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Realising Urban Potential: Are donors keeping pace with rapid urbanisation?


According to the most recent UN World Urbanization Prospects around half of the world’s population is living in urban areas in 2008, and the world will be increasingly urban from now on.  The World Bank, in a recent piece on ‘The Urbanisation of Global Poverty’, noted a simultaneous trend towards the urbanisation of poverty, with the poor moving into towns and cities faster than the rest of the population.

Urbanisation is characterised by the massive expansion of informal settlements and strains on existing urban work, land, services and infrastructure. For example,  the number of people living in slums has doubled in India in the past 20 years and is now greater than the entire population of Britain (The Times, May 2007). Are donor strategies, policies and programmes keeping up with the pace of change occurring in the least developed countries?

From a quick review of ten major international donors we saw little or no  evidence that urban insecurities are moving up the aid agenda. What we tend to find is that development itself retains a very rural focus, with the urban focus limited to a series of statements about the challenges of infrastructure, environment and sustainability, and urban governance.  Four or five donors articulated a specific urban interest, but none appeared to have a strategic approach to the urbanisation of poverty. Is it because urbanisation is subsumed within the agendas of other development agendas, such as   trade, economic growth, and infrastructure investments?  There is nothing inherently wrong with taking an integrated approach, but we would argue that the specific challenges of rapid urbanisation and the changing face of poverty warrant strategies that are very well articulated and forward looking.

That said, urban centres are acknowledged as engines of growth. A few things are worthy of note here. The World Bank, through its World Development Report 2009, 'Reshaping Economic Geography', has begun to take this further through the idea of balanced spatial development. This perspective is useful and fills an important gap, as pointed out by ODI’s Kate Higgins earlier this week.

We would caution against simple analysis of economic opportunities. The reality of urban markets mean the urban poor are often trapped in constrained market relationships (e.g. see a recent ODI Briefing Paper on urban labour markets ). Micro-level concerns are often over-looked as city planners and policy-makers compete with other cities on national, regional and global scales.  

Two particular concerns stand out for us.

  • First, what is pro-poor urbanisation? What is the relationship between the pace of urbanisation, the pace of economic growth and the pace of urban and national poverty reduction?
  • Second, urbanisation needs to be understood as a process of social transformation. Urbanisation can transform social relations, such as class and caste systems and  gender dynamics, in ways that may provide benefits (e.g. greater freedom for women to enter the labour market). Transformed relationships can also be inhibiting (e.g. poor labour or citizenship rights for migrant workers). There is a role for minimising new forms of exploitation and vulnerability.

Responding to these challenges requires drawing the linkages between social inclusion, urbanisation and economic growth.

Strategically, cities can be viewed as sites of vulnerability (a welfarist approach) or they can be recognised for their strategic role in development (economies of scale, vibrancy, change processes). We would argue for the latter, but urge caution against blind dismissal of the realities of rising urban inequalities, new forms of urban insecurity and poverty. Cities are, by their very nature, always in a state of flux – new people, new trade opportunities, new forms of power and opportunities. However, these dynamics lead to tensions and violence, often linked to control over space and the changing nature of vulnerability. It is very unclear how donors plan to engage with and harness these urban energies and change for pro-poor development.

This limitation is openly acknowledged in some donor quarters. Encouragingly, Andrew Steer, (DG for Research and Policy, DFID) has acknowledged that in 30 years time, poverty will be overwhelmingly urban and admitted that ‘we are severely under-equipped to deal with this’ (at DSA conference, 8th November 2008). And as delegates gathered last week in Nanjing, China for the 4th World Urban Forum it is becoming clear that to meet international development targets, such as the MDGs and the reduction of global inequality, donors need to respond to and maximise the potential of an urbanised developing world.