Catalog

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p. 8 of 26 BACK | NEXT Executive Summary I. Introduction II. The Urban Sector III. The Bank's Involvement in the Urban Sector A. Trends in Bank Lending B. Performance of Lending in the Urban Sector C. Coordination with Multilateral and Bilateral D. Lessons Learned IV. Objectives and Policy Priorities V. The Bank's Urban Sector Strategy VI. Implications for Bank Operations VII. Conclusion

Urban Sector Strategy : III. The Bank's Involvement in the Urban Sector

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A. Trends in Bank Lending

57. The Bank’s activities in the urban sector have expanded rapidly since the beginning in 1968, with the provision of 183 loans to 26 DMCs, valued at $8.08 billion.⁸ In addition, some 309 technical assistance (TA) projects have contributed to urban project preparation, planning studies, policy reforms, and institutional development. Some 95 percent of this assistance has been under the responsibility of the water supply, urban development, and housing divisions of the Bank’s agriculture and social sector departments, and their predecessors. Other divisions contributing to urban sector development have included the transport and communications, financial sector, and industry and energy divisions of the infrastructure, energy, and financial sector departments.

58. Although project loans have been the most common form of Bank intervention in the urban sector, sector loans for integrated urban projects began in 1976. Sector projects have included secondary and small town development in Bangladesh, Indonesia, Philippines, and Sri Lanka, and water supply and sanitation to small towns and villages in those DMCs and Nepal. Eleven country urban sector profiles and/or strategies have been prepared and used to address policy issues and external assistance needs, and to outline a strategy for Bank involvement in the sector.

59. Recently, the sector development program loan modality, which provides a means to combine policy-based and sector investment loans, has also been used in the urban sector. Under the Community and Local Government Support Sector Development Program in Indonesia,⁹ a policy loan is supporting the government’s decentralization reform program and an investment loan is providing funds for village and district-level subprojects. By combining mutually supportive policy and investment loans, the sector development program is able to pursue the policy objectives of decentralization, increased community participation, and improved governance while providing funds for poverty alleviation and improved basic services in poor areas. With the emphasis of the Bank on policy reforms, it is expected that there would be scope for increased use of sector development program modality in the future.

60. In addition to DMC loans and TA projects, the following Bank-sponsored regional seminars have contributed to the development of support to the urban sector in the Region: Financing of Low Cost Housing (1983), Major National Policy Issues (1987), Women and Water (1989), The Urban Poor (1991), Managing Water Resources to Meet Megacity Needs (1993), Megacity Management (1995), Urban Infrastructure Finance (1996), and the Development and Management of Cities: Establishing Networks and Cooperation (1998). The publications based on several of these seminars formed the Bank’s substantive contribution to Habitat II in 1996.

61. Other Bank efforts have contributed to urban sector activities. Manuals have been prepared for the economic evaluation of urban development and water supply projects. The Strategy and Policy Office has carried out several TAs and regional TAs on governance and municipal service delivery. One general constraint has been a lack of comprehensive information on which to base the Bank’s urban activities. However, the water supply sector has led the way in filling this gap by publishing the water utilities data books, and a similar approach is planned in 1999 for data collection on local government performance.

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