Aug. 28-Sept. 10, 2001

Volume 4 Number 9

  Finding Central America on the world city map
  WorldCities: Miami in Perspective
      Written By: Jan Nijman

Mostly as a consequence of geography, the Central American region has always had a tough time connecting to the world economy.

With the exception of Panama, due to its prized inter-oceanic waterway, the region has been overshadowed by the much larger countries to the north and to the south.

How many people, even in Miami, know the name of the capital of Honduras? This is not to say that Central America has been excluded from the world economy.

In fact, the region has been intensely integrated into the world economy since the 19th century.

But it appears to have always been at the receiving end of political and economic power relationships, from the earlier times of national agro-export development strategies to more recent neo-liberal overtures inspired by the Washington consensus.

In present times, Central America is also an exceptional region in the sense that none of the five countries in the region, north of Panama, are home to a recognized world city.

None of the known world city rankings include any Central American city. In other words, no single city in the region has a significant role beyond the national border.

In a recent study at Loughborough University in the United Kingdom, researchers found that the world's 100 largest producer services firms (accounting, law, consulting, advertising, banking/finance and insurance) were represented in a total of 316 cities around the world.

But only 21 of the 100 firms had offices in Central America. San Jose had representations from 20 firms and Guatemala City had offices of 19 firms, with some overlap.

On the basis of a calculation of centrality and connectivity in the network, London and New York were at the top of the global rankings. The highest-ranking Central American cities were San Jose and Guatemala City, which took, respectively, 130th and 139th place.

Obviously, this is not nearly enough for serious consideration of world city status.

These findings suggest that, even if the Central American cities are not entirely out of the loop, they are poorly connected and the region is not represented through a major world city.

But instead of viewing these kinds of linkages from the center of the world economy outwards (i.e., from London or New York, where most of the biggest global firms are headquartered), we can also measure these linkages, so to speak, from the ground up.

In other words, instead of looking at the world's largest service firms and their penetration of the Central American region, we can focus on the biggest banks that originated and are headquartered in the region, and on their extra-regional linkages.

These kinds of connections may be less significant from a global point of view, but they are vital for the region.

The 22 most important banks that are headquartered in Central America maintain ties with a cumulative total of 319 "correspondent banks" outside the region.

Correspondent banks provide services to clients of Central American banks that the latter are unable to provide, often simply because they do not have their own branch where the service needs to be provided.

It turns out that, of the 319 extra-regional links of Central American banks, 168 are with one city - here's the moment you've been waiting for: Miami.

Far behind, in second place, is New York, with 35 links. After New York, the remaining links of any significance are with Panama City (18), Germany's Hamburg (11), and Mexico City (10). To be sure, Miami's dominance is overwhelming, especially in comparison with New York.

It is, say the researchers: "a remarkable finding, a stark indication of the domination of Miami in the external financial connections of Central America."

While Miami attends to Central America and connects the region to a wider world, in its own small way Central America attends to Miami and helps create a major world city.

Jan Nijman is a professor of Geography and Regional Studies at the University of Miami.


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: Jan Nijman

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