Never before have cities been so important to human development. With urban growth having reached an historic tipping point – for the first time more than half the world’s population is city-based - the need for comprehensive urban planning, effective management of municipal services and finances, alleviation of poverty, and environmental protection is greater than ever before.
The world’s urban population is expected to swell to over 60% in the next two decades, and continue to rise. More significantly, 90 percent of that growth will happen in the developing world: an expansion of almost two billion people.
Africa and South Asia, the only regions still mostly rural, will see their urban populations double in that time. Much of the growth will take place in small and intermediate-size cities often lacking the skills, facilities, and services necessary to cope with the human tide.
The World Bank recognizes that such growth and its attendant challenges are inevitable, but also laden with opportunities. For, while sheer numbers of people may overwhelm local government capacity, consigning millions of poor people to slums that undermine their ability to improve their lives, it has positive implications.
The relative proximity of urban-based communities to basic services and work opportunities – over 70% of global production comes from cities – enables governments, development agencies and employers to more easily reach the needy.
As economists describe it, urbanization has brought about a convergence of production and consumption markets, thus enabling the benefits of agglomeration economies to take root. This view has overtaken the now-discredited thinking of urbanization as a phenomenon to be avoided. The new approach amounts to a "paradigm shift", due largely to the contributions of the multilateral Commission on Growth and Development and the World Bank’s World Development Report 2009 on economic geography.
The key ingredient for successful urban development is the realization by governments that cities are not avoidable burdens. If well managed, they are desirable assets to economic growth, and government must plan and act in the interests of those communities.
Environment in an urban setting
Price: $15.00In the same way, cities have both negative and positive effects on the environment. Because they generate the most economic activity, they are sources of pollution and the main producers of greenhouse gases that hasten global warming. Yet they also offer the most cost-effective means to slowing the rate of global warming and remediating environmental damage. This is a point well made in the World Bank’s Little Green Data Book 2009.
Katherine Sierra, World Bank Vice President for Sustainable Development, has remarked that “National and city governments around the world face major challenges – and opportunities – as they weigh the choices for their future energy mix. There is no doubt that public policies can improve energy efficiency and reduce carbon dioxide emissions. And these decisions will be vitally important, not only to the cities and countries concerned, but to the future wellbeing of our world at large.”
The urgent need for a concerted cities’ response to climate change formed the core theme of the Fifth Urban Research Symposium, held in Marseille, France, this summer. The symposium was arranged by the World Bank and major urban development partners.
Speakers at the symposium noted that the urban population of developing countries was increasing at a rate of 70 million people per year. One billion people already live in slums and 360 million live in urban coastal areas at low altitude, threatened by rising oceans.
Taking action
In June, at a seminar in Singapore, and as one answer to the critical issue of cities and climate change, the Bank launched an urban development program entitled “Eco² Cities: Ecological Cities as Economic Cities”. The program aims to help cities in developing countries achieve economic growth and high quality living standards without damaging the environment.
“The program will provide practical and scalable, analytical and operational support to cities,” explained Abha Joshi-Ghani, sector manager for Urban Development at the World Bank. “It also aims to build a global partnership among forward-looking cities in developing countries, global best-practice cities, academia, and international development communities.”
Also in Singapore in June, the joint World Bank-Singapore Urban Hub was launched, on the sidelines of the Singapore International Water Week. The launch of the Hub follows last year’s signing of a Memorandum of Understanding on expanding cooperation around urban solutions between the Bank and Singapore by World Bank President Robert Zoellick and Singapore Foreign Minister George Yeo.
Singapore will be a test-bed location, bringing together Singapore’s public agencies, research institutes, and leading private sector players to explore leading urban solutions for developing cities, with special emphasis on the vulnerability of urban poor to coastal flooding in low-lying slums.
The next 10 years
A renewed attention to the urgency of the urban agenda in the developing world coincides with a new World Bank Urban Strategy, currently under development, which will drive the organization’s work in urban development over the next 10 years.
“Urbanization was once criticized as being unmanageable and counter productive, but it is now considered a key element in promoting economic growth, if well managed,” says Joshi-Ghani. “In many countries, cities are leading the way in innovations and responses to global development challenges, including climate change, energy efficiency, and economic development.”
The key pillars of the new strategy rest on the five loci of engagement by the Bank with its city partners – through policy advice, technical assistance and lending. These are:
City management, finance and governance - focusing on the core elements of the city system;
Urban poverty and slums - making pro-poor policies a city priority;
Cities and economic growth: enabling city economies;
Urban planning, land and housing - encouraging progressive land and housing markets, and;
Urban environment, climate change and disaster management - promoting a safe and sustainable urban environment.
These features are expected to substantially replace the current urban strategy, instituted in 2000 and entitled Cities in Transition: A Strategic View of Urban and Local Government Issues. A decade of developments such as rapid urbanization, globalization, sectoral changes, climate change, and increasing recognition of urban role in national economic development are compelling reasons for the update.
“Our past interventions aimed directly at urban poverty alleviation – such as site-and-service, or slum, upgrading - have generally been successful,” said Stephen Karam, senior economist for Urban Development at the World Bank.
“These approaches, however, don't come close to addressing the magnitude of the problem. In fact, while we might achieve success in the narrow project sense where we intervene in some cities, we find greater numbers of urban poor within the city facing informality and slum conditions, many of whom are rural migrants seeking work and better living conditions in the city. For this reason, the new strategy calls for a broader-based, scaled-up approach to urban poverty, focusing more than ever before on the policies that can create livable cities.”
Unlocking the potential
Nevertheless, resistance to urbanization remains a serious obstacle to the sustainable development of many cities around the world, said William Cobbett, manager of Cities Alliance, an international partnership formed by the World Bank and United Nations-Habitat 10 years ago, which now has 26 members.
Many national governments, and even development agencies, focused on the negative aspects of cities – overcrowding and slums – instead of trying to unlock the efficiencies of urban agglomerations that would enable them to capture and pass on the economic advantages to the countries at large.
“Governments have to accept urbanization as inevitable and desirable,” said Cobbett. “For no country has achieved wealthy status without urbanization; though urbanization itself is not enough to achieve economic growth.”
One way of strengthening the economic base of a city is to open the ownership of the land markets to enable city’s inhabitants to raise themselves out of poverty. Yet most of these land markets remained closed, opaque and governed by outdated state policies and procedures. “There is still a belief within many governments that providing more services and facilities will only encourage more people to come into the cities; so these governments don’t provide those facilities, and yet the people keep coming anyway.”
Cobbett commends the World Bank for what he calls an “excellent” World Development Report 2009, and he welcomes the revision of the Bank’s urban strategy. However, such documents - however, fine their intentions - will be effective only if the directors of the Bank’s many country offices put those urban development policies into practice by incorporating them in their country development strategies.
Inclusive development
Price: $26:00The World Development Report 2009 found that economic growth will be unbalanced, but development still can be inclusive. It recognizes that three billion people present the biggest development challenges: one billion slum dwellers in the developing world’s cities; one billion in fragile, lagging areas within countries, and; one billion at the bottom of the global hierarchy of nations.
“Concern for these intersecting three billion sometimes comes with the prescription that economic growth must be made more spatially balanced,” the reporters state. “The growth of cities must be controlled. Rural-urban gaps in wealth must be reduced quickly. Lagging areas and provinces distant from domestic and world markets must be sustained through territorial development programs that bring jobs to the people living there. And growing gaps between the developed and developing world must be addressed through interventions to protect enterprises in developing countries until they are ready to compete.”
“World Development Report 2009 has a different message: economic growth is seldom balanced. Efforts to spread it prematurely will jeopardize progress. Two centuries of economic development show that spatial disparities in income and production are inevitable. A generation of economic research confirms this: there is no good reason to expect economic growth to spread smoothly across space.”
Review of past efforts
Download now: 2.09MbThe World Bank's Independent Evaluation Group (IEG) released a report this year on a review of the Bank’s worldwide urban development programs in the 10 years from 1998 to 2008. The report found that the Bank committed $14.5 billion, or 3.4 percent of its total lending, to 190 “municipal development projects” in the 10-year period. The projects assisted nearly 3,000 urban municipalities - about 15% of all those in developing countries, more than a third of which are in the Latin America and the Caribbean Region – with an overall 74% success rate.
The programs varied enormously, from tailor-made technical assistance and significant investment funding to training just a few municipal staff. The IEG found that the programs might have benefited up to 345 million people – the group’s estimate for the entire population of the 3,000 participating municipalities.
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