City cluster development (CCD) is an urban-led development
approach that enhances the ability of cities to promote economic
growth in an extended urban region. The primary methodology of
CCD is to assess the competitiveness of the city's ability to increase
the value of its enterprises, and to enhance its ability to nurture the
progress of its local economic dynamism for the prosperity of its
residents. An extended urban region is defined by spatial spheres
of economic influence, not administrative jurisdictions. CCD takes
advantage of economies of scale in extended urban regions, thus
increasing the intensity of economic activity.
Asia is urbanizing rapidly. By 2030, more than 55% of Asia's
population will reside in urban areas. Thus, a development
approach, which can take into account both rural and urban
economic activities in a regional economic context, is needed.
CCD can provide new insights into the changing economic
structure and spatial pattern of business activities and investment
in selected CCD economies by
CCD calls for a unified multisector approach to reach common
development goals among local government bodies and
stakeholders in both urban and rural areas in an extended urban
region. It can improve the financial viability and credit rating
of local government bodies of the city region by forging areawide
fiscal measures, tapping into the economic value of land,
and encouraging private sector participation. CCD requires
cooperative and coordinated actions among local government
bodies within the city cluster.
The table provides a strategic framework for policy makers
in enhancing the growth potential of CCD with respect to
institutional, demographic, and structural factors.
| FACTORS |
BARRIERS |
MITIGATION MEASURES |
STRATEGIES |
| 1. Institutional, legal, and governance mechanisms |
- Autonomous local units may resist CCD
- Antiurban mind-set
- overnmental fragmentation
|
- More information to local government officials about the merits of CCD wLocal government reforms
|
- Use region-wide planning to usher in region-wide governance
- Nurture strong leaders as a catalyst for CCD
|
| 2. Demographics, resources, and spatial aspects for integrating rural and urban economies |
- Population size to form an agglomerated pattern of city regions
- Conventional perception on rural–urban dichotomy deters inclusive CCD
|
- Strengthen economic links between rural and urban areas
- Improve the flow of goods and services in both directions
- Strengthen unified city clusterwide efforts to reduce poverty through political will
|
- Encourage compact settlement patterns within an 80-kilometer radius
- Do not dichotomize urban and rural sectors; include both in area-wide development
- Promote agro-processing businesses and enterprises
|
| 3. Development planning issues |
- Planners use mainly physical planning detached from economic planning that cannot be implemented
- Zoning codes and standards too focused on local issues
|
- Support data-gathering and dissemination activities
- Train planners to strengthen comprehensive plans in city clusters in connection with economic and fiscal planning.
|
- Adopt an area-wide approach suitable for ushering in governance reforms
- Formulate and adopt comprehensive city cluster plans reflecting a longerterm perspective
|
| 4. Land resources and land tenure |
- Private ownership of land makes it difficult to leverage land for CCD financing
- People's resistance to "land grabbing" for project use
- Failure to repeal legislation on land issues will delay CCD programs
|
- Capture tax revenue from increased value of land resulting from provision of infrastructure
- Implement tax reforms to capture economic value of land and land tenure
- Use land readjustment
|
- Use land readjustment mechanisms to unlock the economic value of land and increase property values
- Revise tax laws to facilitate use of land as a development financing resource
|
| 5. Economic growth potential and trade functions |
- Low level of economic productivity
- Lack of industrial–commercial activities
|
- Tap intellectual capital and resources from academic research institutions
- Formulate and implement city cluster local economic development strategies
|
- Concentrate infrastructure investments in one area to attract more enterprises
- Attract foreign and domestic investors by offering tax incentives
|
| 6. Taxation, fiscal issues |
- Low revenue-generating capacity on the part of local government bodies and low credit ratings
- Dependence on fund transfers and grants-in-aid
|
- Institute area-wide tax reforms
- Train local officials in revenueraising techniques, budgeting, and fiscal accountability
|
- Improve tax collection
- Invite PSP investments
- Consolidate city clusters to achieve higher credit ratings
|
| 7. Infrastructure and informational connectivity |
- Poor urban infrastructure and services
- Lack of coordination in the provision of infrastructure
|
- Tap central and provincial or state governments to provide more infrastructure
|
- Encourage PSP for infrastructure investments;
- Set up SEZs and industrial parks
|
| 8. Private sector participation |
- Low level of PSP interest
- Lack of mechanisms for PSP
- Lack of transparency and accountability
- Widespread rent-seeking
|
- Facilitate PSP by streamlining procedures
- Tap into banks and other financial institutions for investments
|
- Provide mechanisms for more PSP in financing urban infrastructure and services
|
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