By now everyone knows the acronym “BRICS,” which formally stands for Brazil, Russia, India, China and South Africa, but informally has come to refer to dozens of so-called emerging markets whose natural resources and trade surpluses are making them the center of geo-economic competition.
Far less appreciated, however, is how these powers’ rise is fueled by urban centers like Sao Paulo, Mumbai, and Shanghai, places that have become global centers in their own right, more connected to the world than ever before through commerce, technology, and transport. The total economy of Russia is scarcely more than what is concentrated in the government, banks and companies based in Moscow.
Worldwide, a new class of global cities is emerging combining mega-populations, massive markets, and international ambition.
As this new crop of global cities increasingly set their own agendas to maintain stability and prosperity, they might take a page from what is still the world’s undisputed capital of capitals: New York.
Meet President Bloomberg
Michael Bloomberg has no official mandates beyond Mayor of New York City. Yet even though the U.S. Constitution arrogates all foreign policy making powers to the federal government, New York City’s leadership gets more and more involved in American diplomacy—and pursues its own—every single day.
With an annual budget of about $60 billion, 250,000 municipal, employees, nearly 35,000 armed police officers, over 26,000 vehicles, and 656 miles of subway track, the sheer scale of New York City governance dwarfs most sovereign nations. The world’s largest diplomatic and consular community (including, ostensibly, a fair helping of spooks), are based in New York, including United Nations headquarters, 192 permanent missions to the UN, and 111 consulates.
This week, New York is hosting heads of state and other dignitaries from around the world for the annual UN General Assembly, the largest such conclave in the world. On the sidelines, Mayor Bloomberg and French President Nicolas Sarkozy are holding a joint event to celebrate “125 years of friendship between New York City and France”—under Lady Liberty, no less.
New York belongs as much to the world as to America. Bloomberg, therefore, acts not just as mayor, but also effectively the head of a de facto city-state. He at one point even employed a diplomatic coach in Nancy Soderberg, a former U.S. ambassador to the UN.
Wall Street and the World
New York has an autonomous voice in global finance and trade matters that has accrued over literally centuries. From the Great Depression of eight decades ago to the current Great Recession, global market turmoil usually starts and ends in downtown Manhattan. Remember that Goldman Sachs, Citigroup, and JP Morgan Chase are not just American banks located in New York; they are New York companies that could be anywhere in the world, and Bloomberg has as much a role in keeping them there as Congress and the White House. This is why Bloomberg has appeared in Washington time and again to ask lawmakers not to implement regulations that could drive away financial institutions, such as restoring states’ authority to regulate national banks over federal laws.
It’s not only Wall Street that gives New York City its global role, but the clever financial diplomacy conducted on its behalf. The NYSE-EuroNext merger, for example, was an act of New York commercial strategy to tie the city to other large cap exchanges and boost its access to global capital. And on a visit to China in 2007, Bloomberg spoke out against Chinese intellectual property violations that hurt New York’s luxury retailers and other businesses. Bloomberg has called intellectual capital the city’s “ace in the hole.”
All indications suggest that despite the blame Wall Street took for the financial crisis, New York will lead the charge to recovery. Right now, New York’s real estate market, jobless rates, tourism figures, and other economic indicators are well ahead of the nation’s and dramatically better than most other major American cities. The good news is that historically, the fortunes of the city are a prelude to those of the nation in good times and bad. If not, then New York will be ever more decoupled from the rest of America’s downward slide.
NYC Doesn’t Just Host the United Nations, It's Like the United Nations
New York City’s diplomatic outreach actually dates back to three decades before the UN was even founded. Since 1918, New York has had a Mayor’s Commission charged with facilitating dialogue and relations among foreign missions and consulates, local, state and federal government agencies, and New Yorkers, making city authorities key diplomatic brokers. Today the New York City economy gains an estimated $2.5 billion annually from its massive overseas diplomatic presence, which is why Bloomberg has toned down much of the anti-UN rhetoric Giuliani deployed and focused on accommodating the UN’s physical expansion and refurbishment of its asbestos-riddled headquarters. He recruited his sister, Marjorie Tiven, to run New York City’s UN and Consular Liaison Office, and neither wants to see the UN move to Dubai, an aspiring global city with central geography that’s made cleverly welcoming intimations of its willingness to host the international organization if New York proved to be too inhospitable.
In a world where a congress of cities is as important to positive action as a collection of countries, the Commission now also houses NYC Global Partners, a permanent forum for inter-city cooperation on tourism, security, technology, and the environment. It is under this guise that Bloomberg has undertaken his own climate diplomacy, circumventing moribund international summitry by directly inviting hundreds of mayors from around the world to New York to focus on how urban leaders can share policy initiatives and technologies to reduce emissions. The resulting C40 Large Cities Climate Summit is considered one of the most promising approaches to tackling the huge share of global emissions represented by urban transport, heating and cooling.
Bloomberg’s own PlaNYC calls for a 30 percent reduction in the city’s emissions by 2040, far more ambitious than any other city in America. As a businessman, he is wisely pitching his ambitious climate policy as a business opportunity. He’s similarly pushing for the aggressive roll-out of alternative-energy programs for electric cars, bicycle lanes, building retro-fitting, and planting one million new trees. While Congress has poured cold water over Obama’s “green economy” declarations, New York is seizing the opportunity to turn innovation into profit.
New York came into the geopolitical spotlight with the 9/11 terrorist attacks. With thousands of New Yorkers murdered and incalculable damage wrought on the still smoldering wreckage of the Twin Towers, Rudy Giuliani emerged as a fearless leader, soothing New Yorkers and also notably making often unwelcome diplomatic snipes, like when he refused to accept disaster relief aid from Saudi Prince Alwaleed bin Talal.
Together, 9/11 and Giuliani set a new tone for New York mayors, and opened up more maneuvering space for Giuliani’s successors. Bloomberg is of course a very different personality, favoring pragmatism to ideology.
Take, for example, the controversy over the construction of a mosque and inter-faith center near Ground Zero in 2010. The “Park 51” drama combined the still tender wounds of 9/11 with undertones of perennial debates about the separation of church and state, as well as multiculturalism. While the White House in principle supported Park 51 (but only half-heartedly in practice), and other national figures angled to denounce it for political gain, Bloomberg became the Islamic center’s most vocal advocate.
At the same time, Bloomberg has given wide latitude to his police force to freelance overseas for intelligence and counterterrorism work. NYPD Commissioner Raymond Kelly and his staff have conducted an unprecedented level of cooperation with foreign entities such as Interpol (where Kelly worked as an executive in the 1990s), the governments of Israel and the Dominican Republic, and law enforcement agencies in cities such as London, Moscow, and Madrid.
Put simply, New York City doesn’t believe that Washington and the Pentagon can protect it from future terrorist attacks.
The NYPD played a lead role in wrapping up terror plots such as Najibullah Zazi’s subway bombing plan, or nabbing would-be Times Square bomber Faisal Shahzad before he almost fled from JFK Airport. The NYPD even altered the course of a French national election by arresting IMF Chief Dominique Strauss-Kahn. Episodes like these only bolster the NYPD’s requests for more resources, such as cameras to enhance the surveillance “ring of steel” or officers in new overseas posts. The city has also shown up undercover at gun shows in Arizona to track illegal weapons that might wind up on New York streets, in an effort to shut down lax gun selling practices.
NYPD reportedly runs a 500-person Intelligence Unit led by David Cohen, a former CIA operations director with experience and access in Washington. It has conducted forensic operations in Mumbai after the 2008 terror attacks there, to report on its potential lessons for New York. The division’s International Liaison Program (ILP) has 11 offices in foreign capitals staffed by New York detectives, and an unpublished portion of the $68 billion intelligence budget. The program is partly funded through a public-private partnership called NYPD Shield that includes business community stakeholders. Unlike federal agencies such as the DEA, CIA, or FBI, the ILP does not have the same level of congressional oversight.
Meanwhile, U.S. Attorney Preet Bharara has used his perch in Manhattan to prosecute cases of global import such as insider trading on Wall Street, international terrorism and organized crime, and online gambling rings that are often multinational enterprises. This follows in the footsteps of the longtime U.S. Attorney and District Attorney Robert Morgenthau, who established a reputation on cases of securities fraud and other white-collar crime with effects far beyond New York.
Cities as the Tip of the Spear
Over the past decade, New York City has stepped in to attempt to fill almost every void the federal government has left open through its own dithering and gridlock, from a counter-terrorism strategy to protect the city’s infrastructure to a climate policy to help protect its coastline. Bloomberg has also become a leading pragmatist in immigration debates, seeing complementarity rather than competition between the jobs taken by immigrants and the existing American workforce. Even as Bloomberg prepares for retirement from the mayor’s office, the portfolio of the office is additive: his successor will have to continue to innovate the city’s global role given the lack of national leadership and competition from other global cities.
In a complicated and messy world, such foreign policy activism on the part of mayors is no longer viewed as over-stepping bounds and treading on others’ turf but rather contributing to a stronger America through agility and innovation. Strong city diplomacy doesn’t undermine America’s federal authority, it gives it credibility and demonstrates innovation.
Around the world, mayors are taking the national and international stage. From West Germany’s Willy Brandt to France’s Jacques Chirac, and today Turkey’s Recep Tayyip Erdogan and Iran’s Mahmoud Ahmedinjad, mayors have become heads-of-state and increasingly vie for executive office. Running an over-populated mega-city or world-class global city is increasingly seen as a job no less challenging than running a country.