According to a report published by the Bank of America Merrill Lynch, cities around the world need a massive investment to cope with the steep population growth, thanks to the trend of more and more people moving from villages to the cities.
The report says 70 percent of the world’s population will live in cities by 2050, up from last year’s estimate of 55 percent. The share of cities of the global gross domestic product will almost double to $115 trillion by 2030.
BAML analysts point out that the cities will need an investment between $71 and $78 trillion dollars over the next 10 years so that they can have the infrastructure to sustain this huge population growth. The present rate of investment in the cities is simply inadequate according to the analysts. Plus, they say, the “smart city” market is going to expand to $1.6 trillion by 2020, which is 60 percent more than what it is now.
80 Percent of the Cities Are Fragile
A BAML statement said, “More than 80 percent of the world’s cities show signs of fragility, yet the success or failure in meeting the world’s most pressing challenges will be decided in them”. There are likely to be 41 megacities and 11 metacities in the world in 2030. The most populated urban agglomerations will be Tokyo, Delhi, Shanghai, Mumbai and Beijing. The 700 largest cities in China will provide 30 percent of the world’s global consumption growth. They will account for $7 trillion.
The mayor of Cascais, a coastal town of Portugal, agrees with this. He says world cities need an estimated $4.5 trillion every year for renovation. He says the costs are too high for most governments, so there should be public and private cooperation.
Cities Need the Money to Fight Poverty and Reduce Risks
Researchers at the Bank of America Merrill Lynch are further pointing out that, urbanization can also help us fight poverty. This is one more reason why infrastructure development is very important. For instance, an estimated 500 million people in China has managed to come out of poverty because of urbanization. The World Bank says per capita income in the country will double if China’s urbanization goes up by 230 percent.
Cities around the world also need to cope with threats. A World Bank report says cities are going to lose $330 billion every year till 2030 because of environmental disasters. So part of the investment to build infrastructure will have to go towards reducing the risks in urban areas.