Annex A
INTERNATIONAL DONOR INTERESTS ON URBANISATION
AND POVERTY
How effectively are developing country governments
and donors addressing the challenges presented by urban poverty?
The donors considered here are: the ADB, the AfDB, the UNDP and
selected bi-lateral donors.
GENERAL
The types of investment from donors that can
potentially improve the lives of poor urban dwellers and the quality
of slums/poor urban neighbourhoods include such elements as:
— Environment (climate change, pollution
control and clean air, etc. as well as planning policies, urban
design, provision of green space, disaster planning, etc).
— Poverty reduction and social considerations
(education, gender, employment, etc).
— Land use, registration and tenure.
— Infrastructure (water and sanitation,
roads, electricity, etc).
— Services (transport, healthcare, municipal
services, etc).
— Urban local economic development.
In addition, concerns about climate change and
the current economic downturn are affecting donor responses to
urbanisation and poverty, as outlined below;
(1) Climate change is leading to more money being
allocated to the urban sector, particularly on mitigation and
adaptation (areas where cities are thought to be significant players),
and which is also allowing organisations previously not involved
in development, to allocate money (eg the European Investment
Bank now has a mandate from the EU to invest in climate change
mitigation and adaptation in developing countries; the German
Ministry of Environment has opened up a line of support to work
in the urban sector in developing countries). Climate change is
seen to be both an opportunity for greater focus on the urban
sector, but also to be taking focus away from targeted programmes
such as urban poverty reduction or slum upgrading.
(2) The fallout from the financial crisis, and
the stimulus packages introduced by various countries and lending
agencies have a strong focus on investing in urban infrastructure.
The financial crisis will undoubtedly lead to greater urban poverty
however there is little direct focus on poverty reduction or slum-upgrading.
The focus is mainly on job creation through infrastructure works,
many of which will take place in cities. As yet, most countries
and donors are indicating that funding will increase or be maintained.
There appears to be little focus on urban poverty
or slum upgrading as a specific programme theme or investment
goal. Often poor housing and poverty tend to be identified as
downstream impacts rather than actual targets. Some anecdotal
reasons given for this were that these projects tend to be more
difficult and "messy", with results that can be hard
to demonstrate. It would appear that donors and countries now
consider climate change to have a higher priority and profile
than urban poverty and have changed focus accordingly. Also there
is the continuing belief (sometimes, but not always, true) that
poverty is worse in rural areas.
However, there is an emerging sense that urban
issues are rising in prominence and that resources should be commensurate
with the high global rate of urbanisation, having spent the past
decade being under-funded, dispersed and not receiving attention.
There is some optimism among urban professionals that these issues
are now higher on the development agenda, however, this is mainly
with regards to infrastructure. There was less of a consensus
that urban poverty reduction, housing or slum upgrading would
start to receive more direct investment.
1. ASIAN DEVELOPMENT
BANK
Activities and emphasis of ADB:
— Since late 1960s, approximately 200 urban
projects have been funded and implemented by the ADB, totalling
approximately USD15 billion.
— Much of ADB's lending and technical assistance
has focused on urban water supply, sanitation, and wastewater
management.
— The financial crisis has brought an increased
focus on urban infrastructure and ADB spending in the urban sector
has recently increased to USD2 billion per year (from around
USD1 billion per year on average previously[37]).
— Within the ADB, there has been an increasing
focus on the urban sector since about 2006.
— The current guiding policy document of
the ADB, Strategy 2020, summarises ADB urban priorities as follows:
— Liveable cities. To improve the
quality of life for their inhabitants and to reduce the carbon
footprint of Asia's cities—ie, the amount of harmful greenhouse
gases produced—ADB will assist Developing Member Countries
(DMCs) and their municipalities in addressing a range of environmental
problems resulting from rapid urbanisation. These include reducing
air and water pollution, supporting cleaner modes of transport,
improving systems for solid waste management, and reducing urban
waste.
— Urban infrastructure. ADB will
focus on water supply, sanitation, waste management, and urban
transport. ADB's infrastructure operations will not be limited
to building physical assets. They will also include improving
the delivery of infrastructure services, which will create an
enabling environment for the private sector. ADB will: (i) build
DMCs' capacity for better infrastructure management, (ii) promote
institutional and policy reforms that enhance operational efficiency
and sustainability of infrastructure projects, and (iii) support
logistical systems to increase trade and investment.
— Approach: In terms of operational
approach, the ADB emphasises engaging with the private sector.
— Guiding documents: In 1999 the
ADB produced an Urban Sector Strategy, which was reviewed in 2005 in
light of developments such as the MDGs. A further review was completed
in 2006, the findings of which pointed out the fact that ADB investment
was nowhere near commensurate with the rate of urban growth in
the region and led to an increased focus on the urban sector within
the ADB. As a result of the 2006 Review, the urban sector
was included in the ADB strategy document, Strategy 2020
and a document called Managing Asia's Cities was produced.
These documents led to the establishment of the Cities Development
Initiative for Asia (CDIA), an organisation promoting investment
in cities (in collaboration with GTZ, with additional funding
from SIDA and Spain).
— Types of projects: A brief review
of ADB projects from 2008 reveals a broad view of the scope
of the urban sector. Initiatives include elements of urban water
supply and sanitation, housing, urban drainage and flood control,
urban transport, urban environment, slum improvement, sites and
services, (urban) institutional strengthening and capacity building,
urban land management, urban governance, and urban finance. Poverty
reduction components and micro-credit are also endorsed as part
of the urban sector, when included in urban development projects.
— Climate change is having an impact
on re-focusing resources towards climate proofing cities, enabling
sustainable development and elements such as cleaner and more
extensive public transport.
— Loans and TA: In 2009, the ADB
will be providing loans and technical assistance to approximately
47 projects broadly considered to be in the urban sector.
Some examples include the Second Neighbourhood Upgrading and Shelter
Sector project in Indonesia (USD700,000 in technical assistance)
and the Rajasthan Urban Sector Development Investment Program
in India (USD150 million loan). Of the proposed projects,
17 are technical assistance projects and 30 are loans.
— Institutional development: the
ADB currently has a cross-regional Urban Community of Practice
(UCOP) focusing on the urban sector. In 2001, the Bank was reorganised
and urban sector expertise was re-distributed throughout other
sectors and became somewhat diluted. The urban sector is addressed
under broader themes such as governance and social development
and competes for resources in larger groups such as transport
or water policy, the latter often traditionally focused on rural
areas. The UCOP redresses this previous organisational change
somewhat, and has raised the profile of the urban sector within
the Bank. The relative influence of urban sector issues declined
from 1999 to 2006 but has increased since then.
— Partnerships: Since 2002, ADB
has worked with the Cities Alliance (CA) to support the preparation
of certain City Development Strategies and the Cities Without
Slums action plan. ADB is supporting the Clean Air Initiative
for Asian Cities together with the WB. ADB collaborates quite
extensively with GTZ. The CDIA is a partnership between ADB and
GTZ. ADB and DFID have worked together on country-level initiatives
in Kolkata and Madhya Pradesh in India.
— Human resources: ADB currently
have plans to hire 20-30 new staff in 2009, with specific
urban-sector expertise, to be based in the Manila office. This
is significant as it will approximately double its urban specialists.
2. AFRICAN DEVELOPMENT
BANK (AFDB)
Activities and emphasis of AfDB:
BACKGROUND:
The AfDB's first Strategic Plan was produced
for the 2003-07 period. There was little consideration for
the urban sector in this Plan. According to the most recent Annual
Report (2007), the 2003-07 period had the Bank's priorities
as agriculture and rural development, with greater emphasis being
given to water and sanitation in rural and peri-urban areas, and
to human capital formation through primary education and health
services.
The justification for this is the fact that,
although urbanisation is increasing, Africa is still predominantly
rural (although there is obviously a great deal of variation between
countries) and suffers from lack of access to very basic services,
food and water. The 2008-12 Strategic Plan has a stronger
focus on infrastructure as a key priority area, particularly transport,
power and ICT.
There is some sense within the Bank that urban
issues will grow in prominence in the next few years, particularly
once the Urban Strategy (see below) is finalised. The rate of
urbanisation in Africa is significant and increasing. Climate
change will have a major impact on urbanisation in Africa; the
AfDB anticipate a potential influx of farmers into cities due
to lack of water, drought and crop failure.
Rural-urban linkages have also been identified
to be important: farmers currently produce more for export than
they do for the burgeoning local urban population so food security
and agricultural policies are closely linked to urbanisation and
urban policy and planning.
Urban Strategy:
— The AfDB is currently developing an urban
strategy (started in 2008) and aims to complete it, including
an action plan and results-based management framework, some time
in 2009. There is a draft format but this in not publicly available
yet.[38]
— An urban strategy was prepared in the
1990s but it was not influential in terms of the Bank's activities
and is no longer available. The new strategy is intended to be
more integrated and actionable.
— The new draft strategy has identified
several "pillars": infrastructure, governance, private
sector development and cross-cutting issues (which are gender
and climate change). These may change in the final strategy.
Current Work:
— Currently, AfDB's work in the urban sector
mostly takes place under the infrastructure and water departments
and does not have an "urban" focus as such. There are
few urban poverty or slum upgrading projects.
— The AfDB estimates that urban work accounts
for 15-20% of its portfolio, mostly in water and infrastructure.
They anticipate that the strategy, when it comes in to effect,
will increase this proportion but there is no firm target.
— There is no dedicated urban department,
and no plan to create one.
— There is a sense within the Bank that
urban issues are now getting more attention. In particular, there
is a greater focus on urban poverty.
Some projects that the AfDB has/is supporting
include:
Ghana Urban Poverty Reduction Project:
Began in 2005 and is on-going. This project is aimed at achieving
MDG 1 on eradicating extreme poverty and hunger and focuses
on economic development and job creation.
Shelter-Afrique (approved February 2009):
A USD 30 Million Line of Credit (LOC) and a USD 7.5 Million
equity investment will be provided to Shelter-Afrique. The LOC
will be used for on-lending to private real estate developers
and housing finance companies to finance housing projects and
related infrastructure services. The equity investment will strengthen
Shelter-Afrique's capital base. In addition, a Technical assistance
grant of USD 0.95 million will be provided by the ADB-managed
Fund for African Private Sector Assistance (FAPA), a trust fund
established by contributions from the Government of Japan to finance
capacity building activities. Shelter-Afrique is a pan-African
housing finance and development institution established in 1981 by
African governments, the AfDB, Africa-Reinsurance Co. and Commonwealth
Development Corporation Group (CDC), to mobilise funds and support
provision of sustainable housing in Africa.
3. UNDP
Activities and emphasis of UNDP:
— The UNDP has few activities that are
clearly linked to the urban sector. Its current Annual Report
(2008) makes little mention of cities and none at all of slums.
— Under the category of Democratic Governance:
decentralisation, local governance and urban/rural development,
expenditures from 2004-07 are reported to be USD 990 million.
— UNDP tends to channel its support through
groups like UN-HABITAT and the UN Millennium Project (which published
a report, A Home in the City. Report of the Task Force on Improving
the Lives of Slum Dwellers in 2005) and through its country
programmes.
— UNDP has a strong research and poverty
reduction/achieving the MDGs approach but it is not very strongly
or comprehensively focused on the urban sector in terms of overall
strategy. It is not known if there are any clear plans to change
this but there are no obvious signs that there are.
Some projects that the UNDP has supported in the
past include:
Philippines: A series of interventions
in the Philippines which established a citizens' watch for monitoring
progress towards achieving the MDGs at the city level. These MDG-focused
projects have raised awareness among city bureaucrats and the
citizens at large to marshal efforts towards MDG achievement.
The initiatives promoted collaboration among departments in planning
and delivering basic services to meet the MDG targets in 13 cities
across the country. These cities' laws, ordinances and policies
were improved to make them more responsive to the MDGs, human
rights and gender. The projects ultimately improved access to
public goods and services for poor and disadvantaged groups. The
success drivers included poverty profiles and development baselines
(which form the basis for setting local MDG targets), twinning
cities with local resource institutions, and knowledge-based constituency
feedback mechanisms that made the local government units more
accountable. The model has been documented and is being disseminated
throughout the Philippines. (Source: 2008 Annual Report).
Urban Management Programme: The UMP was
one of the largest global technical assistance programmes in the
urban sector. It started in 1986 and was a joint undertaking
of UNDP, UN-HABITAT and the World Bank. The programme worked to
develop and apply urban management knowledge in participatory
urban governance, alleviation of urban poverty and urban environmental
management, and facilitate the dissemination of this knowledge
at the city, country, regional and global levels. It was a ten-year
programme ending in 2006 and was primarily carried out by
UN-HABITAT.
City Development Strategies: The UMP
has implemented City Development Strategies in several cities
to further improve the capacity of municipal authorities to implement
participatory management mechanisms. These cities include Bamako,
Mali; Cuenca, Ecuador; Colombo, Sri Lanka; Johannesburg, South
Africa; Santo Andre, Brazil; Shenyang, China; Tunis, Tunisia and
cities in the Lake Victoria Region namely, Kampala, Uganda; Kisumu,
Kenya; and Musoma, Tanzania.
4. OTHER DONORS
Activities and emphasis of other donors:
Other donors identified to have a commitment
to working on urban issues include SIDA, Germany (through GTZ,
KfW and BTZ), SDC (Switzerland), AusAID, Japan, Spain and France.
The most prominent are probably SIDA, and the German government,
which tends to focus on environment and infrastructure.
SIDA (Sweden)—a strong urban poverty
focus, particularly in Africa (its work in Asia has been reduced
in recent years although it has been supporting the CDIA). SIDA
did have a dedicated urban development department but this has
been dispersed throughout other departments. According to its
own documents, SIDA's priorities in the urban sector are: urban
development; infrastructure and local services; land and housing,
and environmental sustainability but it is one of the few donors
with a reputation for also focusing on urban poverty reduction
and slum upgrading. Some projects undertaken by SIDA in recent
years include: Housing credit schemes and slum improvement programmes
in Central America, Africa and Asia; supporting sustainable urban
development in Bangladesh where the strategy for development cooperation
includes a particular urban development strategy, and a long-term
programme on housing in South African cities.
Germany (BMZ, GTZ, KfW)—German government
support to the urban sector had waned and then been revived in
recent years. Through GTZ, direct focus on the urban sector is
funneled through the Governance theme (Urban and Municipal Development
sub-theme). GTZ is a co-sponsor (with the ADB) of the CDIA. Other
themes, such as Environment and Infrastructure also relate to
the urban sector. There is not a major urban poverty reduction
approach. BMZ supports the urban sector through GTZ, KfW and various
NGOs.
SDC—the SDC's focus on the urban sector
has diminished in recent years and its activities are limited
at the moment. At one stage, it was quite actively involved in
the urban sector (through, for example, support to urban governance
in Vietnam, co-sponsoring Cities Alliance cities in preparing
City Development Strategies). Currently they have few projects
directly in the urban sector although a project in Georgia works
to build social housing for internally displaced persons, and
provide community support.
AusAID—AusAID work focuses mainly
on urban infrastructure.
Spain—Spain appears to be newly focusing on
the urban sector. They recently gave support to the CDIA.
Agence francaise de developpement (AFD)—the
AFD has a strategic focus on cities in francophone countries and
former French colonial cities (such as Hanoi and Luang Prabang).
As of a 2006 strategy document, it noted that the importance
of the urban sector was expected to increase gradually. AFD is
particularly known to support culture and heritage projects in
cities, in addition to its focus on infrastructure, environment
and services. Some examples of AFD projects include: urban upgrading
in Haiti, Cities Without Slums, Morocco and Tunis subway line
extension. They are also currently supporting a consultant to
assist the AfDB to develop its urban strategy.
Japan (JICA, JBIC)—Japan is strongly
focused on infrastructure and environment, working mostly in the
Asia region.
37 These numbers were given by an ADB urban sector
specialist but it is not known how they were calculated or what
is included as "urban". The point the ADB person was
trying the make is that both focus and funding are increasing.
The USD2 billion figure is not an official target. Back
38
An AfDB staff member kindly gave the author of this paper a briefing
on what the strategy was likely to include. The draft itself is
not being circulated outside of the Bank yet. Back
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