Information Technology in Municipalties and Major Problem of Sustainable Devlopment ,  How We Can Empowering Municipalties and Enviorment ?-----------------Nagar Panchyat Ashrafpur Kichucha is Taken This Draft from WORD BANK, UNDP, ADB and Municipalties polcy. THANKS WORD BANK, UNDP,ADB ….

Information Technology is regarded as the key technology and its playing vital role in overall development of a country. It's the "brain" and not "brawn" that is the key to sustainable economic growth. While the second industrial revolution was initiated in the labor-intensive manufacturing industry , and it's very clear that the third revolution is driven by the knowledge-based services sector. IT  is being used widely in  macro-economic planning and decision making, public administration, education, health-care, manufacturing, finance and banking, transportation, commerce, publishing, energy conservation and environmental management. India has been playing vital role in IT sector through its skilled manpower. Nagar Panchyat Ashrafpur kichucha is also not lagging behind in this sector. After the IT needs of the NPAK and ICT have been established to promote the IT Culture in the Nagar Panchyat Ashrafpur kichucha.NPAK Empowering local people giving public participation in local administration and decision making.

 

Enviorment, Finance and Sustainable Devlopment is Major Problem in Urban Area-

 

  Strategic Urban Environmental Planning is an important tool to address urban environmental issues in a systematic and planned manner. Cities in developing countries face myriad urban environmental problems. Commonly known as the Brown Agenda, these include lack of sanitation, lack of adequate solid waste collection services, water pollution from untreated municipal and industrial wastewater, indoor and ambient air pollution, contamination of soil and land from improper disposal of solid and hazardous waste and so on. It is important to address these problems for meaningful improvements to be achieved in enhancing urban livability in cities of developing countries.

Urban environmental problems are generally very complex in nature due to their multi-sectoral nature. Air pollution owes as much to use of unclean fuels (in houses and industries) as to vehicular pollution, only exacerbated by traffic congestion. Poor sanitation is a result not only of poor drainage systems but also of dumping of solid waste in drains. Further, especially in larger cities, urban environmental problems span across multiple jurisdictions, such as collection, transportation and disposal of solid waste or water pollution in rivers traversing through several adjacent cities and towns. There are other problems that hinder proper urban environmental management, which include lack of adequate knowledge (data and analyzed information) on urban environmental problems, poor institutional capacity for planning as well as managing urban environment. Towards Urban Environmental Strategies.  Addressing the complex urban environmental problems, in order to improve urban livability through Urban Environmental Strategies (UES), involves taking stock of the existing urban environmental problems, their comparative analysis and prioritization, setting out objectives and targets, and identification of various measures to meet these objectives. This is followed by the preparation and appraisal of alternative packages, the reexamining  of the urban environmental objectives (to ensure that they are affordable and achievable), preparation of financial packages for the UES, preparation of concrete action and implementation plans for the selected urban environmental objectives, and the institutionalization of the UES. The process does not end here, but is pursued through monitoring and evaluation of the implementation process (for which urban environmental management indictors are necessary), with feedbacks leading to the updating of the UES based on implementation experience.

Strategic Environmental Assessment

Strategic Environmental Assessment (SEA) is a decision-aiding tool which complements the process of strategic planning with: (i)  a solid assessment of environmental and other issues;  (ii)  a well structured public and government debate on these issues;  and (iii)  a mechanism to take the results of the above assessment and debate into account.  In other words, SEA is a toolkit in itself to improve information, participation and transparency in strategic planning.  The main concern in SEA is always with environment, but it is often used to assess social issues as well. Increasingly, its usefulness has been found in the inter-relationship among environment, social and economic issues.  Thus, it is a tool which supports and complements strategic urban environmental planning. The purpose of the Urban Environmental Management (UEM) Toolkit is to strengthen urban environmental management decision-making and planning practices.  For its implementation, the UEM Toolkit aims to provide decision-makers with mechanisms (i.e., management indicators) to gauge the progress of their urban environmental management activities from a life cycle perspective.  The Toolkit will also provide a range of examples of urban environmental management activities that are recognized as Best Management Practices (BMPs), including development policy strategies that integrate poverty reduction, cross-sectoral interests, and local-national-global perspectives.  Ultimately, the Toolkit is intended to serve as a contribution for the achievement of the Millennium Development Goals.

A key concept behind the development of this (UEM Indicators) section of the Toolkit is to identify environmental management indicators that go beyond a description of a condition and effectively link to the decision-making process, the latter often being a management element.  The BMPs are to be related to the planning decision, to elements of environmental management, and to the indicators themselves.
 The process for selecting indicators must consider the need for flexibility, as well as the contribution to an integrated vision.  The flexibility is required because, while developing countries may historically lack certain key data, significant advances in urban environmental data collection continue to be made (e.g., through the establishment of urban air quality monitoring networks and the assessment of health impacts resulting from the changes to environmental quality).  The set of environmental indicators selected must contribute to the integrated vision of decision-makers.  Therefore, the set must contemplate a variety of relationships, including inter-sectoral, multi-media, life cycle, and
major themes.

This paper reviews the causes and effects of urbanization in the Asian and Pacific Region, highlights the resulting demands for improved management and servicing of urban growth, and proposes a strategy for Bank action in the sector. Because of the enormous variety of urban conditions and stages of economic growth in developing member countries (DMCs), the development of an urban strategy for the region is complex and needs to recognize the importance and diversity of country-specific policies and programs. However, a number of common themes underlie the strategy.

At the macro level, urbanization is strongly linked to economic growth and has contributed positively to the gains made in many countries throughout the Region. Measures to improve the extent, management, and operation of urban services benefit both local and national economies. At the same time, urban areas are exposed to external forces over which they have little control, such as the progressive globalization of decision-making and the economic crisis currently affecting the Region. The Bank’s urban strategy, therefore, must be both robust and flexible to respond to such forces and their impacts.

The phenomenal rate at which urbanization is occurring has overwhelmed those tasked with managing urban areas, particularly in the poorer countries of the Region. Exacerbated by a flood of rural-urban migrants, cities have witnessed tremendous growth of unserviced slum and squatter areas where millions of urban poor residents lack adequate access to potable water and sanitation services. A key theme is the way in which the problems of environmental degradation of urban poor communities, and urban poverty in particular, can be addressed. Related to these challenges are issues concerning improvement in the status of women and other vulnerable groups.

Potential improvements in the provision and maintenance of urban infrastructure and services are constrained by poor urban governance, management, and finance. Outdated legal, institutional, and governance traditions, as well as inadequate reform measures have constrained the pace of development. Thus a major theme is to address urban governance and the improvement of urban management through innovative approaches in the design and implementation of development activities; participatory processes at the local level; and the building of partnerships between corporate, community, and public sectors. The more efficient use of existing financial tools, the introduction of market-based approaches to local government operations, and the use of innovative financing mechanisms will also be required.

Achieving sustainable urban development is a final crosscutting theme, defined here as meeting the growing needs of the present without compromising the ability of future generations to meet their own needs. This is in accordance with the recommendations of the United Nations Conference on Environment and Development (1992), known as the “Earth Summit,” and the Second United Nations Conference on Human Settlements (1996), Habitat II. The comprehensive Global Plan of Action adopted at Habitat II incorporates policies for the sustainable development of settlements and the increased role of local governments in urban development and management. The urban strategy is designed to achieve significant increasesin sustainability within the framework defined by the long-term goal of full urban sustainability in DMCs in environmental, financial, and socioeconomic terms.

Development of the Urban Strategy

Responding to the growth of increasingly complex urban areas requires a review of Bank approaches to urban program and project formulation, prioritization, and implementation within and among DMCs, taking into account lessons learned from the Bank’s 30-year experience in the sector. While DMCs can be broadly grouped by stage of economic growth in terms of the priority needs of their urban areas, urban strategies must respond to competitive and comparative advantages, local urban economic circumstance, and other location-specific concerns. Therefore, this paper proposes a broad regional strategy for the urban sector that can provide both a framework for specific DMC urban strategies and a guide for Bank action in the sector.

Most Asian cities have grown and diversified economically well ahead of their capacity to manage development. Better governance is required if cities are to function as engines of growth, avoid further environmental deterioration, and provide residents with at least a reasonable quality of life. Because the management of cities is complex, involving many stakeholders in the public and private sector whose cooperation must be obtained, the requisite institutional structures are of necessity diverse, complicated, and imperfect.

Urban governance encompasses institutional strengthening and capability building, decentralization, community participation, and involvement of the private sector. Infused within these components are four principles that form the foundation of good governance as part of improved urban management: (i) accountability of public sector staff and organizations; (ii) greater participation of community and interest groups in decision making on the delivery of services and demand management; (iii) predictability of markets, regulations, and legal frameworks; and (iv) transparency in dealings between the private sector and government.

Implicit within urban governance is the necessity of a holistic, comprehensive view of urban economic development, and a clear understanding of its linkages to investment promotion, competitive advantage, urban management capacity, and responsiveness to the requirements of the private sector. Urban economic development is an interrelated, complex process that requires the creation of an enabling environment that supports productive firms and individuals; promotes conditions for efficient urban markets for land, labor, and credit; and capitalizes on an urban center’s competitive and comparative advantages. Cities and other urban centers must be able to develop such a vision and an associated enabling environment through intensive consultation, participatory community processes, and innovative partnerships. Importantly, urban centers must be able to articulate this vision to the world at large, while at the same time strengthen urban governance through a continuing process of self-monitoring and evaluation.

Decentralization

Decentralization represents a profound shift in the manner and system of urban governance and empowerment of elected local officials. Political, fiscal, and administrative decentralization has been occurring to varying degrees in most DMCs over the past decade. By decreasing the role of central government and augmenting the authority of responsive local institutions, accountability between the providers and users of local services can be greatly increased. Examples can be found in the enactment of the Local Government Code (1991) in the Philippines, where new devolution of authority, responsibilities, and resources for urban service delivery to local government units has met with some success. However, implementation has been uneven within and among DMCs and failure to build local capacities in line with devolved responsibilities has frequently resulted in insufficient local revenue generation and inadequate local management capability that have compromised the developmental benefits of decentralization.

Community Participation

Community participation has increased in urban development in many DMCs through the involvement of nongovernment organizations (NGOs), business associations, religious associations, environmental pressure groups, associations of slum dwellers, and other community-based organizations (CBOs) in many aspects of urban development. Such groups may become involved in local planning initiatives, taking responsibility for infrastructure improvement and maintenance, obtaining innovative means of credit such as the Community Mortgage Program in the Philippines, or participating in the provision of basic services, as in India and elsewhere. Clearly the local community is a major resource that can be used in partnership with the public sector in development planning and management. Community commitment to development initiatives is vital for their success, and many local governments are moving away from a dependence culture to a demand culture, taking on greater responsibilities for promoting investment in urban development and prioritizing the provision of urban services.

The Private Sector

Many local governments are increasingly adopting an indirect enabling role, i.e., focusing on policy making, planning, regulation, and protection, while private sector companies take full or part responsibility for the delivery of one or more city services. New relationships have been created, while public sector facilities and services (such as water supply and sanitation) have been corporatized (restructured as corporations) or privatized. For example, Metro Manila’s water supply is now managed by two private sector concessionaires. Special purpose authorities, such as the Metropolitan Waterworks Authority in Bangkok, are learning to adapt to this new environment. Given the massive investment required in urban infrastructure, greater focus is needed on the creation of cost-effective and efficient public-private partnerships that include mechanisms for attracting private capital urban infrastructure provision. Involvement of the private sector must not be viewed solely as an activity, but rather as a process that changes mind-sets and institutionalizes the enabling role of government.

Urban Finance

Asia’s cities continue to impose staggering demands on fiscal resources. The Bank has estimated that annual municipal infrastructure requirements alone in DMCs will rise from about $38 billion in 1998 to $292 billion in 2020, to provide sufficient services to sustain urban productivity and achieve some improvement in the quality of life. (These amounts compare with a total flow of official development assistance and private resource flows to all developing countries of some $239 billion in 1995.) The investment estimates include the cost of renewing existing infrastructure and providing new infrastructure as urban population increases. Transport and communications, energy, water supply, and sanitation will consume the largest shares. In addition, there will be corresponding costs for operation and maintenance (O&M) and for delivery of related services. Without these sustained high levels of expenditure, cities will become increasingly inefficient and unpleasant places to live and work in as pollution, overcrowding, social friction, and deteriorating environmental conditions reduce the quality of life.

Enhanced sources of funding for urban development are urgently required in most DMC cities as part of the need to overhaul their financial management systems. Local governments are being given greater responsibility for the provision and operation of urban services without the authority to raise extra revenues or enjoy fiscal independence. The typical current mix of local land- and property-based and other taxes is inadequate. User charges may sustain or partly sustain the operations of city services in sectors such as water supply, sanitation, and power but other services such as roads, drainage, and health depend heavily on frequently.13 erratic transfers from central, state, or provincial governments. Such problems have hastened various initiatives under way in the Region to attract private capital. For example, many cities have contracted out part of their solid waste management services (as in Bangkok) privatized water supply and sewerage (as in Manila) and are in the process of deregulating transport services.

The potential for using municipal bonds as a cost-effective means to finance urban infrastructure is increasingly evident for DMCs, i.e., using domestic private capital rather than sovereign borrowing by national governments. In India, the Ahmedabad Municipal Corporation recently raised $30 million to finance medium-term investment plans. In the Philippines, the Local Government Code authorizes local governments to sell bonds to finance “self-liquidating, income-producing development or livelihood projects,” while the Water Crisis Act of 1994 authorizes water districts to sell revenue bonds. However, to date, few initiatives have succeeded. The bond markets in many DMCs are largely unexplored and require significant assistance if they are to be developed. For many poorer cities, the options in the short term at least are limited to (still very worthwhile) improvements in financial management.

Urban Infrastructure and Services

a. Institutional Strengthening and Capability Building

Many local governments desperately lack the required skills to manage growth, provide urban services, and maintain infrastructure. Often training and capability building initiatives are undertaken in an uncoordinated, unfocused fashion, replicating previous programs and failing to enhance skills of urban managers and their staff. In addition, there is an urgent need to promote and strengthen existing and new institutional structures that are responsible for, or can facilitate, urban development, such as the League of City Mayors in the Philippines. Technology and automation, (e.g., computerization, geographical information systems, and other tools) can greatly enhance urban management systems if properly designed, implemented, and staffed. Local governments are also increasingly adopting tools from the private sector such as demand management in the areas of service tariff reform, improved use of limited road space, and regulation of groundwater use.

In addition to the urgent need for enhanced human resource skills at all levels of the urban development process, the institutional structures and the relationships between these structures need to be improved. Better horizontal coordination is critically needed in cities, particularly as urban areas spread across several local administrations. Policy dialogue with and assistance to metropolitan authorities are required to redesign institutional frameworks, revise regulations, and restructure decision-making mechanisms. Better vertical coordination between central (state and provincial) and local governments is increasingly essential as decentralization policies become more common and are progressively implemented.

Water Supply, Sanitation, and Solid Waste

In most of the poorer DMCs, the quality and quantity of water supply in urban areas fall far short of demand. Faced with an unreliable or intermittent supply and variable quality, a high proportion of residents buy potable water from vendors and/or are obliged to boil, disinfect, or filter it to protect their health. The Bank estimates that some 93 million people in DMC urban areas have no access to safe drinking water (ADB 1997d and 1998). Such shortages contribute to high levels of waterborne disease in many cities, with particular impacts on the vulnerable under-five age group. There are many reasons for such inadequate supplies. At the water resource level, management problems are caused by overextraction of groundwater, salination, unrecorded extraction by industry using deep wells, and pollution of raw water supplies. At the water delivery level, many water utilities provide deficient service through inadequate metering,high rates of unaccounted-for water6 (55-60 percent in Jakarta and Manila), damage and contamination of the pipe network, arbitrary decisions on water tariffs, low collection efficiencies, and exclusion of supplies to informal settlement areas. In the last few years, one response to these failures has been experiments in contracting out or privatizing all or part of city water services, as in Malaysia, Philippines, and Thailand.

The five main challenges in the urban water supply subsector are (i) meeting rapidly increasing demand for household and industrial water within agreed limits, (ii) increasing investments in new water delivery systems that will meet 24-hour demand, (iii) upgrading and managing existing systems to run more efficiently, (iv) safeguarding social equity by provision of potable water to poor households, and (v) achieving full cost recovery.7

While investments in water supply have enjoyed a fairly high priority in most cities, the provision of adequate sanitation is a more widespread problem, with some 300 million urban residents in DMCs estimated to be without adequate facilities. In many cities, most wastewater is discharged without treatment. Where sewerage is provided, the network frequently functions as a combined wastewater and stormwater system. While septic tanks can provide an intermediate level of treatment, the resulting discharge in built-up areas often enters the street drainage system where it poses a potential health hazard, made worse in many DMC cities that are subject to flooding. Even where substantial investments in sewerage have been made, as in South Asia, institutional weaknesses and poor cost recovery have held back further investment.

The Bank has financed 14 stand-alone sewage treatment projects through 1998, in the PRC; Hong Kong, China; Republic of Korea; Pakistan; and Philippines. In addition, small sewage treatment components have been included in integrated urban development projects (IUDPs) in India, Indonesia, Mongolia, Pakistan, and Sri Lanka. Until recently the emphasis of sanitation programs was on the collection, treatment, and disposal of human wastes. Now industrial wastes are also being targeted, as in the Bank’s ongoing support for industrial wastewater treatment in Karachi. Levels of dissolved solids, suspended solids, and organic loadings in wastewater discharges may increase by factors of 16-18 in high growth areas over the 1995-2025 period (ADB 1998b). The negative impacts of untreated liquid wastes are widespread and pernicious and include risks to public health and adverse environmental impacts on surface, ground, and coastal waters. To compound the problem, the high capital, operational, and maintenance costs of conventional sewerage and sewage treatment systems generally restricts affordability to low-income households.

The immediate challenge for sanitation services is how to (i) address the perceived high need but low demand for urgent remedial actions, (ii) develop alternatives to capital-intensive systems, and (iii) overcome the low levels of willingness to pay where households have alternative means of disposal. In the longer term, the challenge will be to move beyond the provision of sanitation systems and address wider issues of development-environmental interactions at the city and regional levels.

The sheer volume of solid waste generated in urban areas around the Region is staggering, and poses a continuing challenge to the health and quality of life in urban areas. In India for example, 60,000 tons of municipal solid waste is generated daily and this is expected to rise to 100,000 tons by the year 2000. Shanghai’s solid waste has grown in volume by 6 percent a year, reaching 7,500 tons daily in 1997. Metro Manila’s solid waste was estimated at 6,100 tons daily in 1995, and is expected to double in the next two decades. In Metro Manila and many other DMC cities, only 40 percent or less of this waste reaches a sanitary landfill, with the greater proportion dumped in open sites, or left to rot in backyards, streets, drains, and waterways. Solid waste is intrinsically linked to water quality and water pollution, as it typically ends up in water systems in one way or another. Open dumpsites encourage disease vectors, generate foul odors, contaminate groundwater supplies, and generally contribute to health risks and a decline in the quality of life in urban areas. However, few cities in the Region have the technical know-how to develop integrated solid waste management systems and sanitary landfills. Moreover, many cities are experiencing an increasing shortage of sites available and suitable for landfill development within a reasonable distance of the city. A number of efforts, however, are under way to minimize waste through refuse recovery, as in the reuse of inorganic industrial solid wastes around Beijing; community solid waste management techniques in Jakarta; and vermiculture, composting, and biogas production in Mumbai.

Urban Transport

Urban transportation is critical to sustainable development in DMCs in terms of quality of life and economic success. As traffic congestion in the larger cities of the Region becomes chronic, the urban poor suffer because of inadequate public transport, and the general quality of life decreases through long commuting times, accidents, and pollution (much of which is vehicle-generated), and the urban economy must absorb significant economic costs related to lost productivity and inefficiency. The sheer scale of megacities in the Region puts great demands on transport systems capable of moving large quantities of passengers and freight at affordable prices. While motorization levels are low in many DMCs relative to levels in developed countries, major increases are forecast and virtually all governments support the trend, implicitly or explicitly. In India, for example, car ownership is expected to grow from 14 to 27 per 1,000 population over 1994-2001 and two-wheeler use from 112 to 250 per 1,000 population over the same period (ADB 1998c).

Few DMC cities have well-integrated systems of primary, secondary, and tertiary roads and many lack road space in their central areas with consequent impacts on traffic management and public transport efficiency. While some larger cities have developed mass transit systems, such investments have been costly, and characterized by long time-frames for planning, design, and construction. Such schemes often highlight the lack of coordination between land use and transport planning, and the roles of the public and private sectors in urban transport strategies. The challenge is to make investments in urban transportation sustainable through coordination, both in terms of physical provision and economic and financial policies, and by comprehensively addressing related issues such as a city’s balance in the locations of employment and housing. Investments should incorporate concepts of demand management, and consider appropriate roles for the public and private sectors.

Urban Housing

Access to affordable urban housing is an increasing problem in the Region as population pressure increases and land prices rise. The negative impacts are demonstrated through (i) increased sharing of dwellings by two or more families, (ii) increased squatting on public and private land, (iii) occupation of infrastructure easements and hazardous or ecologically sensitive areas, and (iv) outright homelessness. There are about 2.17 people per room in urban Asia and this figure is 5.3 in greater Mumbai. The urban housing shortfall in India has been calculated at some 7.6 million units, of which approximately three quarters represent replacement and upgrading needs, with sharing of a dwelling accounting for the balance. The low-income housing backlog in the Philippines is an estimated 4.2 million units.

The bulk of housing in DMCs has been and is being provided by individual households, CBOs, and private developers. Over the past 30 years, the Region’s public sector has generally failed to provide affordable shelter for low-income households. Prime factors have included failure to meet target group affordability without significant subsidies and inadequate financial resources. Recent DMC policies based on urban upgrading have been more successful, but have often suffered from a lack of “ownership” in terms of the residents’ involvement in planning and design, responsibilities for O&M, and contributions to desired services. A major challenge for DMC governments is to recognize in policy making that a greater or lesser share of housing in their urban areas is being provided by informal housing supply markets, and to develop policies that will help improve such housing markets.

The limited availability of formal credit is a major constraint on the supply of affordable housing in most DMCs, but there are a variety of informal or semiformal credit mechanisms. For example, some low-income families who can only afford minimum standard housing, usually in unsanitary environments and without secure tenure, will frequently fund improvements through help from family and friends in an incremental development process. Other families may join informal, community-based savings groups and obtain loans from those groups. Such self-help processes mean that over time a substandard shanty can be transformed into an adequate low-cost house. The conventional housing finance approach taken by most housing finance institutions in the Region is not usually available to such families. The challenge is to build on the experience of community-based housing finance mechanisms being used in some DMCs (such as the SEWA Bank in India, the Community Mortgage Program in the Philippines, and the Urban Community Development Office in Thailand) to create large-scale and effective provision of housing finance to low-income households. This entails, in part, strengthening links between the formal and informal finance sectors.

Urban Land Management

The critical role of land supply in supporting quality of life in urban areas demands a holistic approach. However, such an approach is far from being met in many DMCs where large numbers of poor and now middle class families, as well as small businesses, are prevented from gaining access to land for development. Many obtain land illegally and then face problems due to the lack of secure tenure, inability to use land as collateral, lack of services, or other setbacks. More efficiency, fairness, and transparency is needed in urban land markets.

Many bottlenecks in the land market slow land supply and increase prices. For example, land accounts for some 40 percent of site development costs in Metro Manila. Typical problems include (i) inappropriate or unaffordable land use, building standards and regulations, such as unrealistic ratios of required public land to total site areas; (ii) no allowance for mixed land uses; (iii) cumbersome and expensive procedures for land transfer (including cadastral mapping, titling, and registration); (iv) land held vacant for speculative purposes; (v) lack of information to the public on land market indicators; and (vi) failures in coordination among agencies concerned with servicing new urban land. All too often, these failures in the land market are compounded by irrelevant spatial planning processes that are unable to keep up with, let alone guide, new urban development.

The Challenge of Sustainable Urban Development

Urban development is sustainable if it permanently enhances the capacity of urban society to maintain or improve the quality of life without exhausting nonreplaceable resources or damaging the economic, cultural, or natural environment. At the same time, sustainable urban development should serve to reduce poverty while strengthening the ability of local institutions to involve and empower citizens and ensuring that financial resources are sufficient to allow replacement of assets and new investments.

Quality of Life

The quality of life in urban areas includes concepts that can be measured to some degree: freedom from hunger; capacity to live a healthy life; access to education, shelter, and basic services; and a secure and livable environment at home and at the workplace. Equally important but less quantifiable are concepts such as family stability, freedom from crime, and full involvement in the community. Rapid urbanization often disrupts the social, cultural, and religious pattern of people’s lives. For example, the tensions caused by the integration of migrants from more traditional lifestyles, and the conflicts between traditional close family relationships and the more individualistic relationships characteristic of large cities. Where whole communities become the vehicle for social, economic, political, or religious discontent cities may become flash points for unrest, as at times in Jakarta, Karachi, and Manila.

Urban quality of life presents a highly varied picture across the Region. In the middle-income countries of East and Southeast Asia, many cities have provided for some of their residents, at least until recently, living conditions similar to those in developed countries. In such cases, a significant middle class emerges, has increased mobility and resources, and seeks greater participation in government and action on community concerns such as the environment. Such cities are in transition from traditional quality of life risks, such as waterborne diseases and lack of medical services, to more modern risks, such as air and industrial pollution and stress-related illnesses (Figure 3). In contrast, many urban centers in South Asia are dominated by areas of poor housing, inadequate infrastructure and social services, poor transport, and high rates of illness and morbidity. Poor living conditions can also be found in urban areas in middle-income DMCs such as Thailand and the Philippines, where 20 to 40 percent of urban residents live in slum or marginal settlements. In large cities in particular, the problem of high land values is one of the biggest constraints on a poor family’s ability to acquire shelter. Quality of life indicators in selected present and future megacities are presented in Table 1.

Urban Poverty

Urban poverty—often more harsh and extreme than rural poverty—is widespread in the Region, particularly in South Asia. Poverty is not only related to low income, it involves poor health and education, deprivation in knowledge and communications, inability to exercise human and political rights, and low self-esteem; in short, a poor quality of life. Urban poverty is not precisely defined. However, based on the crude measure of a poverty line of $1 per day per person and purchasing power at 1985 levels, about 960 million of the 1.3 billion people worldwide classified as poor in 1993 lived in Asia (UNDP 1996). Experts have stated that “urban poverty will become the most significant and politically explosive problem of the next century” (World Bank 1990). In the absence of political options, urban dwellers respond to poverty by working harder, taking on multiple jobs, working longer hours, and increasing household participation (particularly women and youth) in the labor force.

The complexities of defining urban poverty mean that data must be used with great care. For example, the income level needed to avoid poverty will vary by urban area; local costs of living; the availability of free or subsidized education, health, and other services; access to water supply and other infrastructure; and the number and age of dependents in the household. As a result, two families in two neighborhoods of the same city, classified as having the same income, may in fact require very different income levels to avoid poverty. Simplistic definitions of poverty also ignore the deprivations in quality of life when families respond to falling incomes and rising prices by, for example, taking children out of school to earn money for the family or having one parent move to where job possibilities are better. Quality of life decreases when a family must move in search of cheaper housing. These effects are being highlighted in the current economic crises in some DMCs. Poverty reduction programs have to be widened to accommodate such diversity.

Households headed by women, more common in cities, are particularly vulnerable to poverty. Women generally have more limited access to education, and suffer disparities in employment opportunities and wage levels compared to their male counterparts. Women have the additional burdens of culture and tradition that can manifest in legal and social obstacles to access to land. Faced with limited opportunities and the necessity to meet basic needs, many poor women are forced into highly vulnerable and dangerous jobs in the commercial sex industry and other degrading means of employment. Additionally, domestic violence poses a serious, and largely unacknowledged, threat to women.

Urban poverty has many causes. Some of these are the willingness of new migrants to take low paid jobs in the city, increases in the cost of land, long journeys to work, less support from an extended family network, exposure to greater environmental risk, and greater vulnerability to changes in market conditions in urban areas. Conditions of urban poverty are worsened by the scale and speed of urbanization in many DMCs, forces with which municipal governments cannot keep pace. In a situation of scarce resource allocation, the urban poor are badly placed to compete for essential services and shelter. Biases in investments, standards, pricing policies, and institutional structures often skew services in favor of the better-off in cities. For example, access to water is generally provided unevenly among income groups, with formal supply systems being denied to poor communities who are forced to turn to water vendors and often pay much more per liter than higher income households. This is often due to unavailability of reticulated supplies to these communities or the high one-time connection fee that most urban poor cannot afford.

The challenge is to reduce urban poverty through a combination of approaches, a mandate given particular urgency in light of major increases in the urban poor in many DMCs affected by the current Asian financial crisis. A range of measures is being explored, including employment creation, credit for informal businesses, education and literacy training, provision of legal tenure to squatters, improved social and infrastructure services and access to shelter, and support for better human rights. This includes the right to vote in electing representative government and to organize at the community level.

The Urban Environment

Urban environmental conditions in the Region are threatened by rapid and often uncontrolled growth, inadequate and poorly maintained infrastructure, industrialization, and increasing vehicle densities. Urban areas in the region are found at all stages of the transition between traditional public health problems (e.g., poor air quality, water-related diseases, malnutrition, and lack of medical resources), and more modern health risks (e.g., exposure to toxic/hazardous substances, industrial and vehicle-generated air pollution, noise, vibration, and stress-related illnesses). In terms of air quality, the World Health Organization calculated that in the early 1990s, 12 of the 15 cities in the world with the highest levels of particulates, and 6 with the highest levels of sulfur dioxide in the atmosphere were in Asia. While the focus of environmental concerns has previously been on large cities, increasing attention is being given to secondary cities, as in Malaysia and Thailand. The environmental problems of Asian cities are well documented, such as the depletion and contamination of water resources (e.g., saline intrusion in groundwater in coastal cities such as Dhaka, Jakarta, Karachi, and Manila), rapid run-off leading to soil erosion and flooding, land contamination, air pollution, and the loss of irreplaceable natural resources such as forest reserves. Low levels of investment in wastewater management and solid waste collection and disposal result in direct discharge of wastes to surface drains and open land, leading to increasing risk of health epidemics. The economic impacts of pollution in urban areas, in terms of loss of productivity and health costs, have been estimated to range from 1-5 percent of their GDP (World Bank 1992).

Urban environmental improvements require institutional coordination between government departments, agencies concerned with sustainable environmental management, and private sector interests. In practice, this has proved to be difficult to achieve in DMCs. Lack of political commitment and environmental awareness and poor enforcement are also cited as major causes of low levels of investment in environmental management facilities. The institutional framework for better environmental management is further complicated in instances where interventions must address multiple administrative boundaries, such as in the case of a polluted river that flows through several municipalities. In recent years, however, there has been growing pressure on DMC governments and industries by environmental and other concerned groups to improve conditions in urban areas. Unfortunately, because of worsening macroeconomic conditions in many DMCs, environmental concerns are likely to be accorded lower priority than job creation, especially for low-income DMCs grappling with basic issues of urban poverty and public health needs.

To date, most urban environmental management in the Region has consisted of remedial action through infrastructure investment to clean up pollution. Often, as in the case of wastewater collection and treatment, poorer urban households can not afford such actions, and the remedial actions may not be able to keep up with demand. While the Bank has undertaken a variety of projects within a broad definition of environment, it has implemented only a few projects focusing specifically on urban environmental improvement. The difficult, but ultimately worthwhile, task is to develop preventative policies that can forestall future environmental degradation without imposing impossible financial burdens on governments. Preventative action need not be capital intensive; for example, the following can all be implemented at low costs: (i) policies to guide growth away from environmentally sensitive areas, (ii) market-based economic instruments limiting levels of discharge that force reevaluation or upgrading of production processes, (iii) development policies aimed at reducing vehicle usage, and (iv) the greater use of economic resource pricing in cost recovery mechanisms. However, given that the benefits of sustainable environmental programs and policies are often only evident over the long term, communities (and local-level policy- and decision-makers in particular) need to be convinced of the value of these approaches through awareness initiatives.

Policies for Promoting Urban Governance

Principles

Four principles for achieving good governance underlie all policies for strengthening urban management in DMCs.

      i.            Accountability. If city managers and staff are to be more accountable to central government policy makers and to residents, their work will need to be assessed using performance indicators and benchmark criteria. Accountability is also increasingly important in the delivery of services by the private sector.

   ii.            Participation. Greater participation is an essential prerequisite of good governance, represented by a growing web of interest groups that want more say in policy development and implementation. Participatory approaches are of particular relevance to reduce urban poverty and enhance the role of the informal sector. Community participation will also be enhanced where the principles of demand management are used to improve service delivery.

iii.            Predictability. With many cities growing faster than the institutional capacity to manage their growth, administrative and legal procedures are often applied unevenly and to the disadvantage of the poor. An overhaul is required, so that, for instance, housing and land regulations and standards are affordable to poor families. Innovative land tenure policies could allow squatter families and informal businesses to enter the formal housing and land markets. Streamlined procedures for land registration and the validity of titles give confidence to households and businesses. In addition, potential private investors in the delivery of city services need confidence that the legal system is adequate in terms of contract law, dispute procedures, and clear allocation of responsibilities.

iv.            Transparency. In dealings between the private sector and local governments, transparency is too often lacking. As an example, data on land markets is often not freely available, resulting in increased costs to the potential developer and often the payment of illegal demands for money. This problem should ease as, for example, computer-based land information systems facilitate the storage and dissemination of data and as the benefits of freely available data are realized. To promote transparency and accountability, specific anticorruption measures should be put in place and enforced.

Decentralization

Decentralization is a commitment to sustainable development through empowering citizens and their locally elected officials, accompanied by a reduction in the monopolization of resources and powers by central authorities. From the perspective of intervention, external resources should be used not so much to produce direct results as to strengthen local capacities to initiate and manage activities that produce benefits for the local community. This implies a demand-driven process, where communities define what they feel they need in terms of development, and where participatory processes for such input are institutionalized. Decentralization should not be viewed as a goal in itself, but as an instrument for achieving more effective service delivery systems, opening institutions to wider civic participation, and increasing public trust in government.

There are compelling reasons for DMCs to pursue decentralization policies, which, properly conceived, will greatly improve the management of urban areas and support the better delivery of urban services. The Local Government Code (1991) in the Philippines, the Decentralization Act (1998) in Nepal, and the 74th Constitutional Amendment in India for example, are landmark pieces of legislation by which local governments have been given greater authority, responsibility, and resources to implement urban development projects. A prudent decentralization program should include

      i.            the simultaneous decentralization of responsibilities, resources, and autonomy;

   ii.            strengthening of local government capabilities, powers, and responsibilities;

iii.            the collection and diffusion of information on local government services;

iv.            the retention by central government of certain functions for reasons of efficiency, such as income redistribution and macroeconomic policy; and

   v.            review of city government remuneration, incentives, and career structures.

Three critical types of coordination are needed to support the decentralization process. Policies are needed to address the following:

      i.            Vertical coordination will remain important to urban management as central government will continue to be responsible for the legal framework of the public sector and for various critical functions. Responsibility for services should be assigned to the level of government whose boundaries best incorporate the beneficiaries of those services.

   ii.            Horizontal coordination will be needed among public sector stakeholders involved in city development as well as public-private sector coordination. Cross-border coordination will be needed where large contiguous urban areas are composed of numerous local governments (such as the Metro Manila National Capital Region, the Calcutta metropolitan area, and Indonesia’s JABOTABEK, the Jakarta metropolitan area).

     iii.            Internal coordination mechanisms are critical to overcome poor coordination of interdepartmental, sectoral, spatial, and financial planning; poor coordination of service provision; inadequate staffing; and unfamiliarity in dealing with private service delivery companies. In addition, cities face many cross-sectoral issues such as poverty reduction and environmental protection that require new arrangements for coordinated action.

Community Participation

85. Development programs funded through external assistance have often been criticized for having been designed in a top-down fashion, dictating the kinds of activities that should be undertaken. Such programs were typically not designed in consultation with stakeholders who would be affected by the project, or worse, by those required to implement, operate, and maintain them. The following principles support community participation:

      i.            Support and utilize participatory processes. Learning from past experience, current development theory encourages stakeholder participation in community and urban development. For this to work, people must be aware of the issues, and have the authority to make decisions, act on them, and mobilize the required resources.

   ii.            Develop effective systems for communication, replication, and feedback. Participatory decision-making processes, by design, require decentralized local governments that can be effectively responsive. Inherent within these processes are systems for communication, replication, and feedback.

Private Sector Involvement

The introduction of market-based principles and private sector expertise into the urban sector can bring a variety of benefits, particularly in larger cities.

      i.            Market-based approaches. The adoption of market-based approaches may allow existing agencies to deliver better and self-financing services. In other cases, the private sector may bid to operate a service, either on a contractual or an ownership basis. For example, the corporatization of public sector water enterprises to allow more autonomy and better human resources than local governments, can lead to improved services, increased operational efficiency, reduced tariffs, and access to private financial resources. Similar approaches can and are being applied in public transport, markets, and solid waste management in many DMC cities. However, the possible problems associated with replacing public monopolies with private monopolies in the delivery of services should be considered, especially in Pacific DMCs whose market size is extremely limited.

   ii.            Training and familiarization for local officials. Whichever form of private sector involvement in service delivery is decided upon, government officials will need to be trained in their new responsibilities as a party to the contract. The contract will bind the private operator to provide services in which payment is by results, while the government retains overall regulatory authority. A national statutory framework is needed as a starting point for contract negotiations and must cover factors such as minimum quality standards and environmental parameters.

iii.            Regulatory framework. At the local level, regulations will need to address the quality, price, and required reliability of the service; the investment program; maintenance of assets; and rights of access in the public domain. Risk assessment is another skill where public agencies will need to gain understanding so that they can create an environment conducive to attracting the private sector. Furthermore, in forging agreements with private sector providers, the rights of the urban poor to enjoy equitable access to basic urban services must to be protected.

Major Themes

This paper reviews the causes and effects of urbanization1 in the Asian and Pacific Region, highlights the resulting demands for improved management and servicing of urban growth, and proposes a strategy for Bank action in the sector. Because of the enormous variety of urban conditions and stages of economic growth in developing member countries (DMCs), the development of an urban strategy for the region is complex and needs to recognize the importance and diversity of country-specific policies and programs. However, a number of common themes underlie the strategy.

At the macro level, urbanization is strongly linked to economic growth and has contributed positively to the gains made in many countries throughout the Region. Measures to improve the extent, management, and operation of urban services benefit both local and national economies. At the same time, urban areas are exposed to external forces over which they have little control, such as the progressive globalization of decision-making and the economic crisis currently affecting the Region. The Bank’s urban strategy, therefore, must be both robust and flexible to respond to such forces and their impacts.

The phenomenal rate at which urbanization is occurring has overwhelmed those tasked with managing urban areas, particularly in the poorer countries of the Region. Exacerbated by a flood of rural-urban migrants, cities have witnessed tremendous growth of unserviced slum and squatter areas where millions of urban poor residents lack adequate access to potable water and sanitation services. A key theme is the way in which the problems of environmental degradation of urban poor communities, and urban poverty in particular, can be addressed. Related to these challenges are issues concerning improvement in the status of women and other vulnerable groups.

Potential improvements in the provision and maintenance of urban infrastructure and services are constrained by poor urban governance, management, and finance. Outdated legal, institutional, and governance traditions, as well as inadequate reform measures have constrained the pace of development. Thus a major theme is to address urban governance and the improvement of urban management through innovative approaches in the design and implementation of development activities; participatory processes at the local level; and the building of partnerships between corporate, community, and public sectors. The more efficient use of existing financial tools, the introduction of market-based approaches to local government operations, and the use of innovative financing mechanisms will also be required.

Achieving sustainable urban development is a final crosscutting theme, defined here as meeting the growing needs of the present without compromising the ability of future generations to meet their own needs. This is in accordance with the recommendations of the United Nations Conference on Environment and Development (1992), known as the “Earth Summit,” and the Second United Nations Conference on Human Settlements (1996), Habitat II. The comprehensive Global Plan of Action adopted at Habitat II incorporates policies for the sustainable development of settlements and the increased role of local governments in urban development and management. The urban strategy is designed to achieve significant increases in sustainability within the framework defined by the long-term goal of full urban sustainability in DMCs in environmental, financial, and socioeconomic terms.

Development of the Urban Strategy

Responding to the growth of increasingly complex urban areas requires a review of Bank approaches to urban program and project formulation, prioritization, and implementation within and among DMCs, taking into account lessons learned from the Bank’s 30-year experience in the sector. While DMCs can be broadly grouped by stage of economic growth in terms of the priority needs of their urban areas, urban strategies must respond to competitive and comparative advantages, local urban economic circumstance, and other location-specific concerns. Therefore, this paper proposes a broad regional strategy for the urban sector that can provide both a framework for specific DMC urban strategies and a guide for Bank action in the sector.

The strategy was prepared by staff of the Water Supply, Urban Development and Housing (East) Division, with the support of interdepartmental working groups2 guided by an interdepartmental steering committee3.

The Challenge of Rapid Urbanization

Urbanization and the Growth of Large Urban Centers

Urban population growth in the Region has been rapid. While total population of the DMCs grew from 1.7 billion in 1965 to 3.1 billion in 1995, urban population grew from 0.32 billion to 0.93 billion over the same period (Asian Development Bank [ADB] 1996a and United Nations Development Programme [UNDP] 1995). These figures represent 58 percent of overall world population increase and 45 percent of world urban population increase over this period. However, the 1995 urbanization level of 30 percent for the DMCs is low in comparison with the Organization for Economic Cooperation and Development member countries and Latin American countries, where urbanization levels averaged 70-75 percent. While some DMCs such as the Republic of Korea are in the final stages of the transition to fully urbanized societies, the urban populations of South Asia currently average only 25 percent of the total. Continued massive increases in urbanization in the Region are expected: the United Nations (UN) forecasts 53 percent urbanization in Asia by 2025, with the majority of urban growth in Bangladesh, People’s Republic of China (PRC), India, Indonesia, and Pakistan (Figure 1). These projections equate to an average of more than 40 million new urban residents per year (Appendix 1).

Figure 1: Asian Urban Population

The proportion of urban population living in large cities in the DMCs will also continue to increase. In 1995, the DMCs contained six of the world’s megacities4 (Beijing, Calcutta, Jakarta, Mumbai [formerly Bombay], Shanghai, and Tianjin) and are forecast to have 11 more by 2025 (Bangalore, Bangkok, Chennai [formerly Madras], Dhaka, Hyderabad, Karachi, Lahore, Manila, New Delhi, Shenyeng, and Yangon). Increasingly, megacity growth is taking the form of extended metropolitan regions (EMRs), covering 50-100 kilometers from the city center, with polycentric structures acting as focal points in the movement of people, goods, and services. Metropolitan regional growth has typically sprawled along major highways, expressways, and railroad lines radiating out of urban areas, superimposing new towns, industrial estates, housing projects, and other urban forms onto areas that were previously predominantly agricultural and rural. Without strategic interventions in land-use management and transportation planning, environmental and economic constraints will increasingly affect EMRs; particularly those on low-lying plains subject to flooding, subsidence, and ground and surface water contamination. While not resembling planned cities, at their periphery EMRs provide a cost-effective way for low-income families, developers, and others to gain access to affordable land for shelter and employment. Furthermore, minimum levels of services and infrastructure can be upgraded over time if rights-of-way are secured early enough.

While many DMCs have one or several very large urban areas or megacities, problems related to urbanization are best addressed at the level of secondary cities and smaller urban areas, before they become megacities. Interventions should begin at this stage to (i) prevent problems worsening as cities grow; and (ii) support the programs and policies that many DMCs have instituted for the dispersal of industries; development of regional growth centers, corridors, or zones; and promotion of an equitable and balanced hierarchy of urban settlements. Most national urban strategies have adopted some variant of this approach, incorporating explicit and implicit polices that guide urban growth and development to designated urban growth centers.

Figure 2: Level of Urbanization and GNP per Capita
of Selected DMCs (1995)

Rationale for Investing in the Urban Sector

A strong case can be made for the importance of investment in the sector on the basis of the central role played by urban centers in national economic growth. Urban areas are dynamic engines of growth, centers for innovation and entrepreneurship, and sources of highlydeveloped social services. This view is in stark contrast to earlier development theory, particularly expounded in the 1970s, which focused on rural development and viewed cities as parasitical, resource-draining concentrations of people, often poor, that generated little productive return. Opposition to urban development as a national economic strategy was based on the belief that cities already benefited from an urban bias, were too expensive to develop, and increased unemployment as urban labor supply outpaced urban labor demand.

A chief complaint against urban development and urbanization was that the process accelerated rural-to-urban migration, characterized by rural workers being lured to the city with false hopes of a high-paying job, only to end up unemployed or marginally employed in the informal sector. However, during the 1970s and 1980s urban areas played a crucial role in absorbing excess rural labor through rural-urban migration, accounting for some 40 percent of urban population growth over the period. Research in Bangladesh and India illustrates that migrants are much better informed about job opportunities than previously thought, and make migration choices in a rational fashion. Unable to be satisfactorily absorbed in an increasingly developed agriculture sector, better-educated workers tend to look to the industrial and service sectors in urban areas for employment. Often employed in the informal sector, migrants’ urban incomes frequently surpass those of midlevel formal sector employees, which subsequently boosts rural household incomes through remittances to their families in the provinces. Urban migrants make rational decisions about their own future, and almost never return to the provinces—deciding that life is better and opportunities are greater in urban areas. The informal sector is actually a competitive center of economic activity, and migration has increased net productivity of the economy by directing labor to locations with higher wages and where a greater contribution to economic production can be made.

Recent experience and analysis demonstrates the efficiency of cities as generators of economic growth (United States Agency for International Development [USAID] 1991). The Bank has estimated that some 80 percent of the Region’s new growth is generated in its urban economies (ADB 1996a). Many DMCs are expecting their cities to provide most of the employment required by their rapidly growing populations. In large cities in particular, urban areas benefit from a large and skilled labor force, economies of urban scale, and economies of agglomeration (i.e., efficiency resulting from the clustering of firms in a given industry or related industries), as well as the resulting demand for intermediate and consumer goods (Appendix 2). There is ample evidence that labor productivity increases with city size. For example, the ratio of GDP per capita to national GDP per capita is 1.9 for Manila, 2.5 for Calcutta, 3.5 for Bangkok, and 3.7 for Shanghai. These ratios could be even higher if cities were made more efficient.

At the same time, the importance of secondary cities and towns and rural-urban linkages at a regional level must not be overlooked. In many East Asian newly industrializing countries, agriculture has been developed with the rest of the national economy, which in turn has played a critical role in the development of domestic markets and integration into the international economy. Secondary towns and cities provide markets for rural products, service centers for rural activities, and jobs to absorb surplus labor. Strengthening linkages between urban centers and rural areas is necessary to ensure that the two remain mutually reinforcing.

While initial capital requirements may be greater in urban than in other areas, the payoff from such investment can also be high. Urbanization brings health and social benefits that could only be achieved in rural areas at far greater costs. Residential infrastructure costs may be higher in cities, but households are also better serviced with piped water, solid waste collection, and electricity—all of which contribute to better health and welfare. Additionally, economic returns to industrial and commercial investments also tend to be higher in cities than in small towns and rural regions. More productive jobs can be created in cities, due in part to the fact that workers have more complementary capital inputs to increase productivity.

Throughout the Region, urban areas are, and will continue to be, at the center of economic growth. Economic efficiency of cities is based on the fact that urban growth follows the market. Cities will continue to grow as positive externalities outweigh negative ones. Urban areas with large productivity advantages, stemming from locational features or from the agglomeration of industries, will continue to expand in population and area, and will command the highest wages and land and housing prices. Less productive cities will grow at a slower pace and to a smaller size, where wages, land prices, and worker productivity will be lower. Nevertheless, market forces generally fail to fully incorporate the harmful effects of urban growth, as many of the consequences of environmental deterioration go unrecognized and no market mechanisms are in place to correct them. This may account for the fact that in India, medium-sized cities are growing more quickly that the larger urban areas. Further, the World Bank estimates that the growth of intermediate-sized cities in the PRC and Indonesia account for 24 percent of incremental global urbanization. The dynamics of urban growth is complex, varies between countries, and is not well understood.

Other forces are at work in the Region. Globalization and technological change will strongly affect the fortunes of different DMCs depending on their perceived locational advantages, potential profitability, available skills, and adaptability. These external factors are influencing cities in the Region in two ways. First, there is increasing competition among cities as multinational firms compare labor and other input costs and assess economic incentives available, the regulatory climate, the existence of market-based laws and institutions, flexibility of the labor force, and political stability: cities that can meet these requirements will progress economically at much faster rates than those that cannot. Second, the emergence of information-based service industries including financial and producer services, research and development, and media is benefiting larger cities that can offer the most efficient conditions for information dissemination.

The process of globalization through the international trade of goods, capital flows, and labor mobility has created an increasingly integrated world economy and growing competition between urban centers for foreign and domestic investment. Interdependencies are being created between urban centers across national boundaries, often creating links that are stronger than those between an urban center and its own hinterland. Trade liberalization, while often painful in terms of the required restructuring across sectors, is creating new opportunities and synergy within and between regional growth zones. Ultimately, competition between urban centers will not only be related to locational and production advantages, but to less tangible but equally or more important factors such as good governance, quality of public service provision, and support for entrepreneurial enterprise. This process will result in both winners and losers.

 

Urban development is sustainable if it permanently enhances the capacity of urban society to maintain or improve the quality of life without exhausting non replaceable resources or damaging the economic, cultural, or natural environment. At the same time, sustainable urban development should serve to reduce poverty while strengthening the ability of local institutions to involve and empower citizens and ensuring that financial resources are sufficient to allow replacement of assets and new investments.

The quality of life in urban areas includes concepts that can be measured to some degree: freedom from hunger; capacity to live a healthy life; access to education, shelter, and basic services; and a secure and livable environment at home and at the workplace. Equally important but less quantifiable are concepts such as family stability, freedom from crime, and full involvement in the community. Rapid urbanization often disrupts the social, cultural, and religious pattern of people’s lives. For example, the tensions caused by the integration of migrants from more traditional lifestyles, and the conflicts between traditional close family relationships and the more individualistic relationships characteristic of large cities. Where whole communities become the vehicle for social, economic, political, or religious discontent cities may become flash points for unrest, as at times in Jakarta, Karachi, and Manila.

 Urban quality of life presents a highly varied picture across the Region. In the middle-income countries of East and Southeast Asia, many cities have provided for some of their residents, at least until recently, living conditions similar to those in developed countries. In such cases, a significant middle class emerges, has increased mobility and resources, and seeks greater participation in government and action on community concerns such as the environment. Such cities are in transition from traditional quality of life risks, such as waterborne diseases and lack of medical services, to more modern risks, such as air and industrial pollution and stress-related illnesses (Figure 3). In contrast, many urban centers in South Asia are dominated by areas of poor housing, inadequate infrastructure and social services, poor transport, and high rates of illness and morbidity. Poor living conditions can also be found in urban areas in middle-income DMCs such as Thailand and the Philippines, where 20 to 40 percent of urban residents live in slum or marginal settlements. In large cities in particular, the problem of high land values is one of the biggest constraints on a poor family’s ability to acquire shelter. Quality of life indicators in selected present and future megacities are presented in Table 1.

Figure 3: Quality of Life Risks in Asia’s CitiesTable 1: Quality of Life Indicators in Selected Present and Future Asian Megacities

Urban Poverty

Urban poverty—often more harsh and extreme than rural poverty—is widespread in the Region, particularly in South Asia. Poverty is not only related to low income, it involves poor health and education, deprivation in knowledge and communications, inability to exercise human and political rights, and low self-esteem; in short, a poor quality of life. Urban poverty is not precisely defined. However, based on the crude measure of a poverty line of $1 per day per person and purchasing power at 1985 levels, about 960 million of the 1.3 billion people worldwide classified as poor in 1993 lived in Asia (UNDP 1996). Experts have stated that “urban poverty will become the most significant and politically explosive problem of the next century” (World Bank 1990). In the absence of political options, urban dwellers respond to poverty by working harder, taking on multiple jobs, working longer hours, and increasing household participation (particularly women and youth) in the labor force.

The complexities of defining urban poverty mean that data must be used with great care. For example, the income level needed to avoid poverty will vary by urban area; local costs of living; the availability of free or subsidized education, health, and other services; access to water supply and other infrastructure; and the number and age of dependents in the household. As a result, two families in two neighborhoods of the same city, classified as having the same income, may in fact require very different income levels to avoid poverty. Simplistic definitions of poverty also ignore the deprivations in quality of life when families respond to falling incomes and rising prices by, for example, taking children out of school to earn money for the family or having one parent move to where job possibilities are better. Quality of life decreases when a family must move in search of cheaper housing. These effects are being highlighted in the current economic crises in some DMCs. Poverty reduction programs have to be widened to accommodate such diversity.

Households headed by women, more common in cities, are particularly vulnerable to poverty. Women generally have more limited access to education, and suffer disparities in employment opportunities and wage levels compared to their male counterparts. Women have the additional burdens of culture and tradition that can manifest in legal and social obstacles to access to land. Faced with limited opportunities and the necessity to meet basic needs, many poor women are forced into highly vulnerable and dangerous jobs in the commercial sex industry and other degrading means of employment. Additionally, domestic violence poses a serious, and largely unacknowledged, threat to women.

Urban poverty has many causes. Some of these are the willingness of new migrants to take low paid jobs in the city, increases in the cost of land, long journeys to work, less support from an extended family network, exposure to greater environmental risk, and greater vulnerability to changes in market conditions in urban areas. Conditions of urban poverty are worsened by the scale and speed of urbanization in many DMCs, forces with which municipal governments cannot keep pace. In a situation of scarce resource allocation, the urban poor are badly placed to compete for essential services and shelter. Biases in investments, standards, pricing policies, and institutional structures often skew services in favor of the better-off in cities. For example, access to water is generally provided unevenly among income groups, with formal supply systems being denied to poor communities who are forced to turn to water vendors and often pay much more per liter than higher income households. This is often due to unavailability of reticulated supplies to these communities or the high one-time connection fee that most urban poor cannot afford.

The challenge is to reduce urban poverty through a combination of approaches, a mandate given particular urgency in light of major increases in the urban poor in many DMCs affected by the current Asian financial crisis. A range of measures is being explored, including employment creation, credit for informal businesses, education and literacy training, provision of legal tenure to squatters, improved social and infrastructure services and access to shelter, and support for better human rights. This includes the right to vote in electing representative government and to organize at the community level.

Coordination with Multilateral and Bilateral Organizations

The Bank is working with other external support agencies through geographic coordination of assistance programs and in some cases cofinancing of lending and/or TA. In addition the Bank is supporting NGOs, both as a component of projects and directly, as in the Orangi Pilot Project in Karachi.13

Multilateral support agencies operating in the urban sector in the Region include the World Bank, UN agencies (including United Nations Centre for Human Settlements [UNCHS– Habitat] and United Nations Children’s Fund), and the European Union. The World Bank provides the most comprehensive assistance, covering integrated urban projects, water supply, waste management, urban transport, environmental management, and housing finance. Strong emphasis is placed on policy dialogue and capacity building and the World Bank supports its operational activities with sector and research programs. Among the UN agencies, UNCHS provides technical support aimed at all aspects of human settlements development, and codirects the Urban Management Program with the UNDP and the World Bank. UNCHS also directs the Sustainable Cities Program. The Local Initiative Facility for Urban Environments supports NGOs and CBOs in the Region.

Bilateral support to the urban sector includes the Department for International Development (United Kingdom), focusing on urban poverty relief in South Asia; the German Agency for Technical Cooperation (GTZ) on local government capacity building in various countries; Japan’s Overseas Economic Cooperation Fund on transport, drainage, and other urban infrastructure; Australia and New Zealand on local government capacity building; and USAID on highly leveraged, policy-based assistance programs focusing on urban and housing finance, decentralization, and privatization.

In addition to these government-led programs, support to the urban sector also comes from numerous NGOs, CBOs, and academic-based research institutes in many DMCs, such as the Asian Institute of Technology in Bangkok.

Urban Development Objectives

The starting point for formulating urban development objectives is the Bank’s Medium Term Strategic Framework, 1995-1998. The five strategic objectives against which Bank project activities are measured are (i) promoting economic growth, (ii) reducing poverty, (iii) supporting human development, (iv) improving the status of women, and (v) protecting the environment. While the objectives are currently under review, they are not likely to change dramatically. At least 50 percent of projects and 40 percent of lending should be for projects with social or environmental benefits. Bank operations are targeted to emphasize policy support; capacity building; strengthening of productive capacity, infrastructure, and services; and improved regional cooperation.

Most urban development, water supply, and housing projects are classified by the Bank as human development projects. In addition, depending on their specific goals, urban projects frequently address one or more of the other four overall strategic objectives. The current priority for the Bank to respond to the economic crisis in several DMCs is highlighting the key role of urban projects in reducing urban poverty. The overall strategic objectives can be realized for the urban sector through the following operational objectives:

     i.            maximizing the economic efficiency of urban areas (economic growth) through

                          a.            increased contribution to GDP;

                          b.            easier market entry for small businesses;

                           c.            creation of employment;

                          d.            attraction of inward investment; and

                          e.            availability of suitable land, infrastructure, energy, and services to meet business demand;

  ii.            reducing urban poverty through

                          a.            reduced unemployment; and

                          b.            increased number of households with access to land, infrastructure, and services;

iii.            improving quality of life (human development and the status of women) through

                          a.            reductions in environmental pollution levels;

                          b.            improved support mechanisms for the disadvantaged;

                           c.            enhanced role for gender development;

                          d.            reduced crime levels;

                          e.            reduction in serious illness;

                             f.            availability of suitable land, infrastructure, and services to meet residents’ demand; and

                          g.            increased participation in decision making;

iv.            achieving sustainable urban development (protecting the environment) through

                          a.            reduced use of nonreplaceable natural resources;

                          b.            increased use of energy pricing, taxation, and energy-saving forms of

                           c.            urban land use and construction;

                          d.            increased social equity in the distribution of social benefits;

                          e.            reductions in environmental pollution levels; and

                             f.            use of improved urban management systems, including good governance, decentralization, private sector involvement, funding mechanisms, and community participation.

To achieve these objectives, the Bank should promote the following policies for inclusion in national government urban sector policy and strategic frameworks: (i) promoting good urban governance, (ii) improving urban management; (iii) mobilizing financial resources; (iv) reducing urban poverty; and (v) addressing urban development subsectors (IUDPs; water supply, sanitation, and solid waste management; and transport and housing). Policies for Mobilizing Financial Resources

A variety of policies are available to support the mobilization of financial resources, and to finance and maintain urban infrastructure and services, including the following:

     i.            Promotion of fiscal autonomy. The catalyst for improving financial management at the city level is the drive toward financial autonomy that encourages responsibility, efficiency, and increased sustainability in funding urban services. In this connection, DMCs’ central governments should allow localgovernments to retain locally collected revenue and to seek funding from a wide range of sources, including the private sector. Increased fiscal autonomy should be accompanied by regulatory mechanisms appropriate to protect the interests of producer and consumer.

  ii.            Computerization and automation. Increased autonomy should also encourage computer-based accounting, cost control, billing and collection procedures; contracting out of services such as infrastructure maintenance; and development of management information systems and strategic financial planning.

iii.            Market-based and economic pricing of services. Pricing policy will become more urgent given the pressures on government resources and the increased role of the private sector. While full cost recovery is the long-term objective, in the short term efficiency, cost reduction, and revenue collection should be improved. Action needs to center on the establishment of sound pricing policies, i.e., marginal costs must reflect the costs of additional capacity together with those of O&M and the externalities associated with environmental damage. However, despite the drawbacks, some element of cross-subsidy will frequently be justified as a last resort to maintain access to services for the urban poor. More rigorous targeting of subsidies to families rather than property will need to be encouraged.

iv.            Direct cost recovery. At the same time, service quality will need to be kept commensurate with prices to avoid the build-up of consumer resistance. For that reason, direct cost recovery through user charges will usually be more effective than indirect cost recovery through property taxes and similar levies. However, indirect taxes will remain important elements in the local government revenue base. Property taxes in particular can be better structured to capture the economic benefits of land, as being shown by Bank-assisted projects in Dhaka.14

  v.            User charges and service fees. The adoption of market-based principles for pricing urban infrastructure and services will also help DMCs estimate the incremental demand for resources more accurately. Differential pricing of road usage, for instance, coupled with efficient public transport, as in Singapore, will help keep the demand for new road space at levels that are economically sustainable. Fees should also take account of maintenance costs; for example, by adding a surcharge to water bills to help fund the cleaning and repair of drainage systems. Such charges also act to develop pressure within user groups to compel local governments to maintain assets at high standards.

vi.            Land-related financial instruments. DMCs also need to examine different methods of capturing some of the unearned gains in land values, which result from new or upgraded road construction and other assets built at public cost; for example, through betterment charges, land readjustment techniques, and contributions in cash or kind by developers.

vii.            New sources of funds. New funding sources including private capital are needed for DMCs to meet the costs of infrastructure investments. However, many city economies will take time to expand to a level where they can afford to employ private capital. In the meantime, they will need to continue to rely on transfers from central governments to supplement locally raised revenues. In turn, decisions will be needed on which taxes and charges should be controlled by local governments. Other methods that can be used to supplement local revenues include municipal development funds and other financial intermediaries, community mortgage programs, loans for housing finance through local CBOs, and the funding of new infrastructure through associated property development, as in Hong Kong, China and the Philippines.

viii.            Capital markets and credit finance. Cities need assistance to achieve long-term access to capital markets and/or direct private investment in infrastructure. Issues include removing constraints such as the lack of credit ratings for local governments, addressing the lack of long-term debt instruments such as municipal bonds, and assisting central governments to cope with the required expansion of credit and understand the lending options for urban infrastructure projects. The many examples of private concession contracts in relation to regulatory entities need to be available to people involved in city finance.


 Policies for Improving Urban Management

Institutional Strengthening and Capacity Building

Examples of the Bank’s increasing support for capacity building are the recently approved loans for the urban sector in India, Indonesia, and Sri Lanka15,and for TAs for governance in Dhaka and Bangalore, India16. Across the Region, some of the priority areas to be addressed include training in management skills, especially in response to the increasing use of demand-led provision of services; development of expertise in performance monitoring; financing of investments; evaluation of development proposals; coordination of spatial planning and sector investments; and an increasing use of community resources. Key elements are as follows:

     i.            Define clear roles and functions. A fundamental component of improving urban management is the appropriate institutional structure for planning, financing, and delivering services and other functions of government. Responsibilities for delivery of a service should be assigned clearly to one level of government, the corporate private sector, or the community. An underlying problem is that policies for the urban sector are made in many parts of governments with poor cross-sectoral coordination of policy making. In addition, the growing importance of the private sector is placing new demands on the public sector, which is already short of skilled staff. It is important for city government to thoroughly review responsibilities for service delivery before inviting the private sector to participate.

  ii.            Promote government as an enabler, not provider. The public sector needs to adopt an enabling role in support of the private sector. In an enabling role, the government sets policies and makes choices in sector priorities; monitors private sector operations in service delivery; supports the economic health of the city; and protects the community against threats to urban quality of life, including pollution, congestion, overcrowding, and damage to scarce resources. An important component of the new relationship is to encourage public-private partnerships in land and property development, and service delivery. In many urban areas capacity building is crucial to enable governments to fulfill their existing mandate, let alone take on the new skills required.

iii.            Support for skills training and other capacity-building initiatives. The lack of skilled human resources is a major constraint to developing the necessary structures for urban management, particularly at the local government level. The relatively low status and pay, and lack of incentives offered by most local governments is a principal cause. In some cases, as in India and Indonesia, the status of the local civil service could be elevated to be on par with the national civil service. In addition, public and private corporations can be created that often attract better-qualified staff than government.

iv.            Promote regional cooperation. The problems of managing urban growth and improving the competitiveness and livability of urban areas are common to many countries. Bringing DMCs together at various levels of interaction, including the local government level, is a powerful way to share best practices, cross-fertilize innovation, and promote new ways of problem solving. Networking and cooperation also allows one city to learn from and prepare for problems currently being encountered in another city, and for lessons learned to be shared and successes repeated.

Building appropriate institutional structures for urban management is an incremental process. It is better to have imperfect institutions that can adapt quickly to outside forces than to have rigid systems that cannot. Moreover, even in small and medium-sized towns with few resources, a small group of well-trained multidisciplinary staff willing to think innovatively and with strong community and political backing can have a significant impact on achieving city development objectives.

Urban Land Management

Policies to achieve adequate land for residential, industrial, and other uses to improve the economic efficiency of urban areas and to improve the quality of life for residents are as follows:

     i.            Improve the efficiency and transparency of land markets. The tools that can be used to improve the efficiency and transparency of land markets include improved mechanisms for land transfer (cadastral mapping, land titling, and registration); land information systems for the benefit of private and public interests; deregulation of unnecessary land-use controls; incremental forms of tenure designed to help residents in informal/squatter areas become part of the formal city; and institutional and legal reforms so that land can be used as collateral. Such policy and technical reforms can also contribute to improved property-based tax revenues.

  ii.            Rationalize the institutional framework for land administration. The framework for land administration needs to be rationalized in the context of decentralizing responsibilities for urban management. An example would be merging land development public corporations that operate at the national level with local governments.

iii.            Accelerate the delivery of serviced land17. The Bank will support capacity-building actions to accelerate the delivery of land serviced with adequate access to roads, water, drainage, and electricity. For example, in cities in South Asia DMCs with remaining public land, the objective may be to treat land as an asset in an investment portfolio, i.e., to secure funding and provide security for private sector partners. In DMCs where land is predominantly privately owned, land pooling mechanisms can be tested and applied as part of public-private partnerships, using techniques such as joint ventures for commercial property development, land readjustment, and guided land development.

iv.            Improve spatial planning and urban planning systems. Improved systems for urban planning and regulation should continue to give strategic guidance on urban expansion and renewal policies, and to address the externalities arising from land development such as pollution. However, systems should consider the use of innovative approaches to planning and building standards, incremental in nature, that also increase affordability. Other approaches may include the use of flexible zoning, techniques whereby the private sector provides social/offsite infrastructure in exchange for fast-track planning/building approvals, permissive systems of development control, and innovative techniques such as land-use controls tied to environmental impact.

  v.            Establish procedures for public participation. More effective procedures are needed for public participation in decision-making on the use of land and location of infrastructure investments. Planning processes should incorporate specific components and resources for discussions with a wide range of stakeholders, CBOs, NGOs, business groups, environmental and other pressure groups, academia, etc., as well as other public sector agencies. There should be procedures for an iterative process of plan development and project implementation, using focus groups for example. Mechanisms should be developed and put in place to ensure public participation in the urban land management processes.

Urban Environmental Management

Policies for environmental management are designed to manage air, water, land, and soil resources to (i) maintain their qualities and quantities at levels that are not harmful to public health, (ii) support balanced ecosystems, (iii) contribute to the visual aspects of urban development, and (iv) provide sustainable urban areas. Priority strategies include the following:

     i.            Stimulate demand for investments and policy reform. The demand for urban environmental improvement can be pursued through (a) institutional strengthening, including the issues of low willingness to pay, weak institutional and technical capability, lack of supporting policy and legal frameworks, and the need to create a conducive setting for private sector financing; (b) pilot projects to demonstrate the benefits of urban environmental improvement; (c) strengthening of municipal financial capacity for environmental improvements; (d) increased resource utilization as a project objective; for example, the incorporation of a sewage treatment project within the overall water quality management framework; (e) campaigns to heighten public awareness of environmental issues; and (f) promotion of regional cooperation.

  ii.            Address industrial waste management. Items covered should include hazardous and toxic wastes, medical waste, and other nondomestic waste from industrial processes. Emphasis should be placed on the development of economic instruments to minimize waste creation and enforce due care by waste generators. Where treatment systems are necessary, development of centralized systems should be encouraged.

iii.            Manage domestic waste. Particular attention should be paid to the collection, treatment, and disposal of domestic (solid and liquid) wastes in order to mitigate the health risk and environmental nuisance. Minimizing the creation of solid waste should be encouraged through a combination of economic instruments and public awareness.

iv.            Control air pollution. Large cities should focus particularly on air quality monitoring systems; vehicle maintenance; traffic management; and the introduction of unleaded gasoline, natural gas, and other benign fuel technologies for domestic and vehicle use. In addition, TA and institutional strengthening will be required to assist in developing appropriate legal instruments and incentive frameworks, and in legal enforcement.

  v.            Strengthen urban environmental management systems. Strengthening urban environmental management systems in DMCs will involve (a) promoting close coordination and cooperation between national environmental management agencies and municipal governments, (b) strengthening environmental impact assessment of urban development projects, (c) strengthening the process of environmental audit, and (d) strengthening capacity for integrating environmental dimensions into spatial planning and development projects in environmentally sensitive areas.

vi.            Provide for disaster mitigation. Government, local communities, and the private sector must take a proactive role in natural disaster mitigation, including preparedness programs to help people reduce personal and economic loss caused by earthquakes, floods, and severe weather disturbances. Reducing earthquake hazards, for instance, can include better forecasting; improved model building codes and land-use practices, development and improvement of seismic design and construction techniques, accelerated application of research results, and reduced risk through the use of post-earthquake investigations and education.