From a demographic point of view, more than 9 billion people are expected to live on planet earth in 2050, two-thirds of them in cities. Actually, the entire anticipated population increase is to take place in urban areas, with over 90 percent in Africa, Asia, and Latin American and the Caribbean ; so, global urbanization has long since shifted to developing countries and emerging economies. Approximately 2.7 billion people live in urban agglomerations in developing and emerging economies today; in 2030, that number will rise to 3.9 billion – and reach 5.1 billion in 2050. Around 95 percent of this urban momentum is going to take place in metropolitan regions. Established mega regions like Sao Paulo or Mumbai, as well as urban agglomerations composed of rapidly growing small and medium-sized cities will become the key living and economic spaces of the urban millennium.
In principle, urban areas are better in creating value added (See McKinsey report, ‘Urban world: Mapping the economic power of cities ’), jobs and delivery of services such as the MDGs (World Bank’s Global Monitoring Report 2013 ). However, a big question mark needs to be put after the assumption that this can be generally taken for granted in the face of rapid urbanization and transformation of urban-rural relations. Until now, urban areas provide a creative environment for social, economic, green and political innovations. Based on proximity and density, they enable immediate and efficient exchange between various stakeholders involved – the precondition for developing viable strategies and creating synergies as well as achieving greater efficiency and impact through the coordinated use of limited financial resources. Urban environments are places where social change takes place, where the young and women are more easily able to develop their full potential. It is in cities that the state meets its citizens face to face, that good governance becomes tangible and democratic structures and participation is anchored. Form and shape of rapid urbanization has changed the urban landscape and continues to do so well beyond traditional patterns of density and built up areas: cobwebs of cities transform into large urban zones or expanding urban corridors. According to UNDESA, the number of metropolitan areas of a size of 1 to 10 million in developing and emerging countries is expected to rise from 314 (2011) to 530 (2025).
In the course of the urban millennium, poverty has begun to shift towards the urban and peri-urban areas. Indeed, while extreme poverty, between 1990 and 2008, is estimated to have declined by 550 million in rural areas, urban poverty is estimated to have only declined by 30 million, resulting in the observation that approximately 24 percent of the extreme poor are recognized to now live in urban areas, up from below 18 percent in 1990 (Global Monitoring Report 2013). Further, a potentially gross underestimation of urban poverty may be assumed if all around the world the poor living in peri-urban areas and outside of municipal demarcations would also be accounted for in the urban population statistics.
According to UN Habitat, 32 percent of all urban citizens live in informal settlements today; a number that rises to 78 percent in certain developing countries. UN figures project urban growth to primarily take place in informal settlements; the number of slum dwellers is said to triple by 2050, up to 3 billion people. As urban agglomerations grow by 180,000 dwellers per day worldwide, in a large number of cases this dynamic has manifested itself in vast peri-urban settlements. These have become the evident manifestation of marginalization and poverty in the course of urbanization and paradoxically, economic growth. While cities expand extensively into the urban periphery, overall development is increasingly being determined by transformation of fertile rural lands, growing pressure on surrounding ecosystems, the ever closer interrelation between the rural and urban fabric, resource-cycles and livelihoods, as well as the urbanization of lifestyle and consumption.
As a consequence, the urban and rural have become inseparably intertwined at an accelerated rate; be it with regard to people, market relation or resource-flows. Increasingly peri-urban areas have turned into cities’ “backdoor” where urban areas dispose their waste and extract their resources, while notoriously underserving informal peri-urban settlements with regard to services, e.g. health, education, and/or water and sanitation infrastructure. At the same time, peri-urban areas are highly affected by urban land and food markets, pushing the cost of living up beyond actual market value. In this setting, new forms of bi- and multi-spatial livelihoods – moving back and forth within the rural-urban continuum – contribute to the diversification of residence, income sources and economic resilience particularly for the poor. (See IIED’s Rural Urban Linkages ).
Hence, the geographical and political demarcation of cities has become a challenge: In 2000, data for Manila varied from 1.6 million within official city boundaries to 9.9 million inhabitants within the metropolitan region. The same can be said  for cities like Bangkok, Beijing, Cairo, Dhaka, Jakarta and Mexico City. In many cases, the majority of those populations remain officially designated as rural and are not enough or not at all involved or addressed by municipal planning and budgeting processes or benefit from access to better services that cities offer in education, health, and/or water and sanitation. They have no real part in political legitimation and decision making processes. Hence, they are often still marginalized and trapped in informality.
The phenomenon of changing urban landscapes and emerging metropolitan regions raises new questions and challenges within the development debate. Simplified models of rural and urban livelihoods will no longer provide satisfactory answers to the question how the urban comparative advantage of job creation and service delivery can be leveraged. A close look into existing rural-urban dependencies as well as possibilities to productively consolidate such linkages has become key: Increasing flows of people, goods and resources, and also capital and information outline well the significant interrelation between urban and rural areas. In addition to the relevant urban-rural flow of workforce, the most self-evident arguments are rural-urban market interrelations and respective streams of goods which play and will play an important role regarding local economic development.
Access to services and infrastructure in urban centers for all people living in a metropolitan area, such as health services and education facilities, are an important aspect of rural – urban linkages and are of vital importance for poverty alleviation measures in both rural and urban settings. Another important challenge has emerged over the last decade with regard to natural resources, climate change and biodiversity, as cities have a significant impact on surrounding ecosystems that goes far beyond their political boundaries, commonly referred to as their “ecological footprint.” Where ecosystems are intact, they not only represent important recreational areas for the urban population, but also provide the potential to better adapt to climate change through the use of existing “natural capital.”
Looking ahead, new forms of urbanization and resulting intensification of rural-urban interdependencies, will pose ever increasing challenges as well as potential for sustainable development . The Global Monitoring Report 2013 has confirmed “that urban poverty rates are significantly lower than rural poverty rates and that urban populations have far better access to the basic public services defined by the MDGs. If the forces of urbanization are not managed speedily and efficiently, slum growth can overwhelm city growth, exacerbate urban poverty, and derail MDG achievements.”
In order to seize the opportunity of urbanization, the question of how to ensure that cities remain engines of job creation and service delivery calls for new and urgent ground-breaking reflections off the beaten track on how metropolitan planning and budgeting, legitimate decision making and common investments might turn into common practice. Challenges of immediate relevance include how decentralized power sharing can, at the subnational level, lead to efficient and effective governance of city regions in planning, budgeting and operation beyond municipal borders while at the same time ensuring political legitimation. How can the increasing need of metropolitan infrastructure and service delivery be addressed by adequate financing mechanisms and involvement of private sector investments, such as PPPs? How can the safeguard of important ecosystem services contribute to sound rural-urban linkages and productive regions?
Pioneer metropolitan regions and cities worldwide have started to actively address these matters; first various models and approaches of metropolitan governance have started to develop e.g., how to manage a large metropolitan area with a number of elected mayors and a broad range of interest groups. Experience features : Joint planning associations can be as possible a solution as the setup of a regional parliament or an administrative superstructure. No clear winners are emerging and no one-size- fits- all solution is likely to emerge. However, a smart range of ideas and practices is already out there. Henceforth, in order to pro-actively address our world’s global and local challenges of just human development and sound environment a deepened debate and an elaborated metropolitan research agenda is urgently needed; revolving around pressing matters of planning, political, administrative and financial governance, as well as political and fiscal decentralization.
In conclusion, cities have featured over the past years as a great potential for contributing in ways to implementing international agreements such as the Millennium Development Goals (MDGs). The phenomenon of urbanization can be judged as being of importance for the achievement of nearly all MDGs and related targets: As two out of three children born in developing countries today grow up in cities, the MDG target population needs to be characterized as increasingly urban. Against this backdrop, it is of imminent importance for the development agenda to ensure the potential lever of urbanization on a sustainable footing: socially, economically, environmentally, and politically.