The Planet of Cities: Latin American and Caribbean cities from 1980 to 2080

Greg Clark, Urbanist
Borane Gille, Head of Cities Innovation, The Business of Cities

From unequal, sprawling metropolises of the 1980s to today’s vibrant hubs of innovation, Latin American and Caribbean cities have transformed their challenges into opportunities for reinvention. Large migration to cities in the 70s and 80s exacerbated persistent challenges including economic inequality, informal housing, poor quality of life, and crime. Yet the last decades show how Latin American urbanisation has induced profound creativity and innovation, fostering new ways, models and tools to empower and retrofit cities for more inclusive and sustainable futures. The region has since become relatively safer and tourism has been a driving force in the growth of Latin American and Caribbean cities.

Latin American cities in the 1980s

In the 1980s, two thirds of people in Latin America already lived in cities and the continent was home to two of the first mega cities in the world. Cities were booming with rapid population growth (Figure 1), driven by waves of rural migration and industrial expansion. This growth brought both promise and challenges: while cities thrived as cultural and economic hubs, they also faced stark inequalities, housing shortages and rising crime.

São Paulo was an industrial powerhouse, with a strong focus on manufacturing in automotive and heavy industries. Buenos Aires flourished as the cultural and economic heart of Argentina, with its economy dominated by agriculture-related industries, particularly meat processing and grain exports. However, both cities faced challenges related to housing shortages, traffic congestion and pollution as they struggled to keep pace with the rural urban migration of the 1980s. Rio de Janeiro was emerging into its role as a city of culture.

Bogotá, Lima, Caracas and Santiago also experienced significant growth, emerging as commercial hubs and centres of political power and influence. Informal settlements started appearing on the fringes of the cities, built by those seeking better economic opportunities.

Latin American cities now

Urbanisation, economic diversification and infrastructure investment have transformed the Latin American urban landscape. Latin America is now the second most urbanised region in the world, with 82% of the population living in cities. More than 200 small- and medium-sized cities now complement the previous dominance of the primary megacities. Those cities are experiencing faster growth than larger cities, whose slowdown can be attributed to quality-of-life deficits, fragmented planning and policy, as well as lack of investment. Cities in Brazil, Mexico, Argentina and Colombia generate nearly half of the total growth across the continent.

Countries such as Brazil and Colombia now boast a complex and diverse system of cities, which is becoming increasingly inter-dependent and mature (Figure 2). The demographic and economic shift towards small and medium-sized cities presents a major opportunity to plan and develop better-managed cities in the region through proactive leadership and management.

São Paulo has become the leading financial and corporate centre in Latin America and the main gateway for Brazilian firms seeking to internationalise. The city is being recognised on the global stage for its transition towards a knowledge-based economy, underpinned by a large consumer market and entrepreneurial culture.

Buenos Aires, despite economic fluctuations in Argentina, remains a vibrant cultural centre with a diversified economy that includes finance, technology, tourism and creative industries, particularly in design, fashion and entertainment.

Other Latin American cities have also made strides in economic diversification. Bogotá has a growing technology sector and a strong focus on innovation. It has also gained global recognition through its efforts to tackle congestion and improve public transport use. For example, Bogotá’s TransMilenio and Ciclovía are two global case studies for mobility innovation and have since been replicated in many cities around the globe. Santiago has solidified its status as one of Latin America's most developed cities, with a strong economy based on finance, mining, innovation and technology.

However, across the region, cities continue to struggle with persistent issues including informal housing, inadequate infrastructure and social inequality. In cities with populations above 10 million, there is immense pressure on public services, leading to challenges for transportation, healthcare and education. Crime and violence remain significant issues in many Latin American cities, often linked to broader problems of poverty and inequality.

Caribbean cities are vibrant centres of culture, tourism and economic ambition, yet they face unique challenges that set them apart from many other urban areas. Balancing growth with resilience, cities like Kingston, Port of Spain and Nassau navigate issues tied to climate vulnerability, economic dependence on tourism and limited land resources. These cities are updating their planning and building codes and investing in their public realm and infrastructure to build resilience to disasters, protect their rich ecosystems and foster inclusive urban development. For example, as part of its waterfront redevelopment, the city of Kingston is creating new spaces for local businesses and adding flood-resilient features. As they adapt to climate and economic pressures, Caribbean cities are crafting a forward-looking model rooted in environmental stewardship and community strength.

Latin American cities towards 2080

Along with continuing urbanisation, climate change and technology are creating new challenges and opportunities for Latin American cities. By the end of the century, nine in ten people in the continent will be living in cities. The pace and quality of this growth will depend on how well the cities can address existing challenges and leverage opportunities in emerging industries.

Economic diversification: as traditional industries, such as manufacturing and agriculture, face increasing competition and technological disruption, cities should focus on developing knowledge-based economies, with an emphasis on technology, innovation and creative industries. São Paulo and Bogotá, for example, are likely to continue expanding their tech sectors, becoming increasingly important players in the global digital economy.

Climate change: many of the region's largest and most productive cities are in areas vulnerable to climate impacts, such as rising sea levels, extreme weather events and water scarcity. This creates a critical dependency: if major cities are impacted, the whole national economy is at risk. The frequency of extremely hot days is expected to increase by five to ten times by the 2050s. Cities like Lima or La Paz, which already face water shortages, will need to invest in sustainable infrastructure and innovative water management solutions to ensure their long-term viability. Urban planning will need to prioritise resilience, with a focus on building green spaces, improving public transportation and reducing carbon emissions.

Social inequality and crime: half of the 50 most dangerous cities in the world are in Latin America and the Caribbean. Addressing this issue will require comprehensive policies aimed at improving access to education, healthcare and affordable housing, as well as efforts to reduce poverty and create more inclusive economic opportunities. Social urban innovations such as Bogotà’s care blocks show how cities can deliver services more efficiently and equitably, and improve access to opportunities for its more disadvantaged populations.

Local governance: as cities extend beyond traditional administrative boundaries, governance structures must evolve to tackle urban challenges more effectively and at the right scale. National and capital city governments need to overcome the ‘zero sum game’ mindset, as greater co-ordination and alignment in policies at local, regional and national scales are critical to better manage growth and development. Local governments need more powers and capacity to adapt to climate and economic changes.

Infrastructure deficit: greater local and regional planning is required to increase the share of resources dedicated to urban services, and to increase capital investment in urban infrastructure. It is estimated that the total infrastructure gap represents 2.5% of the entire region’s GDP, or US$150bn a year. This is necessary if the region is to remain globally competitive and meet the demands of global capital in terms of digital infrastructure, connectivity and energy transition.

By 2080, Latin American and Caribbean cities could become more integrated into the global economy through more diversified economies and offer a higher quality of life to their residents. However, realising this potential will require concerted efforts to address the region's persistent challenges, from economic inequality to climate vulnerability. As these cities continue to grow and evolve, their ability to adapt to changing circumstances and seize new opportunities will determine their future success.