[BLOG-LIKE POSTING] On Berlin's Future
Oct. 6th, 2005 06:51 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
rfmcdonaldI recently commented in passing, by way of exploring Toronto's situation, that Berlin may have permanently missed out on its chance to become a world city, or as much of a world city as it was under the Wilhelmine Reich and the Weimar Republic. I was thinking of Berlin mainly in economic terms since, as EURES, "The European Job Mobility Portal," notes, Berlin's economy hasn't been doing that well of late.
Even the Berlin-Brandenburg Business Location Centre acknowledges that Berlin's economic climate isn't becoming so much better as it is less bad. As Judy Dempsey wrote in the International Herald Tribune ("Broke but dynamic, Berlin seeks new identity") this May, the city of Berlin's macroeconomic situation and its post-reunification history are equally dire.
In other domains, as Scott Martens noted at A Fistful of Euros last November the reunified city still seems to lack a strong sense of identity, with West Berliners being twelve times as likely to marry a foreigner as an East Berlin. The 1996 proposal to merge the city-state of Berlin with the Länd of Brandenburg that surrounds it, so as to achieve greater economies of scale and better planning while achieving a higher profile, was rejected, as East Berliners and Brandenburgers living outside of the capital's sphere of influence declined the proposal.
Am I saying that Berlin is doomed? No. As Dempsey noted, post-reunification Berlin is a culturally vibrant place, attracting migrants from all over Germany, Europe, and the wider world with its tolerant atmosphere and low land prices. If you don't believe this, you need only read![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
imomus. What I am saying is that well into the Weimar period, the city of Berlin might well have become a metropolis fully the equal of Paris or London, expanding and modernizing and developing to the point where Berlin would have been a world city entirely on its own merits. Nazi Germany kept Berlin's cosmopolitan promise from being fulfilled; the Red Army devastated Berlin; the Cold War kept Berlin divided and Berliners separated. If reunification has been difficult and disorienting for all Germany, soaking up resources that could otherwise have gone to more productive use, how much more difficult has it been for Berlin? How much more does Berlin have to do, and what will its European peers do in the meantime?
According to initial provisional data, Berlin’s gross domestic product, the indicator of its economic performance, showed a slight increase in 2004 over the previous year, the first increase since the year 2000. At constant prices, it rose by 0.4% to EUR 70.7 billion. The Berlin economy did not benefit greatly from the general economic upturn and lagged far behind the national average growth figure of 1.7%.
The various areas of economic activity contributed in differing degrees to the development of the Berlin economy in 2004. Manufacturing registered the first growth since reunification, increasing its output by 2.3%. The declining output of the construction industry was once again a significant factor in Berlin’s faltering economic performance. Growth was also inhibited by the situation in the financial-intermediaries sector. The hotel and restaurant trade also continued to suffer from the harsh economic climate. The service sector in general was able to expand again after two years of falling output. As a result of the state government’s efforts to curb public spending, public-sector demand did nothing to boost the economy in 2004 either.
In 2004, the Berlin economy saw an increase at last in the number of gainfully employed persons (+1.4%). The increase in employment in Berlin in 2004 is closely linked with an unusually rapid expansion of self-employment and marginal part-time work, which more than made up for the chronic haemorrhaging of jobs for blue-collar and white-collar employees with full liability for social insurance. The loss of these jobs was heaviest in the domains of the sale, maintenance and repair of motor vehicles, motorcycles and personal and household goods (5,800 jobs lost), manufacturing ( 5,300), construction (-4,300), public administration (-4,000), real-estate services (-2,000) and other services (-1,900). The hotel and restaurant trade was the only area of activity where the number of people in employment increased (by 2,100).
The increase in self-employment and marginal part-time work in 2004 therefore tipped the balance in favour of job growth in the Berlin labour market and brought unemployment back down below the 300,000 mark. The average unemployment rate in 2004 was 17.6%, which is half a percentage point lower than in 2003.
Even the Berlin-Brandenburg Business Location Centre acknowledges that Berlin's economic climate isn't becoming so much better as it is less bad. As Judy Dempsey wrote in the International Herald Tribune ("Broke but dynamic, Berlin seeks new identity") this May, the city of Berlin's macroeconomic situation and its post-reunification history are equally dire.
Berlin's debt has risen fivefold in the period 1991 to 2004, to almost €56 billion, or $72 billion, from €10.8 billion. Nearly 12 percent of the budget for last year was earmarked for interest payments alone. The Berlin Senate, the equivalent of the regional government, says the total debt of the city amounts to €18,100 per person. (New York's, by contrast, is $6,223.)
Berlin's gross domestic product per capita, meanwhile, is 20 percent lower than the level for western Germany. From 1991 to 2004, the level of prosperity in western Germany jumped by 8.5 percent; Berlin's fell below the 1991 level.
In other domains, as Scott Martens noted at A Fistful of Euros last November the reunified city still seems to lack a strong sense of identity, with West Berliners being twelve times as likely to marry a foreigner as an East Berlin. The 1996 proposal to merge the city-state of Berlin with the Länd of Brandenburg that surrounds it, so as to achieve greater economies of scale and better planning while achieving a higher profile, was rejected, as East Berliners and Brandenburgers living outside of the capital's sphere of influence declined the proposal.
Am I saying that Berlin is doomed? No. As Dempsey noted, post-reunification Berlin is a culturally vibrant place, attracting migrants from all over Germany, Europe, and the wider world with its tolerant atmosphere and low land prices. If you don't believe this, you need only read
imomus. What I am saying is that well into the Weimar period, the city of Berlin might well have become a metropolis fully the equal of Paris or London, expanding and modernizing and developing to the point where Berlin would have been a world city entirely on its own merits. Nazi Germany kept Berlin's cosmopolitan promise from being fulfilled; the Red Army devastated Berlin; the Cold War kept Berlin divided and Berliners separated. If reunification has been difficult and disorienting for all Germany, soaking up resources that could otherwise have gone to more productive use, how much more difficult has it been for Berlin? How much more does Berlin have to do, and what will its European peers do in the meantime?
