Welcome Remarks by
Geert van der Linden
Vice President, Knowledge Management and Sustainable Development
Asian Development Bank

At the Financing the City Session 1: Asia's Cities: Problems and Opportunities seminar

3 May 2005
Istanbul, Turkey

Honorable Mayors, Distinguished Guests, Ladies and Gentlemen:

Good morning and welcome to the three seminars today on financing the city. This first seminar, as the title says, will set out problems and opportunities facing Asian cities, identify markers for the way forward, and set the scene for following sessions, which will in turn focus on public private partnerships and new modalities at the local level for financing the city.

In the mid 1960s, at about the time ADB was established, the Region was predominantly rural in character. Asia's population was about 1.7 billion and only 320 million, or 1 person in 5, lived in towns and cities. By the mid 1980s the region's population had grown to 2.6 billion and 640 million, or 1 person in 4, lived in urban areas. The rate of urbanization continued to exceed the rate of population growth and by the mid 1990's Asia's population reached 3.1 billion and 930 million, or 1 Asian in 3 were urbanites. This inexorable trend of massive urbanization is expected to continue and it is forecast that the Region's population will reach 4 billion by 2020, with 2.2 billion, or 1 person in 2 living in a town or city.

The rate and scale of urbanization throughout Asia will pose major development opportunities as well as challenges for ADB's developing member countries, and for ADB itself, for the foreseeable future. Urban areas are important to national economies, usually contributing well over 50% of the gross national product. Cities and towns are centers of excellence for education, health care, culture, technological innovation, entrepreneurship, social services and governance.

But rapid urbanization is normally accompanied by high incidences of urban poverty; harmful environmental degradation of water, air and land; and a rapidly growing demand for infrastructure and municipal services like water supply, sanitation, drainage, solid waste management, land management and housing that can quickly outpace local capacities. Today, for example, nearly one third of the urban poor have no access to safe water and over one third do not have access to adequate sanitation.

Given the rate of urbanization, it is conceivable that in the not too distant future the absolute number of urban poor will exceed the number of rural poor in many countries. The majority of the urban poor are, and will continue to be, concentrated in Bangladesh, India, Indonesia, Pakistan and the People's Republic of China.

ADB's urban infrastructure investment comprises about 12% of our annual lending portfolio, averaging about $850 million a year during the period 2002-2004. Together with investments in "urban hardware", ADB also provided about $10 million a year in technical assistance during that period, helping governments institute reforms to support greater local autonomy and greater private sector participation, and stimulate the adoption of market based mechanisms. We expect to significantly increase our assistance to this important area, both through our public and private sector operations.

During this seminar, you will also hear of some specific lessons that have evolved from ADB's experience. You will hear from the leaders of two cities, Istanbul, the host city of this Annual Meeting, and Taguig, from the Philippines, the host country to ADB. You will hear about the business impacts of environmental laws and market opportunities for private investors.

After the individual presentations, which will be for about 10 minutes each, we will have an open forum for about 40 minutes. I look forward to your insightful comments and questions.