Let a hundred Hong Kong bloom
Imagine India few years from now as a network of many Hong Kongs – big, medium
and small ones. I first heard this idea from Sauvik Chakravarti. Big
cities, if we have a decentralised way of decision making, would be
catalyst for medium and small cities sprouting around them. Each of
these cities would be connected to others with good roads, rail and
other modes of transportation.
Free trading cities, each flourishing by leveraging its comparative
advantage. These cities hopefully would not be exact replicas of the
great city, as I mentioned in my earlier post. But Hong Kongs built
with local characteristics and culture as foundation.
How would this come about? Why not do what Sir John Cowperthwaithe
did for Hong Kong. Government could start by showing ‘benign neglect’
instead of active obstruction. Remove all economic laws that obstruct
people from earning a living, trade with each other and generate wealth.
Force central government and state governments to devolve most of
the power and accountability to the local level. Implement the 73rd
and 74th amendments to the Indian constitution in letter and spirit.
Actually put some resource and energy behind the local government and
panchayati raj concept.
Let local institutions, both private and public flourish. Let them
be capable of responding to the concerns and needs of the local
citizens. Empower local authorities to serve the people who elect
them. Empower the local citizen to punish the authorities when they
fail to deliver.
Of course there are other issues like land law reform that are
crucial for a city to bloom. But let us start somewhere. Let us not
allow the complexity and chaos of the present situation to paralyse us.
Think this is too far fetched? Not really. Every government in our
country has toyed with the idea of economic free trade zones. The idea
is to identity a region and simplify or eliminate all or most of the
pernicious economic laws, give tax holidays to industries in that
region, and so on.
(I would rather see the entire country enjoy such benefits rather
than politicians and bureaucrats picking winning and loosing regions.
But a friend pointed out, why not take what you get and ask for more
later.)
If we buy into the economic free trade zone argument, why not
declare a bunch of cities as free trade zones. Suspend all economic
laws and restrictions. Drastically simplify taxes. Why not try this
as an experiment in a few cities.
I am pretty sure that this would set off the next phase of
competition among states and regions. Liberalisation process, which
started in the early 1990s, sparked off competition among states in
attracting capital and industries. Now let the cities compete with
each other in attracting capital, resources and most importantly,
people.
Good cities will attract the most important of resources — people.
Bad ones will lose people and with it the tax base, creativity and
dynamism.
Unleash the potential of our cities. Let a hundred Hong Kong bloom.
More on the great man Cowperthwaithe and Hong Kong