The new world order of mega cities
The world’s first cities grew up in what is now Iraq, near the banks of the Tigris and Euphrates rivers. The first city in the world to have more than one million people was Rome at the height of the Empire in 5 A.D. At that time, the world’s population was only 170 million. But Rome was something new in the world. It had developed its own sophisticated sanitation and traffic management systems, as well as aqueducts, multi-storey low-income housing and even suburbs, but after it fell in 410 A.D., it would be 17 centuries before any metropolitan area would have that many people.
By the 20th century, the population of the world started crowding together in major urban areas. This urbanization led to the new phenomenon of mega city – an urban area with over 10 million inhabitants.
Mega cities are key elements in today’s global economy, which is very different from previous ‘world economies’. We have now possibly entered the third era of globalization, which represents a radical departure from the past.
Highly productive individuals living in areas with high-quality environments can participate in productive processes anywhere in the world. More economic processes, like production, consumption, management, information, capital, markets, and labour, operate worldwide than ever before. This abundance of opportunity applies not only to multinational companies but to micro, small and medium sized businesses and even individuals linked with larger enterprises through production and supply networks. National governments could dominate markets once but now they need to operate within the international economy.
The first large city in the modern era was Beijing, which surpassed the one million population mark in around 1800, followed soon after by New York and London. But at that time city life was an exception with only three percent of the world’s population living in urban areas. In the present time, cities are pushing beyond their limits and are merging into new and massive urban concentrations known as mega regions, which are linked both physically and economically.
The biggest mega-regions leading the front of rapid urbanization today are: Hong Kong-Shenhzen-Guangzhou, China, home to about 120 million people; Nagoya-Osaka-Kyoto-Kobe, Japan, expected to grow to 60 million people by 2015 and Rio de Janeiro-São Paulo region in Brazil with 43 million people. The same trend on an even larger scale is seen in other fast-growing urban corridors: West Africa: 600 km of urbanization linking Nigeria, Benin, Togo and Ghana, and driving the entire region’s economy; India: From Mumbai to Delhi and East Asia: Four connected megalopolises and 77 separate cities of over 200,000 each occur from Beijing to Tokyo via Pyongyang and Seoul. In the first half of the 20th century, the fastest urban growth was seen in western cities. New York, London and other First World capitals were magnets for immigration and job opportunities. In 1950, New York, London, Tokyo and Paris boasted having the world’s largest metropolitan populations. Also in the top 10 were Moscow, Chicago and the German city of Essen. By then, New York had already become the first mega city, with more than 10 million people.
By 2000, Europe and Africa had their first mega cities in Moscow and Cairo, but there were also another four mega cities in Asia, including Karachi in Pakistan and Dhaka in Bangladesh. Asia now had more mega cities than any other continent. Karachi, Dhaka, Jakarta, Mumbai and Manila experienced urban population growth rate at higher than 2.4 percent. By 2025, Asia will have the major concentration of mega cities in the world. The development of mega cities in Asia needs to be analyzed in the context of Foreign Direct Investment in the region.
The first wave of FDI began with the reconstruction of Japan in the 1950s when a substantial injection of Marshall Plan aid investment was used to rebuild the country’s industrial and economic base. Out of this a considerable amount was spent on specialized regional manufacturing industry development, particularly in the Tokyo and Yokohama regions. This led to a second wave of Japanese-led investment to offshore sites in the Republic of Korea, Taipei, Singapore, and Hong Kong. These countries welcomed the capital infusion and the employment, and technological uplift that accompanied the investment.
The third wave occurred in the 1970s and 1980s, when Southeast Asian countries began to attract Japanese investment. This led to higher levels of industrialization in Indonesia, Malaysia, Philippines and Thailand.
The fourth wave began in the late 1980s and early 1990s and centered on China. Four economic development zones (EDZs) in Guangdong and Fujian in southern China were given special privileges to encourage foreign investment.
The fifth wave of FDI began in the late 1990s with the opening of India to overseas investment, especially in the information technology and communications sectors. Countries with new-found wealth such as Malaysia, Republic of Korea, Singapore, and Taipei, China, also began to invest in Bangladesh, Pakistan, China and Vietnam taking advantage of favourable labour costs, lower regulatory costs and also lower standards in some cases.
For the development of mega cities on a stronger economic basis, a new wave of investment is emerging, with China’s businesses facing higher production costs and competitions seeking to integrate with global business. This leads China to invest in other cities in Asia and elsewhere that offer competitive advantages