32973 2004 Annual Report CONTENTS Unleashing the Potential of Cities 3 Realising opportunities for growth 4 Financing city investment needs 9 Focusing on the growth of cities and peri-urban areas 11 Cities Alliance in Action:TheView from the City 15 Sub-Saharan Africa 18 Asia 26 Eastern Europe and Central Asia 35 Latin America and the Caribbean 38 Middle East and North Africa 44 Learning and Knowledge Sharing 49 Emerging lessons 49 Expanding Learning Alliance partnerships 50 Partnership events 2004 51 Publications: The year in review 54 Cities Alliance Organisation 57 The Consultative Group 57 The Policy Advisory Board 59 The Secretariat 61 Financials 62 Improving efficiency and impact 62 Fiscal year 2004 highlights 63 Abbreviations and acronyms 73 Photo Credits 73 Acknowledgements 73 Cover photo: Daily market activity, Makoko, Lagos, Nigeria. © William Cobbett, 2003. Promoting theValues of Local Government was an historic year for the world's cities.The creation of United Cities 2004 and Local Governments has given rise to the first united voice for local governments within the international community. Dedicated to promoting the values, objectives, and interests of cities and local governments across the globe, United Cities and Local Governments provides a platform for a stronger role for cities in internation- al debates and global partnerships such as the Cities Alliance. On behalf of United Cities and Local Governments, we are proud to present the 2004 Annual Report of the Cities Alliance. Five years ago our founding organisations helped establish the Cities Alliance.While playing an active role in its governance, the voice and role of local authorities has steadily grown stronger in the Alliance, which is already changing the way international development agencies engage with cities and local governments. We are committed to the CitiesAlliance not only because we share a common vision, but because we believe that this partnership is helping us to promote the developmental role of local governments not just in implementing policies, but also in defining them. The international system is increasingly recognising the need to work with all actors in this process. With its forward-looking approach and clear focus, the Cities Alliance is playing a crucial role by helping cities of all sizes obtain more coherent support from interna- tional development agencies. By focusing on the future of cities and promoting the positive impacts of urbanisation, the Cities Alliance is helping mayors anticipate and prepare for growth, develop sustainable financing strategies, and attract the long-term capital investments so critical for the provision of infrastructure and other services. As mayors we have first-hand knowledge of the plight of slum dwellers.We also have the primary responsibility for improving their living conditions. Indeed, promot- ing a range of inclusive policies to improve the lives of slum dwellers is crucial for the achievement of all the Millennium Development Goals.This is why our members are committed to moving beyond sectoral approaches to development by introducing comprehensive, citywide programmes that create opportunities for all citizens. We look forward to strengthening our relationship with the Cities Alliance and its members and to working in partnership to achieve the Millennium Development Goals. Bertrand Delanoë Smangaliso Mkhatshwa Mayor of Paris Mayor of Tshwane 2 Residential housing unit, Chengdu, Sichuan, China. © Q.T. Luong/Terragalleria.com 3 Unleashing the Potential of Cities T he Cities Alliance was established to improve the efficiency and scale up the impacts of urban development cooperation and urban invest- ment. From the outset,Alliance members recognised that this meant changing how international development agencies work with cities, including creating a new coherence of effort to reduce urban pover- ty. By supporting cities in their development of citywide strategies that link their economic growth and poverty reduction objectives,the Alliance is helping to overcome the limitations of sectoral approaches to development. The Alliance has made considerable progress on several fronts. This is reflected in the endorsement of the Alliance's Cities Without Slums action plan by the world's heads of state in the United Nations "Over the past twenty-five years, our Millennium Declaration, subsequently incorporated in the Millenni- um Development Goals (MDGs). Equally important has been the re- continent has grown poorer not richer, sponse of a growing number of cities and countries that are adopting and only four countries are on track to comprehensive slum upgrading programmes, setting development meet the MDGs in 2015. On present targets, undertaking reforms to prevent the growth of new slums, and leveraging public and private resources to improve the lives of slum trends...halving poverty will require dwellers. another 100 years." Perhaps the greatest challenge still facing cities and the Cities Al- --Trevor Manuel, Finance Minister of South Africa, liance alike is that so few countries and development agencies have Welcoming Remarks made at the Commission adopted policies and strategies to promote the positive impacts of ur- for Africa Seminar, Pretoria, 2 July 2004. banisation.The need for this is both urgent and long term. Many cities suffer from the effects of genuinely bad national and local urban policies,including misguided incentives,little financial autonomy,and consistent exclusion of much of the population on which the cities depend. And given inadequate policy responses, inequality is also growing.This challenge is greatest in Sub-Saharan Africa and South Asia, where slum dwellers now make up the majority of urban popu- lations and where, not coincidentally, policies have been the weakest. Faced with the reality that managing cities and their growth con- tinues to be sidelined rather than viewed as a core development issue, 4 mestic capital more effectively.This underscores the importance of putting development priori- ties on the balance sheet and using policy con- sistency and budgetary commitment to attract stable, long-term investment--a process that can be supported through the use of sub-sover- eign financing instruments. · Recognising that both national and city-level policies need to anticipate, and be explicitly predicated upon, the growth of cities. With policymakers in denial, urban growth is cur- rently often taking place in a haphazard and unregulated fashion on the peri-urban periph- ery, which frequently results in the growth of new slums. REALISING OPPORTUNITIES FOR GROWTH Cities and towns are essentially markets, places for the exchange of goods, services, and ideas.1 How- ever,the mere physical concentration of people and firms does not guarantee a well-functioning city,let alone a liveable one. Realising cities' economic and social advantages requires good public policy and investments in infrastructure and service delivery, along with an institutional environment charac- terised by accountability. At the same time, many challenges facing cities are rooted in national, and even international, poli- Daily market activity, this year the Alliance initiated work in the follow- cy environments. If cities are empowered from Kaneshie Market, ing three strategic areas where the need for action above through supportive intergovernmental rela- Accra, Ghana is critical: tionships and from below through accountability to the local population, city leaders can create the · Encouraging both advocates and critics of urban conditions for stability and growth, including in- development to take a hard look at what cities stalling capable professionals in the local govern- can contribute to national development and to ment and involving stakeholders from local busi- identify and address cities' performance con- nesses and the community. Many Cities Alliance straints. Instead of spending more time debating partners are using city development strategies the contribution of cities to development, more (CDSs) for just these purposes. energy needs to be spent on unblocking it.The Kessides, C., `The Contributions of Urban Development to Economic 1 best way to achieve this is by engaging local au- Growth and Poverty Reduction with a Special Focus on Sub-Saharan thorities in the national policy dialogue. Africa',informal discussion paper prepared for the Cities Alliance (Washing- ton, DC: June 2004).This section and the data contained therein are drawn · Examining how cities can be proactive devel- largely from this paper. opers of urban infrastructure by mobilising do- 5 Cities are where economies modernise Sustained economic growth is always accompa- The benefits of migration nied by urbanisation, because cities are the most Studies of internal migration show that `it pays to take risks and migrate efficient locations for service delivery and produc- when looking for work' and that migration has proven to be one of the most tive growth. However, despite cities' rapid growth effective coping strategies for the rural poor.3 It is therefore critical, especially and disproportionate contribution to national out- for those populations living in rural areas and on fragile land in Africa, that put,measuring the output of city economies is dif- domestic migration remain unrestricted so that individuals can make their ficult, as few developing countries provide spatial- own location decisions. ly disaggregated national accounts. Some cities have taken steps to fill this knowledge gap by meas- In addition, remittances by urban-based migrants are both an increasingly uring their local domestic product, for example, important source of nonfarm income and spread the benefits of urban mar- the economies of Johannesburg, Cape Town, and kets throughout the country. In Karu, Nigeria, where 80 per cent of the in- eThekwini (Durban) together account for some habitants are migrants from other regions, studies undertaken in connection 50 per cent of South Africa's gross domestic prod- with the Karu city development strategy confirmed that the direct economic uct (GDP), but represent only 20 per cent of the contributions of these migrants reached 24 of the country's 36 states. More- national population.2 over, households engaged in informal sector activities sent more money An assessment of the output of industry and of home than those working in the formal sector. While the magnitude of mi- the service sector can provide a rough approxima- grants' remittances is difficult to measure, estimates suggest that it exceeds tion of the contribution of urban-based activities to other resources, such as microcredit or development assistance. In summary, the national economy, because such activities tend migrants are good for economic development. to take place in cities and towns.The contribution of industry and services to total GDP growth in developing country regions over the past three poor urban policy and the consequent low pro- years ranges from 83 per cent in Sub-SaharanAfrica ductivity in cities often prevent them from playing to 96 per cent in South Asia. this role. Improving the economic performance of cities is crucial to the reduction of rural poverty Rural areas benefit from urbanisation through the provision of alternative employment Urbanisation arising from the release of labour opportunities for rural labour and the stimulation caused by agricultural transformation is one im- of increased demand for agricultural production. portant factor connecting urban and rural areas.In- tensified, high-value agricultural production re- The informal economy contributes to quires accessible markets and therefore tends to economic growth flourish close to urban areas. Former agricultural The real story of production and growth, especial- workers, their situation changed either because of ly in Sub-Saharan Africa and in many other devel- increased farm productivity or the lack of it,are left oping and transition countries elsewhere,lies in the with little choice but to enter the urban labour informal economy. Estimates for Africa indicate market. Nonfarm employment in rural areas also that the informal economy workforce accounts for requires linkages to urban-based markets, suppliers, an extraordinary 78 per cent of nonagricultural and information. employment, 61 per cent of urban employment, In countries with limited connections to glob- and 93 per cent of all new jobs created. Figures for al markets in particular,the domestic urban market Asia and for Latin America are also significant, al- can provide a major stimulus to agriculture, but World Bank, Benin Poverty Assessment (Washington, DC:World Bank, 2003, 3 pp. 4­5). South African Cities Network (SACN), State of the Cities Report 2004 2 (Johannesburg: SACN, 2004). 6 agriculture, overwhelmingly as self-employment or What do formal sector firms say? own-account work.5 The growing evidence of the importance of the Recent investment climate surveys in Africa and Asia asked formal firms in informal economy to both workers and consumers manufacturing to identify the biggest infrastructural and institutional con- makes the case that policies should enable rather straints in their business environments. than oppose it.The informal sector's contribution Infrastructure and other productive inputs: to nonagricultural GDP is estimated to average 40 · Electricity was the biggest obstacle, cited by 65­90 per cent of firms in per cent in Sub-Saharan Africa and 31 per cent in Africa, 90 per cent in Bangladesh, and 60 per cent in Pakistan. In East Asia. However, local and national authorities often Africa, for example, 74 per cent of firms in Nairobi and 67 per cent in Dar fail to recognise the significance of these positive es Salaam have their own generators as a precaution. impacts, and the informal sector often has to sur- · Telecommunications, particularly in capital and primary cities. Firms in vive in the face of a neutral, if not hostile, policy Kenyan urban areas and outside Kampala in Uganda report losing connec- and regulatory environment. tions for an average of more than 30 hours at a time. Many informal enterprises are sensitive to con- · Transportation affects all urban areas, but especially secondary cities in straints that are within the competence of local Mozambique, Tanzania, and Zambia. In Ethiopia, domestic transport costs government to address. Indeed, local governments are eight times those in China, four times those in South Africa, and twice have considerable scope to create a more conducive those in Kenya. climate for the informal sector, which would help · Access to skilled labour, particularly in capital and primary cities, where it grow in scale and develop linkages with formal demand is higher than elsewhere. firms.But many of the problems handicapping even · Access to land, particularly in Africa, Cambodia, and China. In Mozam- large, formal firms in cities are rooted in national bique, firms pay an average of US$18,000 in fees, and in Nigeria, policies and investment.As illustrated at left, some landowners must re-register their land if they want to use it as collateral, of the assumed advantages of urban location--ac- which can take up to two years at a cost of 15 per cent of the land value, cess to services with economies of scale--are weak- excluding bribes. ened for firms in developing country cities. Institutional constraints: Cities and poverty · Corruption is the dominant concern, particularly in capital and primary Some observers take the evidence of urban poverty cities. and deprivation,often most visible in slums,as a sign · Tax administration, with little variation between primary and secondary that urban areas belie claims of economic promise cities, gives rise to problems because this is mainly a national function. and an improved quality of life.The key question is · Crime, theft, and disorder is an issue across Africa and Asia, and was whether poverty in cities is part of a healthy process cited by 80­90 per cent of firms in Kenya and in Maputo, closely followed of economic transition and mobility for the country by respondents in Zambian cities and Phnom Penh. and for households, or rather a perverse trap reveal- · Business licensing is identified as a moderate to major constraint, partic- ing dysfunctional institutions and exclusion that ularly in Maputo, Dar es Salaam, and Dhaka. prevent individuals from moving forwards. Once Source: Kessides, `The Contributions of Urban Development to Economic Growth and Poverty again, much depends on the quality of local leader- Reduction'. ship and on the policies and strategies that local and national governments adopt. beit lower (Table 1).4 For women in Sub-Saharan Cities, especially larger ones, almost invariably Africa, the informal economy represents an esti- offer higher incomes, better services, and lower in- mated 92 per cent of all job opportunities outside cidence of poverty than smaller settlements.This is Kristina Flodman Becker, The Informal Economy (Stockholm: Swedish 4 International Labour Organisation (ILO), Decent Work and the Informal 5 International Development Authority, Department for Infrastructure and Economy, Proceedings of the International Labour Conference 90th session Economic Cooperation, 2004). (Geneva: ILO, 2002). 7 Table 1. Relative importance of the informal economy in employment, selected regions (per cent) Sector of the informal Latin America economy and job creation Africa Asia and the Caribbean Non-agricultural employment 78 45­85 57 Urban employment 61 40­60 40 New jobs 93 -- 83 --: Not available. Source: Charmes, J., Estimations and Survey Methods for the Informal Sector (Versailles, France: University of Versailles, 2002). because larger urban areas provide a wider and cally overly restrict on-plot de- "Ethiopia illustrates the impacts deeper labour market, which offers people the op- velopment and under-provide of inappropriate land use portunity to earn higher incomes and gives them the infrastructure that would val- policies--the current policy of the capacity to pay for services. Moreover, larger orise land,accommodate growth, cities' density of settlement and proximity to cen- and prevent the growth of new preventing land from being tres of government mean that many services can be slums.This is compounded by the traded independently excludes provided more readily and at lower per capita costs. lack of mortgage financing and of most of the population, and only The culture and living conditions of cities also en- microcredit for progressive hous- courage reduced fertility and soften many tradi- ing development. Combined the top 20 percent of the income tional barriers to opportunity for women and oth- with disincentives for rental sup- distribution can afford plots." er marginalised citizens. ply, these deficits frequently con- --Alain Bertaud, Robert Buckley, Sumila Whether cities actually provide a ladder for es- spire to make housing expensive, Gulyani, Kate Owens, and Kevin Villani, caping poverty or dig a deeper hole for those at the even for the middle class,and rel- Real Estate Reform in Addis Ababa: Making bottom depends on two main factors:first,whether egate poor households to slum the City a Platform for Market Development, a city's potential to create jobs is liberated or is ham- housing. Executive Summary (Washington, DC: World Bank, Urban Development Unit, strung by institutions and policy conditions; and 2004, p. 2). second, whether city residents have effective access (ii) Worker mobility to land and housing, education, health care, and se- Failures in urban transport policy curity even if they have erratic incomes, few pow- seriously compromise the movement of individu- erful connections, and unrecognised status in the als, as well as the circulation of goods, thereby con- city. straining the urban marketplace. In numerous cities the poor are simply priced out of public transport. Weak legs in city economies In some cases transport costs account for almost (i) Land and housing markets half of households'expenditures,compared with an The most fundamental requirements for a produc- affordability benchmark of 15 per cent. tive urban economy include available and afford- In the capital and primary cities in Africa, peo- able land for firms and for housing and transport ple need 45­60 minutes to travel to work, which networks that promote the mobility of both goods can be more than double the time in secondary and workers. cities in the same country. In Addis Ababa, a city of In many countries, the public sector still domi- 3.6 million people, 70 per cent of trips are by foot, nates the ownership and use of urban land, yet gov- with an average distance of 5 kilometres. In Nairo- ernments often inadequately protect rights-of-way bi,where only 3 out of 22 traffic signals were work- or sensitive areas from settlement.Authorities typi- ing at the time of one study, 48 per cent of all trips 8 Figure 1. Access to land as constraint in urban centres--a cross country analysis 100 90 Moderate 80 Major 70 Bangladesh Ethiopia firms 60 of 50 centager 40 Pakistan Tanzania China Kenya Mozambique Pe Uganda Zambia 30 20 Cambodia 10 0 Dhaka cities Karachi cities Penh cities nghai cities Ababa cities pala NairobicitiesMaputo cities Salaam cities cities Lusakacities Other and Other Sha Phnom Other es and Other Addis Other Other Other Other KamOther Other Dar abad including Islam Beijing Southwest, Source: As reported in Investment Climate Surveys, M. Chakraborty (2004). Cited in C. Kessides, 'The Contributions of Urban Development to Economic Growth and Poverty Reduction with Special Focus on Sub-Saharan Africa,' p. 39. are undertaken by nonmotorised transport and the should generate a buoyant revenue base that can average walking trip is 4 kilometres. Because the fund many of a city's own needs and contribute to largest cities should be able to afford better man- the nation's coffers, yet the collection and manage- agement of roads and public transport systems than ment of local taxation is sorely neglected in many smaller cities, these figures testify to policy neglect. countries. This should be one of the primary con- The result is untrammelled use of motorised vehi- cerns of both local and national governments as the cles by upper-income groups and walking by every- urban transition accelerates. one else. Moreover, roads are often poorly designed African local governments rely more on trans- for walkers and extremely unsafe--even for cars. fers and less on local taxation than cities in other regions,reflecting in part the incomplete process of (iii) Good governance and sustainable finance fiscal decentralisation. Local governments' revenues The major indicator of a well-functioning city, as and expenditures as a share of GDP vary widely, well as its major determinant, is the quality of its from 11 per cent for the European Community to governance and its financial management. Run- less than 5 per cent for African countries, with lo- ning a city showcases local governance because the cal revenues being less than 1 per cent of GDP in linkages--for better or worse--between public ex- Cameroon and Madagascar. penditure, local public goods, quality of services, and quality of life are hard to miss. Advocates must speak up for cities City financial performance depends, in the first Because issues like city size, migration, poverty, instance, on the intergovernmental fiscal frame- crime, and other high-visibility issues often distract work, which determines a city's authority to tax national policymakers and international develop- and spend,and its access to various forms of central ment agencies, cities rarely figure prominently and tax revenues. The growth of urban economies explicitly in national growth and poverty reduction 9 strategies. Policymakers simply take the function- ing of the urban economy for granted. A notable exception is China's Tenth Five-Year Plan of 2001, which advocates increased urbanisation and active city-region interchange to stimulate rural and na- tional economic development.6 Increasingly civic leaders are making the case to national governments and the outside world about what cities can do and what they need.This year saw unprecedented progress in this regard. The much anticipated formation of a united voice and world advocate for local government was realised in Paris in May 2004 with the launch of United Cities and Local Governments (UCLG).The final declaration of UCLG's founding congress recog- nised local governments'key role in promoting sus- countries contribute substantially to national in- Busy waterfront at Phong Hiep, tainable development and contributing to the come, they rarely receive their due share of key Can Tho, Vietnam. achievement of the MDGs, including their com- city-level investments, such as water supply, waste- © Q.T. Luong/ mitment to attain MDG target 11: cities without water treatment facilities, and solid waste manage- Terragalleria.com slums.7 ment systems, despite the widespread recognition Across the globe, world leaders have recognised that urban infrastructure investments improve the the significance of UCLG in promoting the values, mobility of goods and have positive effects on both objectives, and interests of cities and local govern- economic growth and human well-being. ments.The report of the Panel of Eminent Persons Limited financial assistance from national budg- on United Nations-Civil Society Relations, ets, as well as the lumpy nature of urban invest- chaired by Fernando Henrique Cardoso, the for- ments, especially for water and sanitation projects, mer president of Brazil, which was issued by the makes long-term debt a vital option for local gov- United Nations in June 2004,8 singles out UCLG ernments. However, cities also require short-term as `an important conduit for representing people at working capital because of the mismatch between the local level in the system of global governance'. revenue and expenditure flows, thereby com- pounding the financing problem,while widespread urban poverty limits the city's ability to pay for high FINANCING CITY INVESTMENT NEEDS financing costs. To respond to their enormous infrastructure back- The availability of debt finance is a prerequisite logs and plan for future growth,cities in developing for undertaking essential civic investments. In the countries need to be proactive developers of urban long run, domestic savings through capital markets infrastructure rather than just passive providers of have the potential to be the predominant source of services.9 Even though cities in most developing credit supply, but to achieve this, cities' financing requirements for infrastructure need to be linked to State Council of the Government of China, The Tenth Five-Year Plan of 6 domestic capital markets.An initial requirement is China, Summary (Beijing: New Star Publishers, 2001). UCLG,`Founding Congress Final Declaration ,' para. 22 (May 2004). 7 for cities to become creditworthy. United Nations,`We the Peoples: Civil Society, the United Nations and For most cities in the developing world,sources 8 Global Governance,' report no. (A/58/817 (New York: United Nations, of municipal debt have been limited to govern- 2004, p. 51). Rajivan, Krishnaswamy, `Linking City Financing Needs with Domestic ments,government-owned financial institutions,or 9 Capital', discussion paper (Washington, DC: Cities Alliance, 2004).This sec- finance raised on the basis of government guaran- tion draws extensively on this paper. 10 Kowloon, China © Q.T. Luong/ Terragalleria.com tees. According to a recent estimate, governments cial debt costs are often viewed as constraining fac- or public utilities' own resources financed 70 per tors. From the city's perspective, important imped- cent of all infrastructure spending in developing iments include the high transaction costs of com- countries in the 1990s, the private sector con- mercial finance, the absence of a level playing field tributed 20­25 per cent, and official development in terms of fiscal incentives for municipal debt of- assistance financed 5­10 per cent.10 ferings, and the limited experience of lenders and However, since the 1990s, larger cities in coun- rating agencies in structuring security mechanisms tries such as India, Mexico, and South Africa have that are not based on such traditional instruments accessed capital markets to raise debt for municipal as collateral or guarantees. infrastructure based on their own credit rating The need for national-level policy actions to en- rather than on guarantees. Some smaller Indian able the creation of a new market for private capital cities have pooled their finance needs to become to finance public infrastructure in a sustainable fash- marketable. But because of demand- and supply- ion is now a pressing policy issue. National govern- side imperfections, these recent debt offerings have ments must provide a regulatory framework for mu- yet to be mainstreamed into the investment process. nicipal debt,issue transparent rating criteria,remove From the lenders' perspective, lack of a transparent fiscal distortions, and encourage tradability of debt. accounting system, near absence of collateral, and In federal countries, states can encourage municipal project revenue streams that rarely match commer- reform by adopting accrual accounting systems and cost-recovery mechanisms that acknowledge afford- UK Department for International Development 2002, cited in World 10 ability constraints, as well as by establishing bench- Bank and International Monetary Fund (IMF), Global Monitoring Report 2004 (Washington, DC:World Bank and IMF, 2004, p. 101). marks for approving loans. 11 Experience in the industrial countries empha- sises the essential role of national governments in integrating municipal needs with the domestic debt market. In developing countries, the basic elements of a debt policy framework urgently need to be better defined.An evaluation of lending to cities in developing economies reveals little uniformity with respect to lending criteria, security mechanisms, and appraisal systems.The evidence indicates that institutional debt to municipalities through central governments for investments in water and sanita- tion is often on-lent to parastatals.As a result, such guarantee-based financing has often led to low lev- els of municipal and lender involvement in the de- sign, execution, and financing of projects, with the outcome that loans are seen as impositions on the recipient community. From cities' standpoint, the FOCUSING ON THE GROWTH OF CITIES AND Urban periphery in Jakarta, Indonesia ability to demonstrate both community consent PERI-URBAN AREAS and a clear revenue stream would provide greater Of the 1.4 billion people who will be added to the voice when negotiating for increased devolution of world's cities by 2020, virtually all of them in de- responsibilities. veloping countries, approximately 45 per cent, or At the national level, a commitment to stable 630 million people, will live in peri-urbanising ar- fiscal transfers based on rational,predictable criteria eas.12 This phenomenon has a number of essential would provide an important credit enhancement features, namely: mechanism that would enable private markets to develop confidence in the timely repayment of · Migrants are increasingly settling in peri-urban debt. A clear and usable framework for both lenders areas and seeking jobs. and borrowers is an urgent priority for cities in the · Rural communities are being enveloped by ex- developing world. panding cities. From the international community's perspec- · Urban poverty rates are often higher in peri- tive, the need to invest in making domestic capital urban areas than in core cities. markets work for cities' financing needs, especially for the provision of cleaner water and the treatment This often chaotic pattern of growth produces of wastewater, is increasingly well understood.The a monumental public agenda, especially as the im- MDGs, the Kyoto Water Conference, and the portance of peri-urban areas in poverty alleviation Camdessus Report's recommendations on access to and prevention is even greater than the demo- debt by small and medium cities have affirmed the graphics suggest.Bold thinking and new policy ap- need to address the financing challenges and devel- proaches are urgently required to anticipate this op suitable work plans.11 The hope is that such a growth and focus on the economic and social op- market-making strategy would be the first step in portunities it presents, as well as to prevent the transforming municipalities into freer and more re- growth of the next generation of slums. sponsive developers of urban infrastructure. WorldWater Council,FinancingWater for All: Report of theWorld Panel on Fi- Webster, Douglas, Summary of Peri-Urbanisation:The New Global Frontier 11 12 nancing Water Infrastructure, chaired by Michel Camdessus. World Water (Enschede, Netherlands: International Institute for Geo-Information Sci- Council, 2003). ence and Earth Observation, 2004). 12 ing metropolis through a combination of location incentives and investment in key public infrastruc- ture projects that cater to industry. A new set of drivers is shaping peri-urbanisa- tion in Latin America. Because Latin American countries have already reached high levels of ur- banisation, rural to urban migration is relatively in- significant.The outward relocation of slum com- munities, often driven by land market forces, and the envelopment of smaller towns and cities, have become the principal drivers of residentially-driven peri-urbanisation. Latin American peri-urban pat- terns are characterised by the segregation of lower- income populations in more vulnerable peripheral areas away from the residential developments of the Child hawkers at The spatial pattern of peri-urbanisation is often privileged middle class.The São Paolo and Santia- Xai Xai Market, initially determined by the routes of newly built go extended urban regions epitomise this model. Mozambique highways, but little of the subsequent growth is planned or regulated. Land speculation, and land Peri-Urbanisation and Poverty Reduction grabbing by local elites are more typical. In peri- The geography of urban poverty is changing rapid- urban areas where in-migration from distant locales ly in many developing countries: in many instances is significant, such as Dar es Salaam, and where the inner city slums are accounting for a smaller per- ratio of newcomers to long-time residents shifts centage of low-income people, while peripheral radically, community building can be a major chal- areas are accounting for a higher percentage of the lenge. Often expectations of employment attract urban poor. In most developing urban regions, the more job seekers than can be accommodated or the two main demographic drivers of urbanisation are local poor are left behind. rural-urban migration and envelopment, in which city growth expands outwards, capturing rural Peri-Urban Variants communities. In Africa, peri-urbanisation is often driven by mi- Yet we know little about urban poverty dynam- grants seeking better options in the face of agricul- ics in these peripheral areas, and at the national, tural unemployment, as well as of conflict, resettle- provincial, and local levels, policy frameworks to ment, and insecurity in some rural areas. maximise the poverty fighting potential of peri-ur- Agricultural employment, including market gar- ban areas are virtually nonexistent. In general, poli- dening and urban agriculture,along with the infor- cies stress poverty alleviation at the expense of mal economy, remain as significant sources of work poverty prevention. for migrants to African peri-urban areas. Poverty reduction in the developing world's ex- Peri-urbanisation in the emerging economies tended urban regions should be based on a realisa- of Asia, especially Southeast Asia and China, is tion that largely investment induced, even away from coastal areas in large urban regions in the interior, such as · Peri-urban areas need to be incorporated into Chongqing, Chengdu, and Wuhan.This model is local and regional planning frameworks. based on labour-intensive, mass assembly, export- · Many migrants to urban regions fall into pover- oriented industrialisation. Public policy typically ty because of insecure tenure and poor access to encourages industrial investment outside the exist- transport, information and employment. 13 · Envelopment processes may lower the standards dents to access larger employment and housing of living of those enveloped. markets. It also means ensuring that those who are enveloped do not lose their assets,particularly land, Current static approaches to urban poverty al- without adequate compensation. Land markets in leviation need to be rethought. Policymakers need peri-urban areas,which are all too often controlled to pay more attention to anticipating flows by by elites and those with political connections, will those trying to escape rural poverty who poten- need to be rationalised and made transparent so tially become additional urban poor.This means that both residents and the private sector can pur- accepting and anticipating urbanisation by sup- chase land and provide affordable housing.With- porting peri-urban migrants'access to information out new thinking and policy approaches, the next networks, employment, and skills training. It re- generation of slums will continue to grow on the quires access to land and to affordable, rapid public periphery of urban areas throughout the develop- transportation systems to enable peri-urban resi- ing world. Can Tho, Vietnam © Q.T. Luong/Terragalleria.com Satellite Image of Kibera slum settlement, Nairobi, Kenya 15 Cities Alliance in Action TheView from the City S ince its inception, the Cities Alliance has grown by learning from cities and by helping cities learn from each other.To date, its activities have involved almost 150 cities worldwide.This year it benefitted from an internal evaluation of completed Alliance-supported activi- ties that involved both slum upgrading and CDSs.The activities eval- uated included most of the Alliance's first generation of activities, many of which were approved within the framework of its 2000­01 work programmes. While each activity has its particular unique features and has gen- erated its own lessons, the evaluations identified some common themes.The exercise underscored the importance of examining the kinds of development challenges facing cities from the perspective of cities and their citizens. All the evaluations reinforce the central importance of city and country leadership for sustaining and scaling up the impacts of devel- opment. Accordingly, the Alliance has moved purposefully to pro- mote initiatives owned,generated,and designed by cities,with consis- tently positive results: there is no substitute for the clarity with which the mayors of cities like Addis Ababa,Amman, San Fernando, and São Paulo have set their own developmental priorities. Despite the continued expansion of processes of democratisation and decentralisation,national governments are often still markedly re- luctant to share their developmental responsibilities with local gov- ernments,leading to a mismatch between the risks local governments face and their responsibilities.Those national governments that still prefer to treat local governments as administrative extensions of the centre rather than as autonomous, but complementary, parts of a sin- gle, integrated system lose all the benefits of leveraging innovation, sharing responsibility, and demanding accountability from local gov- ernments. Even from the limited analysis of our own evaluations, what is striking is the extent to which basic failures in the engine room of 16 government--policies, institutions, procedures, and administration--contribute directly to the under- development of cities, the perpetuation of slums, and the creation of a political and social underclass. The same policy failures constrain slum dwellers' natural inclination to improve their own lot and act as a strong disincentive for private sector investment. This is compounded by national governments' and international development agencies' common fail- ure to acknowledge the importance of urban growth and city inclusion strategies as an integral component of national poverty Zahedan slum, Iran, near the Afghan border "[I]ssues of slum eradication, urban reduction strategies.The risks of this failure include perpetuating upgrading, and regeneration-- social exclusion, economic stag- Not surprisingly, the evaluations reinforce the all the elements that make up an nation, and decline. importance of mobilising the resources of all part- approach to poverty reduction and The importance of a positive ners at the local level:those of the city government, vision and policy framework for the domestic private sector, and the poor urban form the basis for formulating a urban development was sharply communities.This is a simple and seemingly obvi- Cities without Slums program-- evident in the work the CitiesAl- ous lesson,but one that is not always heeded.While will logically be identified as in- liance supported with the World each party could undertake activities in isolation vestment priorities under the City Bank and UN-HABITAT in and push ahead according to its own agenda, few, if three cities in Central America: any, examples exist of large-scale, successful, and Development Strategy." Tegucigalpa, San Salvador, and sustainable development activities that did not in- --Asian Development Bank (ADB), City Panama City. As the report on volve complementary efforts on the part of all local Development Strategies to Reduce Poverty the activity notes, the starting constituencies. (Manila: ADB, 2004, pp 4­5). point for comprehensive change The evaluations and many ongoing activities lies with government: `The ur- within the Cities Alliance portfolio demonstrate banisation process will continue to pour hundreds of the interconnections between slum upgrading and thousands of generally poor people into towns and poverty-oriented CDSs.This is particularly the case cities--local and national governments accepting in those cities in which a large proportion of the this as a fact, and as a precondition for further social population already lives in slums. In such cases, a and economic development, can provide the basis citywide upgrading strategy is implausible without for policy development'.13 In short, a policy frame- a fundamental rethinking of how the city is being work that actively promotes social inclusion is a fun- run, and the Cities Alliance's two platforms neces- damental prerequisite for sustainable development. sarily merge into a single, citywide strategy. Yet solutions are not necessarily either difficult This kind of rethinking is clearly the case for or complex. Seeing Ismailia's residents responding the strategies adopted in São Paulo,Hyderabad,and positively to one of the first comprehensive partic- Johannesburg and those now emerging inTetouan, ipatory planning processes in Egypt and investing Lagos, and Mumbai, where slum upgrading is but their own time and money in the city's future is in- one of a number of reforms that are being addressed structive. as part of a longer-term, citywide strategy. Notwithstanding which entry point is used, World Bank, Urban Services Delivery and the Poor:The Case of Three Central 13 Cities Alliance activities are highlighting the im- American Cities, vol. 1, Report no. 22590 (Washington, DC:World Bank, 2002, p. iii). portance not just of the policy framework and the 17 institutional arrangements that operate at the local and residents alike to take a longer-term view and government level, but are increasingly emphasising invest in both their own and the city's future. Local the issue of a sustainable financial strategy, both in governments can contribute to this climate by pro- terms of a city's budget and in terms of investment. moting a rules-based economy with transparent While an important and catalytic role for interna- and participatory decisionmaking processes that tional assistance and investment often exists, the lead to stable and consistent policies, investing in main focus of city managers should be on mobilis- infrastructure, maintaining a fair and efficient ad- ing domestic capital. ministration, supporting a commercial environ- The evaluations of a number of CDSs highlight ment, and using the city's resources to the advan- both the difficulty of and the need for local gov- tage of all citizens. ernments to create conditions that help investors "Municipal governments play a Figure 2. The CDS and CWS processes interrelation key role in managing the local conditions for private sector CDS Development CWS program preparation of key sectors preparation development. They establish the governance frameworks and Preparation Preparation practices. They play a leadership DATA ANALYSIS DATA ANALYSIS role in community development, City Profile Poverty/Slum Profile and KEY SECTORS Mapping managing and administering Sector Themes Statements · Local Economic Development City Profile Review · Poverty, Housing, Social Inclusion the local business environment, · Environmental Degradation Poverty Sector Review Targets, Forecasts · Geographical Constraints Comparative Analysis purchasing and delivering goods · Infrastructure/Services State of the City Report · Transport SHELTER NEEDS ASSESSMENT and services, enabling integration · Governance and Management · City Finance and Resources S-W-O-T Resource Analysis · POVERTY REDUCTION facilitating equity and building CITY DEVELOPMENT STRATEGY CWS Program networks and policy frameworks." 10­15 years (10­15 years) --Yves Ducharme, President of the Federa- Vision/Mission/Objective Objectives/Targets tion of Canadian Municipalities, in his Preferred Strategy CWS PHASE 1 PROGRAM cover note to Municipal Role in Private (3­5 years) Sector Development, Policy Paper Series INTEGRATED DEVELOPMENT no. 1 (Ottawa: Federation of Canadian PLANS/INCOME EXPENDITURE CWS ACTION PLAN/ FRAMEWORK (3­5 years) Municipalities, 2004). IMPACT PROJECTS (1­3 years) BUSINESS PLANS/BUDGETS (1­3 years) Design Implements Implement Monitor/Evaluate Monitor/Evaluate Legend Main CDS/CWS Program Preparation Process Important CDS/CWS Linkage Linkages between ongoing CDS/CWS Program Process and Key Sector Studies/Review Review feedback CWS: Cities WIthout Slums S-W-O-T: Strengths, weaknesses, opportunities, and threats Source: Asian Development Bank (ADB), City Development Strategies to Reduce Poverty (Manila: ADB, 2004, p. 23). 18 Sub-Saharan Africa Alexandra township, South Africa ot only is Sub-Saharan Africa the poorest region in the world, N the number of people living in extreme poverty, that is, on less than US$1 a day, has nearly doubled during the past two decades, ris- ing from 164 million in 1981 to 314 million by 2001.14 As noted in a recent UN report,`Seen from the point of view of development,Sub- Saharan Africa is not just failing to converge with other regions: its decline is absolute'.15 Sustained economic growth is unlikely to make much progress without increased investments in the social well-being and education of the population,as well as the promotion of policies that provide for the absorption of surplus labour into manufacturing, services, and in- formal private sector activities. Achieving this will require a signifi- World Bank, World Development Indicators 2004 (Washington, DC:World Bank, 2004). 14 United Nations Industrial Development Organization (UNIDO),Industrial Development Report 2004: 15 Industrialization, Environment, and the Millennium Development Goals in Sub-Saharan Africa (Vienna: UNIDO 2004, p. xv). 19 cant change in the attitude of many African gov- ernments, which will need to recognise that long- Cities' influence on national policy term national economic growth--as well as re- formulation duced rural poverty--will increasingly and inexorably depend on the efficiency of urban areas, The South African Cities Network (SACN), which the and that economic growth and investment will be Cities Alliance has been supporting since the network's achieved largely as a result of the interest and drive launch in October 2002, had an exceedingly produc- of the domestic private sector. tive year, with its work resulting in two particularly How can African cities help promote a frame- fruitful outcomes. work for good governance that respects and pro- Its highly acclaimed State of the Cities Report 2004 motes the rights of their citizens and attracts in- reflects how by structuring its work programme around vestment? Some hopeful signs have emerged over CDSs and developing indicators to measure city per- the past year that point towards an emerging formance and development, the SACN has established framework within which cities' economic and so- an analytical framework that is serving its nine mem- cial potential can be more fully developed.At the ber cities, as well as the national government, in terms end of 2003, during the Africities Conference, the of deepening the understanding of the role of cities in three African local government organisations, the the national economy and poverty reduction. African Union of Local Authorities (AULA), the Unao do ciudades y capitais lusophono Africana As a knowledge-sharing organisation, promoting (UCCLA), and the Union des villes africaines strategic thinking by cities and various spheres of (UVA) merged to form the Council of Cities and government, the SACN is demonstrating its unique Regions ofAfrica (CCRA).Headquartered in Ra- ability to link national and local governments in work- bat, the new body will bring the African dimen- ing on key policy areas. sion to the agenda for cities being forged by Another key area where the SACN is contributing to UCLG. national policy dialogue is housing and slum upgrad- The New Partnership for Africa's Development ing. As the government pursues its goal of `moving to- (NEPAD) has also moved swiftly to recognise the wards a shack-free society', the SACN is collaborating importance of cities. With the assistance of the with the Department of Housing on the development United Nations Human Settlements Programme of a national strategy for upgrading informal settle- (UN-HABITAT),NEPAD has launched a cities fo- ments. Indeed, in her budget speech to the National rum.The forum held its inaugural meeting in Lagos Assembly in June 2004, Minister of Housing Lindiwe in May 2004,at which NEPAD recognised the roles Sisulu referred to the SACN's State of the Cities Report, that cities can play as engines of economic growth underscoring the impact of the network's contribution: and as vehicles of economic integration in Africa.16 `The difference now is that we are not dealing with in- The recent publication by the South African Cities tent, we will now be operational. There will be visible Network, State of the Cities Report 2004, sets a wel- results within the timeframes we set ourselves'. come standard and demonstrates the importance placed on urban areas in that country. The Cities Alliance has continued making out Slums Facility for Sub-Saharan Africa.The Fa- modest but important progress in Africa,greatly as- cility has provided assistance in Lagos,Addis Ababa, sisted by the support that Norway, Sweden, and Johannesburg, Mbabane, and Ghana's Kumasi re- USAID have provided to theAlliance's CitiesWith- gion and has given Alliance members an opportu- nity to offer essential preparatory assistance to a Communiqué issued at the end of the First NEPAD Cities Consultative 16 number of other cities. Forum, Lagos, 10­12 May 2004. 20 in 2015, and suffers from decades of neglect and LAGOS: PLANNING CITYWIDE SLUM underinvestment.Yet, as the commercial capital of UPGRADING the country, its economy is vital to that of Nigeria, contributing more than 60 per cent of Nigeria's non-oil GDP. Working with the World Bank, the Cities Al- liance has provided a modest grant to the Lagos state government, which has been one of the pio- neers in introducing reforms at the state and local levels.Within the framework of these reform activ- ities,theWorld Bank has been supporting the Lagos state government in the development of a multi- sectoral strategy for economic development and poverty reduction.With a clear and consistent focus on improved governance, this strategy comprises the following elements: Nigeria is the most populous country in Africa and · Institutionalising participatory processes; is also home to its largest city, Lagos.The national · Upgrading slums citywide; annual urbanisation rate is an extremely high 5.5 · Creating an enabling environment for private per cent, and projections suggest that Nigeria will sector investment; be 50 per cent urban by as early as 2007. Most of · Reforming land management and planning the population is extremely poor:estimates indicate practices and preparing for future population that about two-thirds of the population,or some 80 growth; million people, survive on less than US$1 per day. · Reforming public sector management; Indeed,Nigeria's poor account for 6 per cent of the · Monitoring the impact of expenditures to im- world's poor. prove accountability. The democratic government is grappling with an onerous legacy arising, in part, from decades of An important outcome of the policy dialogue military rule and mismanagement that still impede has been the Lagos state government's commitment development and progress.Transparency Interna- to adopt a citywide urban upgrading approach to- tional ranks Nigeria as the second most corrupt wards its slums in a move away from the demoli- country in the world.The federal government and tion, removal, and renewal approach that charac- civil service are extremely large, with the staff pay- terises many other cities and countries.The World roll accounting for an extraordinary two-thirds of Bank expects to support the improvement of living federal government expenditures. conditions in the Lagos slums through investments Nevertheless, the government has made some in basic municipal services. progress in instituting basic reforms, including im- provements in economic stability. It has also made some headway in the fight against corruption and SLUM UPGRADING IN NAIROBI: in improving government accountability.In its 2004 A DIFFICULT ROAD budget, two-thirds of capital expenditures are di- Nairobi has taken the initiative to upgrade its slums rectly related to the achievement of MDG targets. through the citywide Collaborative Slum Upgrad- Lagos is one of the fastest-growing cities in the ing Programme, which the government intends to world, with an expected population of 25 million 21 · A history of poorly implemented and incom- plete upgrading projects has made the residents of slum settlements sceptical.They do not, as yet, believe that this time the outcome will be any different. Policymakers have to strike a bal- ance between raising unrealistic expectations and dampening hopes yet again, which is per- haps the project's greatest challenge. · The population density of around 2,000 people per hectare makes comprehensive, in-situ up- grading extremely difficult.A process of reduc- replicate nationwide.The Nairobi City Council is ing population density is likely to be necessary, implementing the programme with the assistance but this will need to be achieved with the sup- of UN-HABITAT, which has its global headquar- port of the slum dwellers themselves. ters in Nairobi. The Ministry of Roads, Public · The issue was compounded in early 2004 by Works,and Housing has established a secretariat for controversial demolitions undertaken by the the national programme, and to ensure inclusive- government that were only suspended after an ness and act as a forum for contributing ideas, a international outcry.These demolitions dam- stakeholder support group has been established that aged the credibility of those involved in the includes development partners, nongovernmental programme and increased both people's scepti- and civil society organisations, the private sector, cism and the population density. and relevant government institutions. · The issues of tenure security, land market trans- Nairobi's Collaborative Slum Upgrading Pro- parency, and tensions between structure owners gramme commenced in Kibera, one of the city's and tenants still need to be resolved,even though 199 slum settlements. Kibera is a high-density, all of Kibera is on government-owned land. sprawling slum that consists of 12 villages and spreads across approximately 250 hectares in south- On a positive note, the involvement of as many western Nairobi.Home to more than 500,000 peo- stakeholders as possible is making some difference ple, it is one of Africa's largest slum settlements. in addressing the various issues.The Nairobi Infor- Kibera's residents live in conditions of extreme mal Settlements Coordination Committee, which poverty.They lack basic physical and social infra- has a track record of involvement in these slums has structure and have little or no formal security of provided critical support, while collaboration with tenure.Garbage and human waste are littered every- theWorld Bank'sWater and Sanitation Programme where, and residents live in houses made mostly of has generated vital data and information. mud and wattle or of corrugated iron.In addition to The most tangible outcome expected from this high unemployment and illiteracy rates among Kib- phase is a clear implementation strategy for up- era's residents,the incidence of HIV/AIDS is among grading the 12 villages in Kibera--a strategy that the highest in Nairobi. should have the support of all the major stakehold- In starting with Kibera, the City Council and ers and, most critically, the support of the slum the government are hoping to demonstrate what is dwellers themselves.This strategy will be the first possible in the most difficult and notorious of citywide strategy in Kenya to have been generated Kenya's slums. Notwithstanding the government's with full participation by all stakeholders: the na- public commitments to the upgrading programme, tional government, the local city government, the a number of significant challenges have yet to be affected residents, and the private sector along with overcome.These include the following: nongovernmental organisations (NGOs), commu- 22 nity-based organisations, and other development taking the lead in signalling its commitment to pro- partners.The focus is now moving to the mobilisa- viding budgetary support for slum upgrading. tion of investment partners, with the government Uganda: ACCION International Partner, the Uganda Microfinance Union Makes Its First Housing Loan on the first loan, he was informed that UMU was about to introduce home investment loans. Specifically designed for home improvements, the loan of- fers terms of up to 18 months, 6 months longer than for business loans. Even though the loans depend on a de- tailed evaluation of the client, the UMU does not require a mortgage, but clients do have to provide household goods as collateral or a guarantor. Home improvement loans carry lower interest rates than enterprise loans, but longer terms and larger amounts allow the UMU to cover its costs. Before the home improvement loan was launched, Tom had been contemplating selling his furniture and other Tom Kikonyogo's compound is littered with construction household valuables and cutting down spending on basic materials: sand, stones, and planks. In March 2004, Tom necessities. `I was already stuck and worried', recalls Tom. became the first client to obtain a home investment loan `I badly wanted a lump sum to complete my units and pro- from the Uganda Microfinance Union (UMU), an ACCION vide decent accommodation for my family'. The introduc- International partner microfinance institution, to complete tion of the loan was a huge relief to Tom. Had he financed his house just north of Kampala. the construction from his own resources, it would have been disastrous for his family. Tom was the first home im- Tom, age 31 and the father of two--two-year-old Esther provement loan client to register, and he made his first and five-year-old Eric--had rented out their family home loan repayment on time on 1 April 2004. to a road construction company to bring in some much needed extra income. This meant squeezing the family into Since Tom took out the loan for U Sh 3 million (US$1,667), two unfinished rooms with bare mud floors, no electricity, his family's life has changed for the better. The rooms in and no water. his home have been wired and the family now has electric- ity, while the new ceiling cools the house. At the same Working as an attendant at a nearby inn, Tom's meagre time, Tom adds, his children are not starving. salary prevented him from completing his family's home. A guest at the inn had told him about the UMU, which he Tom is using part of the loan to build rooms to rent out, joined in November 2003, taking out an individual busi- which, Tom proudly notes, he has already succeeded in do- ness loan that he diverted to fix the doors and windows of ing. Once all the units are fixed, Tom expects his income to his house. However, his funds were insufficient to complete increase and looks forward to sending his son Eric to a his dwelling. As Tom was about to make his last payment better school. 23 (continued from previous page) The Uganda Microfinance Union currently offers its hous- The following lessons are already emerging from ACCION's ing investment loans at its Bombo and Kajjansi branches. experiences with housing finance: Support from the Cities Alliance to ACCION International · Housing microfinance is a more appropriate lending enabled the Uganda Microfinance Union to develop the methodology for serving the housing finance needs of housing investment loan product to expand housing fi- the urban poor than traditional mortgage lending. nance in Uganda. Working simultaneously with partners · Housing microfinance programmes can be integrated Banco Solidario in Ecuador and SOGESOL, the microlend- into MFIs' existing microenterprise finance operations ing arm of SOGEBANK, in Haiti, ACCION is working to without any adverse effects on the quality or growth of scale up housing microfinance for the poor. their existing portfolios once credit staff have mastered Beyond the development of new housing programmes with the new product. these partner microfinance institutions (MFIs), ACCION · MFIs' existing loan officers can be trained to offer hous- is closely examining the legal, financial, and regulatory ing loans without having negative impacts on their pro- environments that promote or discourage the provision of ductivity. housing finance for the poor.17 It is also working to develop · Needs for technical construction assistance, such as mechanisms for MFIs with growing housing portfolios to drawing plans, estimating construction costs, and super- access stable, medium-term sources of funding to finance vising construction labour, vary from person to person; their growth. Adding housing loans to an MFI portfolio however, providing a wide range of technical advice is dominated by working capital credit leads to larger average costly for MFIs, reduces staff efficiency, and does not loan sizes and terms. As an MFI disburses more housing lead to higher standards of quality in the constructions loans, this situation becomes more acute. financed. · Tools for estimating construction budgets are effective 17For more information about the experiences of ACCION International and in controlling building costs and in ensuring that loans its partner MFIs, see www.accion.org. meet clients' needs. After more than 21 months of intense preparation FROM VISION TO ACTION: BOBO-DIOULASSO and discussion among local and national stakehold- PREPARES TO IMPLEMENT ITS CDS ers,the mayor of Bobo-Dioulasso,a city of 300,000 inhabitants, has launched the city's Local Econom- ic Development Charter, which sets out a vision for re-establishing Bobo-Dioulasso and the sur- rounding region as the economic and industrial heart of Burkina Faso. Participants at an April 2004 workshop run by the city were surprised to learn that financing the strategic investment priorities identified in the city's long-term development strategy was well within their grasp.By combining existing initiatives by na- tional and international partners and looking at dif- ferent scenarios for the development of the city's 24 budget and local taxes,the proposed strategy proved comparison with that of other countries in the re- to be a realistic vision for Bobo-Dioulasso. gion.While poverty in the country's cities is still Bobo-Dioulasso's CDS, which began as a part- notably less than in its rural areas, the combination nership between national authorities, the Associa- of rapid population growth, poor urban infrastruc- tion of Municipal Governments of Burkina Faso, ture, and weakened social links in urban areas por- the private sector, the municipal government, UN- tends higher urban poverty rates in coming years. HABITAT, and the French Embassy, builds on the At its current growth rate of more than 6 per cent results of the ECOLOC approach.This approach per year, Niger's urban population will double in was launched by the Organisation for Economic the next 12 years. Co-operation and Development, the secretariat of Despite the decentralisation process that the the Club du Sahel, and the Municipal Develop- central government recently initiated, Niger's cities ment Programme to provide local elected officials are not yet well prepared for the anticipated popu- and other actors with information that would help lation increase.The national government still re- them improve the competitiveness and quality of tains control of the less than 8 per cent of the pub- their cities. In the case of Bobo-Dioulasso, the lic investment budget dedicated to urban ECOLOC studies provided a comprehensive pic- infrastructure, 80 per cent of which is financed ture of the economic linkages between Bobo- from foreign funds.At this time,how cities in Niger Dioulasso and other areas,including cities in neigh- can contribute to national poverty reduction ob- bouring countries. jectives by means of local actions remain unclear. The city and its partners are gearing up to im- With a view to improving local delivery initia- plement the long-term development of Bobo- tives, the cities of Dosso (43,000 inhabitants) and Dioulasso and the surrounding region.To facilitate Maradi (147,000 inhabitants),in collaboration with the implementation of the agreed strategic devel- the Association of Cities and Communes of Niger, opment framework and priority investment pro- asked the World Bank and Agence Française de gramme,the mayor has set up a working group that Développement (AFD) to support a CDS. One of includes representatives of the stakeholders and is the aims of the CDS is to link a local economic responsible for developing an institutional structure growth and poverty reduction strategy with the na- that will turn the Local Economic Development tional poverty reduction strategy paper process and Charter into action. national macroeconomic and social objectives.The approach complements a national urban develop- ment strategy that the government of Niger is cur- NIGER: DOSSO AND MARADI LEAD rently developing. WITH CDS As a first step, in March 2004 both cities em- barked on a participatory poverty assessment,which revealed that 45 per cent of Dosso's population and 53 per cent of Maradi's population were below the poverty line.The assessments also pinpointed the multidimensional nature of poverty and confirmed the correlation between poverty and the lack of ba- sic services (water, sanitation, electricity). Not sur- prisingly, 90 per cent of those interviewed associat- ed poverty with a lack of employment. On the basis of this assessment, the cities and Niger is one of the world's poorest countries, and their partners will analyse prospects for their eco- its urbanisation rate of around 23 per cent is low in nomic and social development, as well as appropri- 25 ate institutional arrangements for the implementa- ties, by December 2000, Johannesburg had put in tion of a long-term development strategy.With the place a democratic, unitary metropolitan council. active participation of the Association of Cities and In response to a deep-seated financial crisis in 1997 Communes of Niger,the results of these two CDSs and the need to create an efficient city focused on should create a platform for extending CDSs to development, the administration has undergone other urban communes in Niger. radical restructuring. Progressive strategic plans-- notably the iGoli 2002 plan and the iGoli 2010 strategy--led to the creation of the current council THE JOHANNESBURG-ADDIS ABABA structure,which comprises a strong central body,11 PARTNERSHIP PROGRAMME regional administrations, 5 service provision utili- ties and agencies, and 5 corporatised entities.The next stage in Johannesburg's development will be guided by Joburg 2030, the city's development strategy for the next 25 years. Addis Ababa is a city of more than 3 million people and the host city of both the African Union and the United Nations Economic Commission for Africa. Municipal government is a relatively new phenomenon in Addis Ababa: prior to the en- actment of the 1994 national constitution, the city Market in Addis Ababa, Ethiopia was managed as an extension of the central govern- In October 2003, the mayors of Addis Ababa and ment. In 1997, it was granted special status as a city Johannesburg formalised a sister city partnership government, equivalent to a region under the aimed at fostering NEPAD, good governance, and country's federal system.The current city adminis- social and economic linkages. The two mayors tration was established in early 2003 and has begun agreed to proactively engage, promote, and support transforming the city's management, making it each other under a programme-driven partnership more participatory and implementing a strategic involving various forms of exchange and coopera- development framework and action plans as part of tion that included a long-term vision of sustainable growth and poverty reduction. · Promoting city development and planning The Johannesburg-Addis Ababa Partnership strategies; Programme represents a bold initiative for sharing · Enhancing performance management; knowledge about mutually beneficial and sustain- · Developing executive management training; able CDSs for African cities.The programme will · Ensuring efficient financial management; support Addis Ababa's city government in its ongo- · Developing land and housing; ing three-year transformation programme and the · Preventing and treating HIV/AIDS; development of its long-term CDS. Johannesburg's · Improving service delivery approaches. experience with fundamental restructuring should be invaluable to Addis Ababa's CDS process over Partially funded by the Cities Alliance, both the next two years. cities have developed frameworks to implement Cities Alliance members warmly welcomed the their long-term visions of strategic transformation, Johannesburg-Addis Ababa Partnership Programme, economic growth, and poverty reduction. as a good example of cities helping each other to fos- Through incremental restructuring and consol- ter economic growth and poverty reduction. idation of pre-1994 apartheid-based local authori- 26 Asia Children in a slum, Pune, India D espite Asia's consistent progress in poverty reduction, it is still home to 70 per cent of the world's poor.While the number of poor people has fallen from more than 1 billion to 900 million over the past decade,and the proportion of people living below the pover- ty line is declining, important regional variations exist. South Asia has more than 500 million poor people, of which 450 million live in In- dia,and China,despite its remarkable economic growth and the enor- 27 mous strides it has made in lifting millions out of poverty, still has some 225 million people living in absolute poverty. Against this background, it is hardly surprising thatAsian cities and countries are the most active in using CDSs as a means of rethinking the city and planning for its future. In many cases, such as in China, the CDS has been used as a tool to rethink not only the city, but also to plan political and eco- nomic relationships with the city-region, which encompasses a number of other cities and their sur- Kunming, China. © Q.T. Luong/Terragalleria.com rounding areas. Indeed, China has taken the lead in actively planning for an increasingly urban future facturing or service activities. Surprisingly, 39 per and for using urban growth to reduce rural pover- cent of China's GDP from the primary sector is ty.This message is beginning to be picked up else- created within metropolitan regions, reflecting the where in Asia, which will rely on urban areas for proximity of high value added farming to major more than 80 per cent of the region's future consumer markets and distribution hubs. growth.18 China's metropolitan regions will have a signif- In the Philippines,an active national association icant influence on how well the country manages of cities has embraced and promoted the CDS con- its economic, human, and social development in cept, a process that continues with and without in- environmentally sustainable ways.However,growth ternational assistance. In India, increasingly strong in China's metropolitan regions is relatively new economic growth is highlighting the role of cities and has not been addressed systematically. Munici- of all sizes, and the Cities Alliance is witnessing pal governments are facing serious difficulties of greater interest from cities wishing to undertake co-ordination across different jurisdictions and tend comprehensive efforts that would combine slum to be unfamiliar with analytical tools, development upgrading within a CDS. For its part,Thailand has policies, and the most appropriate policy instru- forged its own model in moving towards a nation- wide cities without slums programme that is likely to provide important lessons for other countries in Figure 3. Metropolitan regions' share of population and output the region. by distance from city centres, China 70 CHINA: CITY-REGION 60 60 57 DEVELOPMENT STRATEGIES China 50 of 43 39 More than one-third of China's population of 1.3 40 35 billion is concentrated in its 59 metropolitan re- 30 centager 23 24 19 gions, which together account for close to 60 per Pe20 1918 17 15 14 101010 10 cent of China's GDP.The per capita productivity 10 8 6 7 8 8 4 4 6 6 7 5 3 4 rate falls dramatically outside the major metropoli- 0 within 50 km 50­100 km 100­150 km 150­200 km 200­250 km beyond 250 km tan regions (Figure 3). However, the importance of Percentage of total population Percentage of NSB "Urban" population metropolitan regions is not just limited to manu- Percentage of primary GDP Percentage of secondary and tertiary GDP Percentage of total GDP km = kilometre Asian Development Bank (ABD), City Development Strategies to Reduce 18 Source: CHREOD, Ltd., `China: City-Region Development Strategies 2 Project', Vol. 1 (Ottawa: CHREOD, Ltd., April 2004, p.53). Poverty, (Manila:ADB, 2004, pp. 8­13). 28 ments for guidance and intervention at the metro- politan level. PHNOM PENH CDS: INCLUDING THE POOR National and local government officials are in- IN THE PLANNING PROCESS creasingly searching for alternative approaches to the official master plan approach. Five western cities--Lanzhou,Chengdu,Erdos,Zhengzhou,and Xinxiang--have developed regional CDSs that go beyond the cities' traditional administrative bor- ders.To keep pace with rapid urban and economic change, these CDSs introduce strategic, participa- tory, and flexible approaches to setting develop- ment priorities, policies, and programmes in keep- ing with the iterative process outlined in Figure 4. The CDSs identify strategic governance op- Tonle Sap River, Cambodia. © Q.T. Luong/Terragalleria.com tions for addressing social vulnerability, improving environmental sustainability, managing regional Nearly a quarter of Phnom Penh's informal settlers, growth, and financing metropolitan development that is, more than 11,000 families, have been evict- strategies. For senior leaders of both Lanzhou and ed from their settlements in central Phnom Penh in Zhengzhou, one of the most significant outcomes recent years. Of the roughly two-thirds who have of the CDSs is enhanced public participation in the been resettled, only a small percentage of families city planning process. have consolidated their situation at relocation sites they have chosen and planned themselves.The rest Figure 4. Strategic planning as a cyclical, interactive process are camping out in shacks without water, toilets, roads, or flood protection in remote resettlement colonies that are far from job opportunities, sup- Actual outcomes 1: Establish Common vision relevant scales port structures,schools,and health clinics.For these 10: Operation/ 2: Establish households, resettlement has meant even more ex- service delivery development goal treme poverty. Outputs To improve the situation of Phnom Penh's in- 9: Implement formal settlers and tap into the enormous potential 3: Define problems projects/activities + opportunities for individual and community-based self-improve- ment of the living conditions of the urban poor, in 1998, the Municipality of Phnom Penh, the Soli- 8: Formulate 4: Define issues projects/activities + priorities darity for Urban Poor Federation, and the Asian Coalition for Housing Rights set up the Urban Poor Development Fund, which supports the re- 7: Formulate 5: Define programs objectives settlement of communities facing eviction. The Fund's board consists of a majority of community 6: Define policies + instruments leaders,together with representatives of the munic- ipality, the Asian Coalition for Housing Rights, lo- Desired outcomes (indicators, e.g.: cal NGOs, and other development agencies. · Local economic development · Human capital: urban poverty alleviation Complementing the Urban Poor Development · Governamce and institutional reforms Strategic planning · Municipal finance Fund,in 2002,a CDS that focused on scaling up the Program and projects planning · Public-private partnerships) Implementation and operation community-driven development process was Source: CHREOD, Ltd., `China: City-Region Development Strategies 2 Project', Vol. 3 (Ottawa: CHREOD, Ltd., June 2004, p.6). launched to help the Municipality of Phnom Penh 29 and those involved in city development create a sus- The objective of these pro- "We first discussed our problems tainable institutional setup for maintaining a bal- posals is to provide short-term together and formed a committee anced relationship between various actors in the city security in ways that are simple to write down all the things we'd planning and development process.As a result of the to implement and encourage CDS, communities have been working together people to invest in home im- like to do together to improve our with the municipality to better understand their provements. Longer-term op- settlement and submitted these city, devise alternatives to relocation, and develop tions can then be implemented ideas for support. After the ideas guidelines for unavoidable relocations and put these as communities' administrative into practice in selected informal settlements. capacities increase. were approved, we immediately In the wake of these encouraging results, the To date, the municipality is set to work. The next step in Ros government of Cambodia has committed to pro- still involved in the first stage,and Reay is to get land titles so we viding secure land tenure and supporting in-situ plans are under way to move to can be secure here." upgrading until all of Phnom Penh's urban com- the second stage.The hope is that munities have secure tenure and access to the full agreement can be reached soon, --Keo Yin, community leader complement of basic services. In May 2003, the so that by the end of the project government announced a major shift in its ap- in October 2004, people throughout the city can proach and committed itself to upgrading 100 in- feel secure in their homes and in the city's future. formal settlements a year for five years. In a second activity related to the CDS, the INDONESIA: POVERTY-FOCUSED CDS Cities Alliance, together with UN-HABITAT and GTZ approved a project in 2002 to improve tenure security for households in informal settlements in Phnom Penh.19 The four-stage proposal involved · Announcing a moratorium on relocations and evictions for a period of nine months. This would provide the time to identify settlements that might need to be relocated and locate near- by sites for rehousing them. · Introducing communal land rights for all those relocated and upgrading settlements for a pro- posed period of five years.During this time,de- A slum alley in Jakarta, Indonesia tailed surveys would be undertaken to prepare for the next stage. Since the 1997 Asian economic crisis, when urban · Granting co-ownership titles in all settlements poverty increased sharply in Indonesia, the gov- where communities can demonstrate agreed ernment has begun transferring responsibilities for standards of good governance. For all other set- a number of public services and functions to local tlements, a further five years of communal land governments.To prepare local governments for the rights would be granted. challenges arising from urbanisation and decen- · Providing individual land titles to any house- tralisation, the Ministry of Settlements and Re- holds willing to obtain agreement from their gional Infrastructure, with the support of the neighbours concerning plot boundaries and World Bank, UN-HABITAT, and the United Na- meet the legal and administrative costs involved tions Development Programme (UNDP), has en- in obtaining and registering titles. couraged several cities to implement CDSs.The lessons learned from these experiences led to the For more details, see www.gpa.org.uk. 19 30 mediate goals for five CDSs have been met.The lo- Indonesia's CDSs: cal governments' capacities to conduct participato- Tangible and intangible outputs ry processes in formulating development strategies were strengthened through the active participation Tangible outputs of community groups, professional organisations, · City profiles of the participating cities universities, and the media. · Better public administration and improved public Five of the nine city authorities made participa- service agendas, validated by the World Bank's tory planning mandatory, drafting by-laws that Urban Sector Development Reform Project recognise citizens' right to participate. Because all · Toolkit for implementing CDSs but two of the participating cities (Pangkalpinang · Case studies and lessons learned from a selection and Bontang) became eligible for funding under of CDS cities the World Bank's Urban Sector Development Re- · Web site with results and best practices form Project, this approach may be an indicator of (www.cdsindonesia.org) the success of the CDS programme. The programme also validates the Cities Al- Intangible outputs liance's key criteria for a successful CDS:local gov- · Communication between local governments and ernment ownership, links with potential invest- citizens and between legislators and citizens has ment partners right from the beginning,and a focus improved, as evidenced by the new practice of hav- on implementation.The CDS programme in In- ing consultations on all policy formulation matters donesia was initiated at the national level, with the · Mass media support, as evidenced by the launch of lead taken by a national team of consultants who a column in the local press and a talk show on lo- worked closely with multilateral development part- cal radio that allows citizens and city government ners, while the involvement of theWorld Bank as a officials to exchange opinions partner right from the start of the programme re- · Civil society awareness of the benefits of participa- sulted in the availability of concrete investments for tion in governance has been enhanced, as evi- implementation. denced by an increase in participation rates in city forums from an average of 20 people to more than LEAGUE OF PHILIPPINE CITIES: 100 and city officials' greater responsiveness to CDS HAILED AS AN EFFECTIVE TOOL civil society The Philippines ranks among the most rapidly ur- banising countries in the world. Currently an esti- institutionalisation of poverty-centred CDSs in In- mated 52 per cent of the population, or 40 million donesia's urban policy and to the recognition of people, live in urban areas, and the urban popula- CDSs as one of the primary tools for sustainable tion is expected to increase to 80 per cent before urban investment. the middle of the century.This rapid urbanisation Nine cities were originally selected on a de- rate is largely due to rural to urban migration, mand-driven basis:Bandar Lampung,Bau-Bau,Bli- which has resulted from a perception that urban ar- tar, Bogor, Bontang, Palembang, Palu, eas are beacons of opportunity.In 2000,urban areas Pangkalpinang,and Surakarta.Working closely with accounted for 75­80 per cent of the country's Breakthrough Urban Initiatives for Local Develop- GDP, illustrating a dramatic shift from an agricul- ment (BUILD), a local capacity building pro- ture-based economy over the last 40 years. gramme, and assisted by UN-HABITAT and the To help local governments prepare more effi- United Nations Development Programme,the im- ciently for the challenges of rapid urbanisation, 31 CDS achievements in the Philippines · A broadly based participatory process for visioning and preparing macro-level city strategies and in- vestment plans was developed and implemented in 31 cities. · The strategies were prepared entirely by the cities themselves, using local staff that had little or no previous exposure to such processes. · The cities' mayors played an active role during all stages and took full ownership of the process and UN-HABITAT and the World Bank helped the the resulting strategies. League of Philippines Cities design and implement · A poverty profiling and analysis component was CDSs.This programme is remarkable for having developed and used to prepare the strategies. won the commitment and involvement of a large · The knowledge management web site is widely number of city mayors to a participatory process of used and has toolkit materials useful not only for preparing city plans and identifying investments for the Philippines, but for other countries. enhancing growth and reducing poverty. · The Philippine programme has been recognised by The enthusiasm of the participating mayors and other countries, which have regularly invited may- city officials is best expressed in the 2003 Philip- ors from the Philippines to share their experiences pine Cities Declaration, which was signed in De- on a bilateral basis. cember 2003 by representatives of almost 40 cities · A dialogue was established among mayors facing in the presence of President Gloria Macapagal Ar- similar issues that facilitated learning and the royo. The declaration emphasises the need for a adaptation of best practices. comprehensive and integrated approach towards · The decentralisation process of the Local Govern- urban management and outlines the necessary steps ment Code has been strengthened by the exposure the League and the cities should take to ensure the of new mayors to a participatory process of strate- inclusion of the urban agenda into the medium- gy preparation. term Philippine Development Plan. · The CDS process has led to a League of Philippines Horizontal learning among cities proved to be Cities General Assembly resolution to add an urban a powerful feature of the CDS programme.As sum- component to the Medium-Term Philippine Devel- marised by those responsible for the CDS inTagay- opment Plan that highlights the critical role of tay City:`If they can do it,why not us?'The League cities in national economic development. of Philippines Cities has documented the learning and sharing experience of the CDS programme ex- tensively on the Philippine City Network's web site (www.cdsea.org).The League created the facility in response to the growing demand from municipal leaders and practitioners for a forum for discussion and a way to share knowledge, and through such dialogue to develop more effective solutions for ur- ban problems.The network has grown to include 40 cities throughout the Philippines. 32 The Community-Led Infrastructure Finance Facility with the pilot phase, which is being carried out in India, now in its third year. The pilot is being implemented by the Society for Promotion of Area Resource Centres and Samudaya Nirman Sahayak in partnership with the National Slum Dwellers' Federation, Mahila Milan. Given the innovative and somewhat unusual nature of CLIFF, a significant effort was necessary to overcome a number of institutional and administra- tive obstacles, including the need to ensure a smooth flow of funds able to support the rapid development of projects. This has tested the commitment and adaptability of all stakeholders to learn and adapt practices in the interests of making CLIFF and similar community-driven development initiatives work for the urban poor. CLIFF offers the following forms of financial assistance: · Technical assistance grants, which providing assistance to communi- Community members involved in constructing the third housing block at Sunnuduguddu, ties to package bankable projects. Bangalore, India.The development at Sunnuduguddu is supported by the CLIFF programme. · Capital loans to leverage public and private resources. · Knowledge grants to share lessons learned. In the past year, most Cities Alliance activities have reinforced and fur- ther emphasised the central importance of a sustainable finance strat- In addition, Homeless International is sometimes also in a position to egy in long-term slum upgrading and urban development programmes. complement CLIFF through the provision of financial guarantees to Notwithstanding the variety and complexity of different approaches to banks. achieving such a strategy, two essential trends stand out: CLIFF has now been able to turn its attention to two specific chal- · Achieving scale and sustainability requires forging new relationships lenges that need to be addressed to achieve scale delivery in one of between city governments, the urban poor, and the private sector. the world's most vibrant cities, Mumbai, namely: Few, if any, examples are available of any of these parties achieving · Working with municipal and state authorities to improve the use of development at scale on their own. state subsidies to municipalities to support community-driven and · Emphasising the catalytic role that international development assis- other initiatives. tance can play is important, but the bulk of the resources needed · Engaging the commercial banking sector to identify ways in which for long-term development is often available through the domestic finance and credit could be made available to support and enhance market using a combination of improved municipal financial man- slum upgrading and other activities. agement, domestic capital markets, and slum dwellers' own efforts and resources. Some progress has been made on the finance side, with two separate banks becoming involved: one providing loan capital and the other a Managed by Homeless International under the auspices of the Cities loan guarantee to the Mumbai Municipal Corporation, both for CLIFF- Alliance, the Community-Led Infrastructure Finance Facility (CLIFF) is related projects. However, at the moment viewing these as exceptions designed to help organisations of the urban poor implement and scale rather than as the beginnings of a trend would be appropriate; never- up community-driven infrastructure, housing, and urban services initia- theless, formal deliberations with the commercial banking sector have tives at the city level in conjunction with municipal authorities and the recently increased. private sector, including commercial banks and landowners. The first steps to learn from the initial lessons from the CLIFF pilot in CLIFF provides funding for locally developed projects in a manner de- India are now being undertaken and to begin the process of expanding signed to leverage funds from other sources and recoup the original CLIFF, most likely to Kenya. capital for reinvestment. It has been designed as a 10-year initiative, 33 Provision of universal sanitation in urban India port from the Cities Alliance and the Swedish International Develop- ment Cooperation Agency, to turn this declaration into reality. Pune, a city of nearly 3 million inhabitants, has already demonstrated how partnerships between communities and local governments can provide citywide sanitation for low-income communities. Under the guidance of the city's commissioner, and in partnership with NGOs and slum federations, more than 400 toilet blocks with more than 10,000 seats were built at a cost of some US$8.5 million: more toilet blocks in two years than had been built during the past 30 years. With an aver- age of 50 people per toilet seat , more than 500,000 slum dwellers have benefited from this programme, making Pune a model for the Pu- A public toilet, India rifying India Project. Three of the MDGs depend directly on the provision of sanitation. Few With community involvement, these toilet blocks are well ventilated, well countries have the sanitation challenge faced in India, where the lack lit, and colourful, with separate areas for women, men, and children and of adequate facilities leads to the sight of bare behinds along railway special facilities for the disabled.The most important features are, how- tracks and in other public spaces. Children squat anywhere, while for ever, probably on the roof: large tanks ensure a consistent water supply reasons of safety and modesty, women often wait until dark to per- and a self-contained residential unit for the community-hired caretaker. form their natural functions, leading to widespread gastric and intes- Innovations in design were matched by innovations in implementation. tinal disorders among poor, urban women. Construction managed by slum women ensured good quality work and Most Indian towns generally have two forms of public toilets: those cost savings, as well as women's empowerment. As Savita Sonavane, a that cost nothing to use, which are few and normally so badly main- woman deeply involved in the programme in Pune, reported: `When tained by the city authorities as to be unusable, and those that cost Rs we started ...we didn't know how deep to dig the pits, the plastering, 1 per use per person, which is far too expensive for poor families. the foundation depth, the columns, ...the masonry, what the plinth level should be--we had no idea how to go about such things. We In response to this situation, the government of India is providing more didn't know how to read the architect's drawings. However, once we than US$100 million through its Nirmal Bharat Abhiyan (National City got involved, we started to understand all these complex things.' Sanitiation, or more literally, Purifying India Project) for the construc- tion of community toilets in city slums around the country. To address The commissioner, Ratnakar Gaekwad, reported that initial hostility by the problem of long-term maintenance, local authorities are required some local politicians actually turned to active support: `One of the to build toilet blocks in partnership with slum communities, which will Councillors said that nine toilet blocks had been constructed in his ensure community control and maintenance, while affordable monthly Ward when he could not even get one block constructed in the previ- passes for families will provide huge savings in sanitary staff costs for ous five years. The Councillor said that during election time, all he the local government corporation. would have to do was to stand outside the toilet blocks every morning, with folded hands, and that would be sufficient propaganda for him!' In May 2004, senior officials of the Indian Urban Ministry met in the city of Pune, Maharashtra, with elected representatives, slum dwellers, In the two months following the Pune meeting, construction had already and representatives of NGOs from more than 20 cities to endorse a started in three other cities around the country and active dialogue had declaration for the provision of universal sanitation in urban India. been taken up by authorities in five states:Tamil Nadu, Karnataka, Ma- Three key agencies, the Society for Promotion of Area Resource Cen- harashtra,Andhra Pradesh, and West Bengal. By facilitating a new part- tres, the Administrative Staff College of India, and Yashada are going nership between NGOs, slum dwellers, and city authorities, the Indian to work with the Water and Sanitation Programme, with financial sup- government may have found part of the solution to its sanitation crisis. 34 lian Association of Urban Centres.The association MONGOLIA: ULAANBAATAR ASSISTS WITH was formed to facilitate cooperation between ur- CDS ACTIVITIES IN SECONDARY CITIES ban centres, exchange information, and facilitate urban development and cooperation with local government associations in other countries.The as- sociation is expected to contribute significantly to sharing the experience and results of the CDS and strengthening the capacities of local governments. Mongolia is rapidly urbanising, with more than 57 per cent of its population now living in urban cen- tres.Though predominantly nomadic, Mongolians are migrating to urban centres in larger numbers in part to escape the harsh climatic conditions that have killed off their livestock in recent years. Most have moved to Ulaanbaatar and to smaller urban centres, such as Erdenet, Darkhan, Khovd, and Choibalsan. To better manage the impact of this urbanisa- tion and to realize its economic potential, Ulaan- baatar has already successfully implemented a par- ticipatory CDS with support from theWorld Bank. Now, working with the World Bank and the Asian Development Bank, the Municipality of Ulaan- baatar will act as a resource city for the two major secondary cities, Erdenet and Darkhan, which are seeking to replicate the Ulaanbaatar CDS in their efforts to develop a long-term vision of economic growth and poverty reduction. The economies of Mongolia's secondary city economies are extremely small in comparison with that of the capital, Ulaanbaatar. City officials of Er- denet and Darkhan plan to develop a long-term development vision that is focused on their com- petitive advantages and provides support to the sur- rounding areas and to vulnerable groups in the cities. CDS activities in Mongolia recently received a significant boost with the creation of the Mongo- 35 Eastern Europe and Central Asia A slum in Toopana, Macedonia T he Cities Alliance has a modest portfolio in this enormous and diverse region, which has seen dramatic changes over the past decade.One of the legacies of planned economies is that a higher pro- portion of their populations lives in urban areas than is typical for countries at their income level. In addition, some of the countries, Russia, for example, are facing significant absolute declines in their overall populations.Rural to urban migration is minimal,whereas ur- 36 ban to urban migration persists in some countries. ture, finance, and municipal management and gov- On paper, the region has no striking shortage of ernance.To help the city's administration effective- housing stock, yet this apparent availability masks ly implement its long-term strategy, a programme serious quality and management issues. Infrastruc- action matrix details priority actions and objectives ture may be in place, but may be so poorly main- to combat poverty, foster the development of the tained and erratic that this region has the unique local economy, and improve the livelihoods of city challenge of preventing the emergence of slums residents during the next three to five years. among its existing housing stock. However, the overwhelming majority of urban residents in ECA live in secondary cities and not in Urban poverty on the rise in secondary cities capital cities like Sofia. The World Bank report in ECA concludes that in most ECA countries, the inci- Urbanisation rates in ECA are relatively high, rang- dence of poverty in secondary cities is significant- ing from 40 per cent in most of the central Asian re- ly greater than in the capital cities--two to four publics to 70 per cent in the Slavic countries.A re- times higher--and in some cases, the incidence of centWorld Bank report shows that urban poverty is poverty in secondary cities is similar to or worse a significant problem in the region and that the than in rural areas. poverty profile in ECA cities differs from that in oth- er regions.20 This has been exacerbated by countries' LATVIA: EIGHT CITIES DEVELOP CDS transition from centrally planned economies to mar- ket economies,which has created a unique set of ur- ban problems in the region.Although infrastructure and energy services were widely available, mainte- nance of the infrastructure facilities and services has deteriorated to the point where reliability and even access are becoming significant welfare issues. SOFIA: EXAMPLE OF A CDS IN A COUNTRY IN TRANSITION The Sofia CDS is a good example of how a city in the ECA region can manage the unique set of ur- In Latvia, the incidence of poverty is particularly ban problems of an economy in transition. The marked outside the capital, Riga, and is among the strategy provides a basis for sustainable develop- highest of any of the transition countries.The Cities ment of the local economy and the welfare of city Alliance, through its members UN-HABITAT and residents. Developed by Sofia's city management the World Bank, is currently helping eight cities in with support from World Bank staff, the strategy Latvia develop their CDSs to support local eco- builds on recommendations from residents and nomic development and to promote an entrepre- members of the business community provided neurial and competitive economy. Ultimately, the through workshops, surveys, and consultations.The programme aims to support Latvia's poverty reduc- participatory process has enabled the municipal ad- tion strategy, which aims to halve the number of ministration to identify needed improvements in poor by 2015.The eight cities have focused their five broad areas:the economy,services,urban struc- respective CDSs on the development of economi- cally and socially inclusive urban societies and pro- World Bank,`Dimensions of Urban and Infrastructure Poverty in ECA', 20 ductive and competitive urban economies by discussion paper (Washington, DC: Eastern Europe and Central Asia Re- gion, Energy and Infrastructure Unit, 2004). 37 · Devising local economic development strate- cities and regional development agencies to en- gies and action plans to encourage a healthy sure scaling up and replication. business environment and create conditions that facilitate the establishment of new busi- With the implementation of the CDS, which nesses and the generation of employment. include mobilising additional resources from local · Improving governance structures in the cities, stakeholders,the cities expect to be prepared to take focusing on stakeholder participation and part- advantage of the unique investment opportunities nerships between local governments, civil soci- that the European Union's structural funds and Co- ety, and the private sector. hesion Fund offer.These funds are available for the · Increasing the cities' capacity to explore all po- new member countries of Central and Eastern Eu- tential follow-up investments,including public- rope and need to be committed by December 31, private partnerships and the European Union 2006.After all, many of the funds to be supported funds available for Latvia. by the structural funds will have to be designed and · Building capacity and capability within the implemented at the local government level. Urban poverty and slum prevention in Romania Growing evidence in ECA's transition countries indicates that the ur- · Former industrial areas, where low quality apartment blocks ban poor are becoming more concentrated in the deteriorating hous- built near factories prior to1990 have remained since factory clo- ing stock of established neighbourhoods, in poor locations, and in sures without water, heating or electricity, housing those unable to low-quality housing that is inadequately maintained and unserviced. leave as well as equally poor and desperate newcomers; Preventing the emergence of slums among existing housing stock · Neighbourhoods with low quality apartment blocks, quick- presents a particular challenge for policymakers in the region. ly constructed during the socialist period which have turned into vertical slums, where poor families are not able to pay their mainte- Ana Vasilache, a member of Cities Alliance Policy Advisory Board, de- nance costs; and heating, water and electricity are often cut by scribes the situation in her country, Romania: public utility providers; and As many as 400,000 people, including up to 115,000 children, are es- · Informal, illegal settlements located near big city landfills, timated to be living in extreme poverty in Romania's cities. The inci- where poor people who lost both jobs and housing with the de- dence of poverty is particularly acute amongst the historically margin- cline in industry or job seekers migrating from villages, live off near- alised, ethnic Roma population. by landfill resources. To decision makers these figures may not look dramatic, but it is only Existing policies guaranteeing the minimum wage are important but a matter of time before they swell. With targeted policies, it is still offer little support to the poor who do not legally exist--such as possible to prevent problems from spiralling out of control. those who do not have ID [identification] cards or birth certificates. While statistical data have determined Romanian rural areas to be Romanian decision makers urgently need to deepen their understand- poorer than urban areas, these data measure standard poverty rather ing of the harsh realities and trends of this country's cities to inform than the extreme poverty that is found primarily in cities. Romania's their policies. They can learn from countries where policy failure has urban areas of extreme poverty emerged after 1990, physically con- allowed problems to spiral out of control; or, likewise, from those centrated and socially segregated, in four general categories: countries where creative approaches have succeeded in improving the quality of life of the once marginalised urban poor. · Historical areas located in city centres, where poor families live in degraded, nationalised, poorly maintained and cheaply rent- ed old buildings; Source: Anna Vasilache, member of the Cities Alliance Policy Advisory Board. 38 Latin America and the Caribbean Senior Adviser to World Bank President, Mamphela Ramphele, in hat, Paulo Souto, Governor of the state of Bahia, and Mario Gordilho, President of CONDER, with other city officials and children during a visit to the Novos Alagados, Ribeira Azul, Brazil L atin America and the Caribbean is the most urbanised of the de- veloping regions, with 75 per cent of its population of 523 mil- lion living in cities in 2000.While it has a number of megacities,more than 60 per cent of the population lives in smaller cities of 50,000 people or more.21 Nowhere else in the world is the urbanisation of poverty more ev- ident, and the increasing inequity and disparity threaten stability and sustainable development.To halve the number of people living in ex- treme poverty, the region needs to grow at 3.2 per cent per year for the next 20 years.It is the region's dynamic cities that hold promise in this regard. Strikingly, the informal sector accounts for more than 70 per cent of new jobs in the cities. One of the positive recent trends in the region has been the growth of democratisation--a rapid and remarkable change from 1980, when only three countries had mayors elected by popular vote--and decentralisation, which has seen the sustained transfer of Inter-American Development Bank (IDB), The Challenge of an Urban Continent (Washington, DC: 21 IDB, 2004). 39 functions to local governments. However, the lat- municipal administrations in the execution of the ter trend started from an extremely low base, and central government's social programmes, it is ac- currently local governments handle a mere 15 per knowledged that their impact could be strength- cent of government expenditures. ened if they were designed as an integral part of par- During the last year, the region's associations of ticipatory local development strategies. local authorities have expanded and strengthened Housing is one of the key components of the their network.The Latin American Federation of government's social policy. Despite a broad array of Cities, Municipalities, and Associations (FLACMA) instruments and programmes intended to meet the now also serves as the Latin American Regional demand for housing, reaching the poorest families Section for the newly formed UCLG.This consol- has remained a challenge. Often the provision of idation of the region's associations of municipalities social housing has not been integrated with other provides scope for local authorities to have a aspects of urban development,thereby impeding its stronger voice in the policy dialogue process,as well impact and sustainability. as for strengthening learning and knowledge shar- In recent years,Chile's Ministry of Housing and ing among cities in the region. Urbanism has developed the Programme for Dy- The Cities Alliance has its strongest national namic HousingWithout Debt,which has launched portfolio in Brazil,a country with strong local gov- a series of initiatives to implement shelter pro- ernments noted for their innovation and for the grammes that reach the poorest sectors of the pop- strength of civil society. Cities like São Paulo, Re- ulation.The programmes include the Fund for Sol- cife, Rio de Janiero, Porte Allegre, and Salvador idarity Shelter Projects, initiated by the ministry have all introduced policies and programmes that and the Chilean Association of Municipalities, have attracted the attention of urbanists from whereby shelter projects awarded funding are im- around the world. Cities Alliance members were plemented in close cooperation with municipalities delighted when Brazil became the first developing to ensure their integration into the overall urban country to join the Cities Alliance at its 2003 An- and local development context. nual Meeting in São Paulo. Brazil's participation is The Cities Alliance, through its members UN- expected to have a significant impact on the delib- HABITAT and GTZ, is helping local governments erations of the Cities Alliance Consultative Group and the Ministry of Housing and Urbanism to pre- as it brings its country experience of rapid urbani- pare and implement the initial stages of the Pro- sation and its long history of slum upgrading to gramme for Dynamic Housing Without Debt, fo- bear on the Alliance's knowledge sharing and poli- cusing on urban municipalities in theValparaiso and cy dialogue on urban poverty reduction. Bío Bío regions and the Metropolitan Region of The Cities Alliance portfolio has also been ex- Santiago. Supplementing the initial investment panding in the region with new activities recently budget of US$36 million, the activity will develop approved in Chile, Colombia, and Peru. tools and processes to strengthen the capacity of these municipalities, their regional associations, and local stakeholders to participate in the implementa- CHILE: LOCAL DEVELOPMENT STRATEGIES tion of housing programmes within the context of TO OVERCOME POVERTY integrated urban development strategies. Chile has considerable experience with implement- ing social policies and programmes and designing RIBEIRA AZUL PROGRAMME MOVING TO instruments for social investment. Notwithstanding SCALE IN SALVADOR AND BAHIA, BRAZIL the successes of its social programmes in recent decades,their impact on poverty reduction has been The slum upgrading programme of the state of decreasing. Despite the increasing participation of Bahia, Brazil, is among the most successful with 40 sion of health care,education,day care,job training, and support to local cooperatives; the improvement of homes; and the building of social equipment. Thus the programme takes aim not only at target 11 of the MDGs (to improve the lives of slum dwellers) but also at many of the other MDGs.The method- ology also features extensive community participa- Cities Alliance members visit Ribeira tion and a focus on the community as a whole. Azul during the Another feature of the programme is its broad- Consultative Group Meeting held in São ly based partnerships.Through the Cities Alliance, Paulo in October 2003 the government of Italy provided more than i5 million in grant funds for technical and social assis- which the Cities Alliance has been engaged. It has tance activities for the ongoing Ribeira Azul pro- been characterised by gramme and has pledged a further i5 million for the new statewide programme.TheWorld Bank has · Being scaled up to citywide and statewide levels; provided extensive technical assistance for the · Using a participatory,integrated,and area-based Ribeira Azul programme and is helping the gov- methodology; ernment of Bahia design and prepare the statewide · Involving a broad group of local and interna- programme. tional partners; An international NGO,Associazione Volontari · Focussing on monitoring and impact evaluation. per il Servizio Internazionale (AVSI), has adminis- tered most of the Italian grant funds.This NGO has Building on the experiences of a slum upgrad- worked in partnership with the state's Urban Devel- ing programme begun in the mid-1990s and affect- opmentAgency,CONDER,for more than 12 years ing 15,000 slum dwellers, in 1999, the government and has contributed millions of dollars for social in- of Bahia teamed up with Cities Alliance members, frastructure, including schools and day care centres. the Italian government,and theWorld Bank to scale It works closely with more than 60 local NGOs, up its efforts to improve the lives of 150,000 slum community-based organisations, and cooperatives dwellers living in 40,000 households in the Ribeira to help it deliver social and technical assistance. Azul area of Salvador, Bahia, the state's capital and The Bahia government has also strongly sup- largest city.Approximately 45 per cent of Salvador's ported the efforts of all the partners involved to de- 2.7 million inhabitants live in squatter settlements sign an ambitious monitoring and impact evaluation or informal land subdivisions. plan that will inform programme implementation During the past year, the government has tak- and future programme design.AVSI and its partners en bold steps to continue scaling up its efforts via a are working closely with the University of Trento new, statewide programme--Viver Melhor II-- (Italy) on this initiative, and the World Bank is also that will affect seven other slum areas in Salvador drawing upon this work to strengthen its approach and launch citywide upgrading programmes in to the impact evaluation of slum upgrading. other cities throughout the state.The government Throughout this programme, the Cities Al- of Bahia is working with the World Bank to pre- liance and its members have played a catalytic role pare a new US$96 million loan as part of a US$160 in ensuring the replication and scaling up of the million financing package to support this effort. methodology, building the international partner- The upgrading methodology includes physical ships, and emphasising the developmental impacts. interventions (water and sanitation, roads, housing, The scaling-up process from community, to area and so on) as well as regularising land tenure, and a development, to citywide and now statewide levels package of social interventions,including the provi- 41 has been made possible by the coherent efforts of up and co-operation are primary objectives of the the broad range of development partners who are Cities Alliance. directly contributing to these efforts. Such scaling Community-based approaches to slum upgrading take root in Salvador, Brazil For most of his 32 years as an engineer in the private and public sec- tors in Salvador, Jurandir Fonseca built roads, bridges, sewerage lines, houses, and office buildings, but the past few years of working on the Ribeira Azul programme have led him to a new and broader perspec- tive of his job: helping people improve their communities. `When I first joined the programme', Fonseca recalls, `I felt like just a technician'. But after he started living and working with the slum communities that the programme was upgrading and associating with the social sector professionals also involved with the integrated social and physical intervention, Fonseca notes, `I started getting involved in the community's problems, but no longer as an outsider'. `I realised that I just couldn't put in a street or a house', says the engi- Fátima Cardoso and Jurandir Fonseca neer. `With a broader understanding, I realised there were people in- years ago. Described by the governor of Bahia as `an engineer with a volved. I just couldn't put a road through their house'. social touch', Gordilho has positioned CONDER as a `school to train Fonseca has learned that `you need to build with them [the communi- public managers for Bahia'. ty], to involve them far in advance during the planning process'. He The changes in CONDER are obvious to Fátima Cardoso, the social has gained a greater understanding of the needs and demands of the work coordinator for Ribeira Azul. `This focus on the social aspects is families in the programme area. `I am becoming a social engineer', he no longer seen as a mere way to mediate conflicts between the com- proudly declares. munity and the institutions involved', she observes. `Now that we The Ribeira Azul programme in Salvador is not only improving the lives have learned this lesson, our work integrates technical aspects and a of 150,000 slum dwellers, but is also helping transform the urban de- constant effort to accompany the community in a process of identifi- velopment agency that is leading the slum upgrading programme. As cation of its own needs'. co-director of the Technical and Social Assistance Project for Ribeira The slum communities involved have responded with high levels of Azul, the US$5 million assistance project supported by the Cities Al- participation in the development process, reports Cardoso, although liance and the Italian government, and as a special adviser to the presi- some community leaders voice the desire for even more engagement. dent of CONDER (Bahia's Urban Development Agency), Fonseca is in an excellent position to help influence the agency. He notes that the inte- Fonseca cites several lessons learned from the programme: grated methodology of the Riberia Azul programme is communicated to · We have learned how to bring a project up from the community many of the other 750 staff of CONDER, including nearly 200 engineers rather than down from the technician. and architects, through periodic internal seminars and meetings. Other · We have learned to be more patient and to listen. We always staff will apply the Riberia Azul methodology as part of a new, thought we needed to impose, but we now know we need to listen statewide slum upgrading programme currently under preparation. and learn from the community. The climate of working hand-in-hand with the slum communities has · Community involvement also has its risks, as people can be moti- been instilled by CONDER's president, Mario Gordilho, a prominent vated politically to obtain more power and assets for themselves, businessman from Salvador who was asked to lead the agency five rather than for the good of the community. 42 CDS FOR THE RECIFE METROPOLITAN REGION The Recife Metropolitan Region,which compris- es 14 municipalities, is the fourth largest metropol- itan region in Brazil and the largest in the Brazilian northeast. Located in the state of Pernambuco, one of the poorest regions of the country,41 per cent of its 3.3 million inhabitants live below the poverty line. Unlike other metropolitan regions of the Brazilian northeast, Recife's economy is stagnant and its per capita income has remained the same for The Recife CDS was prepared by the political the last 20 years. and technical organisations responsible for the de- Recife's problems are similar to those of most velopment of the metropolitan region, namely, the of Brazil's other metropolitan areas and big cities. Metropolitan Development Council and the Met- Extremely unequal income distribution, high con- ropolitan and State Planning Agency in partnership centration of poverty,high crime and violence,high with Brazil's renowned Applied Economics Re- unemployment, inadequate housing, water and search Institute.The Institute wanted to test the sewage problems, and bad quality of public trans- CDS as an important tool for promoting econom- portation are among the most serious issues Re- ic growth and poverty reduction not only for Re- cife's inhabitants face. cife, but also for the 50 other metropolitan regions To better prepare the metropolitan region to in the country. On the basis of a series of analytical deal with these problems and to take advantage of reports covering the socioeconomic background its tourism potential and availability of land and and social and infrastructure issues, a regional met- natural resources, the Metropolitan Area Authority, ropolitan strategy was formulated that identified 20 supported the development of a long-term vision strategic, priority investment projects (Figure 5). and alternative scenarios for Recife's economic fu- The CDS has resulted in significant mobilisa- ture through the preparation of a CDS. tion of stakeholders. Based on a thorough analysis of the most important economic sectors,stakehold- ers discussed long-term trends and prioritised strategic actions.The proposed well-defined and Figure 5. Methodology for preparing the CDS for Recife viable strategy led to a comprehensive urbanistic Seminars and discussions with stakeholders plan that was approved by the Metropolitan Devel- Existing to produce the long-term scenarios opment Council. projects and Interviews poposal Simultaneous with the preparation of the strat- Long-term Strategic projects egy for the development of the Recife Metropoli- Consistency 15 scenarios (trend (actions, goals, analysis CDS tan Region,the largestWorld Bank slum upgrading Background and desirable) and resources) project for Latin America, Pro-metropole, was pre- papers Thematic pared and initiated with US$84 million worth of seminars Priority areas of intervention investment.The substantial synergy between the Planning metropolitan development strategy and the up- seminars Discussions with the Reference Group (Planning Secretaries) and in the Metropolitan Council grading project helped shape the preparation of an- otherWorld Bank investment in the Recife region, Source: Lima, Ricardo A., City Development Strategy for The Recife Metropolitan Region, (São Paulo: May 2003, p. 15). the Capibaribe RiverValley Project, which focuses 43 on basic infrastructure in most of the slums of the the notion that strengthening (or creating) city net- municipalities of Recife and Olinda. works is central to the integral development of any As a result of the success of the Recife CDS, region. several other metropolitan regions in Brazil have After an initial period of raising the awareness indicated their interest in initiating a CDS process. of all the actors, more than 60 proposals have been discussed in depth not only by the public and pri- vate partners traditionally involved in such exercis- CITY NETWORKS FOR DEVELOPMENT es, but also by those frequently excluded: the poor- AND SOCIAL INTEGRATION, MISSOES est, the indigenous, the rural workers, the women. REGION, BRAZIL To facilitate the process, five commissions have been established on formal sector development, in- formal sector development, municipalities as pro- moters of economic development, the environ- ment as a job creating opportunity, and gender and ethnic equity. Each commission assessed proposals against common criteria and selected those to pur- sue by consensus. This resulted in 14 cross-cutting projects being chosen for an action plan that was grouped into three categories: initiatives for strengthening local capacities, projects to generate labour and income, During a May 2004 regional seminar organised by and projects to improve the region's economic and UN-HABITAT's Urban Management Programme social structure.Funds to cover their estimated costs in San Miguel das Missoes, Brazil, delegates from of about US$5 million were identified at the na- small and medium municipalities in Argentina, tional, state, and local levels from both the public Brazil, Ecuador, and Mexico discussed the implica- and the private sectors. tions of increasing globalisation for their cities and Among other innovations, a participatory pub- how to be better prepared to deal not only with the lic-private entity, hosted by the Association of Mis- resulting increases in unemployment and poverty, soes Municipalities, was formally established to but also with its potential benefits. manage the action plan and its implementation. The experience of the Missoes region in south- With demonstrated success in preparing the re- ern Brazil, where the shift to export-oriented, gional council for the implementation of the na- monoculture farming of transgenic soja has impov- tional Fome Zero programme to combat hunger, erished small-scale farmers, is particularly instruc- the national government has expressed its intent to tive.The region's poor municipalities (25 munici- support the Missoes' action plan as an example of palities with a total of 270,000 inhabitants) have what could be replicated elsewhere in Brazil. been unable to meet the demands of a population The small cities of the Missoes region provide reduced to poverty. positive lessons about the possibilities for devising In response, the state government, the Associa- alternative development models for regions exclud- tion of Missoes Municipalities,and local stakehold- ed from globalisation. Of particular note for many ers, with support from the Urban Management small and medium cities in Latin America and the Programme and the Cities Alliance, have formulat- Caribbean is the significance of active participation ed a micro-regional plan for economic develop- by all urban actors as a critical starting point. ment, poverty reduction, and inclusion based on 44 Middle East and North Africa Housing in Tangier, Morocco A s reflected in our 2003 Annual Report, a number of countries in the Middle East and NorthAfrica are making concerted progress towards addressing the cities without slums MDG.Tunisia has, possi- bly, come closest to achieving this goal, and Jordan, Mauritania, and Morocco, which is in the process of operationalising its comprehen- sive Villes Sans Bidonvilles programme, have also made notable progress.Iran has recently adopted a framework policy to promote ur- ban upgrading in its cities. Cities Alliance activities in the region continued to expand this year, with new activities approved and under development in Egypt, Jordan, Morocco, andYemen, as well as activities undertaken in part- nership with theArab Urban Development Institute (AUDI) that will have an impact on the entire region. 45 support from the DFID and, from the late 1980s, PROMOTING PARTICIPATORY UPGRADING UN-HABITAT. IN ISMAILIA, EGYPT In 1999, the governor of Ismailia approached the Cities Alliance, with support from UN-HABI- TAT,for assistance with planning and designing the upgrading of two informal areas surrounding Is- mailia's Lake Timsah: El Hallous and El Bahtini. This activity was largely driven by the governorate with the support of local counterparts from the Sustainable Ismailia Governorate Project.Its success was due in large part to the fact that the project al- lowed for continuity and incorporated local knowledge accumulated from lessons learned in the past.The Cities Alliance activity has helped consol- idate the governorate's upgrading strategy. For the communities, the participatory process has given them a role and a voice in the upgrading programme. Possibly the biggest impact of the up- grading on the families affected will be secure tenure.The impact of this security is already observ- able in the large amount of house consolidation that is currently under way in the two communities. The governor, convinced by the results of the preparatory work, moved quickly to start the up- grading. He took the matter to the Ministry of Planning and was instrumental in securing a budg- etary allocation in the first National Five-Year Plan. The governor has indicated his priorities by estab- lishing the High-Level Committee for Slum Up- grading, with a clear emphasis on participatory processes, which are flourishing in Ismailia. As a result of these activities, the governorate Ismailia is situated some 120 kilometres northeast and the UNDP have initiated a participatory ap- of Cairo and was the administrative centre for the proach for the physical and social upgrading of the construction of the Suez Canal. Its civilian popula- two settlements in 2003­05.The Italian govern- tion was evacuated after the 1967 war,returning af- ment has facilitated a debt swap that will leverage ter the 1973 conflict.The destruction from the war about US$3.5 million to support the upgrading left many returnees with few options other than to process in the two neighbourhoods. squat on vacant land and fend for themselves. The success of the Ismailia project has con- The government of Egypt's Master Plan tributed to raising the profile of upgrading on the (1974­76) prioritised the provision of infrastruc- government's agenda, while the governorate has ture, allowing for private and owner-builder provi- signalled its intent to upgrade all informal settle- sion of homes. Subsequently, the Ismailia Gover- ments within its jurisdiction. norate undertook additional upgrading efforts with 46 which are characterised by fragmented decision- URBAN UPGRADING IN IRAN making and responsibilities, resulting in multiple and disjointed housing programmes. Nevertheless, a sound start has been made with the Iranian Cabinet's adoption of a national strate- gy for enabling and regularising informal settle- ments, the most tangible output of the Cities Al- liance assistance.This policy statement is notable for the clarity with which it identifies the main cause of informal settlements: failures of policy and gov- ernance: `In reality, the creation and expansion of informal set- tlements is either the direct result of ineffective current Zahedan slum, Iran macro policies pertaining to the provision of housing and In September 2002,the government of Iran and the related services for lower-income groups or the failure of National Habitat Committee applied to the Cities such existing policies, which is exacerbated by abrupt Alliance for assistance with the development of a population displacement caused by natural disasters or national approach to slum upgrading.With the sup- war.Weak urban management, profiteering, and contra- port of theWorld Bank,the request was presented as dictory decisions in allowing or resisting such settlements a desire to move from isolated, project-based activi- at the micro level further compound the situation'.22 ties to participatory, citywide programmes across all The policy response to this situation takes,as its the urban areas of the country. To this end, a mod- starting point, two principles of the Iranian consti- est Cities Alliance grant was approved for the Min- tution: Number 3, which refers to the creation of a istry of Housing and Urban Development to facili- suitable environment for improving ethics, eradi- tate a national dialogue on slum upgrading to cating discrimination, and ensuring equitable con- formulate a new national policy approach. ditions for all citizens,and Number 31,which refers Some 21 per cent of Iran's population of 65 to the universal right of all to suitable shelter, with million lives below the national poverty line.With priority to be given to the needy. more than 65 per cent of the population already From this beginning,the policy document out- urbanised, this poverty manifests itself physically in lines the following three main objectives: informal settlements and slums around cities and towns.The Iranian government anticipates that if · The provision of a safe, healthy living and current trends persist, the number of people living working environment that secures human dig- in informal settlements will double during the next nity, faith, and social participation in an inclu- decade. sive and sustainable manner. Local governments have not, however, been in · The provision of accessible and affordable infra- a strong position to respond to these challenges: structure and basic services for all so as to re- even though the Iranian constitution assigns major duce differences in the quality of life in the set- roles to elected local councils,this provision has not tlements and in the rest of the city. been comprehensively implemented. Recently, the · The preservation of the environment and of process of decentralisation has gained momentum Iran's cultural heritage through participation by and is likely to be the main thrust of the Fourth Development Plan.This process will also need to The editors have made minor, nonsubstantive adjustments to the text, 22 improve upon current institutional arrangements, which was translated from Farsi. 47 residents of the settlements in decisionmaking The national government has selected the and local operations. Tetouan region for substantial investments in the transport sector,including a new harbour for car fer- The policy document then outlines a series of ries, a new tourism zone, and the Tangiers-Tetouan guiding principles that focus on, among other highway.In addition,Tetouan will be a satellite loca- things, the need to revise current policies, use local tion for a planned regional investment centre.The resources, recognise secure tenure, and support the government's Villes sans Bidonvilles initiative will roles and duties of local city management. also invest in upgrading 22 informal settlements in This policy statement constituted the frame- theTetouan metropolitan region.Because of the in- work for a recently negotiated US$80 million volvement of the national government in the re- World Bank loan to Iran designed to support the gion's investments, a close link has been established implementation of an integrated approach to up- with the governor of the region. grading informal settlements and lay the founda- The launch of the Tetouan CDS last year dur- tions for more fundamental housing sector reforms ing an election period initiated public debate about over the next five years. the direction of the region, providing community groups, civic associations, NGOs, and the private sector with access to information about the metro- ROLE OF CDS IN MOROCCO'S TETOUAN politan region. Because of its systematic approach REGION and the inclusion of actors from various levels of government and civil society, the CDS has been used to direct both local and national spending, foster pro-poor policies, reinforce the decentralisa- tion process, and institutionalise the approach as a good governance practice. A number of partners are supporting Tetouan, including USAID, UN- HABITAT, the International Network for Urban Development,the Arab Media Forum for Environ- ment and Development, the Near East and North Africa Region (NENA) Urban Forum, and the Koraat Sbaa neighbourhood, Tetouan, Morocco Morocco Urban Forum. Municipal governance in Morocco was strength- PresentingTetouan's CDS experience at a work- ened significantly through recent decentralisation shop sponsored by the CitiesAlliance during the re- legislation and municipal elections in September cent Founding Congress of UCLG, Rachid Talbi, 2003, which increased local governments' adminis- minister of trade, industry, and telecommunications trative and fiscal responsibilities.All five communes and president of the urban commune ofTetouan in that make up the metropolitan region of Tetouan 2003, emphasised the positive impacts of the CDS view the CDS approach as a useful vehicle for tak- and the importance of the participatory approach in ing advantage of the changes and preparing a long- developing it.Involving the various stakeholders has term vision for economic growth and poverty re- leveraged nonstate resources and investments, pro- duction.While the region's economic potential is moted policy reforms at the local level, and identi- significant,in the past,local authorities did not have fied necessary actions at the national level.Engaging the mandate to co-operate beyond their adminis- stakeholders and including the urban poor from the trative boundaries, and thus could not take advan- beginning in planning the CDS has proven crucial tage of the synergies and economies of scale inher- for successful implementation. ent in a concerted approach for the whole region. 48 Plywood industry in Lagos, Nigeria 49 Learning and Knowledge Sharing I n addition to the learning and knowledge sharing that take place within the framework of all Alliance activities, the Cities Alliance also supports a number of global and regional learning activities. Fiscal year 2004 (FY04) was a productive year for the Learning Alliance. EMERGING LESSONS This year the Alliance undertook evaluations of its completed activi- ties to assess their impacts and garner lessons, both substantive and in terms of the Alliance's own grant procedures.The evaluation includ- ed desk studies of most completed activities, supplemented by two on-site evaluations of the upgrading of informal areas in Egypt's Is- mailia Governorate and the scaling up of poverty-focused CDSs in the Philippines. Activities were assessed against their original stated objectives and the Alliance's core criteria, in particular, assuring the commitment of local and national authorities, ensuring participatory involvement by local stakeholders, having cross-sectoral co-ordination and collabora- tion among agencies and donors, investment follow-up, focusing on institutionalisation and replication,and scaling up to citywide and na- tionwide levels. The evaluations conducted to date have reinforced the signifi- cance of the Alliance's central criteria and validated a number of spe- cific procedural lessons.These include the following: · Continuity of efforts makes a difference when building and insti- tutionalising local capacities.Thorough documentation is critical to institutionalising knowledge gained and enabling interventions to build upon accumulated knowledge. · Involvement by multiple partners creates opportunities, strength- ening the quality and impact of development co-operation and contributing to scaling up. Programmes with support from a sin- 50 gle donor are at a disadvantage, as they are less CDSs. Documenting and disseminating these likely to capture the opportunities, synergies, more rigorously and innovatively as they emerge and specialised capabilities resulting from nu- during implementation will be of strategic impor- merous partners working in concert. tance to the Learning Alliance and its partners in · Well-positioned activities can yield substantial the coming years. benefits. Even under less than optimal operat- ing conditions,such as insular intergovernmen- EXPANDING LEARNING ALLIANCE tal structures, stop-and-go funding, and cum- PARTNERSHIPS bersome procedures,progress is possible if some key features are in place, namely, a local cham- The Learning Alliance partnership launched in pion(s) with vision and experience, the requi- 2003 with the French nonprofit organisation the site legal and administrative framework, clearly Institute des Sciences et des Techniques de l'E- understood priorities and objectives,and a real- quipement et de l'Environnement pour le istic timetable. Développement (ISTED) has continued to con- · Consultative processes can help stimulate na- tribute significantly to the Alliance's knowledge tional processes of dialogue and co-ordination. sharing capacities, underscoring the value of strate- · Participatory processes usually take longer than gic partnerships for communications and dissemi- expected, and project planning should make al- nation. ISTED's bilingualVilles en Développement lowances for this. Careful assessments of local newsletters have captured the experiences of Al- practices and institutional procedures, along liance partner activities, reaching urban develop- with realistic estimates of the time needed for ment practitioners worldwide. From the evolution the lengthy process of preparing and imple- of urban and regional policies in China to urban fi- menting participatory upgrading and CDSs,are nance and poverty reduction in Madagascar, IST- important. Ensuring from the outset that all ED's news bulletins have been disseminating les- stakeholders and administrative officers are in- sons of experience. formed of the activity and its objectives, priori- To support the Alliance's outreach initiatives, ties, timetable, and implementing requirements ISTED and the Alliance jointly produced a user- in relation to staff, budgets, and procedures can friendly guide to the Cities Alliance and its fund- help prevent start-up delays. ing application procedures, Working with the Cities Alliance, in multiple languages. ISTED and the Al- For Alliance members, the outcomes of these liance also collaborated in preparation for the evaluations underscore the value of in-country col- Cities Alliance session at the Africities Summit laboration and argue for continued and strength- 2003, which was held in Yaoundé, Cameroon, in ened coherence of effort and adherence to the Al- December. liance's core criteria.The building of partnerships Learning Alliance partnerships remain an inte- and involvement of investment partners from the gral part of the Cities Alliance's strategy to increase earliest stages of proposal development have proven the dissemination of information connected to the critical to sustainability and to scaling up. These Alliance and its activities. Work is ongoing to criteria will continue to remain as more than bu- strengthen similar communications partnerships reaucratic requirements of Alliance grants. with UN-HABITAT, GTZ, UCLG, and other Al- As demonstrated elsewhere in this report, Al- liance members. liance activities are producing valuable, substantive lessons on slum upgrading and participatory 51 PARTNERSHIP EVENTS 2004 Leveraging private sector investments Financing Strategies for Cities and the Urban Poor, São Paulo Public Policy Forum The Cities Alliance provided support for Shorebank Advisory Services' success- São Paulo, October 2003 ful bid for US$1 million in support from the USAID for a global financial inno- The Alliance's 2003 Public Policy Forum, hosted vations partnership. The partnership is an initiative operated by private sector by the city of São Paulo, focused on the challenges banks that emphasises product innovation to benefit slum dwellers. The part- of financing municipal investments and the gaps in nership will engage multiple private, public, and donor institutions, encourag- and opportunities for extending financial services ing a coordinated solution to the problems of the urban poor. This coherence to the urban poor. of effort will be greatly enhanced by the partnership's intent to work with Financial institutions still view low-income Cities Alliance cities that have already demonstrated commitment to and communities as inherently risky, with high transac- progress in slum upgrading. tion costs, small margins, and low turnover. Private The lack of medium-term funding is a major obstacle to financing housing for sector involvement in slum upgrading programmes the poor in developing countries worldwide. The addition of housing loans to is constrained by this risk assessment, yet without MFIs' working capital credit portfolios requires larger average loan sizes and the active engagement of both slum dwellers and terms, which in turn obligates MFIs to find sources of funds to meet these the private sector, slum upgrading programmes are loan terms and prevent mismatches between assets and liabilities. unlikely to achieve scale or sustainability. Among the most significant challenges for city Just over one year into its partnership agreement with the Cities Alliance, AC- and national governments is to create conditions CION International is making significant strides in developing mechanisms to under which the private sector assumes some or all secure stable, medium-term, commercial funding for MFIs with growing hous- of the development risk and does not act merely as ing loan portfolios. Discussions are underway with GuarantCo, the financial a contractor for government-financed projects. facility that enables nonsovereign entities to access private financial assis- Beyond the financing requirements of upgrad- tance without sovereign guarantees. Designed to help increase the availability ing there are, of course, the extremely large invest- of long-term local financing, GuarantCo and ACCION are exploring the mech- ments that both local and national governments anisms through which GuarantCo could help MFIs extend loan maturities. make in financing infrastructure for urban growth. Early expectations are that this innovative partnership could be piloted in Consensus is growing in many countries on the Latin America in one or several of ACCION's established affiliate MFIs with need to link cities' infrastructure financing require- maturing housing portfolios. ments with domestic capital markets. Just how developing cities can mobilise domes- tic capital and how access to credit can be expand- ed to the urban poor are issues that Cities Alliance Africities 2003 Summit: Ensuring Access to partners are increasingly focusing on, both in the Basic Services in African Local Governments context of scaling up slum upgrading and of Yaoundé, December 2003 strengthening the impacts of CDSs on fiscal sus- The Africities Summit has become an institution at tainability in the provision of urban services.The which mayors of African cities meet to exchange experiences of Brazil and of other developing experiences and learn from each other as to how countries worldwide presented during the forum best to deal with the pressing problems of cities and offered a number of strategies and policy options towns on the continent.23The 2003 Africities Sum- that the Alliance is directly building on both in its Mabogunje, Akin L.,`Access to Basic Services in African Local Govern- 23 major, new municipal finance initiative, as well as ments: Understanding the Challenge and Starting Action', keynote address through its partnerships with financial sector insti- to the Africities Summit, 2 December 2003. tutions. 52 mit was the largest and most representative gather- devoted much time and effort to analysing the ty- ing of African local authorities ever assembled. pology and causes of slums, one of its most impor- In his keynote address, Professor Akin Mabo- tant contributions has been to reinforce and clarify gunje spoke about the importance of local govern- target 11 of the MDGs. By returning to the origi- ments working with the democratic consent of nal text of the CitiesWithout Slums action plan and their citizens and of how this is directly linked to the UN Secretary General's report, which set out local governments' ability to mobilise the infra- the agenda for the Millennium Summit, the task structure investments needed to improve their citi- force has clarified that the target should be inter- zens' access to basic services. preted in the following manner: by 2020, improv- The Cities Alliance organised a half-day session ing substantially the lives of at least 100 million slum at the summit focused on the participation of dwellers, while deterring new slum formation. African cities in the Cities Alliance.This included In its interim report, the task force noted that two panel discussions, one on citywide slum up- while all efforts must be made to take immediate grading in Nouakchott, Mauritania, and the other steps towards meeting the 100 million target by on the experience of the South African Cities Net- 2020, these initial efforts must be accompanied by work with CDSs. incremental actions aimed at reducing the current rate of slum formation in accordance with the Millennium Task Force: Improving the Lives Cities Without Slums action plan.With this ap- of Slum Dwellers proach, the total number of slum dwellers current- New York, February 2004 ly projected to live in cities and towns by 2020 would be halved, thereby aligning target 11 with the other MDGs and targets. Middle East and North Africa region mayors establish CDS as a top priority Marseilles, March 2004 The city of Marseilles and the World Bank Group have teamed up to build capacity for urban man- agement in the Middle East and North Africa (MENA) region.The MENA knowledge hub, as the new partnership is known, is designed to sup- Dhaka, Bangladesh port, on demand, the preparation of CDSs; share In support of the MDGs, the UN launched the knowledge on methods and approaches pertaining Millennium Project to recommend the best strate- to the socioeconomic development of cities; and gies for achieving the MDGs.The Millennium Pro- promote training activities targeted to local con- ject's three-year research programme focuses on texts. It aims to strengthen networks to exchange identifying the operational priorities, organisation- experiences and expertise and support regional al means of implementation, and financing struc- training institutions for municipal management. tures necessary to achieve the MDGs. At this second conference,mayors and city rep- Task Force Eight, Improving the Lives of Slum resentatives from MENA countries selected CDSs Dwellers, involves a number of Cities Alliance as the most important issue on which to exchange members, including the Secretariat.This task force knowledge, experiences, and successful practices. has met a number of times, and in February 2004 Video conferences were subsequently held with the produced an interim report.While the task force Marseilles hub, the World Bank Institute, and the 53 Cities Alliance in May and July 2004,during which tries across 5 continents. It provides a forum for lo- mayors from various countries, including Algeria, cal governments to develop shared policies and po- Egypt, Jordan, Lebanon, Morocco, Syria, and sitions on key issues, including poverty reduction, Tunisia,discussed the essentials of a CDS and shared sustainable development, and social inclusion, and their experiences with strategic planning with offi- will greatly strengthen the role of local authorities cials from Barcelona and Marseilles. in the Cities Alliance. Almost 3,000 mayors and lo- With the support of the World Bank, the cal representatives from around the world attended MENA knowledge hub plans to hold two more UCLG's Founding Congress. conferences by the end of 2004 in Marrakech and The Cities Alliance was invited to organise a Beirut,which will provide MENA mayors with an- workshop during the congress to illustrate how other opportunity to exchange their experiences cities are using CDSs to plan for their future growth with CDSs. and strengthen their decision- making processes to balance eco- "Cities Alliance helps mayors to de- Founding Congress of United Cities and Local nomic, social, and environmental velop citywide strategic develop- Governments progress. Panelists included the Paris, May 2004 following: ment programmes and to find the long-term investment necessary to · Yahya Al-Shaibi, governor of implement them. Both these com- Aden,Yemen, initiator of the ponents are crucial to improving Aden CDS, which leveraged a US$23 millionWorld Bank the lives of the poorest citizens of Adaptable Programme Loan the world and achieving the tar- · Andrew Boraine,chair of the gets set out in the United Nations South African Cities Net- work, which includes South Millennium Development Goals." Africa's nine largest cities that --Marta Suplicy, Mayor of São Paulo and together represent more than President, UCLG 17 million inhabitants and account for more than 60 per cent of South UCLG Presidents, Smangaliso Mkhatshwa, Mayor of Tshwane, Marta Suplicy, Mayor of São Paulo, and Bertrand Delanoë, Mayor of Paris Africa's GDP. · Sun Ping, deputy mayor of Chengdu, China, a The Founding Congress of UCLG was a landmark city with a population of 11 million and where event for the world's local authorities. Created by a city-region CDS with strong rural-urban the merger of the founding local authority mem- linkages is being implemented with co-financ- bers of the Cities Alliance--the International ing from DFID and theWorld Bank Union of LocalAuthorities (IULA),theWorld Fed- · Rachid Talbi, mayor of Tetouan and Morocco's eration of United Cities (FMCU-UTO),theWorld minister of trade, industry, and telecommunica- Associations of Cities and Local Authorities Coor- tions, who manages the Tetouan CDS profiled dinations (WACLAC),and with Metropolis serving earlier in this report. as its Metropolitan Section,UCLG is now the voice of local government to the international commu- The workshop benefitted from an enthusiastic nity. UCLG brings together both individual cities audience of mayors and civic leaders who expressed and national associations of local governments, big keen interest in the CDS experiences and their and small, rural and urban, in more than 100 coun- methodologies and tools. 54 PUBLICATIONS: THE YEAR IN REVIEW way forward and identifies the most promising ap- proaches to achieving the UN's Millennium Dec- Slum Upgrading and Participation: Lessons from Latin laration targets for improving the lives of slum America, Ivo Imparato and Jeff Ruster, 2003 dwellers by scaling up participatory slum upgrad- A road map and practical, hands- ing and poverty reduction programmes. on guide for local officials and The first global assessment of slums, the report policymakers confronted with examines the factors that underlie the formation of the task of designing and manag- slums and their social, spatial, and economic char- ing slum upgrading and shelter acteristics and dynamics. Commenting in the re- projects at the local level, this port's foreword,UN Secretary General Kofi Annan book offers five geographically notes: and institutionally diverse case studies from Latin America that address the following questions: How `Slums represent the worst of urban poverty and in- can we increase service provision to low-income equality.Yet the world has the resources,knowhow and urban areas? How can we increase the impact of power to reach the target established in the Millenni- projects and the durability of the improvements um Declaration.It is my hope that this report,and the they bring about? How can we enhance projects' best practices it identifies, will enable all actors in- financial sustainability and mobilise additional re- volved to overcome the apathy and lack of political sources by involving the private sector? What are will that have been a barrier to progress, and move the key issues this kind of initiative needs to ad- ahead with greater determination and knowledge in dress? our common effort to help the world's slum dwellers to The book provides information and examples attain lives of dignity, prosperity and peace'. to help project designers identify the level and Thirty-three city case studies of slum condi- modalities of participation that will work for them tions, policies, and strategies commissioned and and the components of the environment that they compiled in preparation for this report are available will need to set in place to do so.The study was on the CD-ROM Understanding Slums, compiled carried out by the Brazilian consultancy, Diagonal and edited by the Development Planning Unit of Urbana,under a contract with theWorld Bank,and University College London. with financial support from the Swiss Agency for Development and Cooperation and the govern- Villes en Développement: Bulletin de la coopération ment of Japan.The book was published with sup- française pour le développement urbain, l'habitat et port from the CitiesAlliance and Diagonal Urbana. l'aménagement spatial, ISTED, June­September 2003, issue no. 60­61 The Challenge of Slums: Global Report on Human Since the partnership with the Settlements, UN-HABITAT, 2003 Alliance was launched, ISTED's Almost 1 billion people live in bilingual Villes en Développe- slums, the majority in the devel- ment bulletins have routinely car- oping world, where more than ried news on CitiesAlliance part- 40 per cent of the urban popula- ner activities, events, and tion are slum dwellers. The publications. This special issue number is growing and will was devoted exclusively to the Cities Alliance, fea- continue to increase in the ab- turing the experiences of Alliance partners around sence of serious and concerted action by munici- the world, from CDSs evolving in Bobo-Dioulasso pal authorities, governments, civil society, and the and Aden to poverty reduction and slum upgrading international community.This report points the efforts in Brazil,Madagascar,Morocco,andVietnam. 55 Working with the Cities Alliance, ISTED, 2004 City Development Strategies to Reduce Poverty, This guide walks readers through Asian Development Bank, 2004 exactly what the Cities Alliance In Asia,2.2 billion people,or one supports and its criteria and pro- out of every two, are expected to cedures for funding. Printed in live in cities by 2020.Urban cen- English and French, and with tres are increasing in size and plans for the publication of Spanish and Arabic ver- number.They are important to sions, the guide has been serving the Alliance's ex- national economies,because they isting and prospective local partners seeking sup- are the engines of economic port to scale up slum upgrading and develop action growth and the focal points for such important ac- plans and financing and investment strategies for tivities as trade, commerce, industry, and govern- the development of their cities. ment administration and create employment op- portunities. But despite these advantages, most rapidly growing Asian towns and cities face signifi- State of the Cities Report 2004, South African Cities cant problems.The urban paradox is that amid the Network (SACN), 2004 wealth and prosperity generated by towns and cities, The economy of South Africa, a high incidence of urban poverty persists. like that of many industrial and This publication sets out the results of the Asian rapidly developing nations, is Development Bank's regional technical assistance now essentially an urban econo- initiative, Promoting Urban Poverty Reduction my ever more dependent on the through Participation in the Cities Alliance,includ- health of the economies of its ing guidelines, case studies, and institutional largest cities.This report takes a arrangements for the preparation and implementa- hard look at the forces that have transformed South tion of CDSs and Cities Without Slums pro- Africa's largest cities over the last 10 years. grammes.The case studies on the CDS and Cities The report incorporates indicators within an Without Slums approaches adopted by Calicut (In- analytical framework that includes the South dia); Da Nang (Vietnam); and Caloocan, Quezon African Cities Network's objectives of productive, City, and Taguig (Philippines) underscore that for inclusive, sustainable, and well-governed cities. It cities to benefit from their comparative advantages, also incorporates indicators of the major demo- they must become more efficient, govern well, and graphic trends that are of concern to cities into a establish coherent poverty reduction programmes. so-called statistical almanac, and uses these data to analyse and discuss the implications of current @CitiesAlliance, the e-newsletter for Cities Alliance, trends and responses for the future of SouthAfrican 2004 cities. In addition to municipal councillors and of- The Cities Alliance newsletter was revitalised to ficials, the report speaks to numerous entities re- advance the Alliance's knowledge-sharing goals sponsible, in one way or another, for city develop- more effectively.With more frequent distribution, ment, including national and provincial and carrying news from Alliance partners in addi- governments, businesses, communities, and a wide tion to timely pieces on significant and innovative variety of civil society structures. initiatives in the areas of slum upgrading,municipal finance and CDSs, the Alliance continues to strengthen its outreach to its members and through them to urban practitioners worldwide. 56 Kiosks in Bangkok, Thailand 57 Cities Alliance Organisation I n accordance with its charter, the governance and organisational structure of the Cities Alliance includes the Consultative Group, the Policy Advisory Board, and the Secretariat. THE CONSULTATIVE GROUP The Consultative Group--the Alliance's board of directors--is re- sponsible for setting the Alliance's long-term strategy, approving its annual work programme and budget, and reviewing achievements. The Consultative Group consists of financial contributors to the Cities Alliance Trust Fund and the political heads of the new global organisation of local authorities, UCLG, and Metropolis, who have pledged their commitment to achieving Alliance goals.The Consulta- tive Group is co-chaired by theWorld Bank's vice president for infra- structure and UN-HABITAT's executive director. Prospective finan- cial contributors may serve as associate members for a period agreed to by the Consultative Group. Membership in the Cities Alliance has continued to grow with Brazil becoming the first developing country to join the Cities Al- liance in October 2003. Brazil is represented on the Consultative Group by its Ministry of Cities and by CAIXA Econômica Federal, which is providing financial support for Brazil's membership. The Consultative Group has also set up the five-member Steering Committee, made up of a subset of its members, to provide guidance to the Secretariat. Consultative Group Meetings Consultative Group meetings are held annually in connection with a global public policy forum designed to share the lessons learned from experience and agree on policy orientations and standards of practice in areas related to the Alliance's goals. 58 Consultative Group meetings have been held as follows: · Berlin, December 1999: inaugural meeting, launch of Cities Without Slums ac- tion plan, and approval of the Cities Alliance Charter and 2000 work programme. · Montreal, June 2000: first Public Policy Forum on the dimensions of pro-poor ur- ban policies, Consultative Group review of application guidelines, and approval of Cities AllianceVision statement. · Rome, December 2000: second Public Policy Forum on Local Partnerships: Moving to Scale,Consultative Group approval of amendments to the Cities Alliance Charter, approval of the 2001 work programme and procedures to establish the Pol- icy Advisory Board and Steering Committee. · Kolkata, December 2001: third Public Policy Forum on Sustainable Partnerships for City Development, Consultative Group review of procedures for the independ- ent evaluation of the Cities Alliance, and approval of the 2002 work programme. · Brussels,October 2002: panel discussion at the European Commission onAchiev- ing the Millennium Development Goal of Cities Without Slums, Consultative Group review of the independent evaluation of the Cities Alliance, and approval of the 2003 work programme. · São Paulo,October 2003: fourth Public Policy Forum on Financing Strategies for Cities and the Urban Poor, Consultative Group approval of the 2004 work pro- gramme and procedures for developing country membership on the Consultative Group. Consultative Group Members as of June 2004 The Consultative Group includes representatives of the following: · Local authorities · UCLG, formerly the International Union of Local Authorities (IULA), the World Federation of United Cities (FMCU-UTO), and the World Associa- tions of Cities and Local Authorities Coordination (WACLAC) · Metropolis · Governments · Brazil · Canada · France · Germany · Italy · Japan · Netherlands · Norway · Sweden · United Kingdom · United States · Multilateral organisations · Asian Development Bank · United Nations Environment Programme · UN-HABITAT · World Bank 59 THE POLICY ADVISORY BOARD The Alliance's Policy Advisory Board is composed of eminent urban experts from each region.They provide guidance to the Consultative Group on key strategic, policy, and regional issues and support the implementation of Alliance activities.The composition, terms of office,and operating procedures for the Policy Advisory Board were established by the Consultative Group at its December 2000 meeting.The board brings together civic leaders and policy advisers with a formidable range of public and private sector ex- pertise that spans the leadership of community-based organisations, NGOs and their networks,local authority organisations,community banks,community savings and cred- it schemes, commercial banks, and public sector financial institutions.What they have in common is practical knowledge and political experience in working with poor cities and the urban poor worldwide. The board meets twice a year and is made up of eight members--two from Africa, two from Asia, one from Eastern Europe, one from the Arab states, one from Latin America and the Caribbean, and one from the industrial countries who serve two-year terms on a rotating basis. The Policy Advisory Board held its first meeting on 11­12 June 2001 at the UN's headquarters in NewYork on the occasion of the General Assembly's special session on Istanbul+5.For the Alliance's October 2003 Public Policy Forum held in São Paulo,the board's members from LatinAmerica and the Caribbean and the industrial countries,re- spectively, led the two working sessions on finance for cities and finance for the urban poor. In May 2004, board members gathered in Bangkok for their annual spring meeting, taking advantage of the occasion to gain exposure to slum upgrading programmes be- ing undertaken as part of the government ofThailand's ambitious CitiesWithout Slums initiative.The meeting was organised by Somsook Boonyabancha, the board's chair and director of the Community Organisations Development Institute (CODI), the public organisation underThailand's Ministry of Social Development and Human Security that is deeply involved in the implementation of this national initiative.The board's meetings with slum dwellers and local community leaders and authorities generated a fruitful ex- change of experiences. The government of Thailand has undertaken to provide and facilitate housing de- livery for 1 million households in five years. One of the central programmes of the ini- tiative is the Baan Mankong (Secure Housing) Programme that,through CODI,is chan- nelling infrastructure subsidies and soft housing loans directly to poor communities for a variety of upgrading activities.The programme is both unconventional and highly in- novative, and is based on a communal approach to citywide slum upgrading.This ap- proach relies on a high level of social mobilisation and organisation, with communities, local governments, and affected stakeholders planning an upgrading process to improve all communities within a city. Struck by the power of community participation under the programme, Policy Advisory Board members found the visit rewarding and stimu- lating and have pledged to continue such substantive exchanges in the future. 60 Policy Advisory Board members as of June 2004: · Somsook Boonyabancha is Director of the Community Organizations Develop- ment Institute, a public organisation under Thailand's Ministry of Social Develop- ment and Human Security, and Secretary General of the Asian Coalition for Hous- ing Rights, a regional coalition of NGOs, community organisations, and professionals based in Bangkok. · Yousef Hiasat is Chief Executive Officer of BeitAl-Mal Saving and Investment for Housing, a leading investment and financial firm in Amman, Jordan; former Direc- tor General of Jordan's Housing and Urban Development Corporation, the public institution responsible for housing and urban development policies and housing schemes directed at middle- and low-income households; and former Principal Ad- viser to the prime minister of Jordan on housing and urban development issues. · Mary Houghton is President and Director of Shorebank Corporation in Chicago, a commercial bank holding company with US$1.5 billion in assets organised to im- plement community development strategies in targeted urban neighbourhoods and rural areas,and an adviser to private banks and microcredit lending institutions in de- veloping and transition countries. · Akin L. Mabogunje is Chair of the Presidential Technical Committee on Urban Development and Housing in Nigeria; Chair of the Board of Trustees, Ijebu-Ode Development Board for Poverty Reduction; former Executive Chair of the Devel- opment Policy Centre, Ibadan; and an internationally renowned African develop- ment scholar who has published and lectured widely on urban management, rural development, and spatial perspectives in the development process. · Jean Pierre Elong Mbassi is Coordinator of the Municipal Development Part- nership for Africa,based in Cotonou,Benin;Special Adviser to the Council of Cities and Regions of Africa; and an experienced practitioner in urban management and slum upgrading. · Sheela Patel is founding Director of the Society for the Promotion of Area Re- source Centres in Mumbai, India, working in alliance with the National Slum Dwellers Federation and Mahila Milan in the federation of community-based or- ganisations of the urban poor, facilitating their direct participation in addressing the problems of cities and their relationship with informal settlements; and Chair of Shack Dwellers International, a global alliance of grassroots community federations of the urban poor. · AnaVasilache is founding Director of the Partners Romania Foundation for Local Development, a Bucharest-based NGO that supports democratic processes of gov- ernance and decentralisation, and works to strengthen the managerial capacities of local governments;former Head of the Settlements Management Office in the Min- istry of Public Works and Regional Planning in Bucharest; and has extensive expe- rience with planning legislation. · RichardWebb is Director of the Centre for Economics Research of San Martin de Porres University, Lima, Peru; former President of the Central Bank of Peru; Presi- dent of the Cuanto Institute; and a widely published scholar on public policy, in- come distribution, poverty, and economic reform. 61 THE SECRETARIAT The Alliance Secretariat, housed at World Bank headquarters, carries out the Alliance's mandates and manages its operations. Secretariat staff Manager, Mark Hildebrand Senior Urban Upgrading Adviser, William Cobbett Senior CDS Adviser, Peter Palesch Senior Urban Finance Adviser, Rajivan Krishnaswamy Urban Economist, Pascale Marie-Claude Chabrillat Communications Officer, Chii Akporji Programme Analyst, Andrea Merrick Operations Officer, Kevin Milroy Resource Management Assistant, Françoise Aubry-Kendall Financial Management Specialist, V. Rama Krishnan Programme Assistant, Patria Consuelo M. Morente Programme Assistant, Susanna Henderson Intern, Till von Knebel Regional Advisers Eastern and Southern Africa, Carien Engelbrecht Latin America and the Caribbean, Ivo Imparato South Asia, Alison Barrett 62 Financials T IMPROVING EFFICIENCY AND IMPACT he Cities Alliance's overall objective is improving the efficiency and impact of urban development cooperation in its key areas of focus: CDSs and scaling up slum upgrading. Central to implementing this objective and underlying all its activities is sound financial manage- ment of the funds under Alliance administration. At the partnership level, sound financial management practices and reliable reporting underpin donor confidence that funds are re- sponsibly managed,resulting in sustained and increased contributions. The Alliance's Core Fund and special facilities, such as the Cities Without Slums Facility for Sub-Saharan Africa, provide efficient ve- hicles for members to programme development cooperation funds targeted at the urban poor. At the country programme level, good financial management practices by the recipients of CitiesAlliance funds,combined with ap- propriate oversight by the CitiesAlliance Secretariat,helps ensure that the scarce funding is effectively utilised for the purposes intended and builds local ownership and capacities to sustain development pro- grammes. The Cities Alliance continued to strengthen its financial manage- ment practices at both the partnership and country programme levels during the past year. `The environment in which the World Bank administers trust funds has changed significantly over the past few years',reports Anwar Ravat, the World Bank's Chief Administrative Officer responsible for the Cities Alliance programme.`Trust Fund reform has affected poli- cies,procedures,monitoring and enforcement of trust funds through- out the institution'. The Cities Alliance Secretariat has responded by formalising its policies and procedures, strengthening its procurement and financial management oversight, auditing its internal controls, improving its 63 records management, conducting random grant compliance testing, and participating in World $150 Bank task forces and other groups working on var- ious aspects of trust fund reform.The Secretariat has also developed more efficient practices for set- $100 ting up and monitoring grants made to local au- thorities, NGOs, and other recipients of Alliance funds.This includes procedures for the initial assess- $50 ments of recipients'financial management and pro- curement capacities and for periodic monitoring and financial supervision of partnership grants. $0 Nearly half of Cities Alliance resources are im- plemented by local recipients, with the other half 2000 2001 2002 2003 2004 2005 implemented primarily by the World Bank and UN-HABITAT on behalf of recipients. CWS action plan 6-year target `We have always sought out best practices for 2000­2005 targets: US$115 million in grant assistance the governance and management of partnership Cities Alliance commitments to date: US$69.7 million programmes both within and outside of the World Bank', says Cities Alliance Secretariat Manager Mark Hildebrand.`I am pleased to report that now many programmes turn to the Cities Alliance for financial management best practices'. ity. (The last two years of the agreements are con- tingent on the next independent evaluation of the Alliance.) The United Kingdom entered into a FISCAL YEAR 2004 HIGHLIGHTS three-year agreement for £2.1 million (US$3.7 Cities Alliance members paid in more than US$15 million) in core funds, and Germany entered into a million in contributions during FY04, including two-year agreement for 0.5 million (US$0.6 mil- US$6.5 million in core contributions and US$4.8 lion). million for the Alliance's special facilities:the Com- Also in FY04, Italy committed US$0.65 mil- munity-Led Infrastructure Finance Facility, the lion for scaling up successful methodologies in the Sub-Saharan Africa Facility, and the Community LatinAmerica and Caribbean region, Japan contin- Water and Sanitation Facility. The Alliance dis- ued its support for CDS activities in Asia with a bursed more than US$13.2 million in FY04, up US$0.75 million contribution, and Norway con- from US$9.2 million in FY03. More than US$6 tributed US$0.9 million to the Sub-Saharan Africa million in new work programme allocations were Facility. Canada made a contribution for an urban made during the year, including more than US$2 financing programme for the 2006 World Urban million for activities in Sub-Saharan Africa. Forum to be held inVancouver (US$0.075 million), During the year, the Alliance signed new mul- and the Netherlands continued its support for local tiyear trust fund agreements with Germany, Swe- economic development activities in Sub-Saharan den, and the United Kingdom.The Swedish Inter- Africa (US$0.05 million). national Development Cooperation Agency signed TheWorld Bank confirmed late in the year that five-year agreements to contribute SEK 25 million it would contribute US$1.7 million in core funds (US$3.3 million) in core funds and SEK 23 million in FY05 through a one-year extension in Window (US$3.0 million) for the Sub-Saharan Africa Facil- 2 of the Development Grant Facility.The World 64 Bank is currently reviewing options for financing report by the World Bank's Operations Evaluation its membership in subsequent years. Department on global partnership programmes to The Alliance was favourably reviewed in two be released in late 2004 gives the Alliance high separate reports issued during the year by theWorld marks, including for its governance and manage- Bank. A July 2003 Quality and Assurance Group ment,monitoring and evaluation,financial leverag- report noted that the Alliance was `rated highly by ing, and consistency with Development Commit- Bank staff and other members of the partnership'.24 tee criteria. The group's findings included:`The ability of the World Bank,`Urban Development Sector Board Assessment' (Washington, 24 CA [Cities Alliance] to support the CDS process as DC: Quality and Assurance Group, 2003, p. 7). a means of opening/sustaining dialogue with lead- ers at the local level was highly valued by staff'.A 65 SOURCES OF FUNDS FY00­FY04 (unaudited) (US$ as of 30 June 2004) SUMMARY Type of funding Pledges Paid-in Core funding 28,725,000 22,064,809 Non-core funding 35,230,000 22,113,763 Non-core Secretariat funding 5,720,000 5,180,000 Total funding 69,675,000 49,358,572 Donor Pledges Duration Paid ina Core funding ADB 500,000 2002­2003 500,000 Brazil 150,000 2004­2006 0 Canada 1,000,000 2000­2001, 2003­2004 1,038,326 France 800,000 2000, 2002­2003 793,609 Germany 1,600,000 2000­2005 1,444,152 Italy 2,120,000 2000­2004 1,665,246 Japan 1,500,000 2000­2004 1,250,000 Netherlands 2,750,000 2000­2004 2,750,000 Norway 1,480,000 2000­2003 1,511,300 Sweden 2,775,000 2000­2005 1,400,341 UNEP 250,000 2003 250,000 UN-HABITAT 100,000 2004 0 United Kingdom 6,600,000 2000­2005 4,415,509 United States 1,250,000 2000­2004 1,000,000 World Bank 5,850,000 2002­2005 4,046,326 Total core 28,725,000 22,064,809 Non-core fundingb Canada 75,000 2004 73,608 Italy 11,635,000 2001­2007 3,528,445 Japan 3,500,000 2000­2004 2,750,000 Netherlands 100,000 2003­2004 100,000 Norway 1,800,000 2002­2003 1,822,034 Sweden 4,275,000 2003­2005 2,482,219 United Kingdom 11,045,000 2001­2007 9,942,457 United States 2,100,000 2003­2004 715,000 World Bank 700,000 2001 700,000 Total non-core 35,230,000 22,113,763 Non-core Secretariat fundingc World Bank 2,950,000 2000­2002 2,950,000 UN-HABITAT 1,450,000 2000­2005 1,270,000 Other 1,320,000 2001­2005 960,000 Total 5,720,000 5,180,000 Note: Fiscal year covers the period July 1 through June 30. a.Amounts may vary from amounts pledged because of exchange rate fluctuation. b.Non-core funding is earmarked for a specific facility, region, or activity. The facilities include the Community-Led Infrastructure Finance Facility, the Cities Without Slums Facility for Sub-Saharan Africa, and the Community Water and Sanitation Facility. c.Secretariat funding includes in-kind funding for staff secondments from UN-HABITAT, Germany, the United Kingdom, and the World Bank Staff Exchange Program with the Caisse des dépôts et consignations. 66 USES OF FUNDS FY00­FY04 (unaudited) (US$ as of 30 June 2004) SUMMARY FY04 Cumulative Funding source Allocations Disbursements Allocations Disbursements Core activities 4,712,440 5,055,560 21,331,918 13,871,382 Non-core activities 1,552,600 8,197,695 26,957,220 5,654,627 Total uses of funds 6,265,040 13,253,255 48,289,138 29,526,009 APPROVALS BY TYPE OF ACTIVITY FY04 Cumulative Type of activity Core funds Non-core funds Core funds Non-core funds City development strategies 1,395,000 605,000 6,270,012 2,396,620 Scaling up upgrading 1,222,440 682,600 7,071,811 18,018,600 CDS and upgrading 845,000 265,000 5,640,095 1,872,000 Secretariat 1,250,000 0 2,350,000 4,670,000 Total approved grants 4,712,440 1,552,600 21,331,918 26,957,220 APPROVALS BY REGION FY04 Cumulative Region Core funds Non-core funds Core funds Non-core funds Sub-Saharan Africa 1,320,000 845,000 4,606,640 1,537,620 Asia 818,320 432,600 5,517,025 2,182,600 Eastern Europe & Central Asia 0 0 858,227 0 Latin America & the Caribbean 399,120 0 3,763,165 5,475,000 Middle East & North Africa 400,000 0 1,295,000 0 Global/Multiregional 525,000 275,000 2,941,861 13,092,000 Secretariat 1,250,000 0 2,350,000 4,670,000 Total approved grants 4,712,440 1,552,600 21,331,918 26,957,220 SECRETARIAT EXPENDITURES Expense FY04 FY03 FY02 Cumulative Operational Secretariat staff 516,468 451,443 625,295 2,316,421 Consultants, other labour 14,480 5,279 70,819 413,578 Travel 234,195 207,533 208,708 888,436 Other costs 24,901 77,840 71,926 636,667 Subtotal 790,044 742,096 976,748 4,255,102 Management and administration Secretariat staff 673,563 622,786 533,784 2,555,918 Rent, computing, other costs 191,803 160,311 146,030 525,144 Subtotal 865,366 783,097 679,814 3,081,062 Total 1,655,410 1,525,193 1,256,000 7,336,165 67 APPROVED PARTNERSHIP ALLOCATIONS (as of 30 June 2004) Allocation amount (US$) Start date Country Activity SUB-SAHARAN AFRICA REGION 380,640 Mar-03 Burkina Faso CDSs and local Poverty Reduction Strategy Papers for the local governments of Bobo-Dioulasso, Banfora, and Ouahigouya 249,000 Jun-02 Ethiopia Addis Ababa CDS FY04 75,000 Jan-04 Ethiopia Ethiopia Housing Sector Study 41,870 Completed Ethiopia/South Africa Preparation of the Johannesburg­Addis Ababa Partnership Mar-04 Programme FY04 580,000 Jul-04 Ethiopia, South Africa Participation of Johannesburg and Addis Ababa in the Johannesburg­Addis Ababa Partnership Programme 75,000 Jul-03 Ghana Preparing for a CDS in the Kumasi Region 0 Cancelled Kenya Nairobi CDS and Upgrading of informal settlements 240,000 Jul-02 Kenya Collaborative Nairobi Initiative on Slum Upgrading Policy Frameworks 152,000 Completed Madagascar Slum Upgrading and Community Development in four major Sept-03 cities: Antsirabe, Antsiranana, Mahajanga, and Toamasina 286,000 Jun-01 Madagascar CDS for Antananarivo Infrastructure development, urban services improvement, and city poverty strategy 75,000 Completed Mauritania Slum Upgrading and Urban Poverty Alleviation Jun-01 495,000 Jul-02 Mozambique Slum Upgrading and Vulnerability Reduction in Flood-prone Cities and Towns FY04 245,000 Mar-04 Niger CDSs for poverty reduction for Dosso and Maradi 254,000 Completed Nigeria Scaling up Upgrading through a CDS approach in Karu Jun-03 74,750 Feb-03 Nigeria Preparatory Assistance for Lagos Strategy Development 100,000 Completed Regional Regional Roundtable on Upgrading Low-Income Settlements Oct-01 in Africa FY04 50,000 Completed Regional Africities 2003 Summit Mar-04 215,000 Jul-03 Regional Building Partnerships for Cities Without Slums in Eastern and Southern Africa FY04 215,000 May-04 Regional Cities Without Slums: toward implementing a support program for countries and cities of Western and Central French-speaking Africa 165,000 Completed Rwanda Kigali Economic Development Strategy May-02 350,000 Completed South Africa Johannesburg City Level Comprehensive Development Mar-02 Framework 40,000 Completed South Africa Preparation of Southern Africa Cities Alliance Mar-02 750,000 Dec-02 South Africa South Africa Cities Support and Learning Network 68 APPROVED PARTNERSHIP ALLOCATIONS (as of 30 June 2004) Allocation amount (US$) Start date Country Activity SUB-SAHARAN AFRICA REGION--CONTINUED FY04 500,000 Mar-04 South Africa South African Municipal Water and Sanitation Partnership Initiative 36,000 Completed Swaziland Preparation of the Mbabane Comprehensive Slum Upgrading Mar-04 and Finance Programme FY04 500,000 Jul-04 Swaziland Development of a Comprehensive Urban Upgrading Program for Mbabane ASIA REGION 0 Cancelled Bangladesh Khulna: Options for Sustainable Upgrading Jan-02 185,000 Completed Cambodia Scaling up Community-Driven Development Processes in Sept-03 Phnom Penh 54,640 Mar-03 Cambodia Improving Tenure Security and New Housing Options for the Urban Poor in Phnom Penh 500,000 Completed China Metropolitan Level CDS in One Major City-Region and One Dec-02 Provincial Capital 250,000 Completed China Changsha City-Region, Guiyang, and Shengyan City Dec-02 Development Strategies: Urban Indicators Project 900,000 Dec-01 China City-Region Development Strategies 226,000 Completed India Local Partnership for Poverty-Focused CDS in Hyderabad Sept-03 67,000 Completed India Preparation of Gujarat State Urban Slum Policy Dec-03 150,000 Completed India City-Wide Scaling Up of Slum Upgrading (Ahmedabad) Feb-03 387,000 Cancelled India Creating Community Federations for Urban Partnerships (Orissa) 98,065 Feb-03 India Improving Access of the Poor to Basic Urban Services in the Ludhiana Municipal Corporation FY04 70,000 Oct-03 India Tamil Nadu Urban Land Market Assessment for Chennai, Coimbatore, and Tiruppur 450,000 Feb-03 India Scaling-up the Provision of Universal Minimum Sanitation to slums in cities FY04 182,600 Jul-04 India Community-Led Sangli Toilet Construction Activity 30,000 Completed Indonesia Proposal preparation: Poverty-focused CDS Mar-01 600,000 Mar-01 Indonesia Institutionalising poverty-focused CDSs FY04 250,000 Sep-03 Indonesia Yogyakarta (DIY): Regional Development and Poverty Reduction Plan through Strategic Urban-Rural Linkages and Regional Integration FY04 250,000 Sep-03 Mongolia Development Strategy for Secondary Cities 69 APPROVED PARTNERSHIP ALLOCATIONS (as of 30 June 2004) Allocation amount (US$) Start date Country Activity ASIA REGION--CONTINUED 160,000 Completed Nepal Kathmandu CDS and Informal Settlement study Aug-01 30,000 Completed Pakistan Proposal Preparation: Peshawar CDS and City Assistance Apr-01 Programme 150,000 Completed Pakistan CDS and Cities Without Slums initiative for Peshawar Jun-03 30,000 Completed Philippines Proposal preparation: Expansion of the CDS Programme May-01 600,000 May-01 Philippines Scaling-Up Poverty-Focused CDSs 31,000 Jun-03 Philippines Preparation of a Proposal on Strengthening Urban Shelter Programmes in the Philippines 500,000 Sep-01 Regional City Networking and Investment Marketplace Development initiative in Asia 150,000 Completed Regional Asian CDS Workshop 2000 Dec-00 600,000 Sep-02 Regional South Asia Regional Adviser FY04 248,320 Jul-04 Timor-Leste City Upgrading Strategy for Urban Dili 300,000 Completed Vietnam Enhancing Access of the Urban Poor and Vulnerable Groups to Dec-03 Basic Infrastructure and Housing FY04 250,000 Jul-04 Vietnam CDSs in Medium Cities EASTERN EUROPE AND CENTRAL ASIA REGION 75,000 Completed Bosnia and Preparation of Mostar's Local Economic Development, Capacity Jun-04 Herzegovina Building, and Business Improvement Program 75,000 Completed Bulgaria Sofia CDS, Phase I Jun-01 249,800 Completed Bulgaria Sofia CDS, Phase II Jun-03 458,427 Mar-03 Latvia Cities Programme, CDS for Economic Development LATIN AMERICA AND THE CARIBBEAN REGION 195,000 Cancelled Bolivia Slum Improvement and Disaster Management Mitigation in La Paz 180,000 Completed Brazil Recife Metropolitan Region Development Strategy Jan-04 560,000 Apr-01 Brazil Building an Enabling Strategy for Moving to Scale 5,000,000 Jun-01 Brazil Salvador, Bahia, Technical and Social Assistance Project 300,000 Completed Brazil Bairro Legal programme (São Paulo) Jun-04 165,700 Feb-02 Brazil Antipoverty and Anti-Exclusion Socioeconomic Action Plan: City Networks for Development and Social Inclusion (Rio Grande do Sul) 70 APPROVED PARTNERSHIP ALLOCATIONS (as of 30 June 2004) Allocation amount (US$) Start date Country Activity LATIN AMERICA AND THE CARIBBEAN REGION--CONTINUED FY04 75,000 Completed Brazil Housing and Urban Development: Support to a Pro-Poor Mar-04 National Policy 96,000 Completed Central America Urban Review Jul-01 84,000 Completed Central America Regional Coordination towards a Sustained Programme for Sept-02 Upgrading 498,400 Dec-04 Chile Local Development Strategies for Housing Solutions to Overcome Poverty FY04 324,120 Mar-04 Colombia Slum Upgrading and Land Tenure Regularization 320,000 Completed El Salvador Improving Execution capacity for urban upgrading programme Sept-03 in the Metropolitan Area of San Salvador 256,445 Nov-02 Jamaica Kingston and St. Andrew Sustainable Development Plan 245,000 Jun-01 Mexico Scaling up Upgrading and Managing Informal Urban Growth in the Metropolitan Mexico City Area 250,000 Nov-02 Peru Metropolitan Lima City Poverty Strategy 475,000 Apr-01 Regional Moving to Scale in Latin America and the Caribbean 213,500 Jun-01 Regional Build Capacities in Urban Knowledge Management MIDDLE EAST AND NORTH AFRICA REGION 130,000 Completed Egypt Upgrading informal areas in the Ismailia Governorate Mar-02 FY04 200,000 May-04 Egypt Alexandria CDS for Sustainable Development 75,000 Completed Iran National Dialogue on Citywide Slum Upgrading Dec-03 FY04 200,000 Mar-04 Jordan Greater Amman Development Strategy 295,000 Aug-01 Morocco Upgrading project for the Koraat Sbaa neighborhood in Tetouan 245,000 Apr-03 Morocco Metropolitan Cooperation in the Tetouan Region: the Role of the CDS 150,000 Feb-02 Yemen Aden Medium- to Long-Term CDS for Local Economic Development GLOBAL AND MULTIREGIONAL ACTIVITIES 50,000 Completed Global Urban Indicators Linkages Jul-02 150,000 Completed Global Preparatory Assistance Fund Sept-02 49,000 Mar-00 Global Cities Alliance web site FY04 150,000 Nov-01 Global Knowledge Dissemination, cumulative (web site, publications) 50,000 Completed Global Public Policy Forum, June 2000 Jul-00 71 APPROVED PARTNERSHIP ALLOCATIONS (as of 30 June 2004) Allocation amount (US$) Start date Country Activity GLOBAL AND MULTIREGIONAL ACTIVITIES--CONTINUED 60,000 Completed Global Urban Upgrading: A Resource Framework Jun-01 75,000 Cancelled Global CDS Action Plan 287,000 Jun-00 Global Consultative Group/Public Policy Forum meetings, cumulative FY04 145,000 May-01 Global Policy Advisory Board meetings, cumulative 20,000 Jun-00 Global Building Political Commitment 5,000 Sep-00 Global Millennium Summit product and activity 20,000 Jun-00 Global Short Note Series 30,000 Jun-00 Global Technical Peer Reviews, cumulative 500,000 Sep-01 Global Pro-Poor slum upgrading frameworks in India, the Philippines and South Africa 210,000 Completed Global Housing Finance for the Poor: Innovations and Good Practices Jun-03 from the Field 450,000 Completed Global Consolidation of the Experience from Seven CDSs of the Urban Mar-02 Management Programme 10,000,000 Oct-02 Global Development of the Community-led Infrastructure Finance Facility (CLIFF) , DFID funding 2,300,000 Apr-03 Global The Development of the Community-led Infrastructure Finance Facility, SIDA funding 195,000 Completed Global Cities Alliance Independent Evaluation Nov-02 13,195 Completed Global International Mechanisms to Promote Alternatives to Forced Oct-02 Evictions 249,666 Feb-03 Global Building a Solid Foundation: Overcoming the Obstacles to Scalability of Housing Microfinance for the Poor 1,100,000 Completed Global Secretariat budget (FY03) Jun-03 FY04 1,250,000 Completed Global Secretariat budget (FY04) Jun-04 FY04 175,000 Jul-02 Global Knowledge Generation and Learning, cumulative FY04 125,000 Nov-03 Global Final Project Evaluations FY04 225,000 Mar-04 Global CDS Impacts Study FY04 200,000 Mar-04 Global CDS Conference: Measuring and Improving CDS Impacts 300,000 Cancelled Multiregional Regional Action Plans ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank IULA International Union of Local Authorities AFD Agence Française de Développement LED Local Economic Development [French Development Agency] MDG Millennium Development Goals AUDI Arab Urban Development Institute MORE Moratorium on Relocations and Evictions AVSI Associazione Volontari per il Servizio NEPAD New Partnership for Africa's Development Internazionale (Association NGO nongovernmental organisation of Volunteers in International Service) NSDF National Slum Dwellers Federation BUILD Breakthrough Urban Initiatives for Local PRSP Poverty Reduction Strategy Paper Development SACN South African Cities Network CAIXA Brazil's Housing and Urban Development Bank SIDA Swedish International Development CCRA Council of Cities and Regions of Africa Cooperation Agency CDS city development strategy SPARC Society for the Promotion of Area Resource CLIFF Community-Led Infrastructure Finance Facility Centres, India CWS Cities Without Slums UCLG United Cities and Local Governments DFID Department for International Development UN-HABITAT United Nations Human Settlements (UK) Programme EU European Union UNDP United Nations Development Programme FCM Federation of Canadian Municipalities UNECA United Nations Economic Commission FLACMA Federación Latinoamericana de Ciudades, for Africa Municipios y Asociaciones UNEP United Nations Environment Programme GTZ Gesellschaft für Technische Zusammenarbeit UNICEF United Nations Children's Fund (German Agency for Technical Cooperation) USAID US Agency for International Development IDB Inter-American Development Bank WACLAC World Associations of Cities and Local IFC International Finance Corporation Authorities Coordination ILO International Labour Organization ISTED L'Institute des Sciences et des Techniques de l'Equipement et de l'Environnement pour le Développement PHOTO CREDITS p.4: Curt Carnemark/World Bank; p. 11: Erika Puspa; p.12: Eric Miller/World Bank; p.14: Quickbird Satellite, Kenya 2002, UN- HABITAT; p.16: Sateh Chafic El-Arnaout; p.18: Christianna Johnnides; p. 20: Curt Carnemark/World Bank; p.21 : UN-HABITAT; p. 22: Richard Schumann; p. 23: UN-HABITAT; p. 24: Projet de réhabilitation des infrastructures urbaines (PRIU), Maradi, Niger Republic; p. 25: Ray Witlin/World Bank; p. 26: William Cobbett; p. 29: Erika Puspa; p.31: Asian Development Bank; p. 32: Homeless International; p. 33: World Bank; p. 34: Andrea Merrick; p. 35: Ahmed Eiweida; p. 36: Ahmed Eiweida; p. 38: Harold Abrantes; p.40: Cities Alliance; p. 41: Kevin Milroy; p. 42: World Bank; p. 43 : World Bank; p. 44: Françoise Aubry-Kendall; p. 45: William Cobbett; p. 46: Sateh Chafic El-Arnaout; p. 47: Françoise Aubry-Kendall; p. 48: Curt Carnemark/World Bank; p. 52: World Bank; p. 53: United Cities and Local Governments; p. 56: Curt Carnmenark/World Bank. 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