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p. 5 of 26 BACK | NEXT Executive Summary I. Introduction II. The Urban Sector A. The Challenge of Rapid Urban Centers B. The Challenge of Sustainable Urban Development C. Dimensions of 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 : II. The Urban Sector

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B. The Challenge of Sustainable Urban Development

22. Urban development is sustainable if it permanently enhances the capacity of urban society to maintain or improve the quality of life without exhausting nonreplaceable resources or damaging the economic, cultural, or natural environment. At the same time, sustainable urban development should serve to reduce poverty while strengthening the ability of local institutions to involve and empower citizens and ensuring that financial resources are sufficient to allow replacement of assets and new investments.

1. Quality of Life

23. The quality of life in urban areas includes concepts that can be measured to some degree: freedom from hunger; capacity to live a healthy life; access to education, shelter, and basic services; and a secure and livable environment at home and at the workplace. Equally important but less quantifiable are concepts such as family stability, freedom from crime, and full involvement in the community. Rapid urbanization often disrupts the social, cultural, and religious pattern of people’s lives. For example, the tensions caused by the integration of migrants from more traditional lifestyles, and the conflicts between traditional close family relationships and the more individualistic relationships characteristic of large cities. Where whole communities become the vehicle for social, economic, political, or religious discontent cities may become flash points for unrest, as at times in Jakarta, Karachi, and Manila.

24. Urban quality of life presents a highly varied picture across the Region. In the middle-income countries of East and Southeast Asia, many cities have provided for some of their residents, at least until recently, living conditions similar to those in developed countries. In such cases, a significant middle class emerges, has increased mobility and resources, and seeks greater participation in government and action on community concerns such as the environment. Such cities are in transition from traditional quality of life risks, such as waterborne diseases and lack of medical services, to more modern risks, such as air and industrial pollution and stress-related illnesses (Figure 3). In contrast, many urban centers in South Asia are dominated by areas of poor housing, inadequate infrastructure and social services, poor transport, and high rates of illness and morbidity. Poor living conditions can also be found in urban areas in middle-income DMCs such as Thailand and the Philippines, where 20 to 40 percent of urban residents live in slum or marginal settlements. In large cities in particular, the problem of high land values is one of the biggest constraints on a poor family’s ability to acquire shelter. Quality of life indicators in selected present and future megacities are presented in Table 1.

2. Urban Poverty

25. Urban poverty—often more harsh and extreme than rural poverty—is widespread in the Region, particularly in South Asia. Poverty is not only related to low income, it involves poor health and education, deprivation in knowledge and communications, inability to exercise human and political rights, and low self-esteem; in short, a poor quality of life. Urban poverty is not precisely defined. However, based on the crude measure of a poverty line of $1 per day per person and purchasing power at 1985 levels, about 960 million of the 1.3 billion people worldwide classified as poor in 1993 lived in Asia (UNDP 1996). Experts have stated that “urban poverty will become the most significant and politically explosive problem of the next century” (World Bank 1990). In the absence of political options, urban dwellers respond to poverty by working harder, taking on multiple jobs, working longer hours, and increasing household participation (particularly women and youth) in the labor force.

26. The complexities of defining urban poverty mean that data must be used with great care. For example, the income level needed to avoid poverty will vary by urban area; local costs of living; the availability of free or subsidized education, health, and other services; access to water supply and other infrastructure; and the number and age of dependents in the household. As a result, two families in two neighborhoods of the same city, classified as having the same income, may in fact require very different income levels to avoid poverty. Simplistic definitions of poverty also ignore the deprivations in quality of life when families respond to falling incomes and rising prices by, for example, taking children out of school to earn money for the family or having one parent move to where job possibilities are better. Quality of life decreases when a family must move in search of cheaper housing. These effects are being highlighted in the current economic crises in some DMCs. Poverty reduction programs have to be widened to accommodate such diversity.

27. Households headed by women, more common in cities, are particularly vulnerable to poverty. Women generally have more limited access to education, and suffer disparities in employment opportunities and wage levels compared to their male counterparts. Women have the additional burdens of culture and tradition that can manifest in legal and social obstacles to access to land. Faced with limited opportunities and the necessity to meet basic needs, many poor women are forced into highly vulnerable and dangerous jobs in the commercial sex industry and other degrading means of employment. Additionally, domestic violence poses a serious, and largely unacknowledged, threat to women.

28. Urban poverty has many causes. Some of these are the willingness of new migrants to take low paid jobs in the city, increases in the cost of land, long journeys to work, less support from an extended family network, exposure to greater environmental risk, and greater vulnerability to changes in market conditions in urban areas. Conditions of urban poverty are worsened by the scale and speed of urbanization in many DMCs, forces with which municipal governments cannot keep pace. In a situation of scarce resource allocation, the urban poor are badly placed to compete for essential services and shelter. Biases in investments, standards, pricing policies, and institutional structures often skew services in favor of the better-off in cities. For example, access to water is generally provided unevenly among income groups, with formal supply systems being denied to poor communities who are forced to turn to water vendors and often pay much more per liter than higher income households. This is often due to unavailability of reticulated supplies to these communities or the high one-time connection fee that most urban poor cannot afford.

29. The challenge is to reduce urban poverty through a combination of approaches, a mandate given particular urgency in light of major increases in the urban poor in many DMCs affected by the current Asian financial crisis. A range of measures is being explored, including employment creation, credit for informal businesses, education and literacy training, provision of legal tenure to squatters, improved social and infrastructure services and access to shelter, and support for better human rights. This includes the right to vote in electing representative government and to organize at the community level.

3. The Urban Environment

30. Urban environmental conditions in the Region are threatened by rapid and often uncontrolled growth, inadequate and poorly maintained infrastructure, industrialization, and increasing vehicle densities. Urban areas in the region are found at all stages of the transition between traditional public health problems (e.g., poor air quality, water-related diseases, malnutrition, and lack of medical resources), and more modern health risks (e.g., exposure to toxic/hazardous substances, industrial and vehicle-generated air pollution, noise, vibration, and stress-related illnesses). In terms of air quality, the World Health Organization calculated that in the early 1990s, 12 of the 15 cities in the world with the highest levels of particulates, and 6 with the highest levels of sulfur dioxide in the atmosphere were in Asia. While the focus of environmental concerns has previously been on large cities, increasing attention is being given to secondary cities, as in Malaysia and Thailand. The environmental problems of Asian cities are well documented, such as the depletion and contamination of water resources (e.g., saline intrusion in groundwater in coastal cities such as Dhaka, Jakarta, Karachi, and Manila), rapid run-off leading to soil erosion and flooding, land contamination, air pollution, and the loss of irreplaceable natural resources such as forest reserves. Low levels of investment in wastewater management and solid waste collection and disposal result in direct discharge of wastes to surface drains and open land, leading to increasing risk of health epidemics. The economic impacts of pollution in urban areas, in terms of loss of productivity and health costs, have been estimated to range from 1-5 percent of their GDP (World Bank 1992).

31. Urban environmental improvements require institutional coordination between government departments, agencies concerned with sustainable environmental management, and private sector interests. In practice, this has proved to be difficult to achieve in DMCs. Lack of political commitment and environmental awareness and poor enforcement are also cited as major causes of low levels of investment in environmental management facilities. The institutional framework for better environmental management is further complicated in instances where interventions must address multiple administrative boundaries, such as in the case of a polluted river that flows through several municipalities. In recent years, however, there has been growing pressure on DMC governments and industries by environmental and other concerned groups to improve conditions in urban areas. Unfortunately, because of worsening macroeconomic conditions in many DMCs, environmental concerns are likely to be accorded lower priority than job creation, especially for low-income DMCs grappling with basic issues of urban poverty and public health needs.

32. To date, most urban environmental management in the Region has consisted of remedial action through infrastructure investment to clean up pollution. Often, as in the case of wastewater collection and treatment, poorer urban households can not afford such actions, and the remedial actions may not be able to keep up with demand. While the Bank has undertaken a variety of projects within a broad definition of environment, it has implemented only a few projects focusing specifically on urban environmental improvement. The difficult, but ultimately worthwhile, task is to develop preventative policies that can forestall future environmental degradation without imposing impossible financial burdens on governments. Preventative action need not be capital intensive; for example, the following can all be implemented at low costs: (i) policies to guide growth away from environmentally sensitive areas, (ii) market-based economic instruments limiting levels of discharge that force reevaluation or upgrading of production processes, (iii) development policies aimed at reducing vehicle usage, and (iv) the greater use of economic resource pricing in cost recovery mechanisms. However, given that the benefits of sustainable environmental programs and policies are often only evident over the long term, communities (and local-level policy- and decision-makers in particular) need to be convinced of the value of these approaches through awareness initiatives.

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