Latin American smart city potential: Mexico City leads the way

14 May 2018 Consultancy.lat

Mexico City, with a population of roughly 21 million people in its greater metropolitan area, is one of the world’s largest ‘megacities’. The Mexican capital has the digital infrastructure and leadership potential to consolidate itself as a world class smart city, according to an article released by Llorente & Cuenca via Developing Ideas (Desarrollando Ideas in Spanish).

Developing Ideas is a platform for innovation and social intelligence with a focus on Latin America by Llorente & Cuenca, a consulting firm which specialises in communications, public affairs and reputation management. This article is based on two reports by the consulting firm titled 'Mexico City: Keys and challenges to building a smart city for citizens' and 'Latin America challenged by smart cities'.

Latin America is on a path to become one of the most densely urbanized regions in the world. According to the UN, by 2050 about 70 percent of the world’s population will live in cities. In Latin America, that number is estimated to be as high as 90 percent. 

As this rural-to-urban shift occurs, a number of management and planning issues are bound to arise. Mass urbanization creates high levels of pollution and mobility issues as well as multilayered insecurity, poverty, and densely populated slums. Although these challenges cannot be dealt with by technology alone, urban management can be optimised by smart city technologies.

A smart city can be defined as a hyperconnected urban area which utilizes innovation and technology to become more liveable. Through an integrated information network, cities can efficiently manage resources, helping them to become more sustainable while aiding urban planning. In turn this can reduce pollution, increase water quality and open up public green spaces.

Utilizing technology to increase day-to-day quality of life is only a fraction of what makes a city smart. According to Llorente & Cuenca, smart cities are classified by six categories which influence government, environment, economy, mobility, citizens and lifestyle. 

Mexico City has potential to lead Latin America’s transition towards smart cities

The downside of rapid urbanization 

Planning for densely populated cities is imperative as urban migration continues in most Latin American countries. The average rate of annual urbanization growth across the region between 1950 and 2015 was 1.3 percent, and that rate is going to rise towards the middle of the century. In fact, Latin America is urbanizing faster than in any other developing region on the planet.

However, this rapid urban growth has not produced multiple small to medium sized regional cities, which can be seen in some European nations, but has been confined to a number of larger regional hubs. Most Latin nations don’t have more than ten cities which have a population density of over a million people. 

Mexico City is the biggest city in Latin America, including its greater metropolitan area, but it is not alone in its size. São Paulo falls just short of Mexico D.F. with over 20 million inhabitants, and Buenos Aires, Rio De Janeiro, Lima and Bogota all have upwards of 10 million people. The sheer size of these cities suggests a strained demand on governments and public services. 

Latin cities planning for rapid urbanization has been at the best of times too little too late, and at the worst, non existent. With the levels of population growing quicker than housing in many capital cities, almost 25% of Latin Americans now live on informal settlements by 2012 estimations. That is, settlements in areas where the inhabitants have no claim to land.

This lack of planning has had an adverse affect on the states’ ability to foster formal employment and provide basic necessities to people, including healthcare, water, and sanitation. This is a major urban issue wherein many questions arise about the best way to provide services to this huge group of the urban poor.

In Mexico City, these settlements are called ‘cinturónes de miséria’, which directly translates to ‘belts of misery’ but would more commonly be known in English as slums or ghettos. There are thousands of settlements spread out across the city, and the city of Neza-Chalco-Itza on the outskirts of the capital is considered the biggest slum in the world with upwards of 4 million people. 

Mexico City wants to be a smart city

Mexico City smart city development 

Mexico City however wants to face these challenges and be a leader within the region by putting in place proper planning initiatives and utilizing the third wave of the internet. According to the authors of the report, “Mexico City wants to be a smart city, one that offers solutions to the problems afflicting urban areas, taking advantage of technology to simplify people’s lives and business operations.”

The city has begun implementing these plans which have been compiled under the name “Connectivity Master Plan for Mexico City”. The plan aims to use technology and concepts which are being used around the globe in smart city transformations and combine them with the existing infrastructure in the city. 

Mexico has one of the highest internet usages in the region with over 50 million people owning smart phones. Mexico City is also the number one contributor to the economy, bringing in about 17% of national GDP. With such a high level of wealth, connectivity and a defined necessity to act, Mexico City according to LLorente & Cuenca has huge smart city potential.

In the article, Llorente & Cuenca lay out three challenges which Mexico City will face in its development into a smart hub. The authors of the report state: “we would like to offer three thoughts on the challenges facing Mexico City, as its move to become a smart city is no minor issue.” These challenges include human focus on technology, legislation, and priority inclusion from the government and citizen participation. 

The report highlights the necessity for Mexico City to address the rampant inequality which is present not only in the country’s capital but all over the nation. The authors suggest that it is important to remember that technology should not facilitate innovation but rather be a byproduct of it. 

By identifying the main problems that a city faces – for Mexico City these include; water supply, informal settlements and inequality – innovation can deal with these issues through technological developments. However for the technology to adequately shift these social norms, it must draw in those who exist outside the formal sectors of society. 

Citizens within informal settlements or with informal employment or who are unbanked etc. cannot be excluded from smart city developments due to their informality or else any innovation or technological advancements will not realize the desired results.

Another roadblock is how the government reacts to technological developments in terms of regulation and legislation. The report stresses the importance of having an informed government who have engaged in prior planning and know the implications of smart city developments. Without setting in place legislation that will both facilitate innovation and predict the outcomes of a smart Mexico City, the project may get bogged down in bureaucracy.

Lastly, smart city initiatives should foster citizen participation. The goal is to create tangible public value through the development of a smart city and the results will be judged on the satisfaction of the citizens affected. The authors suggest that this entails “not only meeting the population’s basic needs in an intelligent manner, but also strengthening civic and democratic principles within society, including responsibility, transparency and participation.”

Llorente & Cuenca have offices in Argentina, Brazil, Colombia, Chile, Ecuador, Spain, México, Panamá, Perú, Portugal & the República Dominicana, and they also operate in the US, Bolivia, Uruguay and Venezuela. The Spanish firm opened their first office in Latin America in 1998, which was situated in Peru. Today, over 60% of Llorente & Cuenca’s turnover comes from the work that they do across the region. 

Socio-economic inequality driving deforestation in Latin America

22 February 2019 Consultancy.lat

Scientists at the University of Bern have found a connection between rising levels of socio-economic inequality and the rates of deforestation in Latin America.  

In combination with a rising level or urbanization across Central and South America, human development is a growing threat to the lungs of the Americas. Agriculture in particular and a growing demand for meat around the globe has seen hectares of forrest replaced with farmland each year.  

A rising demand for soy, palm oil, cocoa and coffee is translating into expanding plantations for these crops worldwide and contributing to deforestation at an unprecedented scale. However, other factors too need to be considered, according to a new analysis, with researchers from Switzerland finding that there is a correlation between inequality and deforestation. ”More equal distribution of income, wealth, and land ownership is not only fairer, but also an effective means of improving environmental protection,”said one of the project’s researchers, Graziano Ceddia.

"We know that different forms of inequality can significantly impact how environmental laws are formulated,”researcher Ceddia added. “The novelty of this study is its explicit investigation of the interaction between agricultural productivity, farmland expansion at the expense of forests, and various forms of inequality.”

Socio-economic inequality driving deforestation in Latin America

Just under half (40%) of Latin America is covered by the tropical rainforest known as the Amazon spanning from Brazil and Venezuela to Colombia, Ecuador and Peru. This territory represents 22% of the global forest area and it is located in the Amazon basin, which is the largest continuous mass of the world's tropical forests. 

The stark truth is that there is not one custodian of the Amazon where inequality is not a major electoral issue. "If we want to ensure that increased agricultural productivity serves to protect tropical forests, then the message to policymakers is clear,” Ceddia said. 

In an increasingly hostile political environment, advancing environmental or climate policies alone may be difficult. As Brazil’s new president demonstrates, he has already moved to relax protectionist policy for the Amazon, pushing sustainability up the agenda is easy at times of economic bloom, but significantly harder in the current economic climate. This leads Ceddia  to believe that, if played correctly, addressing inequality may be a leaver which could make a more important difference, and more importantly, is one that could be implemented in the current circumstances.

Deforestation and climate change

With the link being drawn between deforestation and inequality, it is imperative to note that there is also an inextricable link with carbon emissions. As forests are natural carbon capture and storage machines, deforestation and forest degradation also impact climate change.  

Around 15% of human-made emissions are directly linked to deforestation, second only to fossil fuel combustion,explained PwC partner Celine Herweijer in an article written for the World Economic Forum (WEF). “More than half of deforestation is the result of the production of commodities such as soy, palm oil, pulp and paper, and cattle products.”  

“Brazil, for example, has committed to reducing its emissions by 37% by 2025: almost half of that will be contributed by tackling emissions from its land use and forestry sectors… The business case is clear. The opportunity for the financial sector to play a part in driving and integrating sustainable practices into forestry management is enormous.” 

However, according to the researchers at Bern, to truly tackle the issue at its core and confront deforestation in the Amazon whilst meeting Latin countries’ pledges to the Paris Agreement, inequality cannot be ignored from environmental or climate policies.