The COVID virus pandemic has raised a number of questions among economists. However, researchers have mainly focused on the advanced economies and the economic’scarrings’ that the virus caused. Some economists, however, are interested in the likely evolution cities will undergo after the pandemic. They note that some cities have been hotspots for the epidemic, notably travel hubs. However, many other, smaller cities, have been relatively spared. Rural areas have also been less impacted, although there are large variations between regions.
There was also a real-life experiment that was unique: people were forced into remote work. Since then, many have become accustomed to the way of living. They would have gone to their offices even if they were given the option to work from home. Will this change? Is it possible that after the pandemic, these same people decide to settle in another city or the countryside with occasional trips to Tbilisi if strictly necessary? It is not clear at this time. Most scholars agree that past epidemics, some of which were much more deadly than the COVID, led to a brief exodus followed by a return to the trend towards large cities. This trend has been ongoing for centuries, with the exception of a few years here and there. Take Tbilisi. Since 2014, the city’s population has been steadily growing. Could COVID make a difference? If the trend could even be slowed (a third of the population already lives in Tbilisi), or reversed (one-third of the population already lives in Tbilisi), it would be good for an urban infrastructure clearly under pressure.
These questions are important, but they have been made more relevant by the recent adoption of the decentralization strategy. Once it is translated into law, COVID will give Tbilisi and other subnational governments the tools to face future challenges. However, COVID could have changed the nature of these challenges.
What do economists say?
The so-called spatial fragment can cause and sometimes be a result of migration to the city center. The concept is difficult to define, but it has its origins in the late 1960s when economists noticed that well-off families were moving to the outskirts (note the word ‘outskirts”) of city centers. The suburbs were where firms had set up their operations, and those who could afford to settle there settled near their jobs. The poorer population could no longer afford these neighborhoods and moved to cheaper houses in the city centers, where there were fewer employment opportunities. This created a vicious circle. The cycle soon stopped, however, as the prospect of a vibrant cultural life in the city center, coupled with cheap and fancy apartments, attracted young people and helped them settle. The trend was reversed and cities began to grow again. It is generally accepted that a greater distance from a plethora of activities increases the likelihood of poverty and unemployment.
In turn, remote areas tend to be poorer and stigmatized. Now that COVID has taught the people to work at home and that internet connections can be reliable, things might have changed. Could it have a significant impact on the growth and development of cities? Certain factors could change the trend’s speed, or even its direction.
The following factors are conducive to the growth of city centers:
* Only a few jobs can be done remotely on a regular basis, and the majority of them require some form of in-person interaction from time to time.
* Rural areas lack certain amenities, especially when a large influx of people is required (leaving Tbilisi). );
* Cities will continue being attractive to young people with high skills who want to take advantage of the cultural activities available (despite the market for friends and partners).
There are also factors that, on the medium-term, will make living in the city center unattractive. These include:
* A reluctance in taking part in any activity involving large crowds (public transportation, movie theatres or restaurants, etc.). );
* The loss of income suffered by wealthy couples that may prevent them from entering or reentering the urban real estate markets;
* People who need to be in the city for work reasons may not want to maintain two residences. This is true even if the apartment in the city they live in is not very large.
The Case of Georgia
Two questions must be addressed: i) Is there a significant spatial fracture in Georgia which could make it impossible to settle outside of Tbilisi. ii) How will the COVID project affect Georgian commuter habits over the long term?
There is a spatial crack in Georgia, but not necessarily one that is more severe than in other countries. A few studies conducted before 2016 have observed an economic fracture. This is largely due to the differences in urbanization between regions. The spatial clustering of regions also does not produce surprising results. The results of these studies should be interpreted with caution because the data is poor. However, it is not surprising that Tbilisi has a better economy than other parts.
In April 2020, a German Economic Team in collaboration with ISET analyzed income distribution in Georgia. The conclusion was the exact same, with one twist: Tbilisi has the highest GDP per person in Georgia. However, it also has Georgia’s slowest growth rate.
Not everything is about economics. In the second question, we do not yet know the relative importance of COVID factors (such those listed above) in the Georgian public’s perception. In terms of employment, subnational competition will be a key factor. In a recent report, the World Bank (2020), identified “secondary nodes” of economic activity outside Tbilisi. These nodes certainly play a significant role in attracting potential residents.
It is difficult to predict how these factors will combine in order to slow down, accelerate or even reverse the general migration to capital.
What may determine the appeal of a place for people and businesses is not only based on economic opportunities. Other factors such as how well connected, rich, stimulating or comfortable the environment is play a major role in our perceptions of quality of life and well-being. Tracking indicators of livability can help us understand the hidden limitations of living outside Tbilisi even with good internet. Indicators of livability could be used to spark change at the local scale. Its pillars include health, education, culture, environment and gender bias. They would determine whether or not the spatial fracture in
Georgia will at the very least heal partially, and also determine the flow of migrants to Tbilisi.
It is a topic worth studying. We all have colleagues that have decided to work from another location during the pandemic. Those I knew seemed to have liked it and some even came back for a short visit.
Blog By Luc Leruth
Read More @ georgiatoday.ge