Urbanization may radically change not only the landscape but also investors' portfolios. Creating the livable urban centers of tomorrow calls for a revolution in the way we provide homes, transport, health, education and much more.
Our expert guests will explore the future of cities and its implications for your wealth.
In a national referendum on Sunday, Chileans overwhelmingly voted in favor of a new constitution. But, why are people in this oasis of political stability and steady economic growth in South America willing to undo the bedrock of the system that has allowed Chile to prosper for so long?
<p><strong>The back story.</strong> The current charter dates from forty years ago, when Chile was still ruled by despot General Augusto Pinochet. It was approved in a 1980 national plebiscite which the opposition says was <a href="https://www.washingtonpost.com/archive/politics/1980/09/12/pinochet-wins-overwhelming-vote-on-new-constitution/750660cc-4fa3-4962-8720-9c4bddb2b595/" rel="noopener noreferrer" target="_blank">rigged</a>.</p><p>Drafted largely by US-educated Chilean neoliberal economists, the Pinochet-era constitution gave a huge role to the private sector in state affairs. Schools, pensions and healthcare were all partially privatized. Chile soon became the most business-friendly South American nation, and its accumulated GDP expanded by an astounding <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CL%5D" rel="noopener noreferrer" target="_blank">800 percent</a> from 1990 to 2018.</p><p>However, the 1980 charter largely <a href="https://www.economist.com/the-americas/2020/10/22/chiles-momentous-referendum-on-its-constitution" rel="noopener noreferrer" target="_blank">concentrated power</a> in the hands of Santiago's political and business elite, who prospered handsomely while the rest of the country got left behind. Over time, the stark disparity bred strong resentment among working-class Chileans fed up with substandard public healthcare and education, students who can't afford rising tuition fees, the elderly who barely get by on meager public pensions, and <a href="https://www.nytimes.com/2020/09/16/world/americas/chile-mapuche-constitution.html" rel="noopener noreferrer" target="_blank">indigenous people</a>, who account for 9 percent of the population yet have no cultural or land rights.</p><p><strong>The four-cent spark for it all.</strong> A year ago, the residents of Santiago <a href="https://www.gzeromedia.com/what-were-watching-unfare-protests-in-chile" target="_self">took to the streets</a> to reject a $0.04 fare hike for the capital's metro rail system. It was an <a href="https://www.aljazeera.com/news/2019/11/26/anger-in-chile-as-ally-of-president-says-rights-abuses-necessary" rel="noopener noreferrer" target="_blank">explosion of anger</a> that caught conservative President Sebastián Piñera by surprise. One of the main demands of the marches — some of which turned violent — was a new constitution.</p><p>Piñera, backed into a corner, agreed to hold a referendum, and a year later, three quarters of Chileans voted "yes" to rewriting the country's charter. They also supported electing a constituent assembly in April, which will set to work on a draft that could be ready for popular approval by 2022.</p><p><strong>The region is watching.</strong> For decades Chile has been an <a href="https://worldview.stratfor.com/article/chile-island-stability-south-america" rel="noopener noreferrer" target="_blank">outlier in South America</a>, boasting political stability and steady economic growth in a region long mired in conflict and economic crises. But now that this unequal prosperity has, ultimately, come at a clear political cost, the country's next steps will be closely scrutinized.</p><p>Proponents of the referendum envision a new charter that will enshrine more <a href="https://blog.petrieflom.law.harvard.edu/2020/09/18/chile-health-care-reform/" rel="noopener noreferrer" target="_blank">basic rights</a> for all Chileans (especially free higher education and healthcare, as well as affordable housing and transportation), limit the role of the private sector, and expand public welfare to create a more equal society. They argue that while Chile's economy has been cruising for decades, growth has not trickled down to the majority of the people. (In 2018, the income inequality gap between the top and bottom 10 percent was <a href="https://www.oecd.org/chile/chile-should-use-upturn-to-address-low-productivity-and-high-inequality.htm" rel="noopener noreferrer" target="_blank">65 percent higher</a> than the average among the 37 OECD member countries — and that was before COVID-19.)</p><p>Although the reforms enjoy widespread support among Chileans, opponents say that implementing a robust social safety net could stifle the country's economic prospects, and open up Chile to the political and economic upheavals that have plagued neighbors like <a href="https://www.gzeromedia.com/argentina-macri-had-a-dream-its-fading-fast?share_id=4558156" target="_self">Argentina</a>.</p><p><strong>Looking ahead.</strong> After decades as a regional model for political stability and economic growth, Chile has discovered it can no longer maintain both. With <a href="https://www.economist.com/the-americas/2020/10/22/chiles-momentous-referendum-on-its-constitution" rel="noopener noreferrer" target="_blank">such high stakes</a>, will the new constitution will help the country's leaders find ways to maintain economic success while ensuring greater equity for the 99 percent, or will this end up being a permanent tradeoff?</p>
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We live on an (increasingly) urban planet. Today, for the first time in human history, more than half of the world's population (55 percent) lives in cities. By 2050, that figure will rise to more than two-thirds, with close to 7 billion people living in urban areas. Cities have always been centers of opportunity, innovation, and human progress. But they are also often on the front lines of the major political and social challenges of the day. Here are three areas in which that's true right now.
<p><strong>Climate change. </strong>Cities are hugely vulnerable to climate change and will have to take the lead in efforts to contain and adapt to it. More than <a href="https://www.c40.org/ending-climate-change-begins-in-the-city" rel="noopener noreferrer" target="_blank">90 percent</a> of the world's cities lie in coastal areas exposed to rising sea levels. At the same time, large cities' traffic, transport infrastructure, and buildings <a href="https://www.unenvironment.org/explore-topics/resource-efficiency/what-we-do/cities/cities-and-climate-change#:~:text=At%20the%20same%20time%2C%20cities,being%20among%20the%20largest%20contributors." rel="noopener noreferrer" target="_blank">are responsible</a> for 75 percent of global carbon emissions.</p><p>The major global climate change agreements — like the Paris Accord — exist at the national level, but implementation falls largely on cities. Many large cities are <a href="https://assets.locomotive.works/sites/5ab410c8a2f42204838f797e/content_entry5ab410fb74c4833febe6c81a/5b97d05514ad66062f99bd66/files/C40_Report_Cities_leading_the_way.pdf?1536675925" rel="noopener noreferrer" target="_blank">already taking the lead</a> on their own — in some cases (as in the US currently) working at cross purposes with national leaders who are climate skeptics.</p><p><strong>Technology.</strong> Urban planners are excited about "smart cities" where digital technologies (including sensors and cameras deployed across the city) can make the city more efficient, less polluted, and more responsive to citizens' needs. But there are two big political issues here.</p><p>First, who's watching all of this? All of those data flows have to be monitored and safeguarded by someone. As cities get "smarter" they'll wrestle with politically fraught tradeoffs between urban efficiency and personal privacy.</p><p>Second, who's making all of this? Smart cities require next generation 5G networks. Right now, the most cost-effective manufacturers of 5G equipment are Chinese companies. But the US government has banned them at home over national security fears and is pressuring other countries to do the same. As the world slouches towards a bigger <a href="https://www.youtube.com/watch?v=lTyjBDBg5Rs" rel="noopener noreferrer" target="_blank">US-China tech divide</a>, cities that want the technologies of the future will be caught in the middle.</p><p><strong>Pandemic.</strong> All of the things that make cities vibrant centers of progress and innovation – density, diversity, strong connections with the rest of the world – will also leave them sitting ducks for outbreaks of contagious disease. That's been particularly true of the coronavirus pandemic. COVID-19 first spread in a city (Wuhan, China — population 10 million) and since then, the overwhelming majority of the disease's victims have been in cities. In the US, for example, a study in June found that more than <a href="https://onlinelibrary.wiley.com/doi/10.1111/jrh.12476" rel="noopener noreferrer" target="_blank">94 percent</a> of all cases (and deaths) have been in urban areas.</p><p>When we talk about the devastating impacts of the pandemic, and particularly its disproportionate public health and economic effects on minorities, the poor, and women, we are talking primarily about urban crises.</p><p><strong>Polarization.</strong> No matter who wins next week's US presidential election, the electoral map is likely to be a sea of red (many less densely populated precincts that voted Republican) with large islands of blue (Democrat-leaning cities). But that political divergence between more liberal big cities and more conservative towns and rural areas isn't just an American phenomenon.</p><p>In 2016, for example, Londoners overwhelmingly <a href="https://www.bbc.com/news/uk-politics-eu-referendum-36612916" target="_blank">voted</a> <em>against</em> Brexit. Poland's recent presidential election was similar, a right-wing conservative <a href="https://www.politico.eu/article/rural-urban-split-defines-polish-presidential-race-andrzej-duda-election/" target="_blank">beat</a> a liberal big city mayor by drawing votes from the countryside. In Turkey, strongman president Recep Tayyip Erdoğan is least popular in the big cities, particularly his hometown of Istanbul, which his party lost control of last year.</p><p>The political divergence between town and country, and between cities and national governments, will become increasingly acute as cities grow and gain more economic power.</p>
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October 26, 2020
Europe's second wave: After a brutal spring in which Europe emerged as a coronavirus epicenter, the outbreak largely subsided across the continent in the summer, allowing many Europeans to travel and gather in large groups. But now, a second wave of infection is wreaking havoc across Europe, with the region reporting more than 1.3 million cases this past week alone, according to the World Health Organization, the highest seven-day increase to date. Former coronavirus hotspots like France, Italy, Spain, and the UK are again grappling with a record number of new cases that could soon dwarf the out-of-control outbreaks seen this past spring. Meanwhile, countries like Germany, Poland, and the Czech Republic that staved off massive outbreaks in the spring are also seeing an unprecedented number of new daily cases. As Europe now accounts for around 22 percent of all new COVID infections worldwide, hospitals in many cities are being swamped as many struggle to source life-saving equipment. As a result, Spain declared a national state of emergency Sunday, imposing nighttime curfews, while Italy imposed its strictest lockdown since May. Europe's Center for Disease Prevention and Control warned against complacency, noting that while transmission is mostly between younger people, keeping the death rate low, that could swiftly change if Europe doesn't get the virus in check.
<p><strong>Iraq a year later:</strong> Marking a year since the outbreak of widespread protests over corruption and joblessness in one of the world's most oil-rich countries, demonstrators in Iraq have again flooded the capital, Baghdad, and other cities with<a href="https://apnews.com/article/baghdad-iraq-middle-east-6794a4d2c0594f921dc4c74b5e3d0f3b" target="_blank"> renewed calls</a> to clean up graft and implement broader political and economic reforms. In recent years, unemployment has surged in the country, and millions of Iraqis have fallen into <a href="https://www.uniraq.org/index.php?option=com_k2&view=item&layout=item&id=941&Itemid=472&lang=en" target="_blank" title="https://www.uniraq.org/index.php?option=com_k2&view=item&layout=item&id=941&Itemid=472&lang=en">poverty</a> while politicians have continued to line their pockets. The government's <a href="https://www.nytimes.com/2020/01/25/world/middleeast/iraq-protests-Sadr.html" target="_blank" title="https://www.nytimes.com/2020/01/25/world/middleeast/iraq-protests-Sadr.html">brutal crackdown</a> on the last protests in 2019 — killing more than 500 people — remains a rallying cry, even after months of the pandemic largely kept activists off the streets. Police responded to the new wave of demonstrations fiercely, tear-gassing protesters, some of whom hurled Molotov cocktails at security forces. We're watching to see whether this fresh mobilization on the streets will move the needle on overdue reforms. The outcome of the US election could also play a role: will a Biden administration put more pressure on Baghdad to clean up its act?<br/></p><p><strong>Erdogan playing with fire: </strong>Turkey's strongman president Recep Tayyib Erdogan let loose over the weekend, with a wild speech in which he dared the US to impose sanctions on his country, blasted the EU, and <a href="https://www.bbc.com/news/world-europe-54678826" target="_blank">called</a> French President Emmanuel Macron crazy. Erdogan is upset about Washington's warnings not to get more involved in the war over Nagorno-Karabakh, in which Ankara is openly backing Azerbaijan against Armenia, as well as US objections to Turkey's<a href="https://www.militarytimes.com/news/your-military/2020/10/25/trump-administration-slams-nato-ally-turkey-for-test-firing-s-400-air-defense-system/" target="_blank"> testing </a>of an advanced missile system that it recently bought from Russia. Macron, for his part, needs "mental treatment," the Turkish president said, because of his views on "Islam and Muslims." Macron, who has traded barbs with Erdogan in the past, recently vowed to quash radical Islam after a jihadist beheaded a <a href="https://www.bbc.com/news/world-europe-54639343" target="_blank">French teacher</a>. Erdogan has a long history of throwing punches abroad to distract from problems at home, but with the Turkish lira <a href="https://www.aljazeera.com/economy/2020/10/26/turkeys-lira-hits-another-record-low-as-rift-with-france-deepens" target="_blank">hitting record lows</a>, can he afford to be so pugnacious? The <a href="https://foreignpolicy.com/2018/05/25/erdogan-is-a-mad-economist-and-turkey-is-his-laboratory/" target="_blank">foreign investors</a> whom he depends on to keep his economy afloat seem to think not. <span></span><br/></p>
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