Jakarta, Manila rank high among 34 cities

MANILA, Philippines - Manila is second among five cities in Southeast Asia with the highest potential of getting much better in the next two decades, a report from the Wall Street Journal quoting US-based consulting firm A.T. Kearney showed.

In the report, Manila was next to Jakarta on the list of 34 cities in low- and middle-income countries most likely to take the global lead in key areas from business to workforce health and security.

The A.T. Kearney ranking said Manila was followed by Ethiopian capital Addis Ababa.

The other Southeast Asian cities on the list were Kuala Lumpur, which was 10th followed by Bangkok at 21st and Ho Chi Minh City at 29th spot.

In its ranking of cities, A.T. Kearney cited Jakarta’s increasingly stable political system and emphasis on addressing income inequality and environmental concerns.

But while Jakarta was first on the list, Manila appeared to have more promise, according to Euben Paracuelles, Nomura’s senior economist for Southeast Asia.

“Manila I think has done a little bit better over a relatively short period of time,” he said.

“Assuming they sustain this reform momentum, that bodes very well, ” Paracuelles said in the WSJ report.

He said the upcoming presidential election in Indonesia could prove to be a significant stumbling block to Jakarta’s globalization, depending on poll outcome. In Indonesia’s recent legislative elections, the party thought to dominate the polls got less votes than anticipated.

Analysts said the development has created the need for multiple party coalitions, which in the past have held up policy-making, the WSJ report said.

If a large, clunky coalition leads the next government, it could continue to delay much-needed reforms, the WSJ said quoting analysts.

The Philippines is basking in its improving economy and greater investor confidence resulting from the Aquino administration’s good governance and anti-corruption efforts.

Economic growth in the Philippines was at 7.2 percent last year, second only to China’s 7.7 percent in Asia. The growth came despite devastation caused by a deadly earthquake and by Super Typhoon Yolanda late in the year.

The World Bank expects this year’s growth to be at 6.6 percent amid a slowdown across Asia.

In its survey, A.T. Kearney took into account a wide range of metrics in determining its rankings – including how developed infrastructure was in each city, as well as ease of doing business, income inequality and environmental stability.

Jakarta scored most highly on measures involving its population, such as income equality, while improvements in stability and security also bumped it up the table, the WSJ report said, adding that scores were determined by evaluating how cities progressed between 2008 and 2013 and extrapolating to measure the likelihood of improvement in the next two decades.

While Jakarta is known for its mind-boggling traffic, infrastructure has seen much improvement over the past five years.

Its governor Joko Widodo has been credited for implementing a low-cost healthcare scheme and dramatically raising the minimum wage.

While Bangkok was ranked as Southeast Asia’s cultural capital, it ranked low on other factors mainly due to political and economic stagnation, made worse by recent political instability caused by ongoing anti-government protests, the report said.

“Long period of political uncertainty” has tarnished Bangkok’s image so much so that it now ranks behind Caracas in Valenzuela and just above Casablanca in Morocco.