Tuesday, July 14, 2015

Smart Cities : Changing lives

What is a Smart City? According to the British Standards Institution 2014, a Smart City is an urban developed area with effective integration of physical, digital and human systems in the built environment to deliver a sustainable prosperous and inclusive future for its citizens. In Mauritius, the main objective of the Smart Cities to be designed, is to become self sustained townships dedicated mainly to knowledge-driven industries in which employees can flourish, businesses can succeed and local communities can prosper.

Economist and Chief Executive at AfrAsia Bank, Swadicq Nuthay explains how ‘Smart Cities’ can be beneficial to the country and the people if successfully implemented. However, he is sceptical that the implementation of ‘Smart Cities’ will bring about a “second economic miracle” in the near or medium term. We have extensively been hearing about the booming of Smart Cities around the world and their expected implementation in Mauritius. Swadicq Nuthay says that the Smart City concept has gained momentum with the rapid development of new technologies and innovative processes.

“Smart Cities leverage on technology resulting in cities that are more functional, competitive and modern… It has proved its worth in major parts of the world. The European Commission initiated the European Innovation Partnership (EIP) on Smart Cities and Communities in 2012 involving more than 3,000 partners across Europe. Smart Cities have been incorporated to reduce energy consumption, greenhouse gas emissions and road congestion. A few days ago, the Indian Prime Minister even launched the Smart Cities Mission and wants to build 100 Smart Cities across India,” explains the economist. Is the Smart City project achievable for a small country like Mauritius? The economist says that 13 mega projects will require investments estimated at Rs 120 billion, an average of around Rs 10 billion per project. Swadicq Nuthay explains that the ability to mobilise sustainable funding will be the determining factor. 

“Given the high public sector debt to GDP ratio of 61.4% as at 2014 and the IMF’s requirement to limit government debt to 50% over the next three years, the private sector and foreign partners will be expected to provide necessary funding,” he says. In addition, the economist strongly believes that for the project to be a success, it requires engagement from various stakeholders (citizens, environmental groups, technologists, private sector, etc.). “To be successful, Mauritius will have to build a strong case and be capable to market these projects at the international level. The success of the project will depend on the capability of Mauritius in attracting foreign buyers,” he highlights. 

Countries around the world have witnessed various benefits following the creation of Smart Cities. The Chief Executive of AfrAsia points out that among the benefits, Mauritius will experience a “reduction in resource consumption, such as water and energy, hence minimising carbon dioxide emissions (environment friendly) and improve the use of existing road infrastructure capacity to reduce congestion. On the macroeconomic front, this is expected to boost the construction sector and economic growth. As a new source of FDI flow, this is most welcome.”

Smart City to bring ‘second economic miracle’?

Will the creation of Smart Cities bring a ‘Second Economic Miracle’? To this question, Swadicq Nuthay says that he remains sceptical. “If successfully completed, these cities will raise GDP growth but I’m sceptical that this will bring about a ‘second economic miracle’ in the near or medium term. This is a long-term project and should yield results over time,” he declares. 

However, the economist believes that the Smart City project “will revive and boost the construction sector which has been lagging behind these past few years, with a contraction of 8.5% in 2014. It will create employment opportunities, with positive effect on household consumption which accounts for around 70% of GDP.” Economic miracle or not, the creation of a Smart City definitely has wide impact on the lives of people residing in the city as well as the regions nearby. What impact should this have on Mauritians living nearby? “The value of properties around Smart Cities would go up. A Smart City’s infrastructure is comprised of a number of systems, including transportation (such as roads, bridges, public transportation, etc.), sewage, utility (gas, electricity, water treatment and delivery), and public and private buildings. 

Therefore, neighbouring cities/villages can benefit from the infrastructural network of Smart Cities – existing infrastructure of Smart Cities can be extended more easily to villages/cities around. Buildings in neighbouring cities/villages shall strive to mimic living systems of the Smart Cities. People residing nearby would benefit from any other facility (overall infrastructure) in Smart Cities,” underlines Swadicq Nuthay. However, he does not deny that negative impacts can also be felt. “This may create a disparity between the ‘high-level’ standard of living in Smart Cities v/s the poverty-stricken adjoining villages. “The Ghetto Syndrome” – which might lead to higher crime level and disorderly behaviour as the worse-off people aspire to the limelight but can’t get access to it,” he argues. 

According to the economist, one important aspect underlying the creation of Smart Cities is that the very concept has yet to be well explained to the population in order for them to understand the improvements to lifestyle that they can expect. “Technology is expected to be at the forefront of this project, and to allow Mauritians to fully make use of smart devices, there is a need for capacity building and to provide adequate access to all,” he adds. 

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