Addis among the Top 3 cities most likely to become a global leader

www.simplesharebuttons.com Share this post...

Jakarta and Manila, two of Asia’s most chaotic, congested cities, are likely to get a lot better in the next two decades, according to a new ranking by A.T. Kearney.

Addis among the Top 3 cities most likely to become a global leaderThe U.S.-based consulting firm placed Indonesia’s capital at the top of a list of 34 cities in low and middle income countries most likely to become a global leader in everything from business activity to workforce health and security. The Philippine capital grabbed second place, followed by Ethiopian capital Addis Ababa.

The only other Southeast Asian countries on the list were Kuala Lumpur (10), Bangkok (21), and Ho Chi Minh City (29).

The A.T. Kearney report cited Jakarta’s increasingly stable political system and emphasis in addressing income inequality and environmental concerns as some of the main reasons for its top ranking.

Some economists, however, expressed reservations.

“We know the potential of Indonesia,” said Euben Paracuelles, Nomura’s senior economist for Southeast Asia. But the upcoming presidential election could prove a significant stumbling block to Jakarta’s globalization, depending on its outcome, he said.

Indonesia just held legislative elections, with the party thought most likely to see huge gains getting less of the vote than anticipated. That has created the need for multiple party coalitions, which in the past have held up policy making. If a large, clunky coalition leads the next government, it could continue to delay much-needed reforms, say analysts.

Mr. Paracuelles says Manila, which ranked just below Jakarta, appears to have more promise.

“Manila I think has done a little bit better [than Jakarta] over a relatively short period of time,” he said. “Assuming they sustain this reform momentum, that bodes very well.”

The Philippines’ economy is storming ahead of its peers this year, bolstered by favorable demographics and a reformist government led by president Benigno Aquino III, whose promise to tackle longstanding corruption has won the favor of foreign investors.

Economic growth in the Philippines hit 7.2% in 2013, second in Asia only to China’s 7.7%, despite being hit by a series of disasters toward the end of the year. The World Bank expects 2014 growth to reach 6.6% — a robust figure when growth across Asia is slowing.

The A.T. Kearney survey took into account a wide range of metrics when determining its rankings. It included how developed infrastructure was in each city, ease of doing business, income inequality and environmental stability.

Jakarta, which is famous for mind-boggling traffic and paltry infrastructure, scored most highly on measures involving its population, such as income equality, while improvements in stability and security also bumped it up the table. Scores were determined by evaluating how cities progressed between 2008 and 2013 and extrapolating to measure the likelihood of improvement in the next two decades.

Over the past five years Jakarta has invested heavily in infrastructure, while Governor Joko Widodo worked to implement a low-cost health care scheme and dramatically raised the minimum wage.

Bangkok was the best performer in Southeast Asia for cultural capital—it was the world’s number one tourist destination in 2013. But it ranked low on other factors mainly due to political and economic stagnation, made worse by recent political instability caused by ongoing antigovernment protests.

“In 2008, Bangkok seemed destined to rise” in terms of business activity, human capital and international political engagement, the report says. “Since then, and coinciding with a long period of political uncertainty, scores in all three of these dimensions have flagged.”

This year Bangkok’s emerging cities ranking puts it behind Caracas and just above Casablanca.

In a separate ranking of global cities including those from developed economies, New York came in first, followed by London in second and Paris in third. Singapore, the only city in Southeast Asia to make the top 40, came in at 9th place.