Crucibles of development
JAMES D. WOLFENSOHN
outlines issues and priorities in the developing
countries
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.
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.
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.
