Urbanisation – A strategy to increase GDP

A book titled ‘Economic Policy in Sri Lanka – Issues and Debates’, edited by Dr. Saman Kelegama, was published by the Institute of Policy Studies of Sri Lanka in 2004.  This book has 22 chapters in the volume, which are divided into six parts namely, Development Strategy and Ideology, Macroeconomic Policy, Agriculture, Industry and Technology Development, Employment and Labour, Institutional and Governance Issues and Social Welfare.  

Whilst all these are important points, a key factor that has been left out, from the point of view of this writer, is urbanisation. Although the other factors go towards the overall development of the country, little thought had been given to planned urbanisation to fuel gross domestic product (GDP) growth, in fact not until as recent as 15 years ago.  

In 2014, the United Nations put out a report ‘World Urbanisation Prospects’, which says that 16 countries were still at low levels of urbanisation i.e. below 20 percent. The largest amongst them, with a total population of 10 million inhabitants or more, include Burundi, Ethiopia, Malawi, Niger, South Sudan, Uganda in Africa and Nepal and Sri Lanka in Asia. This fact seems quite significant since it has now become clear that the cities have higher GDP than the rural areas.  

At a recent function held at The Kingsbury Hotel for the launch of the Development Control Regulations for the Colombo Port City, the Megapolis and Western Development Minister made a point of this. Quoting from the book ‘Winning Global Markets’ by the well-known marketing specialists, Philip and Milton Kotler, he said “the growth of nations is intimately tied with the growth of their major cities.”  

“Top cities have grown faster in GDP than the rate of their country’s GDP growth. Major cities are the source of a nation’s wealth, not the other way around. In the markets of a nation’s major cities, investment, trade and consumption take place.”

Yet, as pointed out by the Kotlers in their book, development economists have spent the last 70 years focusing on nation building and national economic growth instead of city growth. They say that following World War II, the United Nations, World Bank, International Monetary Fund as well as the United States and Soviet Union, pursued policies of building national economies as a route to economic development and growth. 

In fact, they refer to the fact that the Soviet Union sank because its cities sank, since the Soviet Union, India and other nations when propounding central policy that held a tight rein on local initiative, their cities declined in economic growth, environmental quality and social stability. 

The Kotlers say that the same warning could be applied to the United State as the Federal Government has paid little attention to the economic growth of key American cities.  

The predictions therefore are clear. As the ‘World Urbanisation Prospects’ report says, it is Africa and Asia that are urbanising more rapidly than the other regions of the world. The rate of urbanisation, measured as the average annual rate of change of the percentage, urban is reported as the highest in Asia and Africa, whilst the regions that already have relatively high levels of urbanisation are urbanising at a slower pace.  

In 2004, the sitting government made the first move in taking the urbanisation route. Until then, the country as a whole from its policies and its political culture had been trending towards developing the rural sector more than its urban sector. Whilst there is nothing wrong with developing the rural sector, it is probable that this lopsided development is at the root of Sri Lanka not having a robust economy.  
It was in 2004 that the initial thoughts for a Port City actually germinated, when the Singaporean company CESMA was invited by the government to draw up a plan. The development plan they came up with recommended the expansion of the current central business district (CBD).  

However, it was only in 2010 that the Sri Lanka Ports Authority asked the Urban Development Authority (UDA) to prepare a plan based on the 2004 CESMA proposal. The UDA submitted a completely locally drawn up plan for a 200-hectare city, on which the first environmental impact assessment was based.  It was at this point that China Harbour Engineering Corporation (CHEC) came into the picture and requested to participate in this project. It invited the Swedish company SWECO to draw up a Master Plan based on the initial proposal of the UDA. In 2013, SWECO presented its plan and on approval, reclamation for the Port City began in 2014. As the Megapolis and Western Development Minister said in his recent speech, there is greater opportunity in the synergies of a city, especially because people from different walks of life come together and they fuel growth and consumption. It seems the concept of urbanisation is just catching on and since this cannot be done in an ad hoc manner, some serious planning is needed.  

As such, the Development Control Regulations (DCR) to the Port City Master Plan provides a clear mechanism for its implementation and directs both public and private sector developments with a set of development objectives, definitions and regulations.  

The Port City Colombo would be an extension of the existing city’s CBD, with five new districts i.e. the Financial District, Marina, International Island, Central Park Living and Island living. 

Planning would create a robust economy and superior quality of life for the Port City’s residents in an environmentally sustainable manner, while the differentiator would be the resolve to set up a clear implementation process for enforcement, such as the DCR. Clear regulations for all parties involved would work towards delivering this planned world-class city. 

The Colombo Port City Development Project DCR is organised within a framework of four volumes, which covers four key areas, i.e. urban design, utility, landscape and sustainability. The strategies for development are described and then translated to mandatory plot-level regulations for the developers to follow. 

As the Port City takes the lead in sustainable urban development in the city of Colombo, it is expected to be the beacon that attracts the right kind of investors to create fitting synergies that would expand our urban landscape. Plans for the Megapolis itself are huge in terms of developing urban infrastructure and the Port City would undoubtedly be the catalyst in sparking off GDP in the Western Province.