Crucibles of development

Crucibles of development


outlines issues and priorities in the developing countries

men building

Since becoming President of the World Bank last year, I have spent an extensive amount of time travelling to countries throughout the developing world. I have witnessed the many problems city dwellers face: rapid population increase, crumbling infrastructure, increasing violence and crime, growing inequalities between rich and poor, and urban services that do not reach those who need them most. But I have also witnessed a tremendous strength and resourcefulness: entrepreneurs in Katwe, Uganda, earning resources for community improvement by turning banana skins into charcoal for sale; slum dwellers in Haiti, El Salvador and Brazil working together to obtain clean water for their communities. Everywhere in the world, I have witnessed how those who live in cities convert despair into hope and improve their lives through collective inventiveness and effort.

Cities are crucibles of development. By the early 21st century most of the world's population will live in urban areas - a predicted 60 per cent by the year 2020. Since 1950, the urban population of developing countries has grown from under 300 million to over 1.7 billion, and this figure is likely to double in the next 25 years. In cities, diverse ethnic, religious and occupational groups are pressed into close proximity, and must decide how they will live together. They are the centres of global finance, industry, culture and communication; yet the modern co-exists with poverty and broken-down services. It seems inevitable that cities are where the key issues that determine national change will be decided.

Nothing is preordained. Cities contain enormous problems that could eventually overwhelm civic institutions; or they could generate ideas, the social compacts and the technologies that ensure human welfare. They present tremendous cause for concern; they contain enormous opportunities for the future welfare of the planet. Much depends on how we think and plan now for the future growth of the world's cities.

The problems facing the world's urban areas require immediate action. All those concerned with development must treat urban issues as a high priority. The World Bank has provided substantial support to cities in the developing world from its inception. Nearly 25 years ago, urban lending became a special focus of our work, and since then we have lent over $15 billion for over 250 urban projects. Many billions more have been lent in support of education, social services, power and industrial development for urban areas. As the largest international contributor to urban development, the World Bank is currently working in literally thousands of cities and towns around the globe. What do we consider to be the key issues in urban development as we approach the 21st century?

Reaching the urban poor. The central mission of the World Bank is to reduce poverty. An estimated 25 per cent of urban populations - over 400 million people - live in poverty, and this proportion is expected to remain steady over the next 20 years. The poor suffer disproportionately from failures in urban services, from water and sewerage provision to urban transport. Regulations governing land use, housing standards and economic activities often bar the poor from the opportunities that would allow them to improve their circumstances. The challenge is to raise the living standards of the urban poor and bring them into the mainstream of productive urban economies. Addressing the needs of the poor is the starting point for the design of urban projects supported by the World Bank.

dirty alleyway Building capacity for urban management. The explosive growth of urban populations places a huge strain on the ability of governments and municipal agencies to meet the needs of city dwellers. Urban growth creates demands for housing, transport, water, sanitation, power, education and health facilities. Yet public services typically lack the resources, the skilled managers, the trained personnel and the technical capability. In order to redress these problems, it will be important to strengthen the skills of both management and staff in municipal government; decentralize responsibility for community development; and utilize the private sector where it can provide urban services more efficiently than the government. The Bank has supported a highly successful effort to improve municipal services in several French-speaking African countries of the Sahel sub-region through the AGETIP programmes. Non-profit, non-governmental agencies under contract to governments execute public works programmes and other urban infrastructure projects. In Senegal, the AGETIP programme has handled 330 projects in 78 municipalities. It hires local consultants to prepare and implement all phases of these projects. An evaluation of the AGETIPs shows that they have completed projects largely on schedule and at much lower cost than government agencies performing similar work.

Making urban finance work better. Resources are scarce in the cities of developing countries. This fact is made worse by tremendous inefficiencies in the way resources are mobilized and used. For example, the poor pay water vendors many times the price of piped water in countless developing country cities. In Lagos, Nigeria, one-quarter of the capital costs of small enterprises is devoted to investments to make up for failures in the power supply provided by the state monopoly utility. In many cities, tax assessment and collection is entirely inadequate. Making urban finance work is a complex business. It will require greater accountability of local authorities in collecting and allocating resources, establishing fair cost recovery mechanisms that do not harm the access of the poorest to urban services, and reforming tax mechanisms.

Participation. The participation of those who live in urban communities has proved to be critical to the successful design and implementation of projects that improve their conditions. It allows communities to take initiative, be creative, learn and assume responsibility for their own development. Often the urban poor have learned to distrust the outsiders and government officials who arrive in their communities with plans to upgrade services. Once they are asked to play a role in the design, implementation and maintenance of such projects there is a world of difference in the results. We are making participatory approaches the norm for projects in all aspects of the Bank's work, including municipal development. Participation gets results. For example, when a Bank-funded water and sewerage project in the slums of Rio de Janeiro was failing in the early 1990s, the project team approached community organizations, and particularly women's groups, to ask for their input into design and decision-making. Once the community itself was asked to play the leading role, the project turned around and became a major success. We have found that our urban projects throughout the world are accomplished more effectively and often at lower cost when communities participate in the process.

Improving the urban environment. The rapid expansion of cities has caused major problems of noise, traffic congestion, air and water pollution and related environmental problems. In Bangkok, high lead exposure from cars has been found to reduce the average child's IQ by four points. In Mexico City, air particulate contributes to 12,500 deaths a year. In São Paulo and Accra, infant mortality and diarrhoea-related diseases are high in neighbourhoods lacking water and adequate sanitation. These and other cities will be proving grounds for our ability to deal with global environmental problems, including carbon dioxide emissions and ozone depletion. Addressing environmental problems in urban areas is a top priority in the Bank's approach to urban development.

little girl on street corner Partnership. Working in partnership with local governments, non-governmental organizations (NGOs) and other international development agencies is critical to producing strategies that work. In today's climate of decreasing support for international aid, it is all the more essential that available resources be concentrated and their use governed by well-coordinated planning involving all partners in the development process. This is the reason the City Summit meeting, HABITAT II, in Istanbul, is such an important event. It will provide an opportunity to harness the already growing collaboration among donors, NGOs and governments.

The World Bank is committed to addressing the problems of urban areas, but we know we do not have all the answers. This is why it is so important that we and other development agencies seek to learn from each other, as well as from the people who live in the communities we are trying to help. It is through partnerships involving stakeholders and donors that we will find our way forward.

The fate of urban areas could go either way: they could become human and environmental disaster areas, or they could become centres of global creativity, prosperity and growth of the human spirit. In many ways, how we approach urban development is central to the broader challenge of development, because cities concentrate all problems and all opportunities. Working in partnership, I am convinced that we can ensure that cities of the 21st century become arenas of opportunity and hope for mankind.

James D. Wolfensohn is President of the World Bank.

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