FINANCING CITIES IN THE GLOBAL ECONOMY LOCATION AND GEOGRAPHICAL ECONOMICS Liga Mieze Denis Assimwe Kangere Bizuneh Gultu Lakew Camilo Mendoza May 2005 IHS- Rotterdam

Source: Biological Resources Investigation Institute Alexander Von Humboldt, 2000 Mid Point between North and South America 2 Oceans: Atlantic & Pacific Spanish language Colombia General Information

Source: IGAC Why Colombia? Because of its location ~ could be a bridge between North and South America In negotiation a Free Trade Treaty with USA Analysing a Latin American Country 1,141,748 km 2 inland – km 2 on water Population: 46 million 72% in cities Colombia General Information

Colombia turned from a mainly rural country to an urban one in the last half century as a result of: industrialization / diversification of exports (mining products)industrialization / diversification of exports (mining products) agriculture technology improvementagriculture technology improvement development of third sector activitiesdevelopment of third sector activities rural violencerural violence high birth rateshigh birth rates revenue concentrationrevenue concentration Urbanisation

Pasto Buenaventura Cali Pereira Medellin Tunja Bucaramanga Monteria 36% of the population live in the selected cities Source: Dane

Simulation Assumptions Delta 0.67 reflects the percentage of expenses on manufacturingDelta 0.67 reflects the percentage of expenses on manufacturing Epsilon as provided by modelEpsilon as provided by model Tau(congestion parameter) small deviation & large deviations usedTau(congestion parameter) small deviation & large deviations used Stop criterion and adjustment speed as provided by the modelStop criterion and adjustment speed as provided by the model Initial distribution of mobile& immobile workers based on the populationInitial distribution of mobile& immobile workers based on the population Distances based on time of travel between the different citiesDistances based on time of travel between the different cities

Base Scenario Distribution of Workers

Scenario 1 With tau at 0.2 and transport cost fixed at 1.3,we observe a tendency to spread

Scenario2 With tau increased to 0.3 and transport cost still fixed at 1.3,we observe a tendency to spread to the cities to the far rightWith tau increased to 0.3 and transport cost still fixed at 1.3,we observe a tendency to spread to the cities to the far right

Scenario 3 With tau at 0.4 and transport cost fixed at 1.3,we observe a tendency to spreadWith tau at 0.4 and transport cost fixed at 1.3,we observe a tendency to spread

Conclusions City 12(Tunja) tends to attract the mobile workers as the congestion increases Promote policies that improve the connectivity of the other cities