“Over the past 300 years, the clambering upon this huge raft of refugees, adventurers, idealists and crooks from every land has given Manhattan always a quality of a fulcrum, so when it comes to the end of the world, most people can most easily imagine the cataclysm in the context of this island.”
– Jan Morris, Among the Cities
It was pouring rain in Manhattan when I tried to begin my long journey back to my hometown in Maryland. There was a long line for cabs, and I had to get to Penn Station to catch a train. So I took a bicycle rickshaw whose driver was eager for business. “The only way to travel in Manhattan,” he said. He was a stout fellow with a shaved head and bad teeth that looked like blackened pylons on an old waterfront.
I hopped in and we zipped through traffic. At one point, he crossed over the double-yellow line daring oncoming traffic. “You don’t see any taxicab get away with that!” he hollered back at me after blowing through a red light. Just like being in Asia again!
It was a different way to look at Manhattan and its towering skyscrapers as far as the eye can see down any block you choose to look. Somehow, it all seemed a lot bigger in a rickshaw. Hard to believe that within six years, New York will no longer be among the world’s five largest cities.
The new top five? Tokyo is No. 1, with a population (35 million) greater than all of Canada. Then follows Mumbai, Sao Paulo, Delhi… and Dhaka. Dhaka? Yes, Dhaka. It’s the capital of Bangladesh.
There are some big changes afoot in the world’s cities. These changes will create enormous opportunities for investors that a previous generation could barely imagine.
Consider some of these notes from National Geographic Traveler:
In the past 20 years, the world added about 3 million people a week to its urban populations
More than half of the world’s populations live in cities and more two- thirds will by 2030
The fastest growing cities are all overseas: India has 40 cities with more than a million people; some Chinese cities are growing at more than 10% per year; and Africa’s population should double by 2050.
“All cities are cities of the moment,” says Richard Wurman, the celebrated American architect says. He is right. No city stays on top for long. In the year 1000, the most populous city in the world was Cordova, Spain. Beijing was tops in 1500 and 1800. London was the biggest in 1900, New York the biggest in 1950. Today, Tokyo.
The pace of urbanization is particularly swift in China and India. More than 25 million people move to cities each year.
Some of the numbers are hard to fathom. As U.S. Global Investors points out in a recent presentation, China will add more people in 15 years than the entire population of the United States. “There will be up to 50,000 new skyscrapers,” the company notes, “the equivalent of building 10 New Yorks. There could be up to 170 new mass transit systems. There are only about 70 in Europe today.”
This massive population shift has enormous effects on infrastructure spending. Trillions of dollars will have to go toward building power systems, roads, water and wastewater systems, ports and more.
It’s like what the U.S. went through in the early 20th century – only on a much more massive scale. Historian Scott Nelson likens the current period to the Long Depression of 1873-96 vintage. Then, a banking crisis toppled Wall Street, too. Unemployment in New York hit 25%. But the Long Depression also paved the way for rising industries such as railroads, oil and steel and spawned a period of innovation and industrial growth.
As Richard Florida comments in The Atlantic:
“In 1870… America’s population overwhelmingly lived in the countryside. By 1900, the economic geography had been transformed from a patchwork of farm plots and small mercantile towns to a landscape increasingly dominated by giant factory cities like Chicago, Cleveland, Pittsburgh, Detroit and Buffalo.”
Depressions destroy some things and make others anew. Before the Great Depression, few Americans owned a home. But government policies created the long-term mortgage that led to the rise of the suburbs and homeownership of nearly 70% by 2004. The malaise of the 1970s created the Rust Belt, but also saw explosive growth in the Sun Belt.
Now imagine a transformation very much like America’s from 1870-1900, as people moved off farms and into cities. Especially imagine it on a global scale in China and India. Future historians will wonder how we couldn’t see this great boom unfolding before our eyes – the boom in the building of cities.
for The Daily Reckoning Australia