t r a n s f o r m a t i o n o f c i t i e s in central...

E D I T E D B Y

F . E . I A N H A M I L T O N , K A L I O P A D I M I T R O V S K A A N D R E W S ,

A N D N A T A S A P I C H L E R - M I L A N O V I C

T R A N S F O R M AT I O NO FC I T I E S IN CENTRAL

AND EASTERN E U R O P E

T R A N S F O R M AT I O NO FC I T I E S IN CENTRAL

AND EASTERN E U R O P E

T O WA R D S G L O B A L I Z AT I O N

ˇ ´

Transformation of cities in centraland Eastern Europe: Towardsglobalization

Edited by F.E. Ian Hamilton, Kaliopa Dimitrovska Andrews,and Nata�a Pichler-Milanovi|

Tables and figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv

Part 1 Towards globalization

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3F.E. Ian Hamilton, Natama Pichler-Milanovi|, and Kaliopa Dimitrovska Andrews

2 City development in Central and Eastern Europe before 1990:Historical context and socialist legacies . . . . . . . . . . . . . . . . . . . . . . . 22Jirí Musil

3 City development in Central and Eastern Europe since 1990:The impacts of internal forces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Iván Tosics

4 The external forces: Towards globalization and European integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79F.E. Ian Hamilton

5 Foreign direct investment and city restructuring . . . . . . . . . . . . . . . . 116F.E. Ian Hamilton and Francis W. Carter

v

Contents

6 Mastering the post-socialist city: Impacts on planning the built environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153Kaliopa Dimitrovska Andrews

Part 2 Inter- and intra-urban transformation of capital cities

7 Berlin: From divided to fragmented city . . . . . . . . . . . . . . . . . . . . . . 189Hartmut Häussermann and Andreas Kapphan

8 The Warsaw Metropolitan Area on the eve of Poland’s integration into the European Union. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223Grzegorz Weclawowicz

9 Post-socialist Budapest: The invasion of market forces and the response of public leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248Iván Tosics

10 Prague returns to Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281Jirí Musil

11 Ljubljana: From “beloved” city of the nation to Central European “capital” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318Nata�a Pichler-Milanovi|

12 Mixed success: Economic stability and urban inequality in Sofia . . . 364Elena Vesselinov and John R. Logan

13 Baltic orientations: Globalization, regionalization, or “EU-ization”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399Martin Åberg

14 Moscow in transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428Olga Medvedkov and Yuri Medvedkov

15 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465Nata�a Pichler-Milanovi| and Kaliopa Dimitrovska Andrews

Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488

Tributes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490

Photographers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494

vi CONTENTS

3

At the turn of the millennium, “globalization” has become a very fashionable topicof research and debate, and the subject of a burgeoning international literature.This book, one of a series initiated by UNU/IAS on the interrelationships betweenglobalization and metropolitan or urban change, contributes to that debate andfocuses on a hitherto neglected part of the world: the transition economies ofCentral and Eastern Europe (CEE). The idea of globalization embodies anincreasingly widespread perception or conviction that “the world is gettingsmaller” or, as Held et al. (1999: 1) express it, that “the world is rapidly beingmoulded into a shared social space by economic and technological forces”.Metropolitan regions located around the world, including those in Europe, arebecoming increasingly interdependent as rising international flows of capital,information, people, and trade make the global economy more tightly integrated.Developments in one city or metropolitan region can have cumulative andfar-reaching impacts on the lives and work of populations in cities and theirregions elsewhere across the globe. Indeed, globalization can be defined as aprocess which is diffusing, deepening, and accelerating the functional integration,competition, cooperation, dependency, and interdependency of cities and theirregions, across international borders, continents, and oceans.

“Thinking globally”, however, is not new: the forces leading to globalizationthat have been at work and gathering momentum during the past few decadeshave attracted a growing body of analytical research and discussion. By the1970s, studies by Vernon (1966, 1971) were recognizing and identifyingmultinational enterprises (MNEs) as a key force in the development of what he

1

Introduction

F.E. Ian Hamilton, Natama Pichler-Milanovi|, and Kaliopa Dimitrovska Andrews

termed “globalism” through foreign direct investment (FDI) in host countries.At the same time, Wallerstein (1974) was propagating a “world systemsapproach” to the operation of the capitalist system in which the “dependencytheory” was evolved to argue that the “third world” or “world periphery” wasbeing maintained perpetually in a state of underdevelopment by the advanced“core” capitalist countries by substituting economic mechanisms for former“imperial-colonial” politico-economic power relations. The structuralist–Marxistideology underpinning such an approach, however, meant that its advocatesexcluded the communist arena from their “world”. Some steps were takentowards correcting this in the sphere of economic geography by the InternationalGeographical Union (IGU) Commission on Industrial Systems, which, in thelate 1970s, initiated research on international industrial systems. It identified

a myriad of interrelationships entangling “North” and “South,” “East” and “West,” orstates grouped into such international organisations as the CMEA or the EEC . . . [while]the erosion or loss of the “national” identities of a multitude of manufacturers have beendemonstrating to ordinary folk . . . that “their street” is but one lane of circulation in aglobal village. (Hamilton and Linge, 1981: 15)

The conclusion drawn from this work, however, was that while “dependency”remained significant, the global economy was becoming more “interdependent”as a result of commercial trade and competition, the armaments trade,multinational enterprise and FDI, the operation of financial markets, and thestrategies of national or city state governments – especially in the “semi-periphery” – to replace import-substitution industrial development policies byexport-orientated industrialization targeted at the global market (Hamilton andLinge, 1981). Although much of this work referred implicitly only to cities, theIGU Commission’s predecessor, the IGU Working Group on Industry, hadinitiated research earlier to show that the growth of non-manufacturing functionsrelated to industry and the associated growth in the importance of informationand innovation diffusion, especially in large cities, were significantly modifyingthe inherited understanding of “Christallerian” urban hierarchies (Christaller,1933, 1966) by creating new, more global, inter-metropolitan interdependencies(see Hamilton, 1974).

Yet, although these lines of enquiry were addressing “global issues”, they didnot address or use the term “globalization” as such; this had to wait until the1990s, when broader, more comprehensive approaches stimulated by the endingof the Cold War began to encompass a multiplicity of interrelated cultural,economic, environmental, political, social, and technological dimensions.While these aspects have come together to generate a growing literatureinvestigating “globalization”, researchers have simultaneously created a gooddeal of controversy over the topic and even in some cases question its relevanceor existence.

4 HAMILTON, PICHLER-MILANOVIC, AND DIMITROVSKA ANDREWS

Recently, therefore, controversy over globalization has been expressedthrough the identification of three broad schools of thought on the subject (Heldet al., 1999).

First, there are those so-called “hyperglobalizers” who, like Ohmae (1990,1995), are dedicated to the idea of an all-powerful, all-pervasive globalizationprocess. They discern a “borderless world” in which global market andtechnological forces are subjugating nation states, deconstructing their nationalsovereignty, and – by extension – affecting trends in their constituent cities andregions.

A second stance is adopted by the so-called “sceptics”, such as Hirst andThompson (1996). They argue that globalization was already well established bythe end of the nineteenth century, when it reached a peak, and that in recent decadesthe world is rather being reorganized into a few major regional–international blocs(such as the EU or NAFTA) which exhibit intensifying internal cohesion andinterdependence and lesser external interdependence. For the sceptics, therefore, theworld economy is more fragmented today and national or local cultural andpolitical forces can wield substantially more power than in earlier epochs. Theclassic case is Japan, where the government, supported by powerful businessinterests, pursues rigorous and changing policies to severely restrict importpenetration and inward FDI while aggressively supporting exports (Longworth,1998).

Third, there are the “transformationalists”, like Giddens (1990, 1996) orRosenau (1997), for whom globalization is a very contemporary phenomenonwithout historical precedent, because most nations and cities are undergoingprofound changes as they attempt to adapt and adjust not only to a moreinterdependent but also a less predictable world.

In one sense, the virtually parallel or simultaneous development andcoexistence of these diverse viewpoints on the globalization debate itselfunderlines that globalization is a reality – it expresses an environment whichfavours the instantaneous, interactive transmission and diffusion of ideas andknowledge, and their empirical testing. This is very healthy – ideas, concepts, orpolicies which become “fashionable bandwagons” can be very dangerous,especially if they are cast in narrow frameworks of bounded ideologies, sincethese can and do exclude “uncomfortable” information or findings and can thusdistort or over-generalize the complexities of the real world. Thus, the rapidevolution of a plurality of approaches yielding diverse findings, both within andbetween these three broad schools of thought, provides a useful starting point forevaluating that complex reality in the case of the current transformation of citiesin Central and Eastern Europe.

This book, therefore, attempts to provide some insights into whether cities inthis region are experiencing the globalization process and being integrated intothe world economy, or whether they are, rather, more strongly subject toregional–international forces such as European enlargement and integration

INTRODUCTION 5

(“EU-ization”). In either case, they are undoubtedly undergoing varioustransformations which embody outcomes of the interaction of both “internal”city or national processes and “external” international processes. In otherwords, the book attempts to evaluate the interplay of the global andregional–international forces with the internal local and national forces ofpolitical and economic transition, in shaping the transformation of cities in theformer socialist countries in Central and Eastern Europe.

The Region Defined

Through long periods of history, the Central and Eastern European region hasbeen plagued by contested definitions, claims, and counter-claims to territorialidentity and affiliation, and nationalist conflict, as well as frequent use of theseto propagate geopolitical and geo-strategic power interests. Frequent wars andchanging political boundaries, and the “relocating” of territory from one empireor state to another, have stunted or distorted urban development, creating realfunctioning environments of poverty and economic, military, and politicalinstability for cities, whose people have had to adjust and readjust to newcircumstances. Few cities in the region have enjoyed a stable interaction with thesame territory; most have had to adapt to new political, social, and economicrelationships in space, like Posen as part of Germany before 1919, or Poznan inPoland since 1919; or like Uzhgorod, part of Austro-Hungarian Monarchybefore 1919; Ruthenia in Czechoslovakia, from 1919 to 1939; German-occupiedEurope from 1940 to 1944; the Soviet Union from 1944 to 1991; and today, aborder town of Ukraine (Fig. 1.1).

The ending of the Second World War and the emplacement of the “IronCurtain” effectively destroyed the historic concepts and functional reality ofCentral Europe, dividing it between East and West.

Thus, during the socialist period, it became common in the Western world torefer to the region as “Eastern Europe”, an area encompassing Albania, Bulgaria,Czechoslovakia, East Germany (the German Democratic Republic or GDR),Hungary, Poland, Romania, and Yugoslavia, as distinct from the Soviet Union –that is, the area lying between the (then) USSR to the east and the civil societiesor market economies of Western Europe, or the member countries of NATO tothe west (Fig. 1.2). The dramatic changes which have occurred since 1989 – thecollapse of communist power, the break-up of the Soviet Union, Czechoslovakia,and Yugoslavia, and the end of the Cold War – have “reconfigured” this region.

“Central Europe” (or more precisely Central-East Europe) has re-emerged asa distinctive subregion embracing the Czech Republic, Hungary, Poland,Slovakia, and Slovenia (Fig. 1.3). Although the former East Germany is nowwithin the European Union, it is also in some respect part of this zone because ofBerlin’s potential wider regional influence. Very distinctive, too, is the Balkan


region, or “South-east Europe”, comprising the former Yugoslav republics ofBosnia-Herzegovina, Serbia and Montenegro, and the Former Yugoslav Republicof Macedonia (FYRoM), as well as Albania, Bulgaria, and Romania, althoughCroatia may consider itself marginal and more part of Central Europe despite its

INTRODUCTION 7

NorthSea

BalticSea

BlackSeaAdriatic

Sea

MediterraneanSea

National States after the First World War

Russian Empire

Fig. 1.1 “Eastern Europe” before and after the First World War.

division between areas focusing respectively on the southern Pannonian plainand those focusing on the Adriatic (Mediterranean) Sea coast.

With the break-up of the USSR, however, two other distinct subregions haveemerged: first, the Baltic states of Estonia, Latvia, and Lithuania; and second,“East Europe”, which is used nowadays to describe the western areas of theformer Soviet Union, namely Belarus, Moldova, and Ukraine, and in somerespect also the European part of Russia (as far east as the Urals). These regional


Fig. 1.2 “Eastern Europe” before 1989.

NorthSea

BalticSea

AdriaticSea

Black Sea

MediterraneanSea

Socialist Countries

subdivisions suggest initially that cities in Central and Eastern Europe, whichwere subjected to a relatively high level of uniformity in their developmentunder communism (see French and Hamilton, 1979), may be experiencing muchmore divergent forces and trends in the 1990s and will do so in the foreseeablefuture. The situation, however, is dynamic and fluid, not static, because thepreparations for accession to the European Union in 2004 have already shaped

INTRODUCTION 9

Fig. 1.3 “Eastern Europe” after 1989: “subregionalization”.

South-east Europe (SEE)

SwedenEstonia

RussiaLatvia

Lithuania

Belarus

Poland

Czech Republic

Slovakia

Austria Hungary

Romania

YugoslaviaBulgaria

Turkey

Cyprus

Albania

Greece

Malta

Macedonia

Ukraine

MoldovaSlovenia

Croatia

Bosnia & Herzegevina

FranceSwitzerland

Italy

Netherlands

Belgium Germany

Denmark

NorthSea

BalticSea

AdriaticSea

MediterraneanSea

BlackSea

Central Europe (CE) East Europe (EE) Baltic States

trends in cities in much of Central Europe (Poland, Czech Republic, Hungary,Slovenia) and in Estonia (i.e. those countries known as “first-wave” EUcandidates since Agenda 2000 in 1997), and also in Slovakia and two otherBaltic states of Latvia and Lithuania that became EU members in 2004(Fig. 1.4). There could also be spillover effects on cities in adjacent EU


Fig. 1.4 EU enlargement towards Central and Eastern Europe.

EU Countries

SwedenEstonia

RussiaLatvia

Lithuania

Belarus

Poland

Czech Republic

Slovakia

AustriaHungary

Romania

Yugoslavia Bulgaria

Turkey

Cyprus

Albania

Greece

Malta

Macedonia

Ukraine

Kishniev

Kiev

MoldovaSlovenia

CroatiaBosnia & Herzegevina

France Switzerland

Italy

Netherlands

Belgium

Germany

Denmark

CopenhagenNorthSea

OsloStockholmStockholmStockholm

Helsinki

TallinnTallinnTallinn

RigaRigaRiga

VilnjugVilnjugVilnjug

Minsk

Moscow

WarsawWarsawWarsaw

PragoePragoePragoe

Vienna

Bern

LjublianaLjubliana

Zagreb BelgradeBelgrade

Sofia

Bucharest

Rome

VallettaNicosia

Ankara

SarajevoSarajevo

Tirana

LuxembourgParis

Brussels

London

AmsterdamAmsterdam

BratislavaBratislavaBudapestBudapest

Ljubliana

Belgrade

Sarajevo

BratislavaBudapest

Berlin

BalticSea

AdriaticSea

MediterraneanSea

BlackSea

Accession countries (2004)

> 8 2 –4 1 –2 0,5–1 < 0.5 POPULATION (million)

Amsterdam

candidates such as Croatia, Bulgaria, and Romania (which are known as“second-wave” EU candidates), and “long-term excluded” territories fromthe EU enlargement such as other former republics of Yugoslavia (Bosnia-Herzegovina, Serbia and Montenegro, and FYRoM), Albania, or the EastEuropean states of Belarus, Moldova, and Ukraine.

Transformation

In the early 1990s, it was assumed, perhaps in both the East and West, that“transition” from a centrally managed state-owned socialist economy, withinthe context of a single (communist) party system, towards a market economy and acivil, democratic society, would project cities in Central and Eastern Europe ratheruniformly along a linear trajectory, which would result in their “convergence”through time towards the spatial–structural and functional characteristics of citiesin advanced market economies, or at least of those in Western Europe. Suchthinking, however, was not only naive in the light of subsequent reality, but wasoften based on a lack of understanding of the “power of the past” to differentiatecity trends: to varying degrees, contemporary developments in, and thecharacteristics of, cities in Central and Eastern Europe are “path dependent” ontheir pre-socialist as well as their socialist-period legacies. Thus, as a startingpoint, one can argue that current spatial patterns of integration among cities in theregion reflect the impacts of at least three “layers” of influences.

The first is the highly differentiated pattern of historical legacies before1945–1949, including imperial division (see Fig. 1.1) of the region throughmuch of the nineteenth century (in some cases until 1914–1918), the effects ofthe processes of nationalism and the creation of “nation” states between 1918and 1939–1941, and the variable effects of the Second World War on individualcountries and their cities.

The second is the socialist period from the late 1940s to 1989–1991. Whilebeing characterized by both a high degree of isolation or closure from the rest ofthe world (as well as from other socialist states) and the integrating influences ofthe Soviet Union, this period did, nevertheless, also yield some importantvariations between cities in different states, as governments either initiatedmodified “paths to socialism” such as the Yugoslav “self-management model”,or more strictly adhered to the Soviet model.

The third set of influences embody the effects of the opening up of cities towider European and global forces – during the post-socialist period since the endof 1980s – through the adoption of more market-orientated principles andpractice, leading to their greater or lesser integration or reintegration into abroader European and world urban system.

During the past decade, the paths of city development and change betweenthose in Central, South-east, and East Europe appear to be diverging

INTRODUCTION 11

significantly. This is occurring in different ways, to different degrees, and ondifferent levels. Globalization and leadership in restructuring national economiesis usually creating significant divergence between (a) capital cities and theircapital city regions on the one hand, where the effects of reforms andrestructuring are most marked, and (b) second- or third-order, smaller citieswhere change is or may be less marked and more narrowly confined. And yetsignificant international differentiation is also occurring between urban systemsin different states as a result of major variations in the speed and depth of, andcommitment or resistance to, reform by national, city, or local governments. As aresult, one may initially differentiate the following groups of territoriesaccording to their distinctive features and trends in city transformation:

Cities in former East Germany which became integrated overnight into theGerman “social market” economy and the EU “single market”. Instantaneous“shock therapy” has radically altered East German cities as a result, although theregeneration and reintegration of Berlin is a special case since it has also beenacquiring the capital functions of a reunified Germany within the EuropeanUnion, while also lying close to the frontier with Poland;

Cities in the “fast-track” reforming states in Central Europe, which wereaspiring to EU membership, such as the Czech Republic, Hungary, Poland, andSlovenia, together with Estonia among the Baltic states. These cities have beenexperiencing varying degrees of “commodification” of production factors andproductive capacities, and have been amongst cities in the region which are mostexposed to globalization and “EU-ization” influences through flows of capital,information, people, technology, and trade. Such cities are more firmly on apath of “convergence” towards cities in market economies as a result ofde-industrialization or industrial restructuring, the growth of producer andconsumer services, the implementation of diversified foreign investment, andthe emergence of small firms and entrepreneurship within the context ofreorganization of production systems. Indeed, cities in these states have beenplaying the leading role in achieving a major shift in economic trends fromrecession and decline in the early to mid-1990s to significant economic growthin the mid- to late 1990s, some more recently than others;

Cities in states of South-east Europe where attempts to introduce “transition”have largely “stalled” in the breadth and depth of real implementation bygovernment and people alike and where, therefore, foreign investors have beenmore reluctant to establish any major facilities. These cities in Romania,Bulgaria, or Baltic states like Lithuania or Latvia may exhibit at bestintermediate levels of transformation because economic decline continues withthe result that informal sector activities may be developed significantly, whileany evidence of globalization or “EU-ization” is very limited;


Cities in the Russian Federation in which apparent attempts at “fast-track”reform have not been matched by reality. There, the following features seem tobe significant. First, a “virtual economy” has been created which is controlled byoligopolists and mafia-style elements and is effectively moving away frommarket reform. Second, with the collapse of a strong central government, Russiais characterized by a “mosaic” of city and regional economies, ranging at oneextreme from cities like Moscow or St Petersburg, which are experiencing verysignificant transformation and integration/reintegration into the European orglobal economy, through to cities where barter and the informal economypredominate, alongside state or unrestructured “privatized” enterprises;

Cities in states of East Europe where, in effect, the state socialist economy hascontinued to be nurtured (Belarus), or has not really been dismantled or subjectto real market reforms (Moldova, Ukraine). These cities are still largely isolatedfrom global influences;

Cities in states which have experienced war destruction or war-related chaos andwhich effectively are either cities in ruins (such as Sarajevo in Bosnia andHerzegovina) where life is attempting to return to normal, or are still shaped bythe legacies of a military economy (such as Belgrade in Serbia) or refugeeproblems. In these cases there is a high level of isolation from developments inneighbouring regions, let alone from those in the wider world. And yet thesecities are also, in part, subject to the operations of international processes, notleast those carried out by UN forces;

Cities in territories which are adjacent to those which have been the object ofmilitary action and hence are, or may be, experiencing spillover effects of theBalkan conflict. In particular, one must single out the Former Yugoslav Republicof Macedonia, where cities have been influenced by the break-up of Yugoslavia,embargoes on trade with Serbia, and refugee and ethnic problems, not tomention political isolation from Greece. This environment of instability orpotential instability combines with geographic isolation (except from Greece) tofoster specific conditions of city transformation (especially, but not only, inSkopje, the capital of FYRoM);

Cities in Albania, where rapid transformation into an unregulated “third world”development model has taken place, following the end of the isolation of theformer socialist countries.

However, one must also take into account the effects of politico-territorialreorganization in Central and Eastern Europe in the 1990s, as this is reshapingthe roles of many cities in the region in various ways, and not only those of thecapital cities. Nevertheless, since these capital cities are the focus of the casestudies in this book, it is necessary to attempt an initial classification of them.

INTRODUCTION 13


Berlin, it must be reiterated, is unique because it is the only city which hasresumed its role as a capital within a larger, reintegrated socio-economic andpolitical space – that of a reunited Germany. In principle, this should result inmajor changes in the city since it is now the capital of the largest Europeaneconomy (in GDP) and is the second largest in Central and Eastern Europe afterMoscow (Table 1.1).

Five capital cities perform their functions within the context of unchangedstate boundaries – these are Bucharest, Budapest, Sofia, Tirana, and Warsaw.Even so, their experiences are quite diverse. Budapest, the capital of Hungary,and Warsaw, the capital of Poland, are playing leading roles in economieswhich have been growing and restructuring strongly or quite strongly. They arealso capitals of states adjacent to the European Union and soon to beincorporated into it. On the other hand, the other three capital cities of Albania,Bulgaria, and Romania are located in states which have been, or still are,suffering from economic decline (for various reasons), and which are moreisolated or distant from the European Union and may be excluded from it in theforeseeable future.

Another group of cities have had their functional status significantly upgradedsince 1991, as the territories over which they have jurisdiction were transformedfrom “semi-autonomous” regions of republics within larger “federated” statesinto independent sovereign states in their own right. These are Bratislava(Slovakia), Kiev (Ukraine), Ljubljana (Slovenia), Minsk (Belarus), Riga(Latvia), Sarajevo (Bosnia and Herzegovina), Skopje (Macedonia), Tallinn(Estonia), Vilnius (Lithuania), and Zagreb (Croatia). In these cases, thechanging patterns of spatial and functional integration must be addressed to seehow, why, and to what extent the acquisition of capital city status has affectedtheir developmental paths in comparison with their former integration into largerstates. Again, however, the contexts of proximity to or distance from theEuropean Union, impending accession to or exclusion from the European Union,and specific circumstances such as location within or near the recent Balkan warzones also play significant roles.

Much the same can be said about the next group of cities which were capitalcities of larger states, and continue to perform capital city functions but havefound themselves, since 1991 or so, presiding over “shrunken” former sovereignstates: Belgrade (Yugoslav Federation), Moscow (Soviet Union), and Prague(Czechoslovakia). It would be interesting to see how their experiences comparewith those of, say, Budapest after the loss of the Hungarian empire followingthe First World War. One would expect a decline in economic activity andfunctions, but the questions then are, to what extent has “transition” facilitatedrestructuring, even growth, certainly in the cases of Moscow and Prague, andhow has Belgrade been affected by the military situation and internationalsanctions, during the 1990s, in the former Yugoslavia?

INTRODUCTION 15

Table 1.1 Changes in population in key Central and Eastern European cities (in 000s).

City Year Year Year YearPopulation Population Population Population

Baltic States

ESTONIA 1956 1970 1990 2000Tallinn 257 363 484 408

LATVIA 1956 1970 1990 1999Riga 565 732 917 793

LITHUANIA 1956 1970 1990 1999Vilnius 200 372 593 578

Central Europe

CZECH REPUBLIC 1956 1970 1990 1999Prague 979 1,080 1,215 1,193Brno 306 334 392 385Plze{ 134 148 175 168

EAST GERMANY 1956 1970 1989 1999(FORMER GERMAN (East & West) (East & West)DEMOCRATICREPUBLIC)Berlin (East) 1,120 1,084 3,409 3,387

Dresden 492 501 501 477Karl-Marx-Stadt 288 298 302 263

(Chemnitz)Erfurt 186 195 217 201Halle 285 258 231 254Leipzig 608 585 530 490Magdeburg 259 270 288 235Rostock 150 197 253 203

HUNGARY 1956 1970 1989 1999Budapest 1,850 1,940 2,117 1,825Debrecen 130 155 220 204Gyor 59 100 132 127Miskolc 150 173 207 173Pecs 110 145 184 158Szeged 100 119 191 159

POLAND 1957 1970 1990 1999Warsaw 1,031 1,308 1,656 1,615Bialystok 69 167 269 284Bydgoszcz 213 280 382 387Bytom 179 187 230 205Czestochowa 155 188 258 257Gdansk 262 364 465 458Gdynia 135 190 251 254Katowice 204 303 367 345


Kielce 61 126 214 212Kraków 456 583 750 740Œódz 686 762 850 803Lublin 143 236 351 356Poznan 379 469 590 578Radom 80 159 227 232Sosnowiec 96 145 260 243Szczecin 239 337 413 417Wroc„aw 390 523 643 637Zabrze 185 197 204 200

SLOVAKIA 1956 1970 1990 2000Bratislava 246 306 443 447Ko�ice 63 144 237 242

SLOVENIA 1956 1971 1991 2002Ljubljana 115 174 267 257Maribor 73 97 104 92South-east Europe

ALBANIA 1955 1970 1990 2002Tirana 108 169 244 700

BULGARIA 1956 1971 1990 2000Sofia 592 898 1,141 1,142Plovdiv 163 255 379 346Varna 120 235 315 293

ROMANIA 1956 1970 1990 2001Bucharest 1,237 1,475 2,127 1,917Arad 106 137 203 183Bac÷u 34 108 197 207Br÷ila 102 152 248 231Bravov 83 182 264 307Cluj – Napoca 155 203 329 332Constan…a 79 172 355 336Craiova 85 175 317 311Gala…i 80 179 326 325Iavi 113 184 347 349Oradea 82 138 171 221Ploievti 115 163 259 248Sibiu 61 120 188 167Timivoara 142 193 351 328

FORMER YUGOSLAVIA: 1956 1971 1991 2001BOSNIA AND HERZEGOVINA

Sarajevo 99 244 529 401

Table 1.1 (continued)


INTRODUCTION 17

The great diversity of conditions and trends which has emerged in Central andEastern Europe in just one decade at the end of the twentieth century thusprovides rich opportunities for the comparative study of cities in the region. It ishoped that the following chapters examining broad processes of transformationand detailed case studies of individual capital cities will provide suchcomparative insights.

CROATIA 1956 1971 1991 2001Zagreb 351 566 704 779Rijeka 69 132 168 144Split 64 153 190 175

FORMER 1956 1971 1991 2002YUGOSLAVREPUBLIC OFMACEDONIA

Skopje 122 313 393 471

SERBIA AND 1956 1971 1991 2002MONTENEGRO

Belgrade 470 746 1,137 1,574Ni� 49 128 176 235Novi Sad 69 141 179 298Podgorica 60 98 118 162Pri�tina 61 105 108 242East Europe

BELARUS 1956 1970 1990 1999Minsk** 412 907 1,613 1,729

MOLDOVA 1956 1970 1990 1997Kishniev 190 356 676 658

UKRAINE 1956 1970 1990 1999Kiev 991 1620 2616 2590

RUSSIA 1956 1970 1990 1999Moscow 4,847 6,942 8,801 8,297St Petersburg 2,819 3,513 4,468 4,678

Notes:*Capital cities in italics.**Urban agglomeration.Sources: Hamilton (1979a: 179–181); Encyclopaedia Britannica, Britannica Book of theYear World Data 1990, Chicago: Encyclopaedia Britannica; Department of Economic andSocial Affairs, Demographic Yearbook, 1955, 1957, 1971, 1972, 1973, 1975, 1990, 1991,1992, 1998, 1999, 2000, New York: United Nations; Census 2001 for Croatia; Census2002 (first results) for Macedonia, Serbia and Slovenia; local demographic sources forAlbania, Bosnia and Herzegovina, Romania, Bulgaria, Estonia and Slovak Republic.

Table 1.1 (continued)


Structure of this Book

The main objectives of this book are, therefore, to identify and describe therelationships among and between:– the forces that are impacting the development of cities, including those

associated with the prevailing historic legacies before the late 1940s, thesocialist period of specific development in relative isolation between the late1940s and 1990s, and the contemporary transition towards market-orientatedand democratic systems emphasizing the processes and impacts of integration/reintegration of Central and Eastern European cities into the European andglobal economy, and international urban networks;

– the accompanying spatial transformation of the urban-built environmentattributed to these changes, including the impact of socio-economic structuralchanges (i.e. industrial restructuring, privatization, restitution), FDI inflows,changes in spatial organization, land-use patterns, and physical structure; and

– the emerging issues and policy responses to these urban transformations,the success, or otherwise, of national and local governance in organizingappropriate urban planning and management, and the role of the EuropeanUnion and other international organizations and agencies.

In order to achieve these objectives, a balance between comparative cross-national thematic analyses, in Part One (Chapters 1–6), and case studies ofselected representative cities, in Part Two (Chapters 7–14) of this book, wasconsidered desirable, especially in view of the unavailability of comparative andcomprehensive studies on inter-urban and intra-urban development in Centraland Eastern Europe.

Most of the recent books published on transformation processes in Centraland Eastern Europe have been on macro-economic or political issues (with theexception of Andrusz et al., 1996; Enyedi, 1998), but not on their comprehensiveeffects on urban development, city-competitiveness, and transformation ofCentral and Eastern European cities (Pichler-Milanovi|, 1998: 2).

In Part One, the similarities and differences between Central and EasternEuropean cities’ development have been addressed in view of comparisons of thedifferentiated pattern of historical context and socialist legacies before 1990(Chapter 2), and the impacts of internal and external forces on (re)shapingthese cities and their paths of transformation since 1990. The discussion ofthe impact of “internal” forces focuses on transformation processes aimed atdemocratization of society and the liberal – fully market-based – economy,especially changes to the institutional system, the elimination of state controlover the land and housing sector, privatization and restitution, anddecentralization of decision-making from the central to the municipal level(Chapter 3). The “external” forces – globalization and internationalization – andtheir effects on city dynamics, structure, functions, spatial organization, spatialforms, and the evolution of city (inter)dependencies have been analysed for the


INTRODUCTION 19

periods before and after 1990 (Chapter 4). The impacts of FDI as the mostexplicit phenomenon among the “external” forces shaping urban restructuringand development in Central and Eastern Europe have been discussed in terms ofinternational patterns of location and determinants and, in particular, theirimpacts on the capital and other cities in the region (Chapter 5). Chapter 6gives a review of the impact of the pressures of globalization, Europeanintegration, and general market competition, on the restructuring of the city-builtenvironment, and the transformation of land-use patterns and physical structure.It specifically examines the role of contemporary planning within the overalldevelopment of each city.

In Part Two of the book, case studies of many of the capital cities in CentralEurope are presented, including examples of the most significant capital citiesin the Baltics, South-east, and East Europe, although there are some notableomissions (e.g. Bratislava, Zagreb, Belgrade, Bucharest, Tirana, Minsk) due tolimitations of time, space, and programming. Berlin was included as a case studybecause of its unique transformation, with the reintegration of West and EastBerlin into the capital city of a reunified Germany (Chapter 7). Warsaw, Prague,Budapest, and Ljubljana represent capital cities of the “fast-track” reformingpost-socialist states in Central Europe (Chapters 8–11). To gain a clearer pictureof the diversity of conditions and trends which have emerged in the processes oftransformation in the Baltics, and in South-east and East Europe, the capitalcities of the Baltic states (Tallinn, Riga, Vilnius), together with Sofia andMoscow, were selected as representative case studies (Chapters 12–14).

In each of these case studies, the authors have reviewed the heritage of past,recent, and likely future trends of the transformation processes, with particularreference to the position of each capital city in relation to its urban region, andnational and international context. They have considered the impact ofglobalization and “Europeanization” or “EU-ization” on urban restructuring andthe inter- and intra-urban transformation of each capital city in relation to itsfunctional region and its reintegration into the European city system. They alsoexamine political and geo-strategic changes, local government reforms, theforms that political, economic, and social organizations have taken in recentyears, and the implications of these factors on urban governance. They exploreeconomic and demographic trends, the structure and patterns of change of urbaneconomics, sources of capital and labour, privatization reforms, capitalinvestments, and FDI. The processes of land (re)development, land-use changes,and the production of the built environment are also described, as are theresulting issues of social cohesion and changing spatial structure of the city.Planning processes and urban management are also reviewed, city cooperationwith global and/or European networks and associations is examined, and finally,prospects – vision and strategy – for the future are identified. The chapters donot cover all the above issues in equal detail, as the authors have been allowedfreedom to concentrate on the features of a particular city that they feel are most

crucial for understanding the specific impacts of globalization and post-socialisttransformation processes, but together they offer a rich source of informationand a solid basis for comparison and/or future comparative research.

Some conclusions are presented in the final chapter of this book, as an attemptto draw a summary from the comparative studies presented in Part One and theindividual city case studies shown in Part Two. The conclusion shows the mainsimilarities and differences between Central and Eastern European capitalsduring the process of their intensive inter- and intra-urban transformation in the1990s from “socialist” to “post-socialist” cities. The impact of globalization,European integration, and the internationalization of their economies andsocieties, together with national policies and specific regulations, have all hadprofound effects on inherited local urban structures. The conclusion also statesthat major policy changes and commitments are needed in Central and EasternEuropean cities, which should take the necessary initiatives towards improvingtheir competitiveness in “global” city networks, while preserving sustainabilityand quality of life for their local citizens.

REFERENCES

Gregory Andrusz, Michael Harloe, and Ivan Szelenyi, eds, Cities after Socialism: Urbanand Regional Change and Conflict in Post-Socialist Societies, Oxford: BlackwellPublishers, 1996.

Walter Christaller, Die Zentralen Orte in Süddeutschland, Lena: Fischer, 1933.———, Central Places in Southern Germany (translated by C.W. Baskin), Englewood

Cliffs: Prentice Hall, 1966.Györgyi Enyedi, ed., Social Change and Urban Restructuring in Central Europe,

Budapest: Akadémiai Kiadó, 1998.R. Anthony French and F.E. Ian Hamilton, eds, The Socialist City: Spatial Structure and

Urban Policy, Chichester and New York: Wiley, 1979.Anthony Giddens, The Consequences of Modernity, Cambridge: Polity Press, 1990.———, “Globalisation: A Keynote Address”, UNRISD News 15, 1996, p. 15.F.E. Ian Hamilton, Spatial Perspectives and Industrial Organisation and Decision-

Making, New York: Wiley, 1974.F.E. Ian Hamilton and Godfrey J.R. Linge, Spatial Analysis, Industry and the Industrial

Environment Vol. 2: International Industrial Systems, Chichester and New York: Wiley,1981.

David Held, Anthony McGrew, David Goldblatt, and Jonathan Perraton, GlobalTransformations: Politics, Economics of Culture, Cambridge: Polity Press, 1999.

Paul Hirst and Graham Thompson, Globalisation in Question: The InternationalEconomy and the Possibilities of Governance, Cambridge: Polity Press, 1996.

Ron Longworth, “Nowhere are the Winds of Globalization Sensed with moreApprehension than on the Continent of Europe”, Global Squeeze, 1998, p. 151.

Kenichi Ohmae, The Borderless World, London: Collins, 1990.———, The End of the Nation State, New York: Free Press, 1995.


INTRODUCTION 21

Nata�a Pichler-Milanovi|, “Globalisation and Transformation of Central and EasternEuropean Cities”, Proposed IAS/UNU Research Project, First Draft (unpublished),1998.

James N. Rosenau, Along the Domestic–Foreign Frontier, Cambridge: CambridgeUniversity Press, 1997.

Raymond Vernon, “International Investment and International Trade in the ProductCycle”, Quarterly Journal of Economics 80, 1966, pp. 190–207.

———, Sovereignty at Bay: The Multinational Spread of U.S. Enterprises,Harmondsworth: Penguin, 1971.

Immanuel Wallerstein, “Dependence in an Interdependent World: The LimitedPossibilities of Transformation within the Capitalist World Economy”, African StudiesReview 17, 1974, pp. 1–26.

© United Nations University, 2005

The views expressed in this publication are those of the authors and do not necessarilyreflect the views of the United Nations University.

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Transformation of cities in Central and Eastern Europe : towards globalization / edited by F.E. Ian Hamilton, Kaliopa Dimitrovska Andrews, and Nata�a Pichler-Milanovi|.

p. cm.Includes index.ISBN 9280811053 (pbk.)1. Cities and towns—Europe, Central. 2. Cities and towns—Europe, Eastern.

3. Globalization. 4. Post-communism—Europe, Central. 5. Post-communism—Europe, Eastern. I. Hamilton, F.E. Ian. II. Andrews, Kaliopa Dimitrovska. III. Pichler-Milanovi|, Nata�a.

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Edited by F.E. Ian Hamilton, Kaliopa Dimitrovska Andrews, and Nataša Pichler-Milanoviè

Transformation of Cities in Central and Eastern Europe: Towards Globalization

Book information:

ISBN 92-808-1105-3; 500pp; US$43.00

This volume is one in a series initiated by the United Nations University Institute of Advanced Studies on the inter-relationship betweenglobalization and urban transformation. It identifies and describes the inter- and intra-urban transformations of Central and Eastern European cities and considers their pre-1945 historic legacies, the so-cialist period, and their contemporary transition towards market oriented and democratic systems. The dramatic changes since 1989 including the collapse of Communist ideology, the break-up of the Soviet Union, Czechoslovakia and Yugoslavia, the end of theCold War and the impact of globalization and European integration, have reconfigured this region and affected their re-integration into Euro-pean and global networks. This book first examines the similarities and differences between significant Central and Eastern European cities, comparing the differing patterns of historical context and socialist legacies before 1990, and the impacts of internal and external forces on re-shaping these cities and their paths of transformation since 1990. It also examines the role of contemporary planning within the overalldevelopment of Central and Eastern European cities. The conclusion demonstrates the similarities and differences between Central and Eastern European cities and their re-integration into global networks.

F.E. Ian Hamilton was a Senior Lecturer in the Department of Geogra-phy and Environment at the London School of Economics andPolitical Science. Kaliopa Dimitrovska Andrews is Director of the Urban Planning Institute of the Republic of Slovenia. Nataša Pichler-Milanoviè is a Research Fellow at the Urban Planning Institute of the Republic of Slovenia and at the London School of Economics andPolitical Science

Contributors:

Martin Åberg •Frank Carter •Kaliopa Dimitrovska Andrews • F.E. Ian Hamilton • Hartmut Haussermann • John R. Logan •Andreas Kapphan • Olga Medvedkov • Yuri Medvedkov• Nataša Pichler-Mila-noviè • Jiri Musil • Iván Tosics • Elena Vesselinov • Grzegorz Weclawowicz

t r a n s f o r m a t i o n o f c i t i e s in central...

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