SA IS a country of competing priorities. The best way to deal with poverty is to encourage urbanisation. No country has achieved sustained economic growth without massive urban growth. About 80% of the population in the highest-income countries is urban, against 10%15% in the poorest.

Dr Wally N'Dow, secretarygeneral of Habitat II, says the quality of life in the global economy is "singularly dependent on the fact that cities work. Urban settlements will be the real challenge of the 21st century."

Tempting as it is to try to deal with poverty and inequality by indiscriminately spreading resources across SA, this will fail. SA's own "regional development" experiment shows this, and the international experience and literature are compelling.

SA's prospects for growth and development hinge on what is happening in its largest cities. Urban crime, unemployment, politics and perceptions will be most important in determining our future. We have to ensure cities have the effective leadership, resources and national support they need to succeed.

Rural development should not be neglected , but the primacy of urban development for all South Africans' wellbeing needs to be understood and acted on.

South African cities are developing in the context of a challenging new global era and can no longer be seen in their national contexts alone. They are subject to powerful international forces and are competing for investors, business, skilled people, entrepreneurs, visitors, conventions, consumers and image with cities across the globe.

South African cities are like other developing world cities, with citizens who participate in the formal and informal sectors in respect of housing, jobs, legality and almost every aspect of their lives. Apartheid has also divided our cities racially, and urban poverty is growing.

The temptation is for urban leaders to become preoccupied with delivering services to the poor or maintaining the number of municipal employees. Some might see the need for economic growth but fail to grapple with the controversial decisions required to turn our cities around.

It is not helpful to talk of "solving" urban poverty. The size of most cities, the speed with which populations are growing and the populations' vast needs require a different approach.

It is only by developing strategies for becoming more competitive in the global economy that SA's cities will cope with the urban challenge. We need to facilitate conditions in which people can help themselves. Attention is urgently required to address crime and inadequate economic infrastructure affecting big and small businesses. Smaller firms feel the effect of public sector deficiencies most acutely because spending on supplementing these represents a greater share of their total investment.

It is a myth to claim competitive economic growth comes only at the expense of the unemployed or the working class. Research in the US shows that in the 1990s "low unemployment rates forced employers to reach deeper into the pool of low-skill workers, hiring and training people who would otherwise have been left out in the cold".

The Centre for Development and Enterprise is not advocating laissez faire, "robber-baron" capitalism, but a competitive, marketled approach with appropriate roles for national and local government, and a committed partnership with key stakeholders.

As a leading professor put it: "The greatest danger to the viability of communities is not globalisation but a retreat into isolationism and protectionism."

SA's cities must move considerably higher on the scale of national priorities. Development is about success. Countries progress if they build incrementally on their successes. The alternative the notion that we can only proceed as fast as the most deprived areas is fatal.

Bernstein is executive director of the Centre for Development and Enterprise. This article is based on the centre's report titled Johannesburg, Africa's world city: a challenge to action.

Oct 29 2003 07:00:08:000AM Ann Bernstein Business Day 1st Edition