Economy

By 2037, half the world will live in cities of emerging markets

Vidya Ram London | Updated on November 15, 2017

Commuters in the Capital travelling by the Metro. New Delhi will be the fastest growing city between 2020 and 2025 (file photo). – Rajeev Bhatt





A huge shift in urbanisation “from the West to India, China and other fast growing economies” is happening. According to a a report, Opportunities in an Urbanising World, published this week by Credit Suisse, by 2037 half the world's population will live in cities in “emerging markets.” The report is based on UN data and estimates.

Year 2044 will be a crucial milestone for India: when 50 per cent of the country will be urbanised, the report estimates.

By 2015, there will be 52 cities in India with more than 1 million people. While India will be one of the last major countries to shift from a majority rural to a majority urban population, between now and 2050 that rate of urbanisation will step up markedly, with a compound annual growth rate of 2.1 per cent “nearly double China's 1.2 per cent CAGR. By 2050, 875 million people, or 54 per cent of India's estimated population in 2050 will live in cities (a level of urbanisation still well below Brazil's 94 per cent, or China's 73 per cent).

Up until 2050 six of the 25 fastest growing major cities in the world will be in India, with seven in China and not a single one in the so-called developed world. And while Kinshasa is set to be the fastest growing city from 2015 to 2020, New Delhi will take that title between 2020 and 2025.

The shift from the West will be accompanied by potentially huge economic gains for the newly urbanising countries: the Credit Suisse study estimates that a 5 per cent increase in urbanisation leads to 10 per cent gain in per capita economic activity with a particular “sweet spot” for countries with an urbanisation rate of 30 to 50 per cent (India's, it estimates is 31 per cent).

However, while the report is mostly positive about China's ability to capitalise on the economic opportunities presented by urbanisation, with India the report expresses reservations, warning that “underinvestment in cities is at critical levels”.

“It is not too late for India to create an economic succession from its progression to an urbanised nation if the Government begins immediately to implement the necessary bold policy measures to tackle the underinvestment, poor planning and management and lack of infrastructure development which has thus far characterised the expansion of its cities.

Published on April 06, 2012

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