Examination of Witnesses (Questions 1
- 19)
TUESDAY 12 MAY 2009
MR PAUL
TAYLOR AND
MR MICHAEL
MUTTER
Q1 Chairman:
Can I say good morning, gentlemen, nice to see you again, on our
turf, not yours, this time. Thank you very much for coming to
give evidence at the start of this inquiry into poverty and urbanisation.
I wonder for the record whether you would introduce yourselves.
Mr Taylor:
My name is Paul Taylor. I am Chief of the Office of the Executive
Director in UN-Habitat. I have worked for UN-Habitat since 1997.
Mr Mutter: I am Michael Mutter.
I am Head of the Slum Upgrading Facility within UN-Habitat. I
am currently undertaking a three-year pilot programme. I am based
in the Nairobi headquarters of UN-Habitat.
Q2 Chairman:
Thank you very much for that. We are aware that last year (although,
of course, it depends whose figures you take) the world became
predominantly urban, but clearly what that is is a process of
growing urbanisation. Obviously, in many cases the conditions
in which people are living in an urban environment are very poor
and they are in a very high degree of poverty. According to DFID
the MDG 7 target to improve the lives of slum dwellers is one
of the "least known and least understood" of the targets.
Is that your take on that? Do you agree with that, and in the
circumstances, given how many people are living in these conditions,
why do you think it is given such low priority?
Mr Taylor: I think it is correct
to say that it is one of the least known targets. Quite often
when you look at reports on the monitoring of the achievement
of the MDGs you find the target on the number of slum dwellers
not even considered. The reasons for this are extremely complex,
but often it is to do with an anti-urban bias within the development
programmes of the aid-giving countries. That is something that
has deep historical roots in culture and tradition and so on,
and it is also a view that is embedded in the philosophies of
a lot of developing countries, whereby urban is bad and rural
is good, and so, although it is certainly not always the case,
the urban challenges which we are facing, and we would argue are
one of the most important challenges of the 21st century, tend
to get dropped off the agenda.
Q3 Chairman:
Obviously, your job is to push them up the agenda. In one sense—I
would not say it is controversial but it is a debatable point—the
use of the term "slum" seems to have generated some
debate in some quarters, saying that it is a pejorative term and
it does not give dignity to the people. They have dignity but
nevertheless it puts them in a box. Do you have any view about
that? Do you think it is an important discussion or not, and would
you offer an alternative expression, if that is the case, because
clearly "slum" means different things to different people?
We have just had a big movie about slums.
Mr Taylor: I can see that Michael
is itching to make a comment but I will dive in first. We have
deliberately adopted the term "slum" because it is a
term that is not ambiguous; it catches people's attention and
it accurately reflects the conditions that many poor people live
in. Yes, I think you could argue that there are some pejorative
elements to it, and I have heard that suggested, but in our view
it is an important issue that needs to be addressed and confronted
and there should be no space for pulling our punches.
Mr Mutter: Perhaps I can just
add that the best way of reasoning the term is to ask the slum
dwellers themselves. Largely what we find is that that they are
very happy to be called slum dwellers. They are happy to be known
as that group of people and a group of people that can themselves
strive towards bettering their own conditions. Governments often
do not like the term, you are quite right, because of the pejorative
nature of it. On the other hand, when trying to measure what this
is about, we are talking about very specific deprivations. We
have a formula on deprivations—on durability, overcrowding,
access to services, which are measurable on a global basis country
by country, and from that point of view it has turned out to be
very useful terminology. Coming back to the target, the other
issue is that it has got a different date for a start. It has
got 2020 on it rather than 2015 which the other targets have.
This largely came out of the last of the global conferences that
led to many of the MDGs—the Istanbul conference in 1996.
Being relatively late in that sequence, for quite a while it did
not have a very specific outcome target, and this one was put
together jointly by UN-Habitat, Cities Alliance and others just
before the 2000 global summit that determined the MDGs.
Q4 Chairman:
So that is how it came about. The target aimed at is "by
2020, to have achieved a significant improvement in the lives
of at least 100 million slum dwellers". First of all, if
it was your target, what have you done to raise the profile? We
will talk a bit more about that a bit later on, but what is the
current financing gap on that? In other words, how much do you
think it will take to deliver that target before we discuss its
relative achievability? Do you have sufficient engagement with
donors to match your requirements?
Mr Taylor: The first point we
would make is that the target is the responsibility of countries.
Those were the commitments under the Millennium Development Goals.
We assist countries but it is countries which have the responsibility
to achieve those targets.
Q5 Chairman:
Presumably you have to have enough countries with targets that
add up to 100 million?
Mr Taylor: What we would see is
that that target has been met already. We think it was actually
a relatively modest target.
Q6 Chairman:
So when you say that that has been met already what you mean is
that you have enough governments that have set a target of achieving
the improvement of slum dwellers' lives by 2020 to add up to 100
million or more?
Mr Taylor: No; I would go further
than that, that governments have already achieved the target of
100 million. The latest figures suggest that India and China alone
have done enough to improve the lives of their slum dwellers to
have met that target without the support of any other governments
throughout the world.
Q7 Chairman:
I think some of my colleagues might want to explore that in subsequent
questions.
Mr Taylor: Sure, but the point
I would also make is that the rate of slum formation is much greater
than 100 million, so you may have achieved the target as presented
but that does not mean to say that in aggregate terms you have
reduced the number of slums.
Q8 Chairman:
I think we recognise that. Does your colleague wish to add anything?
Mr Mutter: Yes, that is absolutely
right. Working on the detail with governments is far more interesting
than the broad numbers of the global position. We estimate that
it is probably more like a billion slum dwellers, 10 times the
target, that would need addressing. An even greater challenge
is preventing slum formation. Slums come and go. It is very difficult
to measure. You would have to revise your figures daily at least
in order to have accurate figures. It is more the kind of approach
that governments are taking to low-income housing, very specifically
land issues. Slums come about through lack of alternative opportunity.
Most of them are there because they are a response by hard-working
individuals to be closer to their areas of work. They take whatever
opportunities they can in developing a place to live which is
convenient for them largely to walk to work. We have got a lot
of people in those conditions, but what I would say is that in
dealing with the governments of each country there is still a
lack of recognition of the scale of the event that needs to be
addressed in terms of provision of adequate shelter for these
people and it is largely a land issue. Land use planning is not
what it used to be, shall we say. The numbers are overtaking whatever
governments are doing currently, and that is the reason for slum
formation and that is what is not being adequately addressed.
Q9 Mr Hendrick:
Clearly, the economic downturn at the moment will have had a big
impact and many of the slums have developed, for example, in China
from migrant workers who have come from other parts of China to
the cities and were probably in a job. Now many of them will find
themselves out of a job so they will not only be in slums; they
will also be unemployed in slums and many of them will have to
go back to the provinces. We are talking about improving the lives
of slum dwellers. Is it just about improving where they actually
live or raising their incomes and improving their standard of
living and work in the cities or whether they are in the provinces
which they came from?
Mr Mutter: It is complex. You
could take any of those approaches or all of them. Certainly,
the normal situation before the downturn was that there was a
relentless rise in numbers of people in some way or other, having
gained a livelihood position within a city, needing somewhere
to live and finding options of where to live difficult. What we
would say is that there is a definite link to shelter and housing
provision and the inadequacies of housing provision, but, that
said, many of the slum dwellers themselves are really looking
for just a very modest improvement in their conditions, not a
stereotyped new house for everyone but certainly the opportunity
to be near areas of work. Yes, areas of work are fluctuating now,
as we know, but very often it is just land and the provision of
some basic infrastructure that is what they are looking for. The
modesty of their shelters is something they are prepared to put
up with; their main criterion is the rental cost or the cost of
the structure that they can provide for themselves. So long as
that is kept low they are happy. If, on the other hand, slums
are replaced by relatively up-market housing relative to their
existing conditions, they face an even bigger problem of not being
able to afford to live in that place, so all of the types of living
accommodation need addressing in some form or another.
Q10 John Battle:
Could I ask about housing provision and housing finance, and thank
you for coming and welcome to what I think is the most neglected
part of the UN's work, which is UN-Habitat's. I would just say
that the report you did on slums, the brown-covered document,
was ahead of the game because we are only just waking up to the
impact of urbanisation and the point that you made earlier on
about how there is an anti-urban bias and a romancing of "rural"
by the whole world's economic thinking, in my view. Very briefly,
my experience of slums was in Korea when the Olympics were on
and people were evicted from their houses and they were promised
they could have the Olympic village afterwards but they had nowhere
to live in the meantime so they parked outside the town hall and
moved around the city for nearly five months; I was there with
them, and their main demand was, "Where will we live?"
I spent some time in São Paolo living under a motorway
bridge where our water came from an open sewer, the most dangerous
conditions I have ever lived in in my life, and our campaign there
was for water. I have also been to Khayelitsha where the biggest
campaign was for electricity. Why do I mention them? Because in
development we talk about the provision of water, schools and
clinics but we do not talk about the provision of houses. I just
wonder how much the focus is shifting onto housing provision and
housing finance. You say in your recent UN-Habitat paper that
you are concerned about the lack of donor finance to the housing
sector in particular. I do not think it is unique to the developing
world or unique to here. We talk about the shortage of council
housing in my neighbourhood but we have not got a strategy in
place to provide those houses yet, so it is an international problem.
About that finance—what is the extent of the crisis for
housing finance if there is this financial crisis that Mark referred
to and that the Chairman referred to? The situation must be getting
worse. People do have to pay some rent and in the meantime we
are putting some water in, we are putting some electricity in,
we are suggesting that people move somewhere else, but what about
addressing the issue of urban development and planning and land
use? Is housing becoming a focal part of that discussion yet?
Mr Mutter: Yes, it is, thank goodness.
What is interesting about the current financial crisis is that
it is slow to reach developing countries. The assumption that
it will have had an impact, for example, on liquidity in banks
such that they would find themselves constrained to offer loans
as part of a low income housing strategy is not the case, not
yet anyway. Certainly, with the Slum Upgrading Facility in the
part of UN-Habitat that I run, for example, in Sri Lanka and in
Indonesia, we have been able to secure loans as part of the overall
slum upgrading process from the commercial banks, Hatton National
Bank, for example, in Sri Lanka, Bukopin Bank in Indonesia, have
both been able to provide loans as expected within the structure
of our methodology for the Slum Upgrading Facility projects that
are running in each of those countries. Doubtless, as your colleague
mentioned earlier, the impact will be more on the general economy
as a result of trade imbalances, et cetera, but for housing finance
what we are finding is that there is a great deal of interest
by governments, by local governments and by the commercial banks
themselves in that there is a huge market that they have not yet
tapped into because they are afraid of moving into that particular
type of market, and what we are able to do with our work is provide
more of the kind of assurance and comfort factors, to put it in
the terms that the banks use, which are very similar to the friendly
societies' work in this country 100 years ago. There is an emphasis
on membership with savings as a starting point. There is a demonstration
not only of good faith in the process by the slum dwellers, but
also it is very straightforward to a banker. If they can see regular
payments going into a savings scheme they can see that there is
an affordability to at least part of the process. I do not pretend
it can meet all the financing but it can go a long way, provided
that there is other financing coming into the process as well.
Q11 John Battle:
And that other financing might include public investment in housing
itself. In Britain 18% is private rented and has been since 1850.
It is still 18% private rented and the variation between owner-occupation
and public renting, whether it is housing association or council
in Britain is that it is now 80% private ownership and there is
talk about building publicly-provided houses to rent again. Where
are we up to in terms of pushing for public investment in housing
or do developing countries themselves give priority to public
investment in pro-poor housing? We call it social housing for
some reason but you can see where I am coming from. I know you
said people live in modest conditions, but I am talking about
providing more units in the appropriate places, maybe near to
work or not, on the forecourt of a town hall, for example, where
people may be squatting.
Mr Taylor: I do not think it is
the case that we are proposing a greater share from Habitat in
terms of good practice. We are not generally speaking pressing
for a greater share of public expenditure in the built form, particularly
for less developed countries. We would argue that the main priorities
are land and infrastructure. It varies a little bit according
to climatic conditions, of course, but generally speaking in hot
countries the built form is less important; it is about access
to services and freedom from fear of eviction which are the most
important thing for the worst off sectors. I would add two things
to this. First of all, in countries that have rapidly growing
incomes, such as China, there is an increased capacity to provide
the built form, social housing, if you like. That is not an opportunity
that is available for the poorer countries. The government budget
provision is just not there. The second point, and this is what
Michael has been working on particularly, is that there is enormous
scope for mobilising domestic finance (private finance we are
talking about here) both from slum dwellers themselves but also
from the local markets. Michael can give you some figures on that.
Generally speaking, we see the role of government as an enabler
rather than as a direct provider. There are questions of balance,
there are question of focus, there are contextual questions, but
as a general argument that would be the way we would go.
Q12 John Battle:
What would you like to see donors doing in supporting housing?
I would be shouting at them, "Take housing seriously",
but what would you want from the donors and what would you expect
the donors to be focusing on?
Mr Mutter: I would say that there
are very good examples, such as the Community-Led Infrastructure
Finance Facility, which is through the Cities Alliance and Homeless
International in the UK and the Slum Upgrading Facility, and also
we have in UN-Habitat our experimental reimbursable seeding operations
programme. Each of those is already established. What I think
is always difficult for donors, but it is where perhaps they should
be concentrating, is looking at the longer term and providing
the degree of continuity that some of the existing initiatives
have already paved the way for and say, "Okay, now we need
10 years of money for this kind of activity". For example,
our programme does not use money directly in construction. It
does not use money directly in each of the countries. What it
does do, through what we call local finance facilities, which
we set up as hand-holding operations locally where the banks and
the government and local government and the slum dwellers can
be represented, is rather more the kind of guarantee facilities
that we need prime capital for that are then able to assure local
operations with the programmes slum dwellers want to pursue and
for that to have, as I say, a lifespan of at least 10 years so
that the initiatives can gain ground. It takes an extremely long
time locally to put a slum upgrading project together. You have
to pull in so many different local agencies that time is the most
precious resource that they are faced with as a problem, so for
donors to be able to give a degree of assurance over a longer
period of time would be really useful in these circumstances.
Mr Taylor: Could I take up a point
that the Chairman made earlier about why is urban not popular
for donors? I think generally speaking it is because it is complicated,
there are long lead times and it takes a long time to show results
because you have to play with so many factors in order to get
a result.
Q13 John Battle:
A rural clinic is easy?
Mr Taylor: Yes, whereas the pressure
on donors is always to show results—"What have you
developed on the ground? What can we see that is tangible?"
There is very little patience when you say, "It is a bit
difficult, it is a bit complicated, it is not straightforward,
there are political factors", and so on. That is why I think
it is fair to say that a lot of donors stay away. You asked me
what donors can do. We are finding a lot of difficulty in persuading
donors to address our innovative approaches to low income housing
finance. We were subjected at our recent governing councils to
extensive grilling, if I can put it that way, for even having
the temerity to propose that we should be involved in this area.
The question was posed, "Is it not rather the role of the
international financial institutions to do this sort of work?"
We said, "Yes, but they are not doing it. It is just not
happening". The bottom 40% of housing is a sort of no-go
area for finance, generally speaking, but we did not adopt the
approach, "Then let us ask for money for Habitat to retail
into the low income housing sector". We said, "What
we want to do is look at down-marketing of existing financial
instruments", and I think the credit crunch has put paid
to one or two of those. For example, we tried to look at securitisation
models in Nicaragua with Merrill Lynch. That is off the table
now, but there are various other things we can do. The point that
I would like to make is that there are excellent examples of good
experience which we then need to upscale and donor support for
that is always useful through such things as guarantees, but,
secondly, we need to innovate in this sector, and there is very
little donor support for this.
Mr Mutter: Could I just mention
one programme that DFID is bravely embracing, and that is in Bangladesh.
UN-Habitat with UNDP and UNDP finance between 2000 and 2007 undertook
a programme in 11 towns in Bangladesh and this showed very promising
results, in the numbers of families that it addressed and the
way in which it was community driven as an outcome. DFID Bangladesh
looked at this programme, did a poverty impact assessment of it,
liked the results and has boldly committed £60 million to
an upscaling of that programme to 30 towns on the same model as
developed locally by UN-Habitat and through UNDP support and with
the local government engineering department in Bangladesh, a fairly
authoritarian group of people, which at least achieved results.
The very basis of it is the community development committees that
are set up in each case. In the first round there were something
like 650 of these local community development committees, and
the outcome is very much the infrastructure side of things—pit
latrines, water supply, paved roads—that the communities
themselves have driven, and there are something like 1,500 community
contracts that were let in that first phase. The second phase
will upscale this but the real bonus of that kind of approach
is that the government could see the effectiveness of the first
phase, so that was the innovation phase, as Paul was mentioning,
but these then do need the support of donors to take them to the
upscaling level.
Q14 Mr Singh:
You have just received a record increase in your budget, about
30%. How has that come about? Does that reflect a growing interest
among donors in urban poverty and what are your priorities in
terms of spending that increase?
Mr Taylor: First of all, let me
clarify this increase in the budget of UN-Habitat. We have been
seeing biennial on biennial increases in our budget since 2000.
Just to give one indicator, for our core budget, which has the
voluntary contributions from donors, we have seen a six-fold increase
since the year 2000 from a very low base. However, our budget
is not money we are actually presented with at the beginning of
the financial cycle. It is an aspirational budget in the sense
that what we then have to do is collect that money over the two-year
cycle of the budget. In all previous years we have had between
20 and 30% increases in our budget and we have always managed
to collect that additional money. We have hit the button almost
every time. One of the reasons we are relatively generous with
our budget is that, unless we include our most optimistic projections,
if we collect money over and above that we are not allowed to
spend it because it is not included in our budget estimations.
It is therefore prudent on our part to allow for what we might
see as being the best possible scenario, and if we do not achieve
that best possible scenario we have prioritised our work programme
in such a way that we can downscale or indeed, if the worst comes
to the worst, not do particular items. I would say that the vast
majority of the money that we get in UN-Habitat is not free money
in the sense that we can use it for whatever we like. It is generally
speaking earmarked funding. DFID will say, "We like what
you do in Bangladesh", for the sake of argument, "and
we will fund that and you can only use it for that", so although
we have prioritised our work programme it does not necessarily
follow that donors will respect our priorities. They tend to follow
their own individual priorities when they give money. In terms
of what we propose to do, we have undergone a major reform exercise
within the agency where we have asked ourselves what we think
are the tough questions about where we want to be in the future,
and we have tried to address the problem that I referred to before
which is that everybody wants to say, "Show us your results.
What have you done? We do not want to hear about your activities,
we do not want to hear about the conferences you have held. We
just want to hear about what you have done on the ground",
so what we have tried to do is formulate the things we do in such
a way that they can be addressed as tangible outcomes, things
which people feel to be useful. The area that we will concentrate
on first of all is advocacy to address the issue of the low priority
that is given to urban in both government and donor development
programmes. The second area we will look at is participatory planning
and management for governance, and I would particularly want to
mention planning here because this is an area where I think major
innovation is taking place. The third area is pro-poor land and
housing. We believe that land is one of the critical levers to
secure improved housing. The fourth area is environmentally sound
basic infrastructure and services—water supply and sanitation
and so on, but with an environmental climate change element to
that, and we can come back to that later. Fifth is housing finance,
and our last focus area is excellence in management. That is our
aim, to get more effective and more efficient processes within
the agency and to have measurable targets for achieving such.
Those will be our priorities over the next biennial work programme
period.
Q15 Mr Singh:
Are you satisfied with those current budgetary arrangements where
you are not quite sure how much you are going to get?
Mr Taylor: We would like to press
for increased flexibility in order to be given more non-earmarked
funds so that we can meet the priorities of the work programme
as stated by our governing council. Quite often, because we get
individual donor priorities that are different from the overall
priorities of our governing council, we end up funding things
that are lower down our priority list than has been agreed by
our working body.
Q16 Mr Singh:
And who are the major donors and where does DFID come in?
Mr Taylor: Our major donors at
the moment for our core funding are Norway, Sweden, the Netherlands,
Spain. Those are the top-ranking ones. Coming further down the
list, number eight is the UK, which gives about £1 million
in core funding. It was at one stage, four or five years ago,
one of the major donors, I think it was even number one at one
point for UN-Habitat, but it has slipped down the list since then.
Having said that, in terms of funding for a lot of our activities
in the field, the UK is a very important partner. In 2007, for
example, in terms of money going directly to Habitat, it gave,
if I recall correctly, something like $12 million. This was mainly
to support humanitarian operations in which we are engaged in
places like Pakistan, Afghanistan, Sudan, Myanmar, those are some
of the major places, and on top of that we get money which is
not reflected in our budget because it is sourced through other
donors. For example, Michael mentioned Bangladesh. That money
goes through UNDP before it gets to Habitat and that is not reflected
in the contributions we get from DFID. Likewise, some of the money
you get for the upgrading facility from DFID is sourced through
an entity called the Cities Alliance, and that also is not reflected
directly in our budgetary receipts.
Q17 Mr Singh:
Is DFID quite reliable in terms of giving you the money it says
it will give you?
Mr Taylor: That is a question
you might want to put to DFID. Let me say that we have not received
last year's contribution from DFID. Of course, we hope to receive
it very shortly.
Q18 Mr Singh:
I hope you do. Are there any specific areas in which you would
like to see DFID develop its work with UN-Habitat?
Mr Taylor: Yes. One of the things
I would say is that we think DFID and the UK generally punch below
their weight in this particular area. It is a point I was discussing
with Michael yesterday. The UK has, particularly in terms of its
university base, a massive comparative advantage over other donor
governments. It has a large number of institutions that have a
worldwide reputation for excellence, yet what we are seeing is
that the support they have historically received from the UK Government
has been dropping away over recent years. We think there is a
lot of scope to use the UK resource base in a more proactive fashion
than we are doing at the moment. As for specific areas where we
think DFID have expertise, I think the housing area within which
Michael principally operates is one area where there is a lot
of background, not only from universities but also from NGOs,
and it is an area where we would possibly like to do more. Across
the board the UK has excellent experience in urban development,
virtually without parallel amongst other nations, so over almost
the whole range of our work programme we can see areas where there
could be additional and specific support, not just financial but
also support in expertise, from the UK.
Q19 Andrew Stunell:
It is interesting you have described DFID as punching below its
weight in this area when we are rather used to people telling
us that DFID punches above its weight, so I wonder if we could
explore that a bit, perhaps by reference to the World Urban Forum,
and I think there is a meeting coming along in Rio de Janeiro
in March next year. What sort of co-operation are you getting
from DFID? Do you think their contribution to that is punching
above their weight or below their weight? What would you say about
the World Urban Forum itself as well?
Mr Taylor: There has been a series
of four World Urban Forums up to now. I think probably the high
point of DFID's presence was at the Vancouver World Urban Forum
where I think it was very prominent in terms of making input to
the discussions and debates that took place there. At the one
in Nanjing I would say the UK was less prominent, particularly
from the Government side, in terms of involvement in the debates
that took place there. I would argue that the debates that take
place at the World Urban Forum are really pivotal in influencing
the directions which practitioners—the UN, governments—go
in the future in the area of urban development and not to be a
part of those debates means that you are some way not involving
yourself in what I would say is the quite profound intellectual
discourse that takes place there. We do not know what DFID's involvement
will be at the next World Urban Forum, which will be in Rio in
March of next year. We obviously look forward to a strong presence
there.
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