Geopolitique...15

Ditching laissez-faire, India plans a city

NAGPUR, India: A year ago, this relatively small, forgettable city in the heart of India did not have an air-conditioned cinema. In the sweltering heat of May, the rich here were known to fly one hour to Mumbai, the financial hub of India, to see a movie. There they stocked up on Levi's jeans and Domino's pizza and other big-city treats that Nagpur failed to provide.

But in a social experiment highly unusual for this most unplanned of countries, the Indian government has handpicked Nagpur to be fattened and primped into an international metropolis.

Lush parks and smooth roads have been lain, and malls and multiplex cinemas have sprouted. A drastically renovated airport is to become the cargo hub of India, with a terminal that is 100 times larger than the existing one and is to handle at least 100 jets at a time instead of the current five. An ecofriendly mass-transit system is being planned to absorb an expected surge in road traffic, years before the average Nagpurian owns a car. The government is building a special economic zone with tax breaks and ready-to-use water, electricity and fiber optic cable, in the hope of attracting 100,000 technology jobs to a city long dominated by coal mining.

Borrowing a chapter from China's playbook, the Indian government has begun working to make metropolises out of smaller, isolated cities, from Jaipur in the north to Vijayawada in the east to Mysore in the south, garnishing them with fresh infrastructure like international airports and financial grants linked to improvements in governance.

"One hundred million people are moving to cities in the next 10 years, and it's important that these 100 million are absorbed into second-tier cities instead of showing up in Delhi or Mumbai," Montek Singh Ahluwalia, the Indian government's chief economic planner, said in a telephone conversation.

Since its independence from Britain in 1947, the city-building philosophy of India has been, to put it tenderly, laissez-faire. Except for the recently developed technology hubs of Bangalore and Hyderabad, India has not added cosmopolitan, globally connected metropolises to its old ones: Calcutta, Delhi, Madras and Mumbai. As the Indian population tripled, the 1.1 billion people living on about 3 million square kilometers, or 1.1 million square miles, were left to scramble for space and opportunity in the few thousand square kilometers that contained well-paid jobs, 24-hour electricity and air-conditioned cinemas.

To take just one measure of the shortage of developed metropolises, there are 65 million Indians for every airport with the three-kilometer, or two-mile, runway required by large jetliners, according to the U.S. Central Intelligence Agency. In the United States, the figure is 1.6 million people; in China, 25 million.

Even as China beefed up second-tier cities like Dalian, Hangzhou and Tianjin and linked them to the world, India waited. And its cities began to break. In Mumbai, a majority of people live in slums, and a sewage river passes through just as the Seine streaks Paris. Delhi is chronically short of water and electricity. Calcutta teems with rickshaw drivers who break their bodies for a few cents a ride, because there are too many people vying for work in so tiny a place.

No one knows if India has the stamina to build Nagpur to completion, and then build 20 more. But many experts regard metropolis-building as a silver bullet for India, slaying many problems with a single shot.

"Much of India's future will undeniably be made in the second-tier cities," said Ashutosh Varshney, a specialist on Indian political economy at the University of Michigan in Ann Arbor. The existing metropolises "will reach saturation points before long, or have already reached such points, and re-engineering their capacities for further growth will not be easy."

New metropolises could erode poverty, easing the load on cramped, Dickensian cities and creating more hubs where rural migrants can go for jobs in textile mills or the retail sector. More international airports could help raise incomes for the 700 million rural Indians by making it easier for their produce to reach export markets.

The Indian metropolis-building might also be an environmental boon. Upstart cities like Nagpur, on which millions have yet to descend, can grow on an ecofriendly model, with green spaces, mass transit and rainwater harvesting, in a way that old cities, with entrenched infrastructure, cannot.

"There's a whole lot of leapfrogging possibilities when you're creating new capitals," said Ahluwalia, the government planner.

New cities are also craved by industry, which is struggling to pay soaring land prices and wages in the traditional metropolises.

Investors have long known this. What is new is the enthusiasm of the government, which has pledged in the last two years to spend $29 billion over seven years to upgrade 63 cities. Grants are given only to cities that tighten governance and enact business-friendly policies like scaling back rent control. More than half the funds are reserved for 56 cities with populations below four million.

One fact separates Nagpur, with an estimated 2.5 million people, from the other 55: When the Indian government selected it as the air cargo hub for the country, it guaranteed skeptical investors that this obscure city would eventually rank with the busiest airports in the world, with all the attendant job creation and prosperity. Nagpur was chosen because it lies near the geographic center of India and is a crossroads of road and rail traffic.

"It has the potential to be the growth nucleus of central India," Lokesh Chandra, the fresh-faced Nagpur municipal commissioner, said in an interview.

Any city chief might make such a claim. But in Nagpur, the blueprints of the new airport suggest that here, at least, India has genuinely broken with its old build-it-only-after-a-catastrophic-shortage approach to infrastructure, adopting something closer to the Chinese if-you-build-it-they-will-come philosophy.

Today, the Nagpur airport is an airstrip. Visitors deplane and cross the tarmac on foot to enter the terminal. It takes 30 seconds to traverse the entire terminal from arrival gate to taxi stand.

The blueprints foreshadow radical change. Nagpur got its first international flight just 18 months ago, but it is already planning a second runway long enough for jets like the Airbus A380 superjumbo. A new terminal, already being built, will occupy 300,000 square meters, or 3.2 million square feet, up from 3,000 square meters. It is designed to accommodate 14 million passengers a year, a 20-fold increase. Consultants from Changi Airport in Singapore have been hired to spruce up the duty-free shopping.

Next to the airport is a vast special economic zone, an enclave of relative economic freedom designed to attract investors. Boeing, the plane maker, is setting up a maintenance hub there, and in an adjoining technology park Indian outsourcing vendors like Satyam Computer Services and HCL Technologies have signed up for land.

Together, the airport, cargo operation and park are expected to employ more than 100,000 people.

The project has made Nagpur's renaissance a fait accompli for many investors, and their enthusiasm has bid up real estate prices.

A decade ago, an acre, or 0.4 hectare, of land on the main street, Wardha Road, sold for 100,000 rupees, or about $2,400 at current exchange rates. Today it costs 20 to 40 times more, property developers say. Even in less lucrative areas, prices have at least doubled in five years.

To some, it feels like a bubble. Alok Tiwari, executive editor of The Hitawada, the local newspaper, said investors were anticipating a boom, but that the underlying fuel of a boom - more jobs and buying power - had yet to arrive. "We've got to create opportunity, not just take land and build a mall there," he said.

Some entrepreneurs accuse the government of building the special economic zones at the expense of clearing the thicket of taxes and regulations that hinders growth outside those rarified enclaves.

"Government is not trying to help," said Vijaykumar, a developer who goes by one name and whose family-run company built Nagpur's first shopping mall.

Yet the boom is real enough that Vijaykumar is investing heavily in new office towers, houses and malls in the city.

That may be enough. Nagpurians marvel at how, with every new mall, the young discover wants they never had before. They work harder to afford those wants. More malls are built to satisfy them. And after a time, the cycle acquires its own momentum.

Vishwas Chaknalwar, a builder, put it this way. "Once you wear Pyramid clothes," he said, referring to a new mall here, "you cannot wear anything else."

By Anand Giridharadas - Thursday, May 10, 2007
The International Herald Tribune