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Urban Development

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Urban Development

At a Glance

·         Cities generate 80% of global GDP and the next 15 years will see the economic importance of cities in the south and east increasing.

·         Today’s urban population of about 3.6 billion people is projected to reach 5 billion by 2030; the world will then be two-thirds urban.  Nearly two billion new urban residents are expected in the next 20 years.  Ninety percent of this growth will be in the cities of South Asia and Africa.

·         Around five million people migrate every month to a city somewhere in developing countries in search of jobs and better access to services. Cities do not create poor people; poor people move to cities in the hope of improving their lives, and especially their children’s.  

·         The built up area used by cities will double from 2000-2030.  At the same time urban densities are decreasing which will increase the cost of delivering infrastructure services and make housing costs higher and less affordable.

·         The poor are urbanizing faster than the population as a whole, reflecting a lower-than-average pace of urban poverty reduction.  Over 1993–2002, while 50 million people were added to the count of the “$1 a day” poor in urban areas, the aggregate count of the poor fell by about 100 million, thanks to a decline of 150 million in the rural poor.  Nearly one billion people live in slums.

·         More than 70 percent of global greenhouse gas (GHG) emissions are attributable to residents of cities. Yet urbanization, if properly managed, can address sustainability issues through denser, more energy-efficient cities that are climate-resilient and that offer a high quality of life.

·         Almost half a billion urban residents live in coastal areas, increasing their vulnerability to storm surges and rising sea levels.


Economic benefits of concentrated urban areas

No country has grown to middle-income status without industrializing and urbanizing. The economic future of most developing countries will be determined by the productivity of their burgeoning urban populations. In China, Japan, Korea, Malaysia, and elsewhere, cities have been major drivers of rapid economic growth and job creation. 


World Bank action

The World Bank urban development strategySystems of Cities: Harnessing the Potential of Urbanization for Growth and Poverty Alleviation – takes a “system of cities” approach, which argues that managing the challenges for cities are fundamentally linked to focusing on the core elements of the city system (encouraging progressive land and housing markets; supporting city economies; making pro-poor policies a city priority; and promoting a safe and sustainable urban environment). 


To support strategy implementation, the World Bank is developing standardized tools and methodologies that help leaders make better decisions based on credible evidence. One tool, The Urbanization Review, provides a robust policy framework and diagnostics to assess specific urbanization challenges and informs policy responses and the necessary tradeoffs on the location and types of infrastructure to connect across cities and to global markets. Urbanization Reviews are being undertaken in Brazil, China, Colombia, Georgia, India, Mexico, Tunisia, Turkey, and Vietnam.  We also work to adapt financing instruments and knowledge products to strengthen local level capacity. We support sustainable urban development by increasing the focus on climate change, energy efficiency, and resilience in cities.


Urban growth

Rapid urban growth provides opportunities to get new growth right.  Rapid urban growth is commonly characterized by expanding slums and informal areas, reflecting a lack of planning for growth and poorly functioning land and housing markets.  By planning responsibly for urban growth, cities set the conditions for cost effective infrastructure provision, housing affordability improvements, better use of transit and reductions in greenhouse gases.  World Bank projects support cities in all of these areas. 


Sustainable cities

Cities account for about two-thirds of global energy use and more than 70 percent of GHG emissions. Integrated transport and land-use development can deliver economic, environmental, and social benefits. These benefits include improved mobility and accessibility, reduced energy use, improved air quality, lower GHG emissions, improved access to jobs, housing and urban services, and an increased quality of life and sense of community. Energy efficiency can offer practical solutions to budget-constrained cities in meeting their energy needs without sacrificing development priorities.   The Bank’s Eco2 Cities program aims to help cities achieve greater ecological and economic sustainability by linking environmental health, energy efficiency, and livability concerns into the way cities plan for the future.


The Global Urbanization Knowledge Platform

The Urbanization Knowledge Platform seeks to equip city managers with the knowledge, data, and innovations they need to harness urbanization for inclusive and sustainable development. Launched in 2011, the platform hosted over 15 regional dialogue events in 5 geographic regions. This has built a network of over 70 partner organizations to explore the most pressing challenges and opportunities faced by cities. In response to the needs expressed by the 750 city leaders that participated in these consultations, the Platform launched the "Rethinking Cities" initiative, and the "Partnership for Sustainable Cities", to fill key knowledge gaps and create joint solutions to important urban challenges..


Regeneration of Historic Cities and Conservation of Urban Cultural Heritage Assets
The World Bank has a robust practice in the regeneration of historic city cores and cultural heritage, with close linkages to natural heritage and sustainable tourism. In the past two years, several large projects have been approved, for example in the Russian Federation ($100 million), China ($50 million), and Georgia ($80 million), with others under preparation.


Highlights and Results

·         The Bank’s urban portfolio has expanded considerably: for example, IDA commitments under the Urban Development theme have more than doubled, moving from an average of US$487 million per year during FY2001-2005, to an average of US$1,036 million per year during FY2006-2010.

·         In FY2012, over 50 projects with an urban component were approved, with $4.12 billion in financing commitments. This represented 12% of overall IBRD/IDA lending that year.

·         The active portfolio currently includes almost 400 IBRD/IDA operations with urban components in over 90 countries amounting to approximately $23 billion in financing commitments.

·         Investment financing is provided for basic services, housing, infrastructure, slum upgrading, municipal governance, environmental improvements and adaptation, and local economic development, including cultural heritage.


Related Links

·         World Bank Urban Development website  

·         World Bank Urban and Local Government Strategy 

·         Urbanization Knowledge Platform 


Contacts: Ellen Hamilton, Lead Urban Specialist, FEUUR, (202) 473 6583 –

Updated September 2012

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