ASEAN Socio-Cultural Community
Secondary ASEAN cities are an untapped resource
The concentration on capital cities has been an unspoken policy in ASEAN countries over the last half century. This has brought growth that has many detrimental effects. Now when the global economy is experiencing its deepest crisis since the 1930s, how secondary cities can contribute not only economically but also by altering our understanding of development should be discussed.
By Stuart MacDonald, 21 June 2012
With the slowdown of the world economy, many growth estimates across the Association of South-East Asian Nations (ASEAN) are being revised downwards. Strategies to offset the weak demand from the traditional export markets of the US and Europe involve the stimulation of domestic demand and a strengthening of interregional cooperation and trade.
While much of the focus is on national-level cooperation and the gradual dismantling of barriers to trade, one needs to ask what role ASEAN’s cities can play in fostering interregional cooperation. Since the early 1970s (Jane Jacobs, The Economy of Cities, 1970) cities have been acknowledged as the primary drivers of economic development, and the policy assumption that economies belong to nations rather than cities is considered detrimental to economic development; and therefore city development. Can a greater focus on cities and intercity connections in Asean support the region in moving towards deeper economic ties?
Competitive or complementary
The promotion of free trade agreements and tariff reductions has been the focus of ASEAN promotion of internal economic development, and the ASEAN Free Trade Agreement (AFTA) initiated in 1992 has gone a long way towards reducing trade barriers within the region. However, it is argued that the ultimate objective of Afta has been to increase Asean’s competitive edge as a production base geared towards the world market, and stimulating intra-Asean trade to date has been viewed very much as a secondary objective .
The existence of almost identical export structures among ASEAN members is argued to have been a significant factor in preventing deeper economic ties developing within the region; manufacturing sectors which dominate trade are more competitive than complementary. ASEAN members, while working to create a fairer trading platform, are still competing with each other for market share and therefore there has been little to drive economic integration any deeper. ASEAN members have looked to retain their position within the region, whilst developing their economic linkages outwards to the rest of the world. ASEAN countries also have a deep rooted concept of sovereignty, which is argued to have prevented the development of a supranational trading block along the lines of the European Union, but this has kept economic development within the domain of national policy rather than being devolved to cities.
In response to current global conditions, leaders of ASEAN have agreed to hasten the establishment of the ASEAN Community by 2015 and to transform ASEAN into a region with free movement of goods, services, investment and skilled labour, and freer flows of capital . The role of cities will be key to this, and Malaysia’s economic development policy is increasingly being shaped by the role of the city. Over the past 12 months, the federal government has recognised the importance of five regional cities and corridors to the economic growth of the country (George Town and the Northern Corridor Economic Region; Johor Bahru and Iskandar Malaysia; Kuantan and the East Coast Economic Region; Kuching and the Sarawak Corridor of Renewable Energy; and Kota Kinabalu and the Sabah Development Corridor), and various transformation plans acknowledge the role of the city.
The phenomenon of urban primacy, which results when one giant city becomes several times larger than the second city and a disproportionate share of national urban functions is found in one place, is widely criticised because of the regional and socioeconomic inequalities that it reflects and the unhealthy distribution of people and economic resources that results from it. South-East Asia and ASEAN member countries have historically been shaped by events and national policies which have promoted the development of their primary cities, resulting in an urban primacy where the capital city dominates. Nations that became independent in the 1950s were especially likely to develop urban primacy, and those colonies employing “direct rule” (e.g. French, Spanish, Portuguese, Belgian) tended to produce more primate urban hierarchies than where the country was under “indirect rule” (e.g. British) .
The urban elite concentrate in the primary city to maximise social contacts within that group and to preserve and further its own interests. Markets and services providing for this group develop, as do access to publicly-provided social and physical infrastructures such as good transport networks, hospitals, schools and universities, which reinforce the role of the primary city. Primacy is therefore associated with political and administrative centralism.
Income inequality in the city may be viewed as a historical result of urban primacy, this inequality is perpetuated as a country develops. The spatial concentration of wealth has adverse effects on the rest of the economic landscape; concentrations of income restrict the market’s ability to supply outside the primary city, while demand for goods and services outside the primary city is low due to lower incomes. The restricted market, coupled with a deficient infrastructure in the periphery, makes it difficult to decentralise production away from the primary city .
Cambodia and Thailand  have particularly high levels of urban primacy, with the metropolitan areas of Phnom Penh and Bangkok being home to more than 50% of the countries’ urban population. In general, ASEAN countries’ second largest metropolitan areas are between four and 12 times smaller than the primate city area, with the exception of Vietnam where the metro area of the capital Hanoi is smaller than that of Ho Chi Minh City.
Secondary cities have an important role to play in the urban and economic structure of their own territories. They are often important engines for national and regional development, which occurs despite the concentration of public resources flowing to the primary city; they often have large labour markets, concentrations of knowledge, varied institutions and universities, and have established trading connections and good transportation routes compared to many smaller, third-tier cities in their territory. Many also offer a better quality of life than the primary city.
Secondary cities need to be better integrated into the national and regional economy so that they can flourish and stimulate more economic growth and job creation. They should focus on their own uniqueness, based on real assets and advantages they possess, as they cannot compete on the same basis as primary cities. They need to do more to become people-friendly and sustain a higher quality of environment, with a humanistic scale and attention to education, recreation and the arts . These strategies can attract a highly skilled workforce which will bring investment and therefore economic development.
ASEAN cities, secondary cities in particular, need to examine how they can capitalise on increasingly free movement of goods, services, investment and skilled labour, and freer flows of capital. As the traditional export markets continue to show weakening demand, cities across the region should explore how interregional trade can help offset falls in demand and sustain economic growth in a period of uncertainty.
A number of ASEAN organisations and networks can be leveraged to support the development of secondary cities in the region. Organisations such as the ASEAN University network  and ASEAN Foundation  can help to develop the knowledge and understanding of the potential benefits of increased intraregional trade and the economic development opportunities that will flow from the creation of an ASEAN Economic Community.
The ASEAN Ports Association at a more practical level can support import replacement strategies, with a detailed examination of imports from outside the region which may be substituted with those from within. The ASEAN City Mayors Forum, which convened for the first time in Surabaya in October 2011, can act as a governance network to bring together the economic argument with the development of on-the-ground practices to stimulate city networks and open up opportunities to increase intraregional trade between cities.
Many argue that the achievements of ASEAN integration to date have been in the political sphere rather than in any economic field . However, cities have an opportunity to take the lead in forging deeper economic integration and sustain economic growth in South-East Asia.
Stuart MacDonald has been researching housing issues in Penang, and previously worked at the Centre for Local Economics Strategies in the UK.