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Strategy to Meet Challenges of Asia's Megacities

SHANGHAI, PEOPLE'S REPUBLIC OF CHINA (8 May 2002): Today, about 38 percent of developing Asia's population lives in cities - some 1.2 billion people. By 2020, the proportion of urban dwellers will rise to 50 percent, with the city population reaching 2 billion. About half of these will be poor people residing in slums. This projection was made today by Warren Evans, the Director of the Asian Development Bank's Environment and Social Safeguard Division, at a press briefing during ADB's 35th Annual Meeting of the Board of Governors.

Yet Asia's developing countries are only experiencing the beginning of this remarkable shift of people and economic activity from agrarian communities to urban and industrial centers. There will be at least 153 cities in Asia with populations over one million. Eighteen of the 27 megacities - cities with over 10 million people - will be in Asia. In the People's Republic of China, the urban population has increased from 190 million in 1980 to 360 million today. By 2010, an estimated 700 million people will live in China's cities. This includes about 37 cities with populations over 1 million, said Mr. Evans, who had earlier spoken at a seminar on Megacities: Local, Regional and Global Environmental Challenges.

This transformation has been accompanied by phenomenal economic growth in many countries. However, urbanization and industrialization have also created a host of social and environmental problems, or exacerbated existing ones. A proliferation of slum areas, severe traffic congestion, uncontrolled industrial growth, poor air quality, an encroachment on natural systems, and a deterioration in public health due to water pollution, inadequate drainage, and solid waste disposal practices are the norm in major cities.

The economic impact of pollution in urban areas in terms of loss of productivity and health costs are estimated to exceed 10 percent of Gross Domestic Product in some countries. About one in four urban residents does not have access to a safe and reliable water supply while one out of three city dwellers lacks adequate sanitation services. The environmental and social issues are much more than local in importance - they have national, regional, and global significance.

The urban challenges - finance, social, and environmental - facing developing countries are alarming. What, if anything, can governments do? A recent ADB study concludes that governments must return to planned and managed growth of the urban sector.

Secondary cities need better infrastructure and other incentives to slow down growth in the primary cities which in turn have minimum investment needs to avoid environmental and public health disasters. More than likely, most of Asia's primary cities will not be pleasant places for residents in the near future and would contain large slums.

Substantial investments are needed to avoid further degradation of urban air quality and to provide adequate safe drinking water. Attention also needs to be given to moving polluting industries away from major urban centers and introducing an incentive and disincentive regime to reduce pollution emissions. Political steps are also required to resolve solid waste disposal location problems, a critical dilemma throughout the region caused by political interference and public distrust.

It is now widely recognized that the urban environment is a poverty issue and that addressing urban environmental degradation must at the same time address the needs of the poor. A key requirement is the strengthening of local government capacity. Similarly, more innovative, equitable and participatory approaches involving local communities are likely to be cheaper and more effective in serving community needs. Self-organized initiatives by local communities, as well as collaborations among civil society groups, business and local governments, have met with some success in providing public goods for the poor.

Finally, urban finance reforms are needed to increase the supply of funds, improve the effectiveness of funding, and improve resource efficiency. These reforms need to be implemented at the micro- and macro-levels. At the micro-level, the financial viability and sustainability of urban environmental services need to be significantly improved by implementing mechanisms for cost recovery. At the macro-level, the overall financial sustainability of government entities responsible for providing such services needs to be improved.

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