, which can help people escape poverty.
A paved road can lead to a world of possibilities for small business owners, increasing access to additional markets and suppliers, as well as opportunities to grow their businesses.
The urban infrastructure finance gap
Cities already account for approximately 70-80 percent of the world’s economic growth, and this will only increase as cities continue to grow.
Cities will need partners to help them provide these building blocks for the future. The public sector cannot address these crucial needs alone, and overall official development assistance barely totals three percent of this amount. Cities should begin looking toward innovative financing options and to the private sector.
As the world urbanizes rapidly, – it is estimated that only 1.5% of the world’s land is home to about half of global production.
Such economic concentration is a built-in feature of human settlement development and a key driver of growth. However, while some countries have succeeded in spreading economic benefits to most of their citizens, many other countries have not.
Especially outside the economic centers that concentrate production, there are “lagging areas” with persistent disparities in living standards and a lack of access to basic services and economic opportunities.
Over one billion people live in underserved slums with many disparities from the rest of the city in terms of access to infrastructure and services, tenure security, and vulnerability to disaster risk. A further one billion people live in underdeveloped areas with few job opportunities and public services.
How can countries address the division between the leading and lagging regions?
As discussed at the Ninth Session of the World Urban Forum (WUF9) in Kuala Lumpur, Malaysia,
[Download: World Bank publications on urban development]
It’s now 2010 and I’m still in Honduras, now amid the reform implementation when reality kicks in. Three new municipal utilities have been established, with catchy logos and new staff and management. Operating costs, salaries in particular, have been slashed, and there’s a sense of opportunity – but also challenges. Those elected mayors are thinking about the next election and not very keen on adjusting tariffs to where they need to be. Installing water meters, a cornerstone of the modernization strategy, is facing a huge backlash from those very customers who are making direct use of the shorter accountability route to make their concerns heard. And services aren’t really getting better as fast as we would want…
Forward to 2014 – I’m now in Croatia. I’m sitting in a non-descript conference hall in Zagreb, Croatia, trying to inform a diverse set of local and central government stakeholders about the pros and cons of merging municipal water utilities into regional operators, as everyone else seems to be doing in the region. In fact, since my transition to Europe & Central Asia the year before, I observe what appears to be a serious case of reformitis: consultants and policy advisors are dutifully preaching the regionalization of just recently decentralized service providers to help implement the European Union’s stringent and costly environmental regulations.
This importance of cities for regional and national development now serves as a foundation for the dialogue between the World Bank and the European Commission, with respect to the design of the European Regional Development Fund (ERDF) for the 2014-2020 Programming Period. The ERDF is the world’s largest investment program targeting sub-national public infrastructure investments.
In this video, World Bank Senior Director Ede Ijjasz-Vasquez and Marcel Ionescu-Heroiu, Senior Urban Development Specialist from Romania Country Office team, discuss the importance of cities in regional and national growth and development, and the role the Bank is playing in the design of the world’s largest sub-national investment fund.
Earlier this month I headed off for the London launch of the 2016 World Development Report, ‘Digital Dividends’. The World Bank’s annual flagship is always a big moment in wonkland, and there has been a lot of positive buzz around this one.
Here’s how the Bank summarizes its content (Frequently Asked Questions, pg. 5):
"What is the Report about? It explores the impact of the internet, mobile phones, and related technologies on economic development.
What are the digital dividends? Growth, jobs, and services are the most important returns to digital investments." (pg. 5)
How do digital technologies promote development and generate digital dividends? By reducing information costs, digital technologies greatly lower the cost of economic and social transactions for firms, individuals, and the public sector. They promote innovation when transaction costs fall to essentially zero. They boost efficiency as existing activities and services become cheaper, quicker, or more convenient. And they increase inclusion as people get access to services that previously were out of reach.
Why does the Report argue that digital dividends are not spreading rapidly enough? For two reasons. First, nearly 60 percent of the world’s people are still offline and can’t fully participate in the digital economy. There also are persistent digital divides across gender, geography, age, and income dimensions within each country. Second, some of the perceived benefits of the internet are being neutralized by new risks. Vested business interests, regulatory uncertainty, and limited contestation across digital platforms could lead to harmful concentration in many sectors. Quickly expanding automation, even of mid-level office jobs, could contribute to a hollowing out of labor markets and to rising inequality. And the poor record of many e-government initiatives points to high failure of ICT projects and the risk that states and corporations could use digital technologies to control citizens, not to empower them.
Digital IDs, combined with the already extensive use of mobile devices in the developing world, offers a transformative solution to the problem — a simple means for capturing personal ID that can reach far more people, as well as and new, more efficient ways for government and business to reach and serve the population.
Given the importance of the topic, the 2016 World Development Report (WDR) includes a Spotlight on Digital Identity, which has been developed by the authors in collaboration with various stakeholders within and outside the World Bank Group.
The 2016 WDR — the World Bank's major analytical publication — aims to advance our understanding of how economic growth, equity of opportunity and public service delivery are being affected by rapid diffusion of digital technologies. This section in 2016 WDR focuses on critical aspects, such as benefits to developing countries and implementation arrangements for Digital ID programs.
English settlers to the New World believed that the climate of Newfoundland would be moderate, New England would be warm, and Virginia would be like southern Spain. These beliefs were based on the seemingly common sense view that climate is much the same at any given latitude around the globe.
What is striking is that these views persisted despite mounting evidence to the contrary. As late as 1620, after 13 years in the settlement, residents in Jamestown, Virginia, were still trying to import olive trees and other tropical plants, perhaps inspired by Father Andrew White, who had assured them that it was “probable that the soil will prove to be adapted to all the fruits of Italy, figs, pomegranates, oranges, olives, etc.” Eventually, the English settlers did adjust their mental models about North American climate. The accumulation of scientific data, combined with personal experience, was undeniable. But the adjustment was slow and costly, in terms of both money and lives lost.
Adverse events coming from systemic or idiosyncratic risks may destroy lives, assets, trust, and social stability. While risks in some areas have diminished in recent years (notably health, and economic crises in developing countries), risk has become more pronounced in other areas, including natural hazards, crime, the environment, and food prices. Especially when risk is mismanaged, the consequences can be severe, turning into crises with often unpredictable consequences.
An old proverb cautions that “an ounce of prevention is worth a pound of cure.” There is a lot of truth to this: interventions to prevent infectious disease and infant malnutrition have repeatedly been estimated to have very high returns, with benefit-cost ratios as high as 15 to 1.
The proverb also applies outside health. Time and again, failure to prevent and prepare has tragic and costly consequences—economic and financial crises, natural disasters, ruinous health outcomes, social unrest—that often could have been avoided at moderate cost. In 2010, an earthquake in Haiti cost more than 220,000 lives, while one of much larger magnitude in Chile produced about 500 fatalities. Chile’s enforcement of building codes appears to account for much of the difference.
The World Bank has been tracking the world's progress against poverty since the late eighties, but the release of 2008 data was the first time in which all regions of the developing world showed a decline in the number of people living below poverty lines!