The Next City
December 21, 1998

ALTHOUGH MEXICO CITY LOOMS LARGE IN THE MEXICAN ECONOMY — hosting 45 per cent of the country’s industry and producing 38 per cent of its GDP — the Western Hemisphere’s largest metropolis has water problems to match its economic and geographic stature. The city’s unusual location (on a plateau surrounded by high mountains), combined with massive mismanagement, has pushed its 20 million people to the brink of disaster.

In 1520, the Spanish conquered the Aztec city of Tenochtitlán in the area that would become Mexico City, and gained possession of an elaborate system of aqueducts, which transported spring water from higher elevations. Residents used these aqueducts until the 1850s, when the discovery of potable water under the city prompted a well-drilling furor. By the 1930s, the demands of the city’s increasing population had caused the water table to fall dramatically and many wells to dry up, but the problems didn’t stop there. As the city pumped more and more water from its aquifer, the soil began to give way. Over the last century, Mexico City’s ground level has dropped an average of 30 feet, surpassing that other famous sinking city, Venice, which has sunk only nine inches. Throughout the city, old water pipes jut 20 feet above the ground, and sewage no longer moves by gravity into the grand drainage canal, requiring the city to spend millions of dollars on 11 pumping stations. Subway line 2, built horizontally in the 1960s, now goes up and down like a roller coaster.

While subterranean pipes and tunnels may be replaceable, the city’s colonial heritage is not. Scaffolding supports the ceiling and walls of the national cathedral, the oldest and largest in Latin America, and engineers wage a constant battle to shore up its foundation. On the other side of the city centre’s Zócalo plaza, architects are struggling to keep the Palacio Nacional from breaking in two.

After hundreds of colonial mansions and churches collapsed, the government decided to take action. However, rather than promoting conservation, it merely began drawing water from suburban wells, shifting the problem from one area to another deemed less valuable. While the central city now sinks about one inch annually, some suburbs plunge as much as two feet.

Mexico City’s water table has been falling about three feet annually, which analysts say can continue for another 212 to 344 years. These estimates may be overly optimistic, given the likelihood of increased residential and industrial consumption, which will probably reach 100,000 litres per second by 2000, compared with 60,000 litres per second in the mid-1990s. To avoid drawing from the aquifer, city authorities began pumping water from the Cutzamala River, but this costly undertaking — involving a 112-mile pipeline over mountains hundreds of feet high — supplies only nine per cent of the city’s water. Groundwater still provides 69 per cent.

Though water professionals agree that the city must reduce demand and increase efficiency, politics has made reform difficult. During the years of one-party rule, the government ran all the utilities as monopolies and propagated the view that people had the right to use water as they pleased, leading to a belief in, and a habit of, uncontrolled water use. The water monopoly also fostered gross inefficiency. A 1992 World Bank study found that providing water in Mexico City cost a very expensive $1 per cubic metre, only a 10th of which the government collected. In the mid-1990s, water leakage was between 30 and 40 per cent, typical of Third World cities but unacceptable in a city with a severe water shortage. Although half of the city’s homes had water meters, many were dysfunctional or were read only irregularly. Repairing these meters and installing them in the remaining homes would have cost the city hundreds of millions of dollars.

In the last few years, the federal government has taken some steps to right Mexico City’s water woes. In 1992, a new law stipulated that government hydrologists can designate a water basin as fully appropriated. Before this law was passed, anyone could drill a well wherever he pleased. Now, someone who wants to drill a new well in a fully exploited basin must purchase an existing user’s rights. If properly enforced, and the costs of water rights are properly calculated, this will restrict new wells in heavily exploited areas.

Mexico City has since begun to privatize the management and operation of its water service with different operators installing meters, maintaining the distribution system, and taking other steps necessary to conserve water and enhance efficiency.

Alex Orwin

India unravels Bombay’s textile industry

GOVERNMENT CONTROLS, IN THE NAME OF SAVING WORKER’S JOBS, are destroying the once flourishing, now threadbare, cotton textile industry of Bombay. Despite occupying some of India’s most valuable real estate, more than half of the city’s 58 enterprises are drowning in red ink. The government has nationalized 25 of the 33 sick factories, keeping them alive with massive transfusions of public money. Most of the purportedly viable firms barely break even. Only a handful turn a modest profit.

Over the years, revival schemes have called for the disposal of the textile industry’s lucrative land holdings and its relocation in outlying suburbs. Studies show that selling the textile mills’ 234 hectares would fetch $2 billion. Even if the companies ploughed only part of this bonanza back into plant improvements, many would be profitable again. But under the Mill Development Regulations Act and the Industrial Disputes Act, the textile companies need state government permission and the consent of the affected workers unions. Citing potential job losses, the government refuses to give the restructuring proposals the green light.

This decision defies logic. Release of the mill lands for commercial and residential development would boost the city’s economy by lightening an obstacle impeding the city’s economic growth — a shortage of space so severe that rents exceed those in New York City and Hong Kong.

Several reputable builders, working hand in hand with mill owners, have drawn up multimillion-dollar redevelopment proposals in the hope that public authorities will one day relinquish their control over the mills’ property. In the early 1990s, the government, in fact, did allow a few sick textile firms to sell their real estate. A flurry of land sales quickly followed, and several former mill sites buzzed with construction activity. But the euphoria was short lived. In 1994, the government changed hands, and the new ruling party withdrew the development approvals. Building work ground to a halt. Today, half-finished structures stand as grim memorials to the reckless abuse of governmental power.

Opponents of the industry’s real estate sales argue that many mill owners care more about cashing out than about restoring the textile industry to its former glory. Others, however, maintain that selling the mill property would be beneficial in its own right. New real estate developments would create thousands of jobs in the construction, retail, and hospitality sectors, as well as enticing new businesses with lower rents.

The textile industry, far from being an asset to the community, has become an intolerable drain. According to one report, the sick textile firms account for half of the $1.5 billion in non-performing loans held by Bombay’s financial institutions. The cumulative effect of this crushing load of bad debts in terms of missed investment opportunities and forgone new jobs has not been calculated, but must be staggering. A sale of mill lands would enable the defaulting textile companies to discharge their debts and allow the lending institutions to recoup their investment. Given their improved financial condition, banks would be able to boost credit to business, thereby helping the city’s economy.

Meanwhile, new storm clouds are gathering, depressing the industry’s prospects even further. India’s recent signing of the General Agreement on Tariffs and Trade has opened it up to low-priced fabrics from South-East Asia. The International Textile Manufacturers Federation estimates that, to be globally competitive, a textile company must invest 7.5 per cent of its turnover in capital improvements. India’s textile industry invests only one-quarter of that amount. Bombay’s impoverished companies spend even less than the national average. As long as public authorities refuse to free this industry from the bondage of government regulations, these enterprises cannot make the huge investments in technology needed to retain their share of the domestic market.

The government has even failed miserably in stopping jobs from bleeding away. In the 1960s, Bombay’s textile industry had a workforce of 300,000. Today, it employs 75,000.

Sat Kumar

A green light for bad drivers

A GOOD FRIEND OF MINE RECENTLY HAD HIS 13TH CAR ACCIDENT IN EIGHT YEARS. As in the other 12, he wasn’t seriously hurt and had miraculously avoided injuring anyone else. In most of his accidents, he hits parked cars, light poles, and trees. In fact, he liked one tree so much that he hit it twice one year. The second time, he was taken, distraught, to the hospital but was quickly released once the doctor found he hadn’t been drinking or doing drugs — he was just a little high-strung about hitting “that tree.” When we drive past the still standing tree, he reminisces like an old friend about his encounters with it.

Most of his acquaintances only reluctantly accept rides with him and then suffer from an uneasy feeling in the pit of their stomachs as they ride to their destinations. My favorite phrase when I’m a passenger in his car is, “You’re going to get us killed!” To which he simply responds, “Calm down.” The last time I rode with him, he turned his head 180 degrees to talk with a friend in the backseat behind him while he placidly continued to “drive” down the street.

When not in the car with him, friends and family laugh about his driving misadventures. The year his father allowed him to drive cars from the family-owned dealership, he achieved what could be a record in bad driving — the destruction of eight new cars. The only person who didn’t get a good laugh was his father, who was paying my friend’s insurance at the time.

If they lived in a jurisdiction that allowed the market to determine insurance rates, neither my friend nor his father would be able to afford the high premiums that his poor driving would have earned him. Lucky for him, he lives in Ontario whose Compulsory Automobile Insurance Act guarantees that all drivers can obtain the insurance required by law. Private auto insurers can refuse poor drivers — anyone who has accumulated four or more points for offences ranging from an at-fault accident to speeding to driving while intoxicated — but then the industry’s Facility Association steps in. As Jeremy Bowditch, FA’s president and CEO, puts it, “We keep the worst drivers in the world on the road,” but he doesn’t volunteer that the government-mandated FA — which calls itself an insurer of last resort — offers this service at the expense of good drivers’ wallets and everyone’s safety. FA is financed with mandatory payments from the province’s insurance companies, forcing them to raise the premiums of good drivers to help bad ones stay on the road. It’s “a kind of public service we’re providing,” Bowditch explains.

Matt Mernagh

Brave new Moon

WHEN YOU’VE ALREADY ESTABLISHED A MAVERICK THEOLOGY ON A GLOBAL SCALE, what do you do for a second act? You build your own dominion of course. That’s the plan, at least, for Reverend Sun Myung Moon, founder and self-styled messiah of the Unification Church, a unique concoction of Christianity, Confucianism, and anti-communism.

Moon recently launched New Hope Farm — a collection of 33 villages spread across 86,000 acres in the Brazilian state of Mato Grosso do Sul — to show the world how to conquer “war, hunger and crime, and how to live in happiness and peace.” He touts the enterprise, set against a tableau of jungle and grassland, as a kind of Garden of Eden meets Little House on the Prairie.

The farm is buzzing with volunteers who hail from 40-odd countries, constructing homes, roads, dining halls, athletic facilities, and even a convention centre all set within a “Micro-World.” According to Moon, New Hope will “transcend skin color, culture, and nation” by creating a micro-Germany, a micro-Hungary, a micro-Italy, and a miniature version of every other country in the United Nations.

Although Moon’s movement is supplying the project’s estimated $25 million seed money, the community aims to become self-sustaining. For starters, the church has dictated that each village choose one tree, one fish, one bird or animal, and one fruit or foodstuff to produce in collaboration with local farmers.

Moon also has plans for New Hopers’ education. Satellite hook-ups will link the community’s students and researchers with classrooms across the globe, particularly with Connecticut’s University of Bridgeport, which a church-linked organization effectively controls following a $60-million loan in 1992. But the community’s schooling will go beyond the strictly secular. As Moon frames it, the “education of heart and norm will take priority over academic education, physical education and technological education.”

Cesar Zaduski, the project’s manager as well as a former church pastor, calls the venture “a riposte to the era of big cities.” He explained that Moon simply plans to create equality among social classes while encouraging environmentally sound Third World development.

Some skeptics, though, dismiss such talk as hyperbole, insisting that the Unification Church is using New Hope to secure a strong South American foothold as Moon’s star falls in North America. According to Nansook Hong, the reverend’s outspoken former daughter-in-law, the number of Moon’s adherents has been dwindling since the 1980s. In her newly published book, In the Shadow of the Moons, she claims that less than 1,000 Americans belong to the Unification Church, while in England the membership totals only a few hundred. South America, on the other hand, is one of the world’s most fertile areas for conversions to the church, and a considerable amount of Moon’s own attention has shifted there during this decade.

Zuding Tse, a Moon spokesperson in New York City, denies any nefarious motives. “This is a natural aspiration for us: to have a community of believers, to have a place of common adherence,” she explains. She adds that Moon sees New Hope Farm as a harbinger of future communities in South America and around the world.

The extent to which Brazilians support the emerging community remains unclear, but that doesn’t worry New Hopers. “If Brazil doesn’t like it, we will go to Uruguay,” says Zaduski. “If Uruguay doesn’t like it, we will go to Paraguay. If South America doesn’t like it, we will go to Africa.”

Shinan Govani