Global Ubanization Costs: Latin America, China, JapanBy 2007, for the first time in human history, the majority of people will live in cities. The subset of developing countries will follow quickly, crossing this threshold in 2020. Driving this trend is the surge of rural workers who migrate to these cities in search of higher wages and better living conditions. Since the early 1980s, 130 million farmers have relocated to urban areas, where their earnings in just one month can be equivalent to their yearly income on a farm. Asian cities alone are home to 1.4 billion people - more than the urban centers of Europe, North America, Australasia, and Latin America (including Spanish speaking countries and Portuguese speaking Brazil) combined. Megacities with populations of greater than five million will increase in number from 40 to 58 by 2015. The most explosive growth of megacities will be in the developing world, where by 2015 the populations of many cities will exceed that of Los Angeles. According to the World Bank, 80 percent of future economic growth will occur in urban areas. Yet these vast metropolises will also create massive needs for infrastructure development. The Asian Development Bank estimates annual costs between $20 to $40 billion (U.S.) for the region. Some of these megacities - such as Korean speaking Seoul and possibly Kuala Lumpur - are poised to be bustling By 2007, for the first time in human history, the majority of people will live in cities. centers of commerce and culture. They are already heavily investing in new infrastructure and are likely to maintain sufficient economic growth to keep their new arrivals productively employed. But other megacities threaten to emerge as ungovernable zones of crime, poverty, disease, and environmental degradation. Mumbai, Dhaka, Karachi, Lagos, Manila, and Jakarta face grave problems because economic growth and infrastructure investment have not kept pace with the urban boom. In Karachi, there are now fewer than three telephones for every 100 people.67 Only half of Jakarta's residents have running water, while 80 percent of the surrounding country lacks access to piped water.68 Lagos, in particular, may be ground zero for the world's worst urban crisis in the coming decades. The Nigerian city already is struggling to accommodate a population of some 13 million. The combined influx of citizens - people seeking refuge from the country's civil conflicts, foreign refugees, and rural migrants - has driven annual population growth rates up to 8 percent.69 The city is also a microcosm of the nation's feuding 250 ethnic and religious groups, among them Christians, Shi'ite Muslims, Sunni Muslims, Yoruba, Hausa, and Ibo. Add inadequate sanitation, water, and housing to this already volatile mix, and the explosive results are all too predictable. Yet, the developing world is not just home to teeming, restless masses. Many countries also boast growing numbers of skilled workers that constitute a huge untapped pool of talent for global corporations. China produced 739,000 university graduates in 2000, equivalent to 13 percent of the total in advanced OECD economies. Universities in India graduated some 167,000 students with science and engineering degrees, nearly two-thirds more than the United States. Together, China (with Traditional Chinese and Simplified Chinese) and India now produce one-fifth of all doctoral students in science and engineering fields. Numbers alone make them attractive locations for companies struggling to find skilled employees. But with substantially lower labor costs than Europe, North America, or Japan, these and other emerging markets also offer huge savings to corporations with production, research, and development facilities there. Already, China has the second highest number of researchers in the world, behind the United States but well ahead of rival Japan.
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