day, but certainly on the trade front, on the business affairs front and previously at State as well and has also had a very successful private sector career at Goldman and others. So your perspectives on all the cities you’ve traveled to and all you know about cities will be very valuable.
And finally, Bill Cobbett, who comes to us from Cities Alliance, a global partnership for urban poverty reduction and the promotion of the role of cities in sustainability development with a particular focus on slums and strategies for the management of cities that face this, which means most cities these days. In addition to being an Ashoka changemaker, he has real-life experience with very challenging cities like Nairobi and others.
So those are our panelists. I’m going to ask each of you if you would to take a few minutes and share your top thoughts on topics I raised or anything else on you mind. And then, we’ll try to start a conversation that includes as many questions from all of you as possible. I’ll start with you, Ambassador.
AMBASSADOR ASHOK KUMAR MIRPURI: Thank you. Thank you, Diana. And you said that Singapore is a very successful city, but Singapore is a very small city relative to all the things that we are looking at in terms of the demographic changes that have been pointed out in the NIC report and the urbanization, the size of cities is going to grow tremendously.
But I thought I would say a few things about Singapore because I think there are certain lessons to be drawn as cities, as particularly cities in China, cities in South Asia start moving towards urbanization. Singapore grew because it was a center for commerce. And it was established during the major trade routes of the 19th century and it’s continued to play this role. It’s really why do people come together in a city. They come together because they want to be able to do commerce successfully. Why do you leave agriculture to move into a city?
And so a city that is successful has to have a rising economy. It has to have innovation; it has to have growing wealth; it has to have cultures that sort of evolve and move along. And in Singapore these urban trends have been that very key driver for economic development, for poverty reduction, for environmental efficiency and in a sense social mobility as well.
It’s all come because we’ve managed to capture all of this in the city. Some of the key elements of this growth which sort of emerged when Singapore became independent in 1965 has been really a consistent pursuit of openness. That’s been a big — bringing in foreign investors, making it a major foreign investment destination has been critical to Singapore’s success as a city.
And it’s something that many cities have to understand, this sense of openness. And investments have really increased the greater trading – the commerce element of it, the trade. Our trade volumes with China and India have been growing dramatically through this, but what has also happened is the connectivity to the outside world.
It’s not just a city by itself and unfortunately some of the big cities do not have that connectivity – connectivity to the outside world, airport, major ports and a development of human capital which is always an ongoing challenge. What we’ve had to do in Singapore is really look at two issues – livability and substantiality. And for those of you who are familiar with Singapore, you recognize that we have very dramatic resource constraints. We’re a small island. And so the issues of livability and sustainability really have to be reconciled with industrialization, which creates jobs for people, and the demands of modern life which means that, you know, your transport is always under pressure, all sorts of areas are under pressure. So what we’ve had to do is integrate many of these elements, essentially five areas that we’ve really focused on, and I’ll just touch briefly on each of these.
The one and the main one that has been a major resource constraint has been water. Singapore does not have enough water resources of its own. We have long-term agreements to buy water from our neighbor in Malaysia. And these have potentially been areas of conflict. As Diana mentioned I was high commissioner to Malaysia and there was one major issue, which I had to deal with was the long-term water resources that we get from Malaysia.
But meanwhile in order to move forward from that, what’s been happening in Singapore is that a city is engineered to capture and recycle every drop of rainwater. We have moved towards desalinization. We have something called new water, which is recycled water that is used over and over again. That’s helped us move out of the constraints of having to rely on water coming from our neighbors and we still have the pipelines with Malaysia. Water is really treated as a strategic resource and a national asset.
The other thing has been housing. When Singapore became independent, we were really a city of squatters. How do you move squatters to become stakeholders into the system within a small geographic area? We couldn’t afford urban sprawl like many American cities. So there’s been a very active program of affordable and attractive high rise housing that is sold to members of the public. Eighty percent of the population live in public housing which they buy usually on their own using a long-term scheme to pay off their mortgages.
The third area has been transport. Again, we cannot afford the U.S. system of just roads and cars because we just don’t have the space for roads and cars. So there’s been a very extensive program, very expensive program to restrict the use of cars, to restrict ownership of vehicles. But that has gone hand-in-hand with the public transport network, a very extensive public transport network that reaches everybody in order to be able to move around the city.
The fourth area has been industrial infrastructure. I mentioned about the strength of commerce and investment. You need industry. Singapore is a niche for high tech manufacturing, but you have to be quite careful how you place these industries when you have no space. Again, looking for space cannot be too far from populated areas but then you look for nonpolluting industries, very critically looking for clean industries.
And the fifth area has really been sustainable environment. Anyone going to Singapore realizes how green the city is. We have created space for parks. Everyone should have a green space around them and the substantial green cover and biodiversity.
What this has needed – and some of the points that Diana touched on – is really the issue of governance, the strategic foresight, the planning and the pragmatism that comes into it, that gives you that opportunity to do some long-term planning of where you want a city to go. We have now created certain models – in fact, we have put out for people to see. There’s an eco-town that test-beds some of the new technologies. There’s a clean tech industrial park working with businesses.
And we’re also using the new area of big data. It’s something we’re very unfamiliar with but we’ve got so many disaggregated networks of data. How do you capture this to capture real-time information for people in order that they can get the most useful part of it in order to make a city much more sustainable? We’re also working with cities in China.
We have an eco-city working with China, in Tianjin, a small 10-kilometer development that’s supposed to be built up through to 2020 to have 350,000 people. Environmentally – an environmental model of a city so that as China urbanizes, this could be something that other mayors could learn from. I’ll stop there.
MS. FARRELL: Wonderful. Thank you, Ambassador. Bob?
ROBERT HORMATS: Well, let me just try – I think you really heard a brilliant exposition on how an excellently run city is so excellently run. Anyone who’s been to Singapore can see that. Let me try to address a few other related issues. One, I divide what needs to be done in a city into three areas. One is accountability, sustainability and opportunity. And let me start with the latter and then move up.
It’s interesting if you look at the way cities started, most cities started in this world in the Fertile Crescent as trading cities, trading cities mostly on rivers because rivers were the primary vehicle for trade. Land transportation was very difficult. Water transportation was actually much easier and much more efficient. So you had the great city-states. You had first of all the Fertile Crescent. Then you had the great city-states of Venice and Carthage and the Phoenician settlements all around the Mediterranean. These were trading cities, and I think they still play an important role in the world and will continue for some time.
But the other element of connectivity these days is the connectivity of ideas, where people come together to interact, to develop new technologies, to develop new ways of interaction, social interaction. And increasingly cities are places not just of physical interaction but of intellectual interaction, of the interaction of ideas. And if you look at the United States, some of the most rapidly growing areas are areas that are not primarily trading cities. They are cities where people come together to exchange ideas. They’re sort of fertile – instead of a Fertile Crescent, they’re fertile areas for intellectual activity. And that’s what they come to do.
New York used to be a great trading city. It really isn’t much of a trading city. There’s a port of New York. Why do people come to New York? They come to New York because there’s finance, there’s ideas, there’s connectivity with other parts of the world and many other cities, the same kind of thing is happening.
So a city needs to have that physical connectivity, but it also needs to have the connectivity of information, ideas, bringing the best and the brightest together to develop new technologies and new innovation. So I think that’s one element that’s important.
Sustainability the ambassador has talked about and I think that’s critically important, and that is cities have to use resources very, very efficiently. Diana’s mentioned that too and the report mentions that as well. So the notion of utilizing resources efficiently is an obvious one but an enormous challenge. The one that I think is particularly important to think about now in terms of governance is accountability. And let me describe what I mean.
Let me take China. I was just in China. China’s the country with the most rapid growing cities and the most rapidly growing number of cities. Depending on what measurement you use, there are probably 200 or so cities in China with a population over a million people. In the U.S., there are eight or nine depending on how you count them. So China is a place where cities are popping up all over.
I look a train from Hefei to Nanjing just a week ago and all along the road there, along the train track there are new cities popping up that used to be little village towns. Now there’s a million, 2 million people in each of them. But the challenge is not just the physical side which obviously is the case. The challenge is, how do you govern these cities. You have to have really good communication between the government and the governed and because, particularly in a country like China – and I’ll use it as an example not because it’s exemplary but because it presents a challenge.
And that is when you get all these people together in a society that is not a democracy, how do you prevent a lot of unrest. And unrest in a few rural villages is not a big problem. Unrest in a city of 2 to 3 million people or 5 million people is a big problem. So you really have to look at governance in cities differently from the way you look at governance in a primarily rural country.
And that is you have to have a lot more communicative people, through social media, social networking, through blogs. They make their views known. Governments have to be a lot more responsive to people in the cities than they do to people in the rural areas because people in the cities, if government is unresponsive toward their needs, can cause a lot of trouble and a lot of social unrest.
So countries that are democracies have to listen to people in the cities. But especially if you’re not and you don’t have the recourse of the ballot box to change things, then the government has to be especially responsive and pay attention to the kind of communications and signals that it’s getting from people in the cities about what they like and what they don’t like and where they want change. And this really involves a greater degree of utilization of information technology with people being able to click on where the sidewalk needs fixing, how the – if the electricity’s off, things of this sort are very important so that the government can be responsive. I would say it’s true in general. In every city, responsiveness to the population is important but particularly in countries where there is no recourse at the ballot box.
The third element in these cities is that people have to feel they’re part of the community. And I’ll use China again, again because it’s the country where the growth is highest, but China has a very – those of you who’ve been there understand this system – they have a system called hukou – H-U-K-O-U or H-O-K-U-O, however you want to spell it – the Mandarin, but same thing either way, and that is it’s you have to register to be part of the community. And it’s mostly people who were born there. If you’ve just come in as a migrant from some rural area, your kids don’t have the right to go to school. You don’t have certain benefits that a traditional resident of that little area have, that block or that region or that neighborhood have.
So that presents a problem. But it’s a problem that if you want to have tranquil cities where you have more people coming in and those people feel a part of the city, there have to be ways of assuring that they are part of the community politically, socially and they integrate into the institutions and the kinds of social developments that are occurring in the city. In the United States it would be church groups, civic groups, et cetera. China doesn’t have quite the same structure, but you have to integrate them into these neighborhood associations so they feel part of it. So for a city to grow organically, people have to feel a part of it. They have to feel that they’re part of the development of the city as opposed to second class citizens. And I think that’s increasingly important. How do you bring them in, how do you integrate people from outside cities into the cities and give them a stake in the success of the city and enable them to network in a comfortable way.
The last point I want to mention really relates to something quite different. It’s a different angle. And that is that increasingly foreign policy, particularly foreign economic policy or international economic policy, is going to be made in cities. This may not be intuitive, but when you go to China or you go to India or you go to Russia or Brazil, in many of these countries it strikes you right between the eyes. And that is if you’re a diplomat, you cannot simply go to Beijing or go to Delhi or go to Brasilia – well, Brasilia’s not –
AMB. MIRPURI: Sao Paolo.
MR. HORMATS: Sao Paolo, right. Or any other – Moscow – any big city and say you’re conducting diplomacy. You may be seeing the president of that country, the foreign minister of that country. You’re not seeing that country. You don’t understand a tenth of what’s going on in that country by being in the capital. You have to get out to second and third cities throughout the country to really understand what’s going on because increasingly two things are going on.
One, those cities because of their power, are having a greater influence on decisions in the capital. And second, the people who rise up in those cities are going to be the leaders of that country 5 and 10 years down the road. In China, you look at the people – the standing committee of the Politburo. Those people – there are seven of them now – they’ve all had experience running provinces as party secretaries or governors of provinces. And many have been mayors. So they really understand what’s going on.
And this is true in other countries. China, it’s really institutionalized into the system. So you really need to understand what’s going on there and go out and understand the kinds of concerns. And the other part is international economic policy which is an area I work on.
And that is you cannot conceivably know what’s going on in that country by being in Shanghai or Mumbai or whatever other big commercial – like in the United States, you can’t go to New York or Washington and L.A. and think you’ve been in the United States and think you understand the United States because so much of what’s going on, so much of the creativity, so much of the dynamism in this country or really any other country is in cities other than the one or two big cities. So you really have to get out.
And increasingly one of the things we’re trying to do now is to have what we call subnational dialogues or state-to-state dialogues or province-to-province dialogues or mayor-to-mayor dialogues where you get subnational actors at a senior level, like governors or provincial leaders as the case is in China or chief ministers in the case of India, to get together and talk about their problems and interact with one another. It’s changing diplomacy in a very dramatic way. And if you sit in Washington and think your only job is to go to the foreign capital of another country and think you understand what’s going on or think you can – if you’re in business think you can conduct business only in Shanghai or Mumbai, you’re wrong. And that’s what one of the key elements of the rise of cities is, they are now foreign policy actors; they’re political actors; they’re economic actors at a level never, never before imagined. And if we’re going to interact with those countries, we have to understand that.
MS. FARRELL: Great. Thank you, Bob. I think you provided a couple of wonderful segues to you, Bill, particularly on the accountability and the creating community. But please.
WILLIAM COBBETT: Thanks, Diana.
And I think to make some sense of urbanization trends going forward we can look briefly backwards at, for example, Latin America and the Caribbean, which over the last three or four decades has seen the kind of urbanization transformation that we now anticipate happening in Asia and in Africa, generally. And we’d also do well to learn some of the mistakes from Latin America and the Caribbean where, to a large extent, urbanization was unplanned and in many ways resisted which unfortunately we’re also seeing being replicated.
But just to –without getting into the numbers because the numbers are always dramatic and exciting and look at the trends, then there’s some trends I’d like to pick out without nuance. The first is that numerically the bulk of urbanization is actually taking place in small and medium cities. It’s not the megacities which of course capture the imagination and the press coverage, but it’s cities the names of which you and I don’t know where the bulk of the populations are moving in Africa and in Asia, particularly in sub-Saharan Africa and in South Asia.
Secondly, and this is a key element for people to understand, most of urbanization that is taking place is not only unplanned, it is also informal. And so this is not the nice movement of people into ready apartments at all. What we understand about urbanization we see visibly in the emergence of very significant slum populations and in most cities of the kind that I’m talking about the informal or stroke the slum population constitutes a numerical majority of that city, as it still does in many cities even now in Brazil.
And thirdly, the urbanization patterns that we see taking place currently are by in large very, very dysfunctional. They are inefficient. They are especially detrimental to the success of the city. And if as both of these reports suggest the success of our national economies is going to be increasingly dependent on the efficiency of our cities, then this is not an idle topic. This is something that is essential for national and local governments to get correct.
So what explains this dysfunctionality (ph)? There are a number of features that I would like to highlight, one of which is the fact that the scale and pace of urbanization that we are now seeing in sub-Saharan Africa and South Asia is unprecedented. It’s never happened. It’ll last for the next two or three decades, but it’s never happened at this scale or pace nor has it happened where uniformly it is so many poor people moving often into poor cities which are under-resourced and not able to cope with – this is not a numbers game, but rather it’s about social transformation that we’re talking about.
Let me highlight though a more central part of my thesis which is that the default position of most governments, be they national or local, is anti-poor. I’ll say it in clear English so everyone understand what I’m talking about. No preparation is made for poor people moving into cities. On the contrary, most cities and most governments have viewed urbanization, which we know to be a trend that is predictable, inevitable, measurable, as a problem, a negative, something to slow down, divert or even attempt to halt.
I’ve heard this as recently as last week in conversations. Also many development agencies also gave this advice over the last one or two decades. So changing the mindset not only about urbanization but of the people associated with urbanization is, I think, one of the key challenges that we face.
The rethinking of the – because the outcome of this is to push out, and I’ll come back to what Bob and the ambassador have both said, the need to bring in the populations, to plan the city in its entirety beyond the next election cycle so that we start introducing 10- and 20- and 30-year planning for cities and not to the mayor’s next election and think of cities as places that provide enfranchisement and opportunity for the majority, if not all, of the population.
I know this sounds like motherhood and apple pie, but of course, in many of the countries that are dealing with urbanization, this would be very different thinking from the way in which urban areas are currently managed. We’ve often challenged the mayor or the national government to think of the slum dwellers as the middle class-in-waiting. These are populations that have moved to the cities. Why? For reasons of economic and social opportunity. People move to cities because they believe that statistically their opportunity of improving their lives are better – is better in cities and of course, they are historically correct in so doing.
And secondly, the way to look at slums is not to look at them as problems and requiring containment, but in fact suburbs-in-making. And the question then becomes to the mayor or to the policymakers, what are the policies that you can introduce that will help the energy of these people actually turn these slums into suburbs because most cities in the developed world went through some slum cycle as part of their development. Singapore did, South Korea did and certainly London and Paris did. And so there’s nothing particularly unique other than the scale that we are seeing and of course the poverty in which it is contextualized.
A last few points is that what exacerbates this exclusion of the slum dwellers is the fact that in too many of the countries in which we work local government is seen as an inferior form of government. The place to be is at national government where all the big decisions are taken.
This is in distinction to what the ambassador just said and he’s completely right about his points in the countries that he mentioned, but where the bulk of urbanization is taking place, the cities are neither resources nor empowered to actually manage the urbanization that is taking place.
And I’ll go back to your three themes, Diana, that you raised right at the beginning about – I think they were the resources, the governance and – let me link all three – infrastructure was the third. Let me link all three in the context of a rapidly developing city where we have new migrants or existing population growth seeking a place to settle. Land markets are completely dysfunctional. No land is made available. And therefore they need to settle wherever they can and we know for sure that’ll be the worst part of the city, the most dangerous, the most exposed. Infrastructure is not provided as a matter of course.
In fact, access to infrastructure is by default or by purchase on a secondary market. And this influences – this impacts directly on governance. So the rule that we convey to the mayors is a very simple, one to make them think, for every service that you as a local government don’t provide, be it land, be it water, energy and more dangerously governance or conflict resolution, someone else will. So if you don’t provide us with land, we’ll get land. If you don’t provide us with water, we have to get water. And you see in city after city the emergence of a parallel market which means that you split your governance between the formal city and the informal city which is why we insist on thinking about the city in its entirety because it’s in fact very much the policy environment today that is creating potential problems for the future by excluding the majority of the population.
And so anyone who doesn’t understand what I’m talking about, look at the army going back into the favelas in Brazil to try and reestablish control. I come from the city of Cape Town where I was the director of housing. We didn’t control the housing, the gangs controlled the housing. Why? Because of decades of neglect. So rethinking cities is absolutely fundamental because as long as policies do not provide for the entire city and the entire population at the same time, then the danger of splitting our cities remains very real.
MS. FARRELL: Wonderful. Let me pick up on a theme that each one of you has come into with a different angle but hit it squarely because I think it connects to so many of the discussions over the past day-and-a-half and it is this governance in its different forms.
Singapore is unique in its city-state nature. And so this tension that both of you talk about between the federal and the city level is a little more resolved, although I suspect you’d tell us that it’s not a simple as all that there either. But what you describe, Bob, was sort of the economic policy levels and in fact quite the opportunity of engaging future leaders by tapping into the full resources, but generally much more managed city process than some of the things you describe. I think you brought the underside of it which is both a pollution issue. It’s a security issue and a safety but maybe criminal networks and other things that we know establish themselves in slums.
How do we reconcile what seem to be dramatically opposing forces which are that the biggest problems in the world actually go not just beyond cities and I would argue not nations but global to questions of security and pollution and global health and climate change, criminal networks, you name it and the locus of power for all the reasons you’ve all mentioned here is actually moving down either to city governments or where city governments aren’t stepping into it to somebody else altogether. How would you help us reconcile that? That strikes me as a critical issue here.
AMB. MIRPURI: Well, as you said, Singapore is unique. So we are a city-state. And it’s so much easier to do these things, deal with some of these issues and avoid some of the dysfunctions. But the challenge has been that because so much of the planning has been top-down, how do you get a sense of participation from the bottom up and that’s really the new conversation going on in Singapore.
You have everything working right. You go in there and everything’s working and working well, but suddenly there’s a sudden sense of disengagement of the population, not so much a dysfunctional population but disengagement in that all the answers are coming from the top. How do you get community engaged? So there’s a process going on now, what we call a national conversation, which is trying to get people engaged in these things and looking at the trade-offs because inevitably every city is going to have to do trade-offs.
How much industries you will now have, how much green space you’re going to have, where your economy is going to go. And that’s really the place we are in now.
MR. HORMATS: Yeah, two points. I gather Brent Scowcroft, who I worked for a number of years on the NSC staff, who is a remarkable thinker even now after many years still thinks about a lot of these systemic issues – the way I look at this and trying to respond to your question is you have the traditional Westphalian system that I gather Brent spoke of.
Then you have a lot of these global issues superimposed on that system and virtually every – environmental issues, financial issues, issues of pandemics. There are – you know, energy – almost anything you look at really requires global cooperation whereas individual countries have systems where their leaders are responsible to the local populace. They have to respond to a national electorate when most of the major issues are global and require global responses.
MS. FARRELL: Maybe even a city electorate, to the point –
MR. HORMATS: Well, that’s where I was going to take it. That is – that’s the next level down. And then you have the pressures from below and you have cities that are – and even below the city level you have a huge amount of public participation in the policy process that you didn’t have 20 or 30 years ago. You have social media now that give people a voice. Even in countries that don’t have democracies, they have to listen because these pressures – in China, there are 500 million people who are netizens. They have these things called weibos, which are little blogs and they constantly are at the government for environmental and other issues.
So governments are in the middle between these global policy issues and populations from below. They have to govern to a national constituency, but the pressures are intensifying on them from various parts of the country.
And one of the points I think is useful to make is in these cities one cannot really look at these cities through the same prism. They are in many cases very different. In China, one of the interesting things – and it’s not just in China, but that’s a good case in point. The cities compete with one another. The provinces compete with one another.
And there is hope in that. And that is it may look fragmented and it may look as if it’s disorganized. But each city because in part getting to power in Beijing depends on how well you do as a mayor and then how well you do as a provincial party secretary or governor. If you can do better than the other person, your chance of promotion is much better.
So these cities and the people who govern them are competing for best practices. And they have to be more and more responsive. And if you read, there’s a wonderful thing. Anyone who’s really interested in China, an interview given by Xi Jinping, the person who’s going to be president of China, is now secretary-general of the Communist Party – general secretary of the Communist Party. He wrote a very interesting – he gave a very interesting interview. Chinese leaders traditionally do not give interviews. He gave an interview with a Danish reporter 10, 12 years ago. He said the main thing he had to do to establish his career was to gain the respect of the peasants of the lower income workers in the province, in the village where he was assigned during the Cultural Revolution and I think this is a very instructive point.
And that is to do well you have to be able to satisfy the needs of people at the city, at the local level, the people in the slums, people who are in these areas. And that is the way you gain credibility as a leader. And more and more I think that’s going to – that’s going to be the case. And I think you’re going to see more and more of the governance process – success in governance being based not just on your ability to give big speeches at the national level but to respond to people’s real needs at the state and local levels.
MR. COBBETT: What we’re seeing is an increasing realization that the problems that we describe as global are increasingly being managed at a local level but in a disparate of all over the world and in different ways.
And just as I’m suggesting to the mayor that he needs to think of his entire population as part of his solution and his constituency, so the relationship between national and local government needs to change so that it’s not a competition nor is it a hierarchy but rather all of this comes back to governance and the dull stuff of good governance which is getting your institutions right, getting your responsibilities and your accountability correct.
So getting local governments to do what they do best and getting national governments to do what they do best solves a great deal of the problem as long as you have a long-term framework that is aiming for the common good. And it’s something – as simple a statement as that that is so often missing which is that you have the interests of the city or the local government captured by the old interests that are – they were there first and therefore that’s how it was always run.
Well, we can’t run our cities like that anymore. We have to run it for very different populations and different classes of populations. And then we have half an opportunity, as we’ve learned in the United States and elsewhere, for the city to be successful – I was going to bring my one quote which would have been Mayor Bloomberg just to sort of – and I would take his – because I use his quote in sub-Saharan Africa which is he says, what’s the key to success – I’m paraphrasing – in New York City. It’s immigrants. It’s the drive and the energy and the hunger that they bring in. Well, change immigrants to the migrants and instead of moving into one of the five boroughs they’re moving into the slums. And they want to make good. Harness that energy and then you have a successful mayor. But most mayors are not accountable to their local population. They’re worried about what’s upstairs.
MR. HORMATS: Yeah, it’s true. Let me just add two quick points to that. One, I think it’s true. If you look – that’s what’s interesting about cities is they bring people together who want opportunity. That’s what they see in cities is opportunity. New York – if you read, there’s a great book called “Island at the Center of the World.” It’s about New York under the Dutch. There were something like 350 people there. They spoke 28 different languages. This is New York before the British took over. And it was people who came in from all parts of the world because they saw an opportunity – 350 people with 28 different languages. And it just showed – that’s one of the reasons for success in the United States, but it can also be a reason for success elsewhere.
MR. COBBETT: Absolutely.
MR. HORMATS: People come with a hunger.
And the other point I’d make, which I think you’ve put your finger on, and that is – Tip O’Neill used to say all politics are local. Well, many of the global issues like the environment are local. You know, the environmental problems may have inspired large international meetings, but it’s the factory belching out smoke here or the factory that’s putting polluted water into the system or the factory that is not – or the mine that is not dealing with carbon dioxide properly.
You have to do these things. You have to get the cities and the localities on board to deal with almost any of these global issues. Look at pandemics. They come from little villages in China or Vietnam or Indonesia. You have to deal with those.
MS. FARRELL: But let me ask you to pause there, Bob, because I’m watching the time and I promised to get some questions from the audience. Yes, right there in the center, if we could get one here, then here, then here. Thank you. We may not have too much more time for that unless we keep our answers brief. Thank you.
Q: My name is Uldur Jurassic (ph). I want to have two actually issues. Uncontrolled development in transportation issue, which is big and then government. How can government help to create business opportunities in small villages and small cities which they don’t have to go some monumental big New York City and others? How can the government help in creating that environment?
MS. FARRELL: Bill, maybe you can take that. That sounds right up your alley. Next one to Steven, to you, please.
MR. COBBETT: Well, I’ll just make a quick point on this one which is – and I refer for those of you who haven’t read it to the World Bank’s World Development Report of 2009 which looked at the space of economic geography of how development takes place. And what they showed quite compellingly was first and foremost that no country has ever achieved middle income status without urbanizing and industrializing, but the other key point they made is that no matter what governments do, economic growth is uneven, that everyone wants balanced development.
But look at the map of the U.S. It is not a balanced development at all. And in fact there are huge benefits for the agglomerations that are on the eastern. So where public authorities make investments, they should do so because the investment makes sense and not for an ulterior motive which is to try and control the spatial distribution of the population. That tends not to work and tends to constrain growth.
MS. FARRELL: Great. Steven, you had a question?
Q: Thanks. I’m Steve Grundman from the Atlantic Council. I wanted to preface my question by referencing Annette Heuser’s call for U.S. and particularly leadership to anchor itself more firmly in a Western tradition, or what I guess Robert Kagan might prefer to call, you know, the liberal economic political tradition. And my question is how does that – does that tradition speak in any way that’s relevant to these problems?
And I guess you can tell from my tone I fear it does not or we’re a little bit too glib about it. You know, we have a liberal political and economic system and that’s the way to success, look at us. The difference being we had hundreds, or decades at a minimum, and several centuries in many of these cases – London and Paris – to work our way through these things, which are going to transpire over the span of a decade or a decade-and-a-half. And so I just wonder about that.
So does the Western tradition have something to say that we can as leaders of the world can hold up to be relevant to what’s going on in these places?
MS. FARRELL: Let me ask you, Ambassador, to touch on that given that you didn’t take centuries and centuries to get to where Singapore has gotten to.
AMB. MIRPURI: Well, we did have the leadership that was brought up in the British Commonwealth tradition. So they did have an understanding of how the city is going to organize. But I would avoid prescriptive models because the Chinese model is so dramatically different from even the Indian model or the African model or the Southeast Asian model. It’s really using your cities.
If you want to showcase something, it’s how do you take the New York model or the Chicago model or the model of Philadelphia to show that a city can be organized well, that there can be long-term planning even though you do have regular elections, even though you have challenges between the city council and the mayor, without saying that this is a prescriptive model.
But how can these things organize, how do you get the private sector involved in the infrastructure, into all these things without saying this is necessary because we have certain values we’re putting there. It is these are successful cities of the world. Where do you position yourself as an upcoming Chinese city or an upcoming Indian city? Do you want to be a Chicago? Do you want to be a Washington, D.C.? Where do you be?
MS. FARRELL: Bob, you’re a diplomat on these issues.
MR. HORMATS: No, I think – I think you’ve put your finger on it very well. I would say that from an American – let’s take the sort of liberal Western democratic tradition. I would say that – two things. One, our success in the world comes not from telling other people how well our system works and how great our philosophy is but by making sure that our system works for our people and our philosophy of government works for our people and our government delivers the kinds of things our people need.
Your prestige in the world, your ability to influence countries around the world is far better if you can demonstrate that your model works and your model is credible. And I think that is what we ought to be doing and making sure that when government operates in Washington, it delivers the kinds of tough decisions that are needed to make our society work not just today but in the future with a sense of vision about the future. What do we need to do today? What tough decisions do we need to do – to make today in order to make our economy and our society better for our children and our grandchildren?
If we can deliver those kinds of things, we’re much more influential in the world than if we go around saying our system works but it doesn’t work as well as it should at home and people can see that in a number of examples. The second point, though, I would make very quickly is this, that all of these – all of these cities need to do one thing.
And that is whether they’re democratic or not democratic, they have to be responsive to their people. Now, whether one calls that a Western democratic tradition or whatever one calls it, responsiveness to the needs of the people – electricity, water, infrastructure, job opportunities, that’s really how a city is going to function effectively. Whatever the philosophical tradition, it’s the functional element that I think is the critical part.
MS. FARRELL: We had a question right up front here. This lady right here, please.
Q: Thank you. Paula Stern, the Atlantic Council. I was – we’ve talked about the Westphalian system. I’d like to talk about waste for a minute – waste management because I looked through the materials that we had and you did a wonderful job of talking about the husbanding, if you will, of water. But if you look at what the challenge in China, in particular, right now, many of the protests are around incineration. And the Asia Development Bank has just gone and funded with another couple – hundreds of millions of dollars more incineration.
There is technology for waste to renewable energy which the U.S. government hasn’t done anything to encourage. They’ve focused on solar and on wind and have never touched this. But there are certain solutions that from a national point of view I think the U.S. could be doing a much better job in really getting out some of our own technology that is done by small companies that would have enormous impact on all of these slums and on all of these emerging million-plus cities that are clearly according to the trends going to be built.
I just don’t see anyone really talking frankly about that. I mean, maybe infrastructure was your euphemism, Bob, for that. But I’m wondering particularly from your point of view since you’ve had such practical experience, what your observations are.
MR. COBBETT: Well, for a lot of the cities and populations that I work in, energy would be nice, never mind the source. And there is no waste management. There is no formal waste management.
MR. COBBETT: In the majority of cities in the developing world, there is no sewage treatment system, period. So this is – the population scale and growth is ahead of the curve of infrastructure. And so, lesson that we learned from Latin America and the Caribbean is by not preparing for an urbanization that we knew was predictable, inevitable and certain, we now spend the next five decades retrofitting the cities at vast expense which, I mean, since the advent of Lula’s government in Brazil, the impact that the Brazilian public authority have had on cities and investment and transport and waste has been dramatic.
But what they are doing now is what they didn’t do three or four decades ago. And that’s the message that we hope is better understood in Africa and in Asia which is that there is – we urbanize once. You don’t get an opportunity to try it again, which is – and we have a window that is closing so fast – two to three decades and then the human settlement patterns are set. And then we are going to be – and if they are as dysfunctional and as spatially inefficient as they currently are and un-serviced, which is your key point.
So I think the type of technology is at the unfortunately currently secondary debate. It’s getting technology in and services in that is the primary concern of most people. It shouldn’t be a secondary debate. So we have a narrow window of time to fix this, but it requires a sea change in the way in which development agencies are thinking.
It requires – and this is not me selling my own pitch – but I’ll pick up on what the ambassador says – a clear focus on cities because national economies are already dependent on the success or otherwise of their cities. It’s not a local issue. And if your cities don’t work, your national economy won’t thrive. So all of those bundled into one require us to fundamentally rethink how we approach development and the success of development.
MS. FARRELL: Thank you so much, Bill. And I – as you mentioned – one thing we didn’t talk about – there were so many more things we could have talked about that we didn’t get a chance to, but we had a very rich discussion. I would highlight two big themes: the critical importance of planning. I think you all have mentioned that. And the necessary responsiveness and accountability and responsiveness to citizens all the way up the chain for even the most global issues that citizens will face. So let me just stop there and try to keep us on track. I thank each of you, Ambassador, Bob, Bill – great discussion. And thank you all for your questions and for your participation.
MR. COBBETT: Thank you very much. (Applause.)