Exploring Strategies for Planned Urban Cluster Development in South Asia

Most cities in South Asia have developed as unconnected centers of growth with unplanned urbanization. Limited fiscal resources and lack of collaborative planning expose their municipal bodies to great challenges. City governments must battle urban sprawl and increasing congestion while ensuring quality public services and maintaining their fiscal health. In contrast, urban clusters—that is, a core city surrounded by other cities—benefit from agglomeration effects, network externalities, and economies of scale, giving them a competitive edge over stand-alone cities. Clusters are seen as potential drivers of economic growth as they harness the economic potential of neighboring cities and towns upstream, and support the growth of domestic and regional corridors downstream. They could be financial centers like Tokyo, Shanghai, and Mumbai; technology hubs like Singapore and Bengaluru; or primate cities like Dhaka and Jakarta. Regardless of the form they take, clusters have influenced the location of industries, allocation of national resources, development of transportation networks, and international trade dynamics. For South Asia to become a leading economic power, development of its cities as prospective centers of growth and dynamism holds great promise. Economically successful clusters are expected to house advanced technology companies and research centers, provide high-quality education facilities, and offer a wide variety of jobs and good living conditions. We identify Mumbai, Delhi, and Dhaka as mature cities in the region; and Pune, Bengaluru, Ahmedabad, Chennai, Colombo, and Kathmandu as emerging cities that display the potential for growth and transition into clusters. To succeed, these cities must avoid lock-in to inefficient urban sprawls; exploit the economic capacity of cities, towns, and villages developing around them; and ensure quality public services to citizens. Based on an examination of the status of development of these cities and assessment of key challenges they face, we develop a list of strategic options for urban cluster development.