Thursday, March 30, 2023

Uncontrolled urbanization

The fundamental idea based on which businesses produce goods and services rests on the premise that there are enough buyers in the market who are willing to buy the produce at a price higher than the cost of its production. And from microeconomics and business profitability point of view, it is always desirable to serve a larger audience than a smaller one. This is why urban centres with substantial aggregate demand often attract businesses and marketers offering different products and services. This is the reason why Dimapur or any other city for that matter witnesses greater economic activity than suburban or rural areas. The sheer density of the population living in urban centres compared to scattered population in rural counterparts acts as a magnet, which creates a pull factor in attracting commerce towards these regions. This should ideally lead to expansion of existing facilities like transport, communication, housing, education, employment, trade and commerce, civic amenities, etc. These improvements are expected to further induce the factors in attracting immigrants towards urban centres, hence further catalyzing the economic growth. However, there comes a point where the downward risks of urbanization start outperforming the benefits of economic growth and employment creation. There is a certain carrying capacity defined by the size of civic spending within which urban systems can function smoothly and soak the immigration pressure. When growth in urbanization is responded with proportionate improvements in supporting financial, administrative and infrastructural growth, the transition is normally smooth and beneficial for the overall economy. Mega cities like Delhi and Mumbai demonstrate how urban infrastructure in terms of demand for mobility (Delhi & Mumbai Metro), expansion (Navi Mumbai, NCR), energy, utilities, etc were proportionally developed with a pace outperforming the growth in immigration. Unfortunately, in case of Dimapur, or Kohima, the situation is absolutely unorganized, unplanned, chaotic, uneconomic and ecologically disastrous. For business and economy, urban centres act as enablers that provide employment, markets, linkages to other markets, access to finances, raw material, skilled human resource and expertise. However, in our case urban centres are themselves gasping for breath. Dimapur, for example, has witnessed unprecedented population growth in the last more than two decades. The space is shrinking which is resulting into conversion of sub-urban agrarian fields, encroachment of water bodies, chocked electricity and water supply, frequent drainage issues and the visible of them all – the traffic mess. Things are taking a very ugly shape, both, economically as well as ecologically. The demand for commercial real estate has seen such a huge jump, and with commercial real estate in Dimapur witnessing an upward surge, it is difficult to spread its costing and create a viable business model. One fails to arrive at a viable return on investment (irrespective of what type of business one do) and it is absolutely difficult to anticipate a break-even even in a decade. Traffic jams and restricted working hours further limit the path towards profitability. The price escalation in labour, real estate, etc is justified only if there is a corresponding increase in productivity and earnings; however, the false flag inflation in these factors of production is only retarding our business growth and limiting the possibility of some potential business ideas from taking off from the ground. Urbanization is guided by many socio-economic forces, which is bound to happen, however, we must accept the fact that we have failed to leverage urbanization for the greater good of greater number of people. Although, there are no perfect solutions for this globally encountered riddle, strategies can be adopted to mitigate the risks arising out of this. We must improve the civic investment towards financial, administrative, economic and ecological infrastructure commensurate with the prevailing and anticipated rate of urbanization, and also invest in creating more small and medium sized towns with more efficient distribution of social services such as government assistance and health care. Instead of letting towns grow haphazardly like over-grown villages, it’s wise to give due importance to their developmental programmes. If we somehow can reduce the gap in quality of life living in Dimapur versus the surrounding towns, we might be in a position to strike equilibrium and smoothen the process of urbanization as a holistic measure rather than a painful uncontrollable phenomenon.