Examination of Witnesses (Questions 140
- 159)
TUESDAY 23 JUNE 2009
MR DAVID
SATTHERTHWAITE AND
MR LARRY
ENGLISH
Q140 John Battle:
Are there lessons that could be learned from India and taken across
to African policy by DFID? Is there expertise in the programmes
that they have in India that could be taken across?
Mr Satterthwaite: Yes, absolutely.
The funny thing is that the slum dwellers in Africa have learned
from the slum dwellers in India. There is this amazing exchange.
Women's savings groups which formed originally from pavement dwellers
in India have gone all around Africa teaching slum dwellers how
to save and how to give loans and how to lobby local government.
It would be nice if DFID did the same.
Q141 Hugh Bayley:
Everyone talks about a multi-sectoral approach. I would like you
to describe what you think it means and whether you think DFID
is multi-sectoral enough. Which bits of the DFID response to urban
growth in developing countries are appropriate? Where do you think
there are gaps that need to be plugged? In which sectors are DFID
strong and in which are they weak?
Mr English: Homeless International
co-ordinate CLIFF.[7]
It has been supported by the public development finance institution
section of DFID, not infrastructure. In fact that fragile thread
of urban is being kept alive by that group of individuals and
that department. Our experience of the multi-sectoral nature is
fairly limited. We have tried to get support for CLIFF from DFID
in India. We are not sure as to what the take-up is of that.
Mr Satterthwaite: Who is the most
multi-sectoral in all of this? The women's savings groups I work
with and the federations of slum dwellers. They are looking for
land, they are looking for tenure, they want to get their kids
into school, they want decent healthcare. They are pushing the
police to put in community police stations. In a sense, you need
a unique urban unit in DFID with expertise that addresses those
demands. As it learns to address those demands, so it becomes
multi-sectoral. The best upgrading programme I know driven by
a government is in Thailand. The Thai government has a national
agency that has available funding expertise and support for everything
that slum dwellers want to do, want to drive themselves, and that
means that all the upgrading programmes they do are completely
multi-sectoral. They do electricity, tenure, water, sanitation.
With this national agency supporting slum dwellers, the slum dwellers
then go to local government and say, "Okay, we need funding
for the school. We need this, we need that." If we can get
that drive from the bottom up supported, it becomes multi-sectoral.
Mr English: Slum upgrading is
the nexus of all these issues. As distinct from the city, any
one slum encapsulates education, health, all the MDGs, and so,
as I was saying earlier, if the context were that special entity,
slums or cities, they would, by confronting the issue, have to
be multi-sectoral. What would bring cogency to the activity or
the programme would be the space in which it operates. If we tackled
it city by city, that would be the entity of management To be
effective, it would need to be multi-sectoral, not just multi-sectoral
but multi-institutional. It would need to have the organisations
of the urban poor involved, much as I think some people have mentioned
participatory planning, so top-down and bottom-up at the same
time. So those are, really, the parameters for being effective
around multi-sectors rather than being multi-sectoral as a set
of programmes that you have within the institution. I think that
the spaces are important, and defining where those places are.
Q142 Hugh Bayley:
David, your image of street dwellers seeking to provide solutions
to a range of needs is compelling, but how would you reconcile
the programmes that a large, bilateral agency, like DFID, has
in particular sectors—it will have an education programme
possibly funded through the Ministry for Education; it will have
a sanitation and water programme and so on—with programmes
which are single sector programmes? You are arguing that in an
urban setting, especially, you need a multi-sectoral approach.
How should DFID or the World Bank or other bilaterals reconcile
those two ways of working in an urban setting?
Mr Satterthwaite: They have got
to start talking to the urban poor. I will give you a dramatic
example: in Mumbai the World Bank was giving a big loan to manage
sewage outfalls—$100 million—but half the city does
not have sewers. So as they began local negotiations they realised
that they actually had to divert some of this money for community
water and sanitation. In a sense, there you have got the solution.
Community water and sanitation works great but you need the water
coming in and the sewers and the drains going out. What we have
seen in cities that work with the urban poor is that the city
provides the trunk infrastructure and the community organisations
do all the messy, complex bit of making sure that all the water
connections and the sewer connections and the drainage gets built
within what is normally termed as the slum. I have seen this transform
many areas of Karachi, for instance, where the community built
the sewers, the drains and the water supply systems, and the local
authority put the mains in. I have seen it transform slums in
India; I have seen it transform slums in Thailand. There is a
good division of responsibility. You need a very competent water
and sanitation agency that just does that, as long as you have
got the population organised and the city government able to respond
to the needs of each community.
Q143 Hugh Bayley:
We saw in Lagos a redevelopment of a neighbourhood which the city
found frustrating because buses and trucks would park in the middle
of a road and create traffic jams, and which people found frustrating
because the big drain that was supposed to drain all their water
and rainfall into the lagoon was blocked and a school was not
provided. There was an attempt to bring the agencies together
but it did seem to me to be a top-down exercise run by city hall
and there was a lot of policing to make it work. If you were a
city planner talking to DFID and saying: "We need to clear
this drain, build a new school and create a bus station or a truck
park", what would you advise them to do to make it work?
Mr Satterthwaite: You begin working
where the urban poor are very well organised, and they become
your partner. In Lagos there is no federation of slum dwellers
with whom to work. Take Malawi: when the Malawi national government
began to get interested in working with the urban poor there were
these women's savings groups and the women's saving groups federated
and met each other and worked together, so that in Lilongwe or
Blantyre when the city government wanted to work with them these
women could demarcate plots, build their own homes and negotiate
with the water and sanitation agency. What we found dramatic was
that in 1990 there was only one federation in India and in 1994
there was the South African federation of slum dwellers; now there
are 20 nations with national federations of slum dwellers, all
based on women's savings groups. City government could find these
wonderful partners to work with. I know it is a silly thing to
say but in Lagos what they need is 2,000 women's savings groups
who then work together to offer Lagos city government a partnership.
Maybe they should pop down to Accra to see how it is working.
Q144 Chairman:
I think there are a lot of things they should pop down to Accra
for!
Mr English: If 50-70% of cities
are slum dwellers, obviously (I have had that situation before)
you need to have people you can work with, particularly if you
want to be effective and respond to their needs. So slum dwellers
have to be organised but it costs them to organise. The groups
that we have dealt with, as David said, start through a crisis
even—preventing eviction—starting to save, building
solidarity and building their organisation in that way. However,
I would say this: ultimately, those organisations need to understand
how the city operates and have to develop their capabilities,
which they do, particularly in Asia they do. In Africa that is
not necessarily the same situation. So getting from the women's
savings group to actually a group that responds and understands
the city they live in and is able to interact with the city around
issues which are around bulk infrastructure, transport issues,
etc, takes some time and requires investment. That is the kind
of support that CLIFF is premised on, but certainly the 15 to
20 years of building that institution prior to CLIFF—one
cannot credit DFID with that because that has come through individuals
and organisations in this country, housing associations, supporting
these organisations to form and recognising the value that they
can play in the city, ultimately. However, getting from just a
mass movement to actually being an effective player in the development
of a city takes some time and investment.
Q145 Mr Singh:
David, you said that DFID probably needs something like an urban
unit specialising in urban proverty, which is a very interesting
idea. Yes, I can see an urban unit in headquarters but I cannot
see every in-country programme having an urban unit. In the meantime,
is there enough co-ordination between different DFID advisers
and technical supporters, and whatever? Is there enough co-ordination,
at the moment, or does that need improving in the meantime?
Mr Satterthwaite: Co-ordination
in what sense?
Q146 Mr Singh:
You have said we need a multi-sectoral approach. In-country, in
terms of urban poverty, does DFID have that? Is there enough co-ordination
between the different advisers and different sectors?
Mr Satterthwaite: What we find
is there is very little urban expertise. Say, in country X there
is a good opportunity; the central government is committed, the
local government has possibilities and the urban poor are organised;
there is no one in DFID that actually will talk to them. That
is the difficulty for me; there is no knowledge, no expertise,
no commitment to address urban issues. There are exceptions: the
office in India has some very good urban specialists. In a sense,
you need this in every country. It is accepted that you have good
agricultural development specialists. Actually, in every country
in Africa, more than half the GDP is in industry and services;
in most it is 70%. In every sub-Saharan nation more than 40% of
the workforce now works in industry and services. There is no
policy for that; there is no expertise for that. Almost all the
population growth in the world in the next 30 years will be in
urban areas—how can you not have expertise amongst aid agencies?
Q147 Mr Singh:
Is there any aid agency from whom DFID could learn and get some
lessons from? Is there a model aid agency?
Mr Satterthwaite: I do not think
there is a model. The trouble is that there are very few bilateral
agencies that have taken urban seriously, as Geoff said previously.
The Swedes had a very good urban policy for 20 years and now with
the cuts in SIDA that is one of the first units to go. In Britain
some of the best urban researchers writing about development are
based here; it is not as if there is not an expertise. As I said,
even within DFID there are some very good urban specialists, including
a few of my ex-students, who are quite exceptional and outstanding.
It needs leadership at the top to say: "We're going to take
urban seriously". Then DFID can move quite quickly.
Q148 Chairman:
You are making, in a sense, quite a simple, specific proposal
that DFID should have an urban development sector or unit—whatever
you want to call it—to drive urban development both here,
in terms of policy, and in terms of strategic priority within
country.
Mr Satterthwaite: Yes, and very
much support country programmes. Yes.
Chairman: I think that is clear enough.
Thank you very much.
Q149 John Battle:
What I find so inspiring about this International Development
Select Committee is I sit here and I am regularly referred back
to my own neighbourhood, and to think positively about it. Just
listening to David, the key in my neighbourhood to tackling loan
sharks that went round the doors is a group of women that organised
a savings group called the Bramley Credit Union—wonderfully
written up in a newspaper recently—run by two women in their
70s, and it was commented that if they had been running some of
the major banks in Britain instead we might not be in the mess
we are in now. The question I want to ask you is about measuring
poverty, really, in facts and figures. It has always struck me
that a person who is poor in a rural area could survive from things
that are grown in the neighbourhood and from support from families.
But you move to a town, on to the street, and try living under
a motorway bridge with a shack that you have put together from
cardboard and old bits of wood that you have found around the
place, and your poverty could deepen immensely compared with a
rural person. How do we get donors to be sure that they are basing
their responses on accurate assessments of urban poverty? How
can we get the measures right?
Mr Satterthwaite: The first thing
is for the donors to change the way they measure poverty. In most
Asian and African nations poverty is measured on the basis of
food expenditure or food consumption and you add a little bit.
Now what you add is not calculated on how much the urban poor
are paying for keeping their kids at school; getting to and from
work—the real non-food costs. Sometimes you get these crazy
statistics—I remember there was a famous one—Kenya
has no urban poverty. I spent 20 years walking through Gicheru,
and half of Nairobi lives in some of the worst conditions you
can imagine. If you get the assumption on which you base your
measurement wrong you get the measurement wrong. The dollar-a-day
poverty line is also another measure that is disastrous because,
obviously, living costs vary. A dollar a day in rural Malawi will
get you quite a lot; a dollar a day in Mumbai or in Buenos Aires
will not get you anything at all. So, first, the donors have got
to accept that they have to change the way they measure poverty.
Rowntree did a pretty good job in York in 1902 and actually had
a more sophisticated methodology than the World Bank employs at
the moment. Having got the measurement right then you have got
to recognise that so much of what you measure does not reflect
the fact that you cannot get your kids into school; does not reflect
the fact that you cannot get on the voters' register; does not
reflect the fact that you are facing discrimination from the police.
So, in a sense, you get the monetary measure more accurate, then
you recognise that an awful lot of poverty is non-monetary. The
loan sharks, as you mentioned—you would not measure that
with a dollar-a-day poverty line.
Q150 John Battle:
Who do we get to change that agenda? There are some academics
that are working on that agenda, Homeless International, that
there should be changes in the way the statistics are measured.
Do we need to change DFID? The Treasury? The World Bank? Who do
we need to wake up to bring in more sophisticated and more sensitive
measures?
Mr Satterthwaite: The World Bank
is much the most influential agency in setting poverty lines.
Q151 John Battle:
So we need to get to them really?
Mr Satterthwaite: Yes.
Mr English: There is another aspect,
that poverty is aggregated by countries yet not by cities. So
the context of poverty within a city may be completely different
to the national aggregate. That makes it very difficult sometimes
to isolate urban poverty and urban issues from the national aggregate.
When so much aid is dependent on your national poverty status
it means that sometimes actually doing work which could be replicated
in other parts of the world—some of the work we are doing
in India; India is now regarded as a much more wealthy country
than others, but certainly in cities conditions are poorer than
some of the conditions we face in African cities. It stymies some
of the work that we are doing on poverty—the way we aggregate
data.
Q152 Hugh Bayley:
Can I pick up on the Rowntree model? At one level Rowntree was
working from a far, far better base of statistical information
on income in Victorian Britain, in that he records what the diet
of a workhouse inmate is, and of course there is no workhouse
in Lilongwe or Lagos. I am trying to relate what Rowntree did
in a laborious way in one small city to what the World Bank might
do across urban metropolises in the developing world. It seems
to me the most important parallel you could draw would be those
coloured maps that Rowntree produced of the poorer streets and
then quintile poorer streets, and so on, until you get right at
the top of a tree of the servant-keeping classes. Is that what
you would argue for in Lagos? In other words, should you do neighbourhood
surveys of income and then target development initiatives on the
areas that are poorest?
Mr Satterthwaite: There is no
point doing income surveys because no one is going to tell the
truth. You can do expenditure surveys, which are more reliable.
When Rowntree set the poverty line he accepted that there were
costs other than food, and he documented them and then made an
allowance for them. Oddly enough, when the US Government first
used poverty lines in the early-60s they took the cost of food
then they multiplied it by three, so the poverty line was the
cost of food and two times as much for non-food needs. That was
based on some pretty dodgy survey work, but at least that was
a decent poverty line. Many of the poverty lines in these nations
are the cost of food plus 10%. That 10% has to pay for rent, for
water, for sanitation, keeping your kids at school, health care,
transport. What we need to do is measure what the cost of housing,
water, sanitation and drainage is and then add that to the poverty
line.
Q153 Hugh Bayley:
When we were talking earlier you stressed the need for building
a matrix of community organisations in the slums. If DFID was
to put money into the Urban Poor Fund International, how many
people would it support per million pounds it put in? How much
capacity do you think the Urban Poor Fund International has to
ramp up its activities if it got further support?
Mr Satterthwaite: Where money
needs to go is where it is available to urban poor groups; the
Urban Poor Fund International is a great way; Homeless International
is a great way; Homeless International has probably done more
to fund the urban poor organisations than any charity in the world
in the last 10 years. You want effectiveness. Three hundred homeless
women in Zimbabwe needed $18,000 (they had been offered land on
the periphery) and no one would give it to them. They wanted a
loan of $18,000. The Urban Poor Fund International gave them $18,000,
they got the land and 2,500 people are now housed in that settlement,
and they are gradually paying back. Obviously, in Zimbabwe, with
the economic conditions, you cannot pay back, but at least there
is a recognition that that $18,000 came to help them get housing
and then, as they got housing, it should be passed on. You can
correct me if I am wrong, but in South Africa when the federation
of the urban poor build homes they build a decent, four-room home
for $2,000.
Mr English: Yes.
Mr Satterthwaite: In Malawi, when
the homeless people's federation build houses they have got them
down to about $1,500. In Thailand, where most of the upgrading
is funded by loans, apart from the purchase of the land, which
is expensive, everything else is $500 or $1,000 per person. Most
of that money is getting paid back to fund other schemes. Money
goes a very long way when it is grassroots' organisations—especially
the women's savings groups—that manage it; they use every
penny. They also have this commitment to repay to help other women
in their federation to do things.
Mr English: I think there is a
lot that makes that work. There is a tremendous amount of solidarity
that has been built up, and trust and transparency in the way
money is used. These organisations of the urban poor, these women
that manage these projects, obviously, can deliver their housing
and water—their solutions—much more effectively, much
more sustainably and much more efficiently than any outside organisation,
but it does mean investment in not just projects; it means investments
in those institutions as well to get those efficiencies.
Q154 Hugh Bayley:
What scale of resources is needed, and which particular urban
community development organisations should be supported?
Mr English: The funds that we
have received from DFID have been around the Civil Society Challenge
Fund. So the fact that we are providing funds to organisations;
those activities have been activities that have helped to develop
civil society rather than the institution, rather than that being
the aim. There is a lot of scope for continuing that kind of funding.
If I could just frame it differently, when 50-70% of the urban
population are the urban poor, the only way that city is going
to develop is to include the poor. The only way that you can work
with the urban poor is if they are mobilised; they are in groups
and those groups actually are able to manage finances and able
to undertake small projects, particularly the domestic projects.
There was a point made earlier about the role of local government.
Obviously, there is a reciprocal role. Urban poor groups do not
do bulk infrastructure, do not do bulk transport activities, but
when it comes to domestic infrastructure—housing infrastructure—they
can do that more effectively than anyone else. If we do not mobilise
50-70% of urban populations around the world we are not really
going to get anywhere near the deficit that we currently face.
So it is not just about clever techniques and clever programmes
about how to put infrastructure on the ground, it is about building
these institutions that mobilise the human resource that exists
in the world. It is reciprocal; it is about those activities,
and it is about water infrastructure, but water infrastructure
is actually helping to build civil society. These two reinforce
each other. To be honest, it is a very positive outlook for the
future of the world to actually look at what can happen in urban
areas that cannot happen anywhere else in the country.
Q155 Hugh Bayley:
Can I ask a question in a slightly different way before you come
in, David? Both of you are making a case that, first of all, you
need to mobilise the urban poor themselves because you will not
get the multi-sectoral approach that is needed unless they are
in the leadership. That in itself costs money. Then, of course,
once you have the mobilised urban poor you need funding for infrastructure,
improvements to education, and all the other components of a multi-sectoral
approach. What, in terms of resources, for the first is needed
to spread the benefits from Asia to Africa, if you like, and to
keep the growth of community organisations ahead of a growth in
population in urban areas globally? Then, what level of funding—perhaps
in proportion to the first—is needed for the actual urban
upgrading programmes which you would expect the urban poor to
fashion and craft and be consulted on and to lead?
Mr Satterthwaite: It has been
happening for 20 years, and it has not cost us very much. India
developed a national slum-dwellers' federation by itself; it developed
Mahila Milan—"women together"—this amazing
network of women's savings groups, 800,000 members. What really
helped in India was funding to allow them to try things out; funding
so that a collection of women slum dwellers could build their
own community toilet. Once they had built the toilet they negotiate
with the local government—local government is now funding
600 of these community toilets. So the external funding was quite
small; it allowed them to organise, it allowed them to meet and
it allowed them to show: "We can do things differently".
Once they get to that scale—in India—they need constant
support to allow them to keep innovating, but the actual big money
is coming from the Indian Government, from local governance. As
they develop their confidence and their capacity they will negotiate
money locally. The Urban Poor Fund International—maybe £5-10
million a year—guarantees that it can always reach the new
groups. There is a group in Madagascar that is interested and
wants to learn how they save, or there is a group in Sierra Leone
that has developed. In terms of funding for infrastructure, again,
they will get most of it locally. If I was to dream, each national
federation would have its own fund where it can draw as it needs—a
little CLIFF fund—where it has complete accountability and
transparency to DFID in everything that is funded, and complete
accountability and transparency for the women's savings groups
it serves. In this way you can then have DFID learning in each
country about the experiences in each country with a financial
institution in each country. My guess is that that could start
with $10 million and easily go up to $100 million as 25, 30 or
40 national federations come. It is pretty small money given how
many people you are going to be working with and how much you
are going to be achieving.
Q156 John Battle:
Could I, perhaps, ask Larry a bit more about Homeless International's
Community-Led Infrastructure Finance Facility (CLIFF). It is just
about their financing of it, really. I think you get funds from
DFID and from SIDA. Are they a grant and a one-off or have you
got core funding, a rolling programme, or have those expired,
and where do you see the funding coming from in future?
Mr English: The funding has expired;
it has not been completely utilised. It totals about £10
million in total—that is between SIDA and DFID. 75% of those
funds are for capital projects and 25% for the overhead of actually
sustaining these organisations, for them to employ professionals
locally, etc. So that is how the funding is made up. It essentially
capitalises a local fund in that country. There are two things
that I would like to contextualise. The story begins long before
CLIFF; the initial exchanges happened between the poor themselves.
So the people who start an organisation, who face eviction or
face the need for water and sanitation, our first intervention
would be to provide just a few thousand pounds—not just
us—for an opportunity for Kenyans to go and visit the Malawians,
or the Malawians to go and visit the Tanzanians to help them set
up their organisation. When they start implementing small projects
to demonstrate what they can do, you could add a zero, so £10,000.
When that group starts to attract the attention of local government
as to what it can do, it begins a conversation; local government
invariably provides land, it provides an opportunity: "Well,
if you know how to do that in that street could you do this here?"
So it ups the ante and they need further funds, and that means
you need to add another zero, so now you are talking, probably,
about £50-100,000 to actually do that work, and to do it
to scale. The problem was reached when the funds that were available
through statutory and through international aid were limited because
they suddenly started to, particularly in India, be able to have
the opportunity as organisations of urban poor to engage in large-scale,
city-scale infrastructure and housing development, and they need
millions. Where are they going to get that from? So CLIFF was
introduced as a way of bridging. One, we realised the institution
needs large-scale funding to demonstrate it can do it at scale,
and, two, it needs to have the credibility to be able to borrow
from banking institutions. No financial institution would lend
to an organisation like this. So that is what CLIFF has been able
to do; CLIFF has actually changed the way the organisation of
urban poor, particularly in India and now in the Philippines and
in Kenya, is viewed by government and viewed by banks; is viewed
by the physical, urban development industry, and that is where
CLIFF comes in. I just thought it is very important to understand
that.
Mr Satterthwaite: He gave you
a better answer to your question than I did.
Mr English: Can it do more? Well
we have to go through the same trajectory in other parts of the
world. The second part is DFID have actually committed to another
phase of CLIFF, and SIDA, because of the recent erosion of the
urban development sector, find it more difficult but through private
sector investment are going to continue funding. So we have a
commitment for another five years of funding in new countries.
Q157 John Battle:
Those new countries will be in Africa, will they, mainly?
Mr English: Mostly in Africa.
We also try to demonstrate something, and what has made it very
difficult is sometimes the best place could be in a country which
is a very, very poor community but has a banking institution it
is wanting to get engaged. So to test the model sometimes it is
better to test it in India or in an emerging economy, where the
poor have been left behind, than in a very poor country which
does not have a banking sector and has an unwilling government.
Q158 John Battle:
You might think this is completely speculative and quirky. I kind
of have a theory that the north-south fracture of the 20th century
will not be the one of the 21st century, and that the lines will
look very different. I just give an example of another place I
used to visit and work in, South Shore Chicago. Do you envisage
the work that you develop in India, Kenya and the Philippines
being applied in northern cities as well?
Mr English: You can hear from
my accent I have not always lived here, but I think there is a
lot that can be integrated here. In this country we refer to urban
regeneration, which is a composite of a whole range of issues:
social, economic, etc, etc. That is the same as slum upgrading.
The methodologies and the approaches that David has outlined,
if we had to adopt those particular approaches in any northern
city that has the same problems, there is a lot of lessons to
learn, which would change a lot of things. The politics of the
way we do development, certainly.
Q159 John Battle:
Just to follow that through, why cannot, then, some of the research
work that you are doing be funded by the Communities and Local
Government Department as well, here in Britain?
Mr English: I think there is a
lot of opportunity. I think the kinds of discussions we have had
through the Cities Alliance and with the Local Government Association
here is: is there a way that we could work in the same space in
Kenya, or in any city in Africa, or in Asia? It is simple on paper.
One of the things that will not be transferable is that you are
not the authority, you are a facilitator. When you are working
with urban poor you do not have all the power, and it is a different
way of working. I do think that there is a way of the housing
associations in the UK, the local government and organisations
of the urban poor in the south actually working together.
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