Manila ranks 139th among world’s prosperous cities

On a list of 300 urban centers of the world, the city of Manila was ranked 139th in terms of prosperity and employment generation last year, based on a joint study of The Brookings Institution and JPMorgan Chase.

The list was dominated by Chinese cities that reflected the emerging strength of China as a world power.

Among Southeast Asian neighbors, Manila was beaten by Kuala Lumpur at 19th, Ho Chi Minh City at 23rd, Jakarta at 34th, and Singapore at 61st. Bangkok came in last, its economy wrecked by political strife.

Macau, the Chinese territory known for casino gambling, outperformed the rest of the world’s major cities economically last year, according to the report. Macau has enjoyed a tourism boom, with gamblers coming to bet at more than 30 casinos, including the Venetian Macau, the world’s largest.

Cities in the developing world, especially China, dominated the top of the annual economic rankings, while cities in wealthy, developed countries tended to lag behind.

Though most of the cities surveyed around the world have recovered from the Great Recession, 65 percent of European and 57 percent of North American cities have not, according to the study, which ranks cities by growth in employment and in economic output per person.

Joseph Parilla, a Brookings research analyst who co-wrote the report, said he was surprised by the “incredible differentiation within what are considered monolithic economic blocs.” Latin American cities, for instance, mostly sputtered. But Medellin, Colombia; and Lima, Peru, both broke into the top 50.

Cities in wealthy countries tended to perform poorly. But US and British cities showed improvement. Three US cities—Austin and Houston, Texas, and Raleigh, North Carolina—cracked the top 50. In the United Kingdom, London came in No. 26 and Manchester No. 60.

The United States and Britain have begun to pick up economic momentum 5½ years after the recession ended.

“In developed economies like North America and Western Europe, cities such as London and Houston are flying high, while others like Rotterdam and Montreal are struggling,” Parilla said.

Twenty-seven of the 50 top-performing cities were Chinese. Increasingly, strong growth occurred in the traditionally underdeveloped cities of China’s interior, rather than its booming coastal cities. Land-locked Changsha, for instance, enjoyed economic growth per person of 8.6 percent last year and wound up No. 15 in the overall rankings.

The coastal manufacturing powerhouse of Dongguan, next door to Hong Kong, registered per-capita economic growth of just 5.2 percent (unimpressive by Chinese standards) and finished No. 70. Companies have begun to move inland as the cost of labor and land rises on the Chinese coast. And the Chinese government has invested heavily on infrastructure in the interior.

The 18 cities worldwide that specialized in producing commodities such as oil registered the highest rates of growth in economic output per person (2.6 percent) and employment (1.9 percent).

“The recent rise in oil and gas production in North America partly explains the success of metropolitan areas like Calgary, Denver, Houston, and Tulsa, which are epicenters of the region’s shale revolution,” the report said.

Next year’s rankings may be different. Oil prices have plunged to less than $48 a barrel from $107 a barrel last June, jeopardizing the prospects of cities that had been riding the energy boom.

Four Turkish cities made the Top 10: Izmir, Istanbul, Bursa and Ankara. Turkish cities boomed last year despite political unrest. “If you look at world headlines, Turkey is not in the news for its economic success, but it probably should be,” Brookings’ Parilla says. “It has pretty solid macroeconomic policies.”

Turkey benefits from its location at the boundary between Europe and Asia and from heavy investment in roads and other infrastructure projects, which create jobs over the short term and are likely to make the economy more efficient over the long term.

Global MetroMonitor, the fourth edition of the report, analyzes 2013-2014 data on the performance of the world’s 300 largest metropolitan areas based on their annualized growth rates of GDP per capita and employment. The Monitor combines these two key economic indicators into an economic performance index on which the 300 metro areas are ranked for 2014.

The 300 largest metropolitan economies are home to 20 percent of the world’s population and jobs, but account for almost half of global GDP, underscoring that the global economy is truly a metro economy.

“When you look at the global economy through a metropolitan lens, you see just how uneven growth is in every major region,” said Parilla.

“In developed economies like North America and Western Europe, cities like London and Houston are flying high, while others like Rotterdam and Montreal are struggling. Developing markets are growing faster overall, but vast differences separate cities in central China from those in the northeast, and cities in Peru and Colombia from those in Brazil and Argentina.”

The analysis found that overall, GDP per capita in these top 300 metro areas grew 1.3 percent in 2014, compared to 1.6 percent in 2013. Employment grew at 1.5 percent in 2014, the same as in 2013. The fastest growing economies were once again found in the Developing Asia-Pacific and Eastern European and Central Asia regions. The slowest-growing metro economies were located in Western Europe, North America and Developed Asia-Pacific.

In 2014, a third of the 300 largest metropolitan economies were “pockets of growth,” outperforming their countries on both income and employment growth. And on income growth alone, nearly half of all metro areas performed better than their national economies.

Even as national growth slowed in 2014, China accounted for more than half of the 30 fastest growing metro economies in the world. Metro areas in China’s inland core continue to exhibit extremely high growth rates. Hefei led all Chinese metro areas with 9.5 percent income growth, followed by Wuhan, Xiamen and Changsha.

All of these fast-growing cities except Xiamen are located in the central part of China, which has benefited from the national government’s efforts to connect these regions to the coast through significant infrastructure investment.

The joint study called the MetroMonitor analyzes the extent to which the world’s metro economies have recovered to 2007 levels of income and employment. The number of U.S. metros that achieved full recovery to 2007 levels in both employment and income has nearly doubled since the 2012 Global MetroMonitor was published, with 32 out of 80 metros in this category in 2014, versus 17 in 2012.

Six years after the global financial crisis the majority of the world’s metro economies have met or exceeded their pre-recession levels of income and employment. Yet 57 percent of metro areas in North America and 65 percent in Western Europe have yet to achieve full recovery.

“The uneven pace of economic growth in the world’s major metro areas in 2014 reflects a still uncertain global recovery,” Alan Berube, Brookings senior fellow and report co-author, said.

“As political gridlock and economic turmoil thwarts decisive action from national governments and multilateral institutions, city and regional leaders worldwide must forge their own economic destinies,” he said.

The edition of the Global MetroMonitor is the fourth in a series started in 2010. The Global MetroMonitor also builds on the model of the U.S. MetroMonitor, which tracks key economic trends in the 100 largest U.S. metropolitan areas.

Launched in 2012, the Global Cities Initiative is a five-year joint project of Brookings and JPMorgan Chase aimed at helping city and metropolitan leaders become more globally fluent by providing an in-depth and data-driven look at their regional standing on crucial global economic measures, highlighting best policy and practice innovations from around the world, and creating an international network of leaders who ultimately trade and grow together.