Catalog

	Table of Contents
p. 1 of 26 BACK | NEXT Executive Summary I. Introduction II. The Urban Sector III. The Bank's Involvement in the Urban Sector IV. Objectives and Policy Priorities V. The Bank's Urban Sector Strategy VI. Implications for Bank Operations VII. Conclusion

Urban Sector Strategy

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Executive Summary

Asia's economic development over the past 50 years has been rapid, and accompanied by a dramatic increase in the level of urbanization. Asia has been particularly successful at exploiting the natural comparative advantages of its urban areas as efficient exchange points for labor, goods, services, and capital. At the same time, rapid urbanization has, in many instances, outpaced housing and service provision. With urbanization expected to surpass the 50 percent level by 2020, it is clear that the main challenges of the future will be tackled in the urban areas of the Asian and Pacific Region.

This paper reviews the causes and effects of urbanization, highlights the resulting demands for improved management and servicing of urban growth, and proposes a strategy for Bank action in the sector. Unlike other traditional sectors, the urban sector, encompassing several subsectors, is a complex development arena that includes cross cutting themes as broad as poverty reduction, quality of life, gender and development, and urban governance. Further, while measures to improve the extent, management, and operation of urban services benefit both local and national economies, urban areas are also exposed to external forces over which they have little control. The strategy must therefore be viewed as a responsive, flexible framework that can evolve to meet the varied demands of the urban sector.

The strategy highlights the operational objectives of (i) maximizing the economic efficiency of urban areas, (ii) reducing urban poverty, (iii) improving quality of life, and (iv) achieving more sustainable forms of urban development. These objectives are to be achieved through the promotion of urban sector policies for (i) encouraging good governance; (ii) improving urban management; (iii) mobilizing financial resources; (iv) reducing urban poverty; and (v) addressing urban development subsectors: water supply, sanitation, and solid waste management; land management; transport; and housing. Good governance includes the principles of accountability, predictability, and transparency, as well as policies and mechanisms for decentralization, community participation, and increased private sector involvement. The strategy highlights key policy priorities in a number of areas, which are synthesized and presented as the recommended urban sector strategy.

The urban sector strategy proposes an incremental and systematic expansion of the Bank's involvement in the urban sector in terms of the volume of lending, the range of subsectors to be addressed, and interrelationships of project components. The increasing complexity of the sector and the relative weakness of sector institutions points to the need for more careful preparation of projects, including more emphasis on institutional aspects to maximize project benefits and increase sustainability. The strategy calls for more in-depth sector analysis and focus on policy and institutional issues, which in turn requires more emphasis on capacity building, in developing member countries (DMCs) as well as within the Bank.

Adoption of the strategy will strengthen the leadership role the Bank continues to play in the urban sector in the Region, and expand the level and impact of development assistance provided to DMCs to manage the process of urban growth. By increasing support for the sector, the Bank will be able to pursue important opportunities to advance the goal of national economic development, while achieving poverty reduction and sustainable urban development in key urban centers in the Region.

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