The future will be won or lost in the world’s cities. With half of humanity now living in cities – and with the breakneck pace of urbanization likely to concentrate two-thirds of the world’s population into metropolitan regions by 2050 – getting urbanization right is the over-arching challenge of this globalizing age.
Urban policy is now at the top of the news due to the bankruptcy filing of forlorn Detroit, which has long been a symbol of urban decay. Yet the urbanization drama goes far beyond the de-industrializing North: The destiny of cities worldwide will determine the success or failure of virtually every development priority – and it will be especially vital for job creation, innovation and productivity growth, environmental sustainability and social inclusion.
The recently launched report by the High Level Panel on the post-2015 Development Agenda puts forward that the post-2015 agenda needs to be driven by five big, transformative shifts. The first one it highlights is that the new agenda should leave no one behind. It states that:
“We should ensure that no person – regardless of ethnicity, gender, geography, disability, race or other status – is denied universal human rights and basic economic opportunities. We should design goals that focus on reaching excluded groups.”
Clearly, the world will have to pay particular attention to slum-dwellers, who are left behind in many areas of development and in the current Millennium Development Goals (MDGs).
Within the next 30 years, urban populations in developing countries will double and UN-Habitat estimates that around 3 billion people will need housing and basic infrastructure. Already, 70% of existing housing in developing countries is built informally without appropriate structural standards. Thus, the challenge lies in reconciling informal settlements with existing and future planned environments.
In light of these challenges, the South Asia urban team at the World Bank, as part of its urbanization webinar series, organized a discussion on “Upgrading Housing in Informal Settlements.” This webinar highlighted the challenges of upgrading housing in informal settlements, and shared lessons from around the globe where targeted policy interventions and grassroots movements have mobilized resources to create success stories. Guest speakers and experts around the world joined the discussion on informal settlements.
On the second day of the three day regional workshop on affordable land and housing in Thimphu, Bhutan, country representatives continued to share policies and projects that their countries have devised and implemented and with that, the ideas that have or have not worked. One common theme was the interest in the development of secondary cities either around the periphery of rapidly urbanizing growth centers or as growth nodes strategically located along infrastructure such as regional transportation networks to create a ‘system of cities’. These growth centers often present a wealth of opportunities for the poor who flock to the cities from villages with the aspirations of a better life. However, this influx often strains the city’s services and infrastructure at an unsustainable rate.
There is little empirical regularity that is as universal as the following: no matter what the path of economic development a country has followed, urbanization has been an inevitable consequence across the world. Already half the world’s population is urban. Currently, Asia and Africa are the least urbanized regions, but they are expected to reach their respective tipping points–that is when their urban populations will exceed the rural population–in 2023 and 2030. While the urban transition occurs with diverse growth patterns at different times, the real challenge for governments is to take actions that allow residents to make the most of living in cities.
The relationship between urbanization and economic development has long been a popular issue of debate. Should a developing country encourage urbanization? While this is a real dilemma in Bangladesh, because of a highly unfavorable land-population balance, the only alternative Bangladesh has to urbanization is urbanization. The question is not whether Bangladesh should urbanize; the question is how Bangladesh will handle the challenges of urbanization.
The world reached 50 percent urbanization some years ago. By 2020, the less-developed world will have followed suit. Harvard economist Edward Glaeser’s vivid 2011 paperback “The Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier” leaves no doubt about it. Cities set in motion a virtuous machinery of agglomeration economies, with economic growth and happiness following suit.
Not so fast, argue equally many learned scholars! Didn’t Vernon Henderson, another acclaimed urban economist, report in the Journal of Economic Growth that higher levels of urbanization are not necessarily associated with higher rates of economic growth. And, hasn’t Africa been urbanizing rapidly over the past 15 years without much poverty reduction?
As the world turns to ending extreme poverty and fostering shared prosperity, the impact of urbanization, and different urbanization patterns, on poverty and inequality, clearly requires more attention. Can urbanization, for example, occurgo too quickly, inducing poverty to urbanize, instead of to declininge? Or can it be too concentrated geographically, generating faster growth (from larger agglomeration economies and economies of scale), but also higher inequality? Or is maximizing poverty reduction from urbanization simply a matter of smart urban management?
This year’s report card on where the world, the regions, and the developing countries are with regard to attaining the various Millennium Development Goals (MDGs), shows quite a diverse picture. As the Global Monitoring Report 2013 points out, progress toward the MDGs has not been universal and there are many poor countries that are still very far away from the targets where we want them to be by 2015.
If we take a look at progress towards attainment of the MDGs, we can conclude that four out of 21 targets have been met by 2010, well ahead of the 2015 deadline. Note that even though there are 8 Goals, there are 21 targets and about 56 indicators through which the world tries to monitor their progress.
Decentralization in many countries has given subnational governments certain spending responsibilities, revenue-raising authority, and the capacity to incur debt. Furthermore, rapid urbanization in developing countries is requiring large-scale infrastructure financing to help absorb influxes of rural populations. Not surprisingly, the subnational debt market in some developing countries has been going through a notable transformation.
This post was originally written for the Collective Solutions 2025 blog, a forward-looking study and collaboration platform to explore how the World Bank and similar multilateral institutions can best support developing countries to meet long-term sustainable development challenges in a post-2025 world. Read more about the study and join the collaboration site here.
I don’t particularly like cities. I’m a country boy. But I have lived in cities for the last 35 years; 10 in Bangkok, 15 in Manila, and 10 in Washington, DC (though DC might be called a town if it were in India or China). In the 1990s, I led work on environmental investments in east and south Asian cities. Most of the cities I worked in were severely “under-infrastructured and under-serviced,” and because many of them are built on coastal zones, this was particularly pronounced when it came to low-lying slums, drainage and sanitation. The heaviest price tag was often for drainage and flood control. During those years, I often wondered if and how the city and country leaders would ever catch up on infrastructure needs with the growing urban populations. Many have done well—while others are in worse shape now because they haven’t been able to meet the human tide.
At the 9th South Asia Economics Students' Meet on Green Growth, participants shared their vision about South Asian cities of the future. These are their innovative ideas.
Without taking care of the environment we are shaving digits off GDP and, therefore, limiting our very potential for the future.
Economic growth in South Asia is driven primarily by exports which has led to expanded production requirements needed to fuel an ever increasing amount of trade. This has accelerated the environmental degradation of many countries in the region. Gradual environmental degradation, climate change and diminishing natural resources create extra pressure to adopt different approaches in supporting the export-driven economic activities. The past axiom of “grow first, clean up later” cannot run more in a region which has limited natural resources and a rapidly growing population directly dependent on natural resources. These countries are now shouldering an increasingly greater share of regional and global environmental production-related burdens.