South Africa is a country of competing priorities. In our view, the best way to deal with poverty is to encourage urbanisation. No country has achieved sustained economic growth without massive urban growth. Some 80 per cent of the population in the highest income countries is urban, compared with 10-15 per cent in the poorest countries. This strong correlation between economic growth and urbanisation is as ‘close to a natural law as almost any social process in human history’.

Dr Wally N’Dow, secretary-general of Habitat II, argues that the quality of life in the global economy is ‘singularly dependent on the fact that cities work, that their institutions work, that their communications work, that their laws work … Urban settlements will be the real challenge of the 21st century.’

Tempting as it is to try to deal with poverty and inequality by indiscriminately spreading resources across South Africa, this will lead to failure. South Africa’s own ‘regional development’ experiment shows this, and the international experience and literature is compelling on these issues. Cities are South Africa’s most important arenas for modernisation and opportunity.
South Africa’s prospects for growth and development hinge on what is happening in the country’s largest cities. Urban crime, unemployment, politics, and perceptions will be most important in determining the country’s future. We have to ensure that cities have the effective leadership, resources, and national support they need to be successful.

Primacy of urban development

Rural development should not be neglected. This country has never had a rural strategy, and desperately needs one. But the primacy of urban development for the well-being of all South Africans – whether urban and rural dwellers – needs to be understood, acted upon, and communicated.

South African cities are developing in the context of a challenging new global era, and can no longer be seen in their national contexts alone. They are subject to powerful international forces, and are competing – for investors, business, skilled people, entrepreneurs, visitors, conventions, consumers and image or brand – with cities across the globe.

This raises the stakes. Cities must position themselves within their own nation, region, and globally. Opportunities for growth and prosperity expand dramatically as cities and their entrepreneurs look beyond city and national boundaries for new markets and opportunities. Simultaneously, the possibility of decline and impoverishment are more pronounced as competition for investors, the location of businesses, and the skilled people and enterprises they employ and attract can now come from a myriad of other cities worldwide.

South African cities are like other developing world cities with dual economies, and citizens who participate in the formal and informal sectors in respect of housing, jobs, legality, and almost every other aspect of their lives. Apartheid has also divided our cities racially, in terms of geography, opportunity, and perceptions. And urban poverty is growing.

The challenge is how to respond to these realities.

The temptation is for urban leaders to become preoccupied with delivering services to the poor, or maintaining the current number of municipal employees. It is seductive to itemise divisions in the city, bemoan poverty, and focus primarily on remedying the ‘social exclusion’ of different groups. Some might see the necessity for economic growth and espouse it, but fail to grapple with the tough, controversial decisions that are required to turn our cities around economically.

Without sustained urban economic growth, the poor will get poorer, and opportunities of urban living will decline for everyone. It is not helpful to talk of ‘solving’ urban poverty. The size of most cities, the speed with which their populations are growing, and the vast needs of those populations require a different approach.

Apartheid and discrimination have imposed a heavy burden, but unless we focus on the right issues now, this negative legacy can only get worse. How do we turn the current situation around for all urban citizens?

It is only by developing strategies for becoming more competitive in the global economy that South African cities will procure the means for coping with the urban challenge.

Enabling environments

We need to create enabling environments, and facilitate conditions in which people can help themselves. The key to dealing with poverty in a developing country is to create cities of growth, safety, good education and health, and expanding opportunities that are open to everyone: black and white, new arrivals, long-time residents.

Attention is urgently required to address crime and inadequate economic infrastructure affecting the conditions for the survival and expansion of big and small businesses. Smaller firms feel the impact of public sector deficiencies most acutely because the investment in supplementing inadequate policing or infrastructure represents a greater share of their total investment.

It is a myth to claim that competitive economic growth can only be bought at the expense of the unemployed or the working class. Cities with rapidly growing economies provide jobs for unskilled and previously unemployed people. Research in the United States indicates that, in the 1990s, ‘low unemployment rates forced employers to reach deeper into the pool of low-skill workers, hiring and training people who would otherwise have been left out in the cold’. New York’s four poorer outer boroughs contributed about 45 per cent of all new job growth in the city during the latter half of the 1990s.

CDE is not advocating laissez faire, 19th-century ‘robber baron’ capitalism. We are advocating a competitive market-led approach to national and global success, with appropriate roles for both national and local government, coupled with a committed partnership with key business players and other significant stakeholders.

As a leading professor has put it: ‘The greatest danger to the viability of communities is not globalisation but a retreat into isolationism and protectionism … Ironically, the best way for communities to preserve their local control is to become more competitive globally.’

South Africa’s cities and their requirements must move considerably higher on the scale of national priorities. Development is about success. Countries progress if they incrementally build on their successes. The alternative – the notion that we can only proceed as fast as the most deprived areas – is fatal.