Urbanisation does not mean all roads lead to Yangon

Linking secondary cities to Yangon or Mandalay as well as smaller towns in the regions will filter down economy activity in the two big cities to local regions, the author of Urban Myanmar said.

Urban Myanmar, a policy note published by International Growth Centre, outlines how cities in Myanmar can become drivers of economic growth and how their negative effects can be avoided.

The International Growth Centre (IGC) is headquartered in London but has an office in Yangon.

The Myanmar Times sat down with the publication’s author, Tim Dobermann, an economist, to talk about the country’s urbanisation process and

According to the National Spatial Development Framework drafted by the Ministry of Construction (MoC), Myanmar has three primary tier cities – Yangon, Mandalay, and Nay Pyi Taw, which serve as national strategic growth centres.

The complementary nature of Mandalay and Yangon

Yangon’s prominence in the economy is well-known – the commercial capital is leading the services sector and light export-oriented manufacturing. The country’s most successful and advanced special economic zone (SEZ), Thilawa, borders Yangon downtown.

The policy note cautioned against focusing solely on developing Yangon’s economy.

Its author explained that a “cascading effect” would result if only Yangon gets to grow.

“One view is that if all investment and financing is focused on a single city like Yangon, then other secondary cities can miss out on attracting such investments.

“If the only place to do business is Yangon, then what are the incentives for a new business to build elsewhere?

“The result could be a cascading effect, where the big city – i.e. Yangon – keeps getting bigger and bigger, leaving the rest behind,” Mr Dobermann said, citing an example for workers.

“If the only suitable place for jobs is in Yangon, you won’t harbour aspirations to look for work in a smaller city outside the commercial capital,” he noted.

The economist emphasised that this should not be an argument on limiting the size of Yangon.

“We shouldn’t approach the issue by thinking about how can we slowdown Yangon but, rather, how can we speed-up everyone else to converge or at least catch up with Yangon – how to link activity and make sure that the areas around Yangon benefit from the activity.

“The emphasis would be better placed on building the links and connections between a big city like Yangon with other surrounding secondary cities and rural areas.

“There is good evidence, from India for instance, that suggests that urban growth in big cities can have positive effects on reducing poverty in the countryside – provided that the cities and rural areas are linked and accessible,” he went on.

For Mr Dobermann, the question boils down to how Myanmar balances the activity and growth in Yangon with the aims of reducing inequality between the rural areas and the cities.

Yangon’s more service-based economy is contrasted with Mandalay’s, which is more manufacture-based with the aim to export to China.

The expert told The Myanmar Times that Mandalay’s attractiveness comes from its geographical proximity to Muse and the Chinese border, and that it can further develop its surrounding regions through its connections to neighbouring areas.

“Mandalay is seen as a very good hub for trade, whether it is trade between China and India or trade between central Myanmar and China. It will [also] be very tied to the development of Yangon.

“You would see a lot more interaction with Chinese economy and trade, really driving some of the businesses.

“At the same time, Mandalay is the regional hub for many people coming through the neighbouring states. Ultimately what is important is that Mandalay has these connections to these smaller cities around it and main connections to the big cities like Yangon,” he said.

The economist added that the two cities are very complementary.

“If you think of Yangon as the entry point for international investment, you can think of Mandalay as the entry point for regional investment, into northern Myanmar and south-western China.

“As an investor, you might want to start in Yangon. However, if you are interested in expanding your operations to a wider Myanmar or a focus on the Chinese market, Mandalay is the regional centre for that,” he continued.

Not ‘all roads lead to Yangon’

There is a lot of momentum behind infrastructure investment on the connection between Mandalay and Yangon, according to Mr Dobermann.

“It’s one of those key ideas in the centre of all these long-term plans,” he said, adding that both connecting Yangon and Mandalay and linking regional urban areas to the two main cities are important.

“This urbanisation and connection between primary and secondary cities will become more of a concern, as questions around inequality or rural development occur,” he explained.

Urban Myanmar argued that secondary cities would need to be connected with both the primary tier cities and towns in their regions, further linked by agro-industrial centres and border towns, in order to expand industrial production beyond Yangon and allow inclusive development.

The economist explained that those connections require a combination of land, rail and water transport.

“It’s really a combination. You’ll have the traditional highway infrastructure.

“At the same time, rail infrastructure is much more efficient in terms of business – if you’re transporting a large number of goods from southern Myanmar to Mandalay into the Chinese border, the rail would be cheaper.

“You need a combination of both road and rail infrastructure.

“And of course, there are the waterways between Yangon and Mandalay. This is another aspect on how to boost trade within the country,” Mr Dobermann noted.

Trade within Myanmar and international trade are equally important.

“We often think about international trade but internal trade is just as important if you want to think about Myanmar’s development and development in the different states and regions as well,” he said.

One way to think of it is like a ladder or staircase, according to Mr Dobermann. At the very top are Yangon and Mandalay, but as you move down, even though they’ve become smaller cities, they’re still a part of the entire staircase. This is the way how economic activity in the two big cities filters down into the local region – the report terms that as the evolution of urban hierarchies.

“When we’re talking about connections, it’s not ‘all roads need to lead to Yangon’ but all secondary cities [in the region] need to be connected to Yangon.

“You have state and region capitals which are linked up to Yangon and Mandalay and in turn those state and region capitals are linked up to their own regional towns,” he said.

According to Urban Myanmar, urban areas can be productive and liveable places if policymakers address key issues such as land, transport, finance, employment, and service provision.

Mr Dobermann told The Myanmar Times that apart from focusing on the long-term planning, Yangon also needs to work on more immediate reforms.

“If you want to have a successful city, you are going to need to take some pretty immediate reforms and steps.

“Sometimes, the conversation [regarding Yangon’s development] is not as heavily focused on these issues. In a way, the city’s long-term plan is essential.

“But if you get the fundamental challenges in a city right – if you are able to establish an effective service provision, reach out to different communities and put in right regulations – these will be what makes the big difference,” he said.

Source : Myanmar Times