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Urban Development

To grow sustainably, cities first need to get their finances right

Ede Ijjasz-Vasquez's picture
Local and municipal governments often operate with limited financial resources, yet they are responsible for delivering an ever-expanding range of infrastructure and services. In many countries, decentralization also tends to put additional pressure on municipal finances, as cities and towns are increasingly expected to take the lead in implementing national policies locally. Yet, this transfer of responsibilities from the national to the local level often does not come with an adequate transfer of resources.
 
In other words, cities are expected to "do more with less"... This can only happen if local government practitioners have the right tools and knowledge to manage their resources as strategically and efficiently as possible. To help cities get their financial house in order, the World Bank has developed the Municipal Finances Handbook (available in English and Spanish), which provides government officials with extensive guidance on controlling expenditures, strengthening revenues, mobilizing external funds, achieving creditworthiness, and adopting good borrowing practices.
 
Lead Urban Specialist Catherine Farvacque-Vitkovic tells us more about the handbook and the associated e-learning course: “Municipal Finances - A Learning Program for Local Governments”.
 
Please note the next edition of our online course will run from March 30 - May 23, 2016. Click here to learn more and sign up (registration ends March 30).

Competitive Cities: Changsha, China – coordination, competition, construction and cars

Z. Joe Kulenovic's picture

Cites are the heartbeat of the global economy. More than half the world’s population now resides in metropolitan areas, making a disproportionate contribution to their respective countries’ prosperity. The opportunities and challenges associated with urbanization are quite evident in the world’s most populous country, whose cities are among the largest and most dynamic on Earth. To better understand what a thriving metropolitan economy looks like in the Chinese context, our Competitive Cities team selected Changsha, the capital of Hunan Province, for inclusion among our six case studies of economically successful cities, as the representative of the East Asia Pacific Region.  
 
As recently as the turn of the millennium, Changsha’s economy was still dominated by low-value-added, non-tradable services (e.g. restaurants and hair salons) – an economic structure commonly seen today in many low- to lower-middle-income cities. Since then, Changsha has achieved consistently high, double-digit annual growth in output and employment, despite its landlocked location and few natural or inherited advantages, such as proximity to trade routes or mineral wealth. With per capita GDP surging from US $3,500 in 2000 to more than US $15,000 in 2012, Changsha has accomplished a feat so many other World Bank clients can only dream of: leapfrogging from lower-middle-income to high-income status in barely a decade, and an economy now comprised of much more sophisticated, capital-intensive industries. 

  

Photos via Google Maps

We took a closer look at the success factors behind this city’s dramatic growth story, and what lessons its experience may hold for cities elsewhere, especially in terms of (1) how to overcome coordination failures and bureaucrats working in silos and (2) how to ensure a level playing field for all firms in the city (that is to say, competition neutrality), even in industries with a strong SOE presence – something still not commonly seen in China these days.
 
Changsha’s (and Hunan’s) growth has clearly benefitted from a highly conducive national macroeconomic and policy framework, including a plan entitled The Rise of Central China, aimed at spurring development in areas beyond the country’s booming coastal regions. This and other initiatives provided for the removal of investment restrictions, more favorable tax treatment, and enhanced infrastructure and connectivity to coastal commercial gateways. China’s massive stimulus plan in 2009 (in response to the global financial crisis and recession) jump-started construction activity in the country, providing further impetus to one of Changsha’s principal industries, construction machinery and equipment manufacturing. And national government interventions in earlier decades – especially the establishment of dedicated research institutes – provided a critical contribution to Changsha’s accumulation of expertise in such disciplines as machinery or metallurgy.
 
Notwithstanding these national initiatives, responsibility for local economic development in China is highly decentralized, with municipal government leaders directly tasked with achieving GDP growth and tax revenue targets. Municipal governments also have rights over almost all land in cities, which can be leased or used as collateral to fund local infrastructure. In Changsha, municipal authorities used these prerogatives to improve their city’s economic competitiveness.

Mobilizing the buildings sector for climate action

Marcene D. Broadwater's picture

Also available in: Spanish

Kolkata West International City, India. Credits: IFC


With the passing of the historic climate change agreement in Paris, the buildings sector, which accounts for 32 percent of total energy use and 19 percent of GHG emissions, has been highlighted as a key industry to transform in order to achieve global climate mitigation goals. The private sector has responded with ambitious pledges for action, and must now turn to practical solutions to put the building sector on a low-carbon path.

The good news is that the level of aspiration is very high. I participated in the first-ever Buildings Day at COP21, witnessing ambitious commitments from both the public and the private sector. Over 90 countries have included attention to buildings in their Nationally Determined Contributions (NDCs), with greater than 1,300 commitments from companies and industry and professional organizations.

When urbanization is messy, students fall through the cracks

Mabruk Kabir's picture
Student in Urban Slum Learning Center
A student at an Urban Slum Learning Center
in Dhaka. Photo: Mabruk Kabir/World Bank

On a foggy winter morning in Dhaka, 41-year-old Jahid was sipping tea by a roadside stall.

“Life was very peaceful back in my village,” he reminisced, “but there was no work, so I moved to Dhaka. Even if I live in a slum, my children are better off here.”

Jahid is one of the 500,000 people that move to Dhaka city each year. Driven by the promise of economic opportunity as well as poverty in rural and coastal areas, it is estimated that half the population of Bangladesh will migrate to urban areas by 2030. 

The Rocky Road to Urbanization

Urbanization can be catalyst for growth. Density – the clustering of firms and workers – can drive productivity, innovation and job creation. It is the benefits of agglomeration that once drew the country’s most important industry – the ready-made garments sector to Dhaka city.

However, it is the costs from congestion that are now pushing factories away, mainly to peri-urban areas. Why are factory owners leaving?


For starters, the tide of new migrants has overwhelmed urban infrastructure, basic services, as well as the stock of affordable housing – eroding the both the livability and competitiveness of Dhaka city. A recent World Bank report described South Asia’s urbanization trajectory as “messy and hidden” – reflected in the large-scale proliferation of slums and urban sprawl.

Sustainable cities, two related challenges: high quality mobility on foot and efficient urban logistics (Part I) ​

Bianca Bianchi Alves's picture
 
Peatonito is a Mexican transport specialist using humor to interact with drivers and create awareness about the need to respect traffic rules. Photo: Peatonito / Flick


Walking is the cheapest, most non-polluting, and possibly healthiest mode of transport. And dense cities seem to be a pre-existing condition for enabling us to meet our daily walking needs, along with diversified land uses, typically called “mixed-use development”. Densification and “mixed-use development” are currently seen as a strategy for designing sustainable cities, and many high-quality mobility plans, which consider the interactions between land use and transport, also pursue this type of urban development.

But densification and “mixed-use development” present (at least) two challenges. The first is how to provide quality pedestrian infrastructure that encourages non-motorized mode choices. The second is how to efficiently deliver the large quantities of goods required in these dense cities. These were the themes of successful seminars recently held in Sao Paulo, Brazil, thanks to a World Bank’s Global Environmental Facility grant.
The “mobility by foot” seminar was a four-day learning event on pedestrian mobility organized by Brazil’s Associação Nacional de Transportes Públicos.  In Brazil, as in most cities in Latin America, around 35% of people’s daily trips are on foot, and there is evidence that this number is underestimated given the limitations of current data collection methods. Given the priority in reducing the impact of our carbon “footprint” (or “carprint”), governments need more evidence and incentives to move the sustainability agenda forward.

How can South Asian countries make the most of urbanization?

Ede Ijjasz-Vasquez's picture
The World Bank recently completed a comprehensive study that looks into the specifics of urban development across South Asia, and provides policy recommendations to help countries in the region build more prosperous, livable cities. One of the most innovative features of this South Asia Urbanization Review is that it relies extensively on geospatial mapping and satellite imagery, especially night-time light data. This approach allowed World Bank experts to overcome the lack of reliable, cohesive urbanization data across South Asian countries, and to measure the footprint of urban settlements in a consistent way. They quickly found out that urban expansion in South Asia remains largely unplanned, and often spreads to areas that are not officially considered urban - prompting them to describe urbanization in the region as "hidden" and "messy". In this video, Peter Ellis provides a more detailed overview of the main findings, and describes how South Asian countries have a unique opportunity to get urbanization right as their cities continue to grow.

Chart: By 2030, Delhi’s Population Will Approach Tokyo’s

Tariq Khokhar's picture
According to the UN's World Urbanization Prospects, by 2030, the world is projected to have 41 mega-cities with more than 10 million inhabitants each. Tokyo is expected to remain the world’s largest city in 2030, followed closely by Delhi. The fastest-growing cities will be in Asia and Africa.

But what exactly is a city?

Chandan Deuskar's blog explores exactly this question. There's currently no standard definition of an "urban area" or "urban population" - each country relies on its own definition and collects data accodringly. This is an important area of data to improve - the Sustainable Development Goals include many indicators and targets explicity concerning cities and new standards and approaches such as using satellite imagery may provide more accurate data and definitions. 
 

Want to build sustainable, resilient cities? Start with quality infrastructure

Ede Ijjasz-Vasquez's picture
Rapid urbanization has put considerable pressure on developing countries to deliver more infrastructure - and, preferably, to deliver it fast and in a cost-effective way. But this sense of urgency should not lead cities to compromise on quality, or to focus only on the upfront cost of building infrastructure rather than to consider the full cost of construction, operation and maintenance over the entire lifecycle of a project.
 
To discuss some of the key infrastructure challenges faced by its client countries, the World Bank recently hosted its first International Conference on "Sustainable Development through Quality Infrastructure” in Tokyo, Japan. But what exactly do we mean by "quality infrastructure", and what role can it play in creating resilient, sustainable cities?


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