IMF, World Bank report says urbanisation can lead to slums and crime

Sodom_GomorrahThe Global Monitoring Report (GMR) 2013, released April 29, 2013 by the World Bank and International Monetary Fund (IMF), states that although urbanisation helps pull people out of poverty and advances progress towards the Millennium Development Goals (MDGs), it can also lead to burgeoning growth of slums, pollution, and crime if not managed well.

Explaining this assertion, the report says urbanisation has been a major force behind poverty reduction and progress towards other MDGs and that with over 80 per cent of global goods and services produced in cities, countries with relatively higher levels of urbanisation, such as China, and many others in East Asia and Latin America, have played a major role in lowering extreme poverty worldwide.

In contrast, though, the GMR 2013 indicates the two least urbanised regions, South Asia and Sub-Saharan Africa, have significantly higher rates of poverty and continue to lag behind on most MDGs.

The report reveals that large cities and smaller towns are fast becoming home to the world’s largest slums, with Asia home to 61 per cent of the world’s 828 million slum dwellers, Africa 25.5 per cent and Latin America 13.4 per cent. The developing world’s urban centres are expected to burgeon, drawing 96 per cent of the additional 1.4 billion people by 2030.

Titled Rural-Urban Dynamics and the Millennium Development Goals, the report starkly compares the well-being in the countryside versus the city and reveals that while urban infant mortality rates range from 8-9 percentage points lower than the rural rates in Latin America and Central Asia; it is 10-16 percentage points in the Middle East and North Africa, South Asia, and Sub-Saharan Africa and highest in East Asia (21 percentage points).

In South Asia, 60 per cent of urban dwellers have access to sanitation facilities, compared with 28 per cent in rural areas. In Sub-Saharan Africa, 42 per cent of the urban population has access, compared with 23 per cent of rural residents. Access to safe water in urban areas in developing countries was almost complete in 2010, with 96 per cent coverage, compared with 81 per cent of the rural population having access, according to the report.

Commenting on the findings of the report, Kaushik Basu, the World Bank’s Chief Economist and Senior Vice President for Development Economics said: “The rural-urban divide is quite evident. Megacities and large cities are the richest and have far better access to basic public services; smaller towns, secondary cities, and areas on the perimeter of urban centres are less rich; and rural areas are the poorest, But this does not mean unfettered urbanisation is a cure-all – the urban poor in many places urgently need better services as well as infrastructure that will keep them connected to schools, jobs and decent health care.”

For his part, Hugh Bredenkamp, Deputy Director of the IMF’s Strategy, Policy and Review Department stated: “Emerging market and developing countries are growing robustly notwithstanding slow growth in advanced economies. Sustaining this growth by continuing to maintain prudent macro policies and strengthening the capacity to manage risks, including through a rebuilding of depleted policy buffers is key to continued progress in poverty reduction as we approach 2015.”

Lynge Nielsen, Senior Economist in IMFs Strategy, Policy and Review Department and co-author of the GMR, however believes “Agglomeration, or the clustering of people and economic activity, is an important driver of development and evidence suggests that it can have high pay offs, particularly for countries on the lower rungs of development.”

For Jos Verbeek, Lead Economist at the World Bank and lead author of the GMR though, “Urbanisation does matter. However, in order to harness the economic and social benefits of urbanisation, policy-makers must plan for efficient land-use, match population densities with the required needs for transport, housing and other infrastructure, and arrange the financing needed for such urban development programmes.”

The GMR, which is also an annual report card on MDG attainment, finds that progress continues to lag on reducing maternal and child mortality and providing sanitation facilities, targets, which will not be met by the MDGs 2015 deadline. However, progress has been stellar on reducing extreme poverty, providing access to safe drinking water and eliminating gender disparity in primary education, with these targets already achieved several years ahead of the MDGs deadline.

Though extreme poverty has declined rapidly in many countries, the World Bank estimates that by 2015 there will still be 970 million people living on $1.25 a day. Therefore, continued concerted efforts to get extreme poverty as close to zero as possible are needed.

As the report points out, the challenge of fighting poverty and improving the living conditions of the poor lies in both urban and rural areas.

To cope with urban growth, a coordinated package of essential infrastructure and services is needed. Only by meeting essential needs related to transportation, housing, water and sanitation as well as education and healthcare can cities avoid becoming hubs of poverty and squalor, the report says.

At the same time it says, stepped up efforts are also needed to improve development in rural areas, where 76 per cent of the developing world’s 1.2 billion poor live, with inadequate access to the basic amenities defined by the MDGs.

Rural poverty rates far exceed those of urban areas across all regions of the world, the report further finds, indicating that rural women are hurt the most by poor infrastructure, because they perform most of the domestic chores and often walk long distances to have access to clean water, and lower levels of education attainment.

Although tackling rural development challenges will not be easy, it can be done with complementary rural-urban development policies and actions by governments to facilitate a healthy move toward cities without short-changing rural areas, the report recommends.

By Edmund Smith-Asante

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