Regional, rural and urban development

Restoring growth in a post-bailout era: the crucial contribution of cities


Remarks by Angel Gurría, OECD Secretary-General, at the International Forum of the Americas Forum for Global Cities

Toronto, 9 November 2009

Mr. Chairman, The Honourable Mayor, Ladies and Gentlemen, good morning.

Restoring growth in a post-bailout era, the topic of this year’s Forum, is one of the greatest challenges we face today and the way we address this challenge will shape our future.

City-power: our recovery engines

The amazing economic power of cities seems an obvious fact. But looking at some numbers always helps to grasp its real dimension. 83% of the population in OECD countries lives in large or medium-sized cities. And these cities are main engines for growth. Seoul, for example, concentrates more than 45% of the Korean population, nearly half of the national GDP, 45% of total employment and 56% of foreign direct investment. Copenhagen and Dublin produce almost one-half of the national GDPs of Denmark and Ireland. Paris and London, account for more than 40% of their respective country’s total patent applications. In many developing countries, the concentration of economic power in big metropolis is even greater.

China, the largest urban nation in the world, has 600 million city dwellers; a figure which is projected to reach 1 billion after 2030. China’s urbanization is having a tremendous economic impact. Currently China has at least 70 cities with more than one million inhabitants. Shanghai has built more skyscrapers in the past decade than New York did in the past hundred years. 

         International Forum of the Americas Forum for Global Cities

Stronger cities, stronger economies

After two years of bad news and trillions of dollars of losses, the global economy is now stabilising. The great challenge is to move from a policy-based recovery to self-sustained growth. At the OECD, we are helping countries build stronger, cleaner and fairer economies. And we are asking ourselves the same crucial question that you are posing here today: how can cities, the main economic engines of this world, contribute to produce such growth?

Today, stronger cities need to be built on the basis of open innovation, hi-tech research and development, strengthened financial regulation, public sector transparency, e-government, stronger corporate governance and sound fiscal health. The strongest cities of the future will be the ones that tackle frontally all the major systemic failures of this crisis, in order to address more successfully their structural challenges: i.e., urban poverty, environmental deterioration, waste management, energy and water supply, efficient transport, public security, etc.

Two additional factors will be crucial to realize the full potential of our cities: First, the capacity of their governments to budget and plan in the 10 to 20 year time frame, beyond political cycles; and second, their capacity to turn their cities into global poles of innovation for green growth and sustainable development. This takes me to the next important challenge: how can our cities help us to build a cleaner type of growth.

Cleaner cities for green growth

Our cities, as they are designed today, are energy hungry. They use over two-thirds of the world’s energy and account for more than 70% of global CO2 emissions. Thus, any solution to climate change will demand significant changes in the ways we build, live and manage our cities. And it will require an intense collaboration between urban authorities globally, including both from developed and developing countries.
The transformation of our cities into energy efficient places is a colossal challenge that will demand unprecedented levels of leadership, research & development, multilateral cooperation and innovative policy-making.

Fortunately leading mayors and regional officials are on the frontlines of this battle and are providing some of the most innovative climate solutions. In our forthcoming report, Competitive Cities and Climate Change, which will be released in the Copenhagen climate change summit, we will show how local officials have shown leadership by reducing carbon footprints. A short list of initiatives includes:

  • high-speed buses that travel in dedicated lanes in Bogotá and Curitiba,
  • wind farms and bicycling in Copenhagen,
  • green landscaping in Hyderabad,
  • water saving programmes in Amman,
  • green public procurement in Vienna, and many others

One of my favourite projects comes from Toronto: the use of naturally cold deep lake water to cool 50 high-rise buildings downtown. This is an important knowledge that needs to be shared, especially with cities in developing and emerging economies, which will account for the bulk of new emission in years to come.

And we need to make our cities fairer

Another important challenge is to turn our cities into social equalizers. Our current fiscal stimulus packages must make this objective a priority.

By 2030, there will be close to 5 billion people in the world living in urban areas. Many of the new urbanites will be poor. It is our duty to share our most innovative policies for urban socio-economic cohesion and inclusion with the authorities of the cities in developing and emerging economies. The OECD is one of the places where this “sharing” is already happening.

Now, how are we going to make these changes possible? How can we turn our cities into engines of stronger, cleaner and fairer economic growth?

Multilevel governance is needed

An important part of the answer lies in better targeting and coordination between local and national governments or what we call in the OECD “multi-level governance”. Here are three reasons why the time is right to revive serious discussions about this topic:

  • First, sub-national governments on average are responsible for nearly 70% of public investment in the OECD. Especially in areas like social protection and education, their engagement with national stimulus programmes is simply vital to effectiveness.  In the OECD Review of Toronto that will be presented after this opening session, we highlight immigration, land use, and conservation plans as areas where Toronto provides a meaningful case for intergovernmental collaboration.

  • Second, innovative national programmes are too costly to be rolled out at the national level.  Cities are needed as testing grounds for such new and creative solutions. They can also provide warning signals about existing national programs which may need to be phased out.

  • Third, local governments have a more direct connection to citizens than national governments. Thus, they are in an important position to provide residents and firms with information to encourage them to conserve electricity and reduce their carbon footprints.

Many national governments have realized the untapped potential of local action. The establishment of the White House Office for Urban Affairs for instance, testifies of the importance of collaboration between cities and national governments.

Ladies and gentlemen,
I wish you all continued success in building stronger, fairer and cleaner cities. I am pleased to note that Mayor Miller has already embraced this message and would like to thank you, Mr. Mayor, as well as your staff for our great collaboration in the Toronto Review. We stand ready to further work with you and your partner cities in making economic recovery a durable reality.

And of course, I could not finish before congratulating you and your city for being chosen to host the Pan American Games in 2017. Well deserved!

Thank you very much.


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