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Urban Sector Strategy : VI. Implications for Bank Operations
117. The continued rapid urbanization of the Region and the dominant role of urban areas in the economic health of DMCs indicate the need for further intervention and accelerated investments in institutional development, capacity building, and infrastructure and service provision. The Bank has a central role in supporting such investments and the urban strategy is designed to guide Bank actions in meeting these expanded demands. The strategy has a number of implications for Bank operations. A. Lending and Technical Assistance1. Sector Loans118. The strategy emphasis on institutional and capacity building assistance in support of improved urban governance and management will require an increasing use of sector and program sector loans. The typical DMC urban sector comprises a large number of towns and cities of varying sizes and widely varying needs and resources. While the larger cities will offer opportunities for project-type lending, in some cases involving cofinancing, many smaller towns and cities can be reached only through sector or sector program-type loans. A proactive, flexible style of operations needs to be developed. 2. Long-Term Relationships with Clients119. For the enhanced role of local governments and communities in project selection, institutional strengthening, and capability building to be effective, longer-term relationships between the Bank and client DMCs and their local governments will be required, and a longer-term and more flexible funding modality. This would provide the opportunity for continuing support for changing TA and project investment priorities as cities develop their management capacities; become more effective democratic institutions; and thus understand their weaknesses, opportunities, and priorities better. 3. Preproject Investigations and Commitment120. City governments will need to demonstrate commitment to improving their urban management procedures in order to qualify for assistance. Where multicenter urban projects are proposed, criteria for participation can encourage urban centers to compete for entry. Cities and towns should improve revenue collections, management efficiency, etc. as a precondition of program participation. In parallel, and in addition to the normal fact-finding mission, the Bank should arrange for 1-2 months of preproject investigations of public and private stakeholders on priority subsector needs, institutional arrangements, and private sector/community capacity, as a contribution to subsequent project design. Where relevant, workshops or seminars should be held. 4. Institutional and Governance Issues121. To place greater emphasis on institutional and governance issues, the Bank will require a deeper understanding of country-specific influences on project design, as part of the development of stronger national policy frameworks. The Bank should renew efforts to complete country urban sector profiles and strategies (with a 5-10 year horizon, updated as necessary), and use these to form the basis for recommending long-term partnerships between the Bank, the DMC, and cities. 5. Coordination between Programs and Projects122. While most urban sector assistance will be developed and implemented by the water supply, urban development and housing divisions of regions east and west, other divisions (such as transport and communications) will develop projects with important urban linkages and impacts. Coordination can be reinforced by project department staff working closely with programs department, and other staff to ensure that urban initiatives in a DMC are coordinated with the relevant COS and country assistance plan. 6. Urban Sustainability123. To help ensure that sustainability is achieved, performance indicators needed to measure project outputs and impacts will be identified as part of the project appraisal. This will be of particular importance in the preparation of stand-alone projects or project components dealing with institutional development, governance, and capacity building, where quantifiable indicators are more difficult to identify. 7. Involvement of Resident Missions124. Resident missions should become more involved in sector institutional development issues, particularly those related to programming and implementation, in line with upgrading of their staff. 8. Expanded Regional Activities125. To support the Bank’s program for the urban sector, regional activities should be expanded. The Bank should prepare regional TA programs on priority issues such as urban management, rather than single projects. The Bank should join programs of assistance to DMCs in cooperation with regional institutions such as the Urban Management Program for Asia and the Pacific and the UN Center for Regional Development. This would leverage the Bank’s human resources and accomplish capacity-building work at a lower cost than could be achieved by the Bank alone. 9. Flexible, Responsive Programs126. The Bank’s program for the urban sector in a particular DMC must be sufficiently flexible to enable projects to be accelerated, slowed, or even canceled depending upon the needs demonstrated and commitments shown by participating cities. Similarly, flexibility will be needed for emergency programs with an urban focus, such as the current social protection programs for Indonesia and Thailand.
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