41239 CONTENTS Foreword ii Cities Alliance in Action 1 Lessons from Slum Upgrading Activities Lessons from City Development Strategies Sustainable Financing of Investments Cities Alliance Members' Reports 29 Communications and Knowledge Sharing 63 Knowledge Sharing Activities Publications Review Cities Alliance Organisation 74 The Consultative Group The Policy Advisory Board The Secretariat Financials 79 Abbreviations and Acronyms 90 Cover image: Informal settlement in Mumbai, India (Mark Edwards/Still Pictures) 2 0 0 7 A n n u a l R e p o r t FOREWORD Wherever it comes from, the growth of urban areas includes huge numbers of poor people. Ignoring this basic reality will make it impossible either to plan for inevitable and massive city growth or to use urban dynamics to help relieve poverty. UNFPA State of World Population 2007 espite the widespread perception that urban issues do not attract the D attention they deserve, it is possible to discern a number of recent, significant trends that, combined, indicate a renewed interest in urban issues and, more importantly, on cities. We can expect increased attention on the role of cities in the context of climate change, which has become a new global developmental priority. Marginal doubts about the negative global impacts of human activity have largely disappeared in the face of a broad international consensus, greatly assisted by coverage given to the Stern Report and, more emphatically, by the authoritative reports of the Intergovernmental Panel on Climate Change. As public awareness of climate change increases, so will the focus increas- ingly shift to cities, where many of the consequences of climate change will be most sharply felt, and need to be managed. Cities Alliance members should be well placed to provide assistance, par- ticularly to smaller cities, as they strive to identify ways to adapt to the consequences of climate change. The United Nations Environment Pro- gramme's efforts in strengthening the Cities Alliance focus on environmen- tal issues in its work programme is thus particularly timely. Climate change will also be one of the main focus areas at United Cities and Local Govern- ments' second World Congress, to be held in Jeju, Korea in October 2007. Additional reasons for the growing international recognition of the scale and impact of urbanisation arises from the very effective role that has been played by the United Nations Human Settlements Programme (UN-HABI- TAT) in hosting the World Urban Forum (WUF). From its very modest begin- nings in Nairobi in 2002, the Barcelona (2004) and, emphatically, Vancouver ii · Cities Alliance Annual Report 2007 (2006) conferences have firmly established WUF as learning and knowledge, and by helping cities to learn the most significant platform for discussing and debat- from each other, directly and indirectly. From its ing urban and city issues. Combined with Habitat's beginning, a central objective of the Cities Alliance State of the World Cities reports, the convening, norma- has been to help improve the quality of development tive power of the United Nations has significantly assistance, and be a party to effecting real, sustainable boosted international attention on urban development and long-term change. The Paris Declaration on Aid issues and on cities, alike. WUF 4 in Nanjing in Octo- Effectiveness, to which most Cities Alliance members ber 2008 is likely to consolidate and strengthen this are signatories, has reinforced the importance of find- process. ing mechanisms to achieve this coherence of effort. Elsewhere, after years of declining interest and Following the second independent evaluation of budgets, a number of bilateral partners have begun the Cities Alliance in 2006, the core focus and man- to renew their interest in urban development. Sup- date of the coalition--supporting citywide and na- ported by the publication of the very direct and tional upgrading programmes, and promoting city readable More Urban Less Poor, the Swedish Interna- development strategies--was reaffirmed. In order to tional Development Agency launched its new urban maximise its impact, the Alliance is in the process of policy in 2006. The Norwegian Government is due reviewing and amending some of its project and pro- to release its own urban development policy before gramme approaches. These are likely to translate into this Annual Report is published. The summer of a far greater emphasis on utilising the knowledge gen- 2007 also saw the French Government produce a erated by the activities of the Cities Alliance and its succinct analysis called Emerging Cities, designed as a members, and improving the Alliance's reach through guide for their Embassy staff, although it will doubt- a combination of knowledge sharing, improved com- less attract a far wider readership. Spanish coopera- munication and advocacy. tion has prioritised decentralisation and the strength- The Cities Alliance 2007 Annual Report reflects ening of local administrations in its comprehensive some of these changes. Previous annual reports had Master Plan to 2008. Looking ahead, the World been successful in combining a significant substantive Bank's 2009 World Development Report will focus message with a review of the highlights of the previ- on the spatial dimensions of development. ous year's work programme and related activities. In Outside of the membership of the Cities Alliance, anticipation of a steady increase in the number, and a significant amount of media attention has been gen- quality, of substantive outputs, this Annual Report erated by the publication of two, high-quality reports. focuses on reporting on the main activities of the year The first was the Worldwatch Institute's report State under review. of the World 2007: Our Urban Future. This was fol- This Annual Report also marks my first complete lowed by the United Nations Population Fund's flag- year as Manager of the Cities Alliance. I want to thank ship publication UNFPA State of World Population the Consultative Group for its constant support and 2007: Unleashing the Potential of Urban Growth. Writ- leadership, the members of the Policy Advisory Board ten in a very accessible style, the report was a wel- for combining lively meetings with high quality ad- come addition to the debate highlighting the positive vice. And, finally, I wish to thank my colleagues in the potential of urbanisation and noting that: `Cities con- Secretariat for what I hope will be the first of a num- centrate poverty, but they also represent the best ber of extremely challenging and productive years. hope of escaping it'. For its part, the Cities Alliance is well situated to William Cobbett continue to provide support to partner cities and Manager countries, especially through an increased focus on Cities Alliance Annual Report 2007 · iii Through small grants the Cities Alliance provided cities with resources to undertake a range of preliminary activities-- surveys, workshops, studies, engaging with Cities Alliance members--that generate information for use in designing larger, more substantial proposals for city development strategies and slum upgrading activities. City view of Bangkok, Thailand CITIES ALLIANCE IN ACTION ver the past year, the Cities Alliance expanded O leaders have been actively supporting programmes its commitment to smaller cities by supporting and policy reforms that target the poorest Brazilians, preparatory strategy development and slum up- particularly with respect to improvements in housing grading initiatives in Africa and Asia. Through small and basic services. grants, typically $75,000, the Cities Alliance provided This chapter provides an overview of these and cities with resources to undertake a range of prelimi- other Cities Alliance activities over the past fiscal nary activities--surveys, workshops, studies, engaging year. Highlighted are the urban challenges of land with Cities Alliance members--that generate infor- shortages, resource availability, and scaling up city mation for use in designing larger, more substantial development strategies to a national level; as well proposals for city development strategies and slum the solutions that come from increased planning, re- upgrading activities. The Cities Alliance has found source mobilisation, more competitive economies, that these grants can offer smaller cities the same op- and greater government involvement--from the local portunities as larger cities to outline the vision for to the national level. their futures, and develop customised strategies. At the other end of the spectrum, the Cities Alli- ance continued to support a large portfolio of pro- Lessons from Slum Upgrading Activities grammes in Brazil, with significant dedicated funding from the Government of Italy. Activities in Brazil Slum upgrading, and slum prevention: encompass large metropolitan areas with millions of lessons from experience inhabitants living in informal or "precarious" settle- Cites with sizeable proportions of their populations ments. Technical assistance and support provided by living in slums invariably have a range of develop- the Cities Alliance and its members over the past mental challenges that require far more than a new years will reinforce the unprecedented investment housing or shelter strategy--such cities almost cer- programme announced by the Government of Brazil, tainly require a fundamental re-examination of basic the Programa de Aceleração do Crescimento (Acceler- assumptions, and existing policies and practices. Many ated Growth Programme). City, state, and national cities in Latin America, Africa and Asia have a major- Courtesy of UNEP Cities Alliance Annual Report 2007 · 1 ity of their populations living in informal, precarious or slum conditions, indicating the depth and the breadth of the governance issues to be addressed. Simply stated, the global growth of slums cannot be reduced to a housing crisis, or a simple failure of Slum Upgrading and Prevention: housing markets. Rather, it is a very visible manifesta- MDG Target 11 priorities tion of a deeper set of policy failures. When a sizeable proportion of a city's population is "In pursuance of our commitment to achieve sustain- not recognised by authorities, or is viewed as tempo- able development, we further resolve: ...to achieve rary, a problem, or a burden, then it is likely that the significant improvement in the lives of at least 100 city will weaken its capacity for economic growth. To million slum-dwellers by 2020, recognizing the ur- improve its chances of economic growth and develop- gent need for the provision of increased resources for ment, both city and national governments may need to affordable housing and housing-related infrastructure, undertake, as their first act, a thoroughgoing reapprais- prioritizing slum prevention and slum upgrading..." al of the official view of the urban--and urbanising-- Resolution of the 2005 Millennium, Review Summit, poor. As the United Nations recently noted: "No coun- Article 56. September 2005 try in the industrial age has ever achieved significant economic growth without urbanization."1 1. United Nations Population Fund. 2007. UNFPA State of World Population Floral garland market on side street of Indian city 2007: Unleashing the Potential of Urban Growth. New York: UNFPA: 1. 2 · Cities Alliance Annual Report 2007 Far left: Programme launch of Quiero mi Barrio (I love my Chile of barrio) in Chile's Valparaiso region Government USAID Left: Community-led sanitation of of project in Sangli-Miraj-Kupwad Courtesy Courtesy Municipal Corporation, India Yet, the dramatic growth experienced by cities Now in its seventh year of supporting city and na- over the past fifty years pales in comparison with the tionwide slum upgrading initiatives, the Cities Alli- explosion projected for the next three decades. Cities ance is observing that increasing attention is being in developing countries are expected to grow from 2 paid not only to the upgrading of existing slums, but billion inhabitants to 4 billion by 2030. For a variety also to the equally important challenge of anticipat- of complex reasons, including a hostile policy envi- ing future urban growth. There is a modest but grow- ronment, this urban growth is occurring with decreas- ing awareness of the need to introduce development ing densities, and could lead to a tripling in the policies that would have the effect of preventing the amount of land used by urban areas globally.2 Slums growth of new generations of slums, by planning and in developing-country cities are growing by an esti- providing for the needs of future urban growth. How- mated 120,000 people per day, generally being forced ever, it is also clear that this process needs to be dra- to settle on the most marginal and precarious land.As matically speeded-up and expanded. Strategies that the world belatedly wakes up to the threats posed by anticipate future growth patterns are generally far climate change, and the realisation that the conse- less costly, less socially disruptive, and less complex quences of this global threat will be managed increas- than those attempting to deal with the issue after the ingly by cities, so the wider dimensions of the growth fact. A quick examination of Latin America's cities of slums should become clearer, further reinforcing will demonstrate the scale of the challenge of upgrad- the need for a far-sighted multi-sectoral response. ing neighbourhoods 10, 20 and 30 years after people The Cities Alliance has consistently argued against have settled. A key challenge for the Cities Alliance using sensation and fear to draw attention to the and its members is to help share such experiences in growth of slums, believing that it is far more produc- the hope that Africa and Asia can learn from them, tive--and historically accurate--to point to the need and avoid the worst pitfalls that continued inaction for cities and national governments to adopt policies will guarantee. A 2006/7 review of the Alliance's designed to capture the positive impacts of urbanisa- slum upgrading portfolio (highlights below) points to tion.As the United Nations Population Fund (UNFPA) some of the central elements and emerging lessons of noted in its landmark State of World Population 2007 curative and preventive upgrading strategies. report, "a pre-emptive approach is needed if urbanisa- tion in developing countries is to help solve social and Upgrading slums, and planning for city growth: environmental problems, rather than make them cata- the issue of land availability strophically worse."3 Central to the challenges of city growth, slums, and 2. Angel, S., S.C. Sheppard, and D.L. Civico. 2005. The Dynamics of Global urban poverty is the issue of demand for well-located Urban Expansion. Washington, D.C.: Transport and Urban Development and affordable urban land. Access to urban land mar- Department, the World Bank. kets has been, and continues to be, a politically 3. United Nations Population Fund. 2007. UNFPA State of World Population 2007: Unleashing the Potential of Urban Growth. New York: UNFPA: 2. charged process, often shrouded in secrecy and Curt Carnemark/World Bank Photo Library Cities Alliance Annual Report 2007 · 3 Residents traveling to new housing project, Lusaka, Zambia Cities Alliance Partners Focus on Land Issues priate institutional framework and non-functioning · UN-HABITAT, with support from the Swedish Interna- land markets. In some countries authorities try to dis- tional Development Cooperation Agency and the World courage migration and deliberately limit access to Bank, launched a Global Land Tool Network: a long-term land and services for new housing."4 effort to support and scale up ongoing initiatives on in- While there is an increasing call for pro-poor land novative, affordable, pro-poor and gender-sensitive land management and the development of equitable and tools. transparent land legislation, many local governments · The World Bank and partners devoted the fourth Urban face a legacy of limited authority, and poor land plan- Research Symposium in May 2007 to the issues of "Ur- ning and management. Far too many cities in devel- ban Land Use and Land Markets," including implications oping countries are now facing the reality of contin- for city spatial growth, efficiency, and equity. ued growth and the creation of new slums, even as their politicians debate whether and how to upgrade existing slums. opaque procedures. Yet the manner of releasing land However, some interesting and innovative exam- in a particular city has direct effects on how well that ples exist, demonstrating the possibility of planning city functions and how efficiently its economy oper- for future growth. The Cities Alliance, in connection ates. In particular, it influences where people live, with a broader World Bank project, is supporting the under what conditions, and at what cost. (See box 1 Ecuadorian government in a bold initiative. Working for an example in Brazil.) with seven secondary cities, the government is antici- As a recent policy document noted: "The reasons why the poor cannot find a place to build is rarely 4. Tannerfeldt, Göran and Per Ljung. 2006. More Urban Less Poor: An Intro- because there is a real shortage of suitable land. The duction to Urban Development and Management. London: Sida and Earths- failure is rather due to poor governance, an inappro- can: 58. 4 · Cities Alliance Annual Report 2007 Edwin Huffman/World Bank Photo Library pating urban growth by making land available for fu- ture development, paying particular attention to the Santo Domingo, needs of low-income populations. Future urban ex- Ecuador's local pansion, new city limits and land acquisition for rights authorities plan for of way and service provision are also being planned. In urban growth with assessing the prospective expansion and new bound- an urban expansion aries of the cities over the next thirty years, the au- grid, to connect and thorities have designed the preliminary layout of an extend the existing arterial road grid covering the entire area designated urban network. From the final report: Urban Expansion Strategy for Intermediate Cities for urban expansion. The right of way to build the in Ecuador (December 2006) roads is to be acquired by the municipality, and roads been an increase in the gap between rich and poor, as will be paved incrementally, as demand increases. well as increased spatial and social marginalisation. One of the main objectives of these Ecuadorian Part of the response was a bold decision by the cities is to ensure that residential land remains afford- Government of Karnataka to constitute Greater Ban- able to the poor and to the city. Significantly, expand- galore, tripling the geographical area of the city to ing the supply of accessible urban land will moderate over 700 square kilometres, incorporating an addi- land price increases and potentially reduce them. tional 2.5 million inhabitants in eight adjacent local Other cities are also taking steps to expand their authorities, and 111 villages.5 boundaries, not only to accommodate urban growth The stated aims of this decision were to: and ensure land remains affordable for the urban poor, but as a critical step in promoting improved · Improve infrastructure development governance and economic performance. The city of · Upgrade urban civic services Bangalore in the state of Karnataka provides one such · Strengthen administrative capacity and improve example. Bangalore's growth over the past two de- compliance cades, driven by its information technology sector, has · Optimise expenditure, especially on staff. seen the city emerge as a global competitor in a very The Cities Alliance and its members have been ap- competitive market. The value of its economy was proached to provide support to Greater Bangalore as approximately $52 billion in 2006, and accounted for it deals with the consequences of these very signifi- 38 percent of India's software exports. The reverse cant changes. side of this economic growth and wealth creation has In Tunisia, the city of Sfax has long been one of the country's premier manufacturing centres, although some of the sectors underpinning the local econo- my--such as textiles and bulk chemicals--are viewed as increasingly risky.The city has gradually been losing its competitive edge over other Tunisian cities since it has a weaker growth rate than Tunis and an increasing rate of unemployment, especially for women. As a first step in responding to these structural challenges, the seven municipalities that make up Greater Sfax took the unprecedented step of drafting the Greater Sfax Development Strategy. Captured under a vision for Sfax 2016, this strategy aims to promote local development, rethink land use and 2005 planning policies, reduce urban poverty and promote Mutter Suzi © 5. The challenge to Bangalore is succinctly captured in a paper entitled "Greater Bangalore--Governance Options," prepared by S. Krishna Kumar, Slum area in Bukit Duri, Jakarta, Indonesia IAS (Ret'd). Cities Alliance Annual Report 2007 · 5 Box 1. Land Regularisation in Brazil Around eighty percent of Brazilians live in cities. Some 12 connected to sewerage systems. Improvements in land million urban poor households--more than a quarter of all planning and management have been viewed as a means households--live in informal settlements without secure to improve the situation of urban poor households. land tenure. Millions of urban residents also lack basic Recognising the scale, severity and implications of the services: 26 million lack access to water, 14 million are informal urban development process, the Brazilian govern- not served by rubbish collection, and 83 million are not ment formulated a national policy in 2003 to orient all government programmes towards the regularisation of ur- ban informal settlements. With support from the Cities Al- liance, the Ministry of Cities has promoted land regularisa- tion to improve living standards in precarious settlements. From 2004 to 2006 the Ministry of Cities earmarked around $14 million* of the federal budget for municipali- ties, state governments, nongovernmental organisations, and public defender offices for the development of land regularisation actions in 397 settlements, encompassing 73 municipalities in 21 states. This was the first federal initiative on this issue, and it has resulted in 1.5 million regularisation processes currently underway, nationwide. The Ministry of Cities has documented this experience in a recent publication, Land Regularization,** including the preventative actions undertaken to avoid the formation of new low-income informal settlements. The publication re- counts the many obstacles that municipalities have encoun- tered in confronting the process of growing informal land development, as well as highlighting actions to address the issue, from transfers of federal budget resources and the use of federal and other public land for the poor to informa- tion dissemination and awareness-building activities. Pictures * In August 2006, US$1= R$2.15 (reals) ** Land Regularization. 2005. National Secretariat for Urban Programmes, Ministry of Cities, Brazil. Edwards/Still Mark Favela Rocinha, the largest shanty town in Rio de Janeiro, Brazil sustainable development for Greater Sfax. While the standard settlements and provide opportunities for Greater Sfax Development Strategy made it possible future urban growth. Cairo is a particularly challeng- to identify investment priorities, Cities Alliance as- ing case as over 50 percent of households live in sistance will help to incorporate these priorities into informal settlements, with 82 percent of these settle- coherent sets of actions to maximise their economic, ments built on agricultural land. The current social, and environmental impacts. mechanism for public land tenure and management Finally, the three governorates that constitute is complex and often contradictory, governed by a Greater Cairo in Egypt are embarking on long-term complicated network of laws, by-laws and decrees, urban expansion strategies to upgrade existing sub- and subject to overlapping authorities. 6 · Cities Alliance Annual Report 2007 Egypt's General Organization for Physical Plan- ning recently commenced a large consultative process with the support of a number of Cities Alliance mem- bers [German Agency for Technical Cooperation (GTZ), Japan International Cooperation Agency (JICA), UN-HABITAT, and the World Bank] to de- velop a strategic urban development plan for Greater Cairo to 2050. Mobilising resources for slum upgrading Even if the political will exists, very few cities in de- veloping countries have been able to keep up with the basic infrastructure and service needs of growing Nini Kraan/Still Pictures urban populations. This is a huge challenge that re- Slum on the outskirts of Cairo, Egypt quires long-term financing, often beyond the limited means of local governments, and points to the need for partnerships that include municipalities, slum · Repayment rates of housing microfinance portfo- communities, the private sector and other stakehold- lios have been higher than for traditional micro- ers. (See box 2 for an example of public-private part- credit portfolios (lending for businesses), likely nerships in China.) due to clients' emotional (and practical) attach- Two mechanisms for financing slum upgrading are ment to their homes and the priority they put on particularly important: first, systems which allow city their housing stock as one of the household's most governments access to finance for public infrastruc- valuable assets. ture; and, second, systems which allow the poor to · Before housing microfinance loans were offered by access credit for home improvements. Ideally these institutions, managers knew that customers often financing mechanisms can work in tandem, under- diverted some or all microenterprise working capi- scoring the need for partnerships between city gov- tal loans for home improvement. The market op- ernments, community savings groups, and the private portunity became much more obvious when MFIs sector. started to offer specific housing microfinance In the area of microfinance for housing, ACCION products that truly addressed customers' needs. International released a study in May 2007 on scaling · Lack of legal title to the home need not necessarily up shelter finance for the poor. The study points to pose an obstacle to MFIs providing affordable some encouraging trends.6 Drawing on the Cities Alli- housing solutions to low-income segments, as they ance-funded experience of Ecuador's Banco Solidario, already have methods to underwrite credit with Haiti's Société Générale de Solidarité (SOGESOL), non-traditional forms of collateral. and the Uganda Microfinance Union in launching housing microfinance products, and reviewing the ex- In Swaziland's capital city Mbabane, the private perience of eight of ACCION's other partners in Latin Swaziland Building Society (SBS) is responding to America, the study revealed that: the city's developing slum upgrading programme by adapting microcredit products to meet the needs of · Rapid portfolio growth has occurred for the the city's lower-income communities. Among the microfinance institutions (MFIs) offering housing products SBS expects to launch for the urban poor-- microfinance, typically at a pace much higher than who are engaged in the informal economy, yet lacking the expansion of the core microcredit portfolio. secure land tenure (land titles are planned for the up- grading programme)--are unsecured loans for shelter improvements, with loan maturity periods, rates and 6. ACCION. 2007. "Getting to Scale in Housing Microfinance: A Study of ACCION Partners in Latin America." Insight, No. 21, May. repayment schedules tailored to this market. Cities Alliance Annual Report 2007 · 7 Box 2. Yangzhou Engages Private Sector in Urban Upgrading In the Chinese municipality of Yangzhou, the city has promoting private sector involvement in the conserva- ensured that the local private sector has been actively tion and management of cultural heritage. Private con- involved in developing an upgrading strategy for the struction companies and local materials suppliers have historic city centre. Their engagement in the planning also participated in renovation and construction activi- process--through workshops and interviews--has con- ties in the old city centre. The municipality has received tributed to an upgrading strategy that taps into local support for its upgrading initiative from Cities Alliance private sector resources, introducing public-private part- members GTZ, the Asian Development Bank, and the nerships in the provision of public services, as well as United Nations Environment Programme. GTZ Consultant Goethert, Reinhard. Dr Above: Community action planning activities engaged residents in planning, financing, and implemen- tation in collaboration with the municipal government Left: Yangzhou, China's historic city centre is being rehabilitated, making it more attractive for residents and tourists, and creating job opportunities Dr. Maria Jaimes/Consultant GTZ 8 · Cities Alliance Annual Report 2007 The most significant new nationwide upgrading ficult policy issues normally associated with slum up- programme this year was the Programa de Aceleração grading, classifying different categories of informal do Crescimento (Accelerated Growth Programme) settlements, and providing a basis for determining launched by the Brazilian Government of President which can (or should) be upgraded, and which will Luiz Inacio Lula da Silva in January 2007, shortly require relocation. Included in this mix is the need to after da Silva's electoral victory for a second term. differentiate between interventions on private land, The PAC, as it is popularly known, is an unprecedent- and those on public land. ed package of investments in energy, and transport, as well as sanitation and slum upgrading. The pro- Field evaluation in Swaziland: lessons from Mbabane's gramme is intended to generate a total of $234 billion upgrading experience (2007-2010) in new public and private investments. Some $8.5 billion will be invested in slum upgrading Swaziland's land markets are still impacted by its tra- and basic sanitation through contracts between the ditional land tenure systems. Security of tenure on Ministry of Cities and the states and municipalities Swazi Nation Land, which accounts for about 60 per- over the next four years. cent of rural and peri-urban land, has normally been This will provide a huge and almost immediate allocated by traditional chiefs on behalf of the King to boost to most large Brazilian cities' upgrading pro- grammes, including those that have already been re- ceiving Cities Alliance support.The new Governor of the State of Bahia, Jacques Wagner, has signalled his intention to continue his government's active collab- oration with the Cities Alliance programme.The pro- gramme involves several Alliance members since it is financed by the Government of Italy and task man- aged by the World Bank. The Associazione Volontari per il Servizio Internazionale (AVSI) implements the programme. The State of Bahia will receive approxi- mately $700 million of federal assistance for slum upgrading. The area selected for PAC financing in the City of Salvador, the state capital, is part of the same macro-area (Bacia de Pituaçu) where Cities Alliance support is concentrated, allowing synergies and cross- fertilisation of efforts. The Municipality of São Paulo, the largest in Brazil, is due to receive a total of about $700 million for slum upgrading from federal and state resources over the next four years. The municipality is using Cities Alliance support to devise one of the most innova- Farouk Tebbal/Cities Alliance tive, informed and comprehensive citywide upgrad- Slums on steep terrain in Mbabane, Swaziland ing programmes anywhere. Among the many inter- ventions being utilised by the newly-energised team at the municipality is a detailed information system, combining the use of cadastral data, classifying the tenure systems of different settlements, updating the cartographic base, and analysing orthophotos--all of which will allow the city to arrive at a rational and defensible methodology to prioritise their interven- tions. The team is also tackling some of the most dif- Cities Alliance Annual Report 2007 · 9 line, 25 percent depend on food aid, and some 30 percent are unemployed. In 2007, the Cities Alliance Secretariat completed an evaluation of Mbabane's urban upgrading pro- gramme, which uncovered a number of significant Alliance lessons of relevance for other countries and cities undertaking comprehensive slum upgrading pro- grammes: ebbal/CitiesT · Provide for the implementation of a few small- Farouk scale activities, or `quick wins.' Strategy develop- Mbabane's Neighbourhood Upgrading Facilitators discussing ment can raise expectations of imminent benefits: community priorities, Swaziland when these do not materialise, the resulting frus- tration can jeopardise any gains from community mobilisation. In Mbabane, community represen- Swazi nationals. In this context, security of tenure is tatives (Neighbourhood Upgrading Facilitators) underwritten more by customary practice than by undertook significant work, including mapping legally entrenched and enforceable rights. Informal exercises, but simple strategies--such as pegging settlements have developed within and around for- plots to maintain momentum--were not initiat- mally proclaimed urban areas which offer proximity ed, resulting in fears that the original enthusiasm to work opportunities, while permitting traditional will dissipate. lifestyles. Some aspects of urbanisation require sig- · Strike a balance between expectations and avail- nificant changes to lifestyles and budgets for newly- able resources. Upgrading projects should be real- urbanised Swazis, such as finding resources to pay for istic, reflecting not only the available financial re- essential services. sources of the city and beneficiary communities, This phenomenon has been particularly pro- but future user charges and maintenance fees. For nounced in the Swazi capital city of Mbabane. To ad- example, when allocating land, often a contentious dress these challenges, the Mbabane City Council issue, plot sizes may need to be reduced to ensure decided to upgrade all informal settlements within overall affordability and take into consideration the city's boundary. With support from the Cities Al- density and locality. Likewise, infrastructure stan- liance, and building on the World Bank-funded Urban dards may need to be modified for these very rea- Development Project, the City Council set out to de- sons.This reality was articulately acknowledged by velop a comprehensive urban upgrading programme both the community beneficiaries and the Mba- that improves roads, water services, sewerage facili- bane City Council. ties, electricity and streetlights, and ensures that resi- · A committed and active city council is vital for dents have secure property rights. success. While the involvement and contributions In developing its citywide slum upgrading pro- of community residents and the private sector are gramme, the Mbabane City Council has had to ad- integral to any slum upgrading initiative, an effec- dress a range of diverse issues. The steep terrain on tive local authority leading the process improves which informal settlements have been established the chances of programme sustainability. Mba- pose costly topographical challenges to settlement bane's City Council was actively involved in plan- upgrading. From a social and health perspective, the ning the city's slum upgrading framework, result- country's high rates of HIV/AIDS infection--affect- ing in high levels of community participation and ing over 30 percent of the population--have a huge resolve. impact on the country's current outlook, while its impact on the future can only be speculated. Further- Mbabane's upgrading programme revealed a num- more, Swaziland's classification as a middle-income ber of lessons of wider relevance. The preparatory developing country conceals the realities it faces: 69 stage of an upgrading programme, where priorities percent of its citizens live below the national poverty and resources can be established, is particularly sig- 10 · Cities Alliance Annual Report 2007 nificant. In this regard, the benefits of developing a slum upgrading initiative alongside a city develop- ment strategy become ever more apparent, especially insofar as this can also facilitate planning for future urban growth and preventing new slum formation. Site visit by Nigerien officials and Cities Alliance consultant to Gamkallé Lessons from City Development Strategies neighbourhood, Niamey Commune IV, Niger Trends in strategic city planning Pascale Chabrillat Cities Alliance members continue to experience significant developments in Egypt, Ethiopia, China, strong demand from cities of all sizes for support to and Mozambique, to name a few. respond to their governance and developmental chal- lenges. The city development strategies (CDSs) sup- Scaling up local CDS initiatives ported by the Cities Alliance encourage cities to look beyond their most immediate and pressing problems, Scaling up local CDS initiatives to a national level has and sectoral problems like transport and sanitation, often occurred as a result of local initiatives, using and take the time to consider the city as a whole. The local resources. National associations of cities have logic behind this is straightforward and compelling-- increasingly the capacity to influence national policy a mayor or a city manager cannot afford to respond to and institutional frameworks. One of the important issues sector by sector, or crisis by crisis, although this implications that the Cities Alliance is starting to still describes the approach of many cities. identify is that, except in rare instances, standalone Undertaking a set of carefully planned actions that CDS initiatives are rarely sustainable. To spread will give a city and its citizens the opportunity to effects across cities within a country and over time identify their strengths and weaknesses, to initiate es- under conditions of imperfect decentralisation, cities sential reforms, and to implement a long-term city- ideally need to work through their national associa- wide strategy calls for a vastly different approach than tions. In doing so, they can obtain support, share that of short-term, sectoral projects. Preparing a city learning, and improve the quality of their engage- development strategy requires politicians to think be- ment with higher tiers of government, without whose yond the next election, just as it requires develop- support systemic and institutional reforms are rarely ment partners to think beyond the next financial year. possible. Moreover, there is an increasing body of evidence, not In the Philippines, a combination of the energy of just from the Cities Alliance portfolio, of the tangible the League of Cities, and a responsive national gov- benefits being reaped by those cities that take the ernment, have combined to offer an excellent exam- time to analyse their own circumstances, talk to all ple of scaling up, with local CDS initiatives directly residents, engage with the private sector and poten- informing national policy changes. In 2007, the tial investors, obtain the support of different levels of League of Cities and the Government entered into a government, and then devise a long-term strategy. Memorandum of Understanding with the Working These are the towns and cities that are turning to the Group on Decentralization and Local Government, Cities Alliance and its members for support. (See box created by the Philippines Development Forum. This 3 on tailor-made CDSs.) Memorandum recognises the need to harmonise the Over the past few years, we have observed a trend national and local planning processes, and is part of whereby this approach has moved beyond the initia- the effort to institutionalise the CDS process in tive of far-sighted or innovative mayors, and has national planning.A year-long collaborative effort has become institutionalised at a national level. Notable also produced guidelines for reducing the often con- examples of this trend include not just the Philip- flicting and contradictory requirements issued by pines, India, Brazil and South Africa, but also include various oversight agencies to local governments for Cities Alliance Annual Report 2007 · 11 Box 3. Tailor-made CDS Guides Produced by City Networks and Associations Many cities and city-networks that have undertaken city processes much needed to enable local strategic planning development strategies are now developing their own CDS in one of the poorest countries in the world (see evaluation guides, guidelines and toolkits, thus enabling nationwide findings later in this section). replication and institutionalisation of processes. Gener- With a Cities Alliance preparatory grant, Guidelines for ally, these products bring together the building blocks of Strategic Planning was produced for the Government of the methodology and situate them in the national context, Punjab (Pakistan), based on the CDS planning experiences legal system and development programmes. Informed by of four municipalities in the province. The World Bank Insti- local city experiences, they provide lessons learned from tute provided resources to convert the guidelines into a successful local practices. practical learning tool, which will be used to expand the This knowledge-sharing exercise has been particularly CDS planning methodology to at least 15 additional mu- strong in the Philippines, a country in its third CDS cycle. nicipalities in Punjab. The CDS team at the League of Cities is revising their initial These products stress that each CDS process is unique toolkit. Based on extensive city experience, an enhanced since each city has it own development path, challenges, methodology has been developed, including several tools priorities, and potential. However, all are based on com- that can be downloaded from the national CDS Web site mon building blocks that aim to develop a strategic plat- (http://cdsea.org). form, and provide a foundation for long-term, sustainable Cities Alliance grants have also funded the develop- development through the elaboration of comprehensive ment of CDS tools by other networks and associations of strategies. The 2006 Cities Alliance publication Guide to cities. In January 2007, the Moroccan Urban Forum pro- City Development Strategies also highlights many of the duced a methodological guide in Arabic and French--Stra- most common and essential elements of strategy develop- tégie de développement des villes: guide méthodologique. ment for cities. Based on conceptual approaches and in- sights from the experience in Tetouan, the guide provides a roadmap that Moroccan cities can use to develop their own strate- gies. The process is described in the guide as "one of the most innovative method- ological tools for urban development of the last decade." In Niger, the national Asso- ciation of Cities also developed a CDS guide as part of the Cities Alliance grant for Dosso and Maradi--Guide d'élaboration des Stratégies de développement de villes. Pictures Although the CDS activities in Dosso and Maradi did not trigger the establishment of a national urban development strategy, the Edwards/Still experience can be used to inform other Mark Families living in Bagong - Silansan, a new community housing project in Manila for families who scavenge landfill sites, the Philippines 12 · Cities Alliance Annual Report 2007 planning, investment programming, and financial Group meetings, in which Alliance governance and management. Cities Alliance support has been used programming are discussed. strategically by the League of Cities to replicate CDSs In Vietnam, CDS development has emerged as a in different cities, producing tangible results and strategic tool for cities of all sizes to identify ways to building a groundswell of support at the city level. meet the challenges of urbanisation and decentralisa- To date, 65 Philippine cities have completed city tion. The first two cities to undertake strategy devel- development strategies, and many of these cities have opment were Ho Chi Minh City and Haiphong in the the reputation for being among the best run in the late 1990s. Since then, Haiphong has produced a sec- country.A further two phases of the CDS programme ond city development strategy, with a much greater are being designed to ensure that all 118 cities under- emphasis on local control. CDSs have also been pro- take city development strategies, which would make duced by the cities of Da Nang, Dong Hoi, Nam the Philippines the first country to achieve total cov- Dinh, Ha Long, and Can Tho, the latter two with erage. The Government of the Philippines has also Cities Alliance support. The growth in the use of city decided to join the Cities Alliance, and will host the development strategies as an urban planning tool Alliance's 2007 annual meetings comprising the Pub- arose largely as a result of the 2004 Cities Alliance- lic Policy Forum, a thematic event to which non- funded international CDS conference in Hanoi. The Alliance members are invited, and the Consultative conference created local and regional interest, and Woman on her way to the floating market in Can Tho, a city on the south bank of Hâ.u Giang, a branch of the Mekong River. The area's river and canal settlements will be upgraded as a result of a recently- completed city development strategy. Alliance Persson/Cities Pelle Cities Alliance Annual Report 2007 · 13 provided a platform for reconsidering centrally- which urban growth issues and poverty reduction can controlled urban planning practices. be addressed. In Vietnam, the integration of CDS processes into Additionally, a Cities Alliance preparatory grant is broader development plans has made considerable being used as seed funding to assist Cities Alliance progress within a relatively short period of time. members in responding to a request to design a sig- Increasingly, strategy development is being used to nificant capacity support programme, enabling them coordinate and integrate existing plans and put them to access national and state JNNURM funds. The into action. Challenges for the future are: (i) generat- project will provide technical assistance to help cities ing the resources to implement CDSs, (ii) sharing prepare strategic city development plans, and im- CDS experiences with more cities nationwide, (iii) prove revenue management, service delivery, ac- institutionalising the CDS process, and (iv) creating a countability, and budget planning execution, through support structure for cities that wish to undertake a better citizen interface. It is also expected to increase city development strategy. the knowledge base of elected officials in municipal In India, the primary national urban development finance and administration. programme, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), continues to gather Promoting a city's competitiveness momentum. JNNURM advocates government pro- motion of city efficiency, economic growth and pov- A second trend among CDS activities is an increasing erty alleviation, and supporting these through central emphasis on promoting a city's competitiveness, with government grants for cities. Billed as the country's the aim of enabling stronger and more inclusive eco- most ambitious programme ever for urban develop- nomic growth. Experience has demonstrated that a ment, the $22 billion programme funds the expan- thorough understanding of local economic condi- sion of economic and social infrastructure in some 63 tions, and being able to identify a city's comparative towns and cities based on a local city development and competitive advantages, is the foundation neces- plan, which has similarities to a CDS. To support sary for developing effective strategies to facilitate Government of India efforts, the Cities Alliance has economic revitalisation and job creation. Yet, devel- provided preparatory support that will feed into oping a clear and constructive profile of a local econ- preparations of a National Urban Strategy (projected omy has proven to be one of the most challenging to the year 2025). The strategy will guide the Gov- aspects of city development strategies. ernment of India's Planning Commission in establish- However, some notable examples have materi- ing a framework of urban reforms and initiatives in alised in which cities have analysed their local eco- nomic structure and urban competitiveness, and then successfully translated their economic findings into Panoramic view of São Paolo, Brazil concrete investments aimed at retaining existing, and attracting new, economic activities. The Alexandria, Egypt CDS relied on two princi- ples to increase the likelihood of sustainability of the strategic planning and local economic development effort: (i) broad-based public, private and civil society stakeholder participation, formalised as a Partnership Forum, and (ii) using the CDS as an overarching mechanism to organise and leverage donor support. The CDS process and consequent investments identified essential infrastructure that would improve the living conditions of people, and tackle key con- Pictures straints to private sector development and economic growth. Through the same process, key barriers to in- Giling/Still Ron vestment and building local capacity were also identi- 14 · Cities Alliance Annual Report 2007 Office fied. The latter included the streamlining of business Project start-up procedures, easing the process of property registration, enhancing private sector participation in the management of industrial estates, and strengthen- Development ing city capacity in managing local assets and sustain- Housing ing strategic planning processes. The Alexandria CDS, and the resultant capital Ababa investment plan that will be partly implemented Addis of under the project, resulted in a shift in local devel- opment practice in Egypt away from the traditional Courtesy top-down, supply-driven process. The latter had Hollow concrete block production by a small enterprise for been criticised for (i) its narrow focus on infrastruc- housing development in Addis Ababa, Ethiopia. tural issues and limited emphasis on local economic dynamics, needs and institutions, (ii) limited private sector participation and understanding of market employment creation. It will also disseminate lessons dynamics and trends, and (iii) the non-participatory from the different approaches to assessing the impedi- nature of the planning, decision making and imple- ments to growth and removal of bottlenecks. The mentation. Instead, the Alexandria CDS and follow- World Bank also envisions using the study to build the up investments rely on a bottom-up approach where analytical basis for integrating urban development into ownership rests with the municipality and local investment climate surveys. partners, jointly formulating a long-term vision and The body of analytic knowledge generated by the identifying development programmes. firm surveys and household surveys has been a critical The success of the Alexandria CDS has been mon- element of the forward-looking and action-oriented itored by other cities and governorates in Egypt, and growth strategy for Lagos. The work has led to a stra- a similar process is in its early stages in Greater Cairo tegic operational intervention supported by theWorld with the support of Cities Alliance members. Bank through the Lagos Metropolitan Development and Governance Project.The project leverages Lagos's own resources alongside project resources to target in- Situating development in national strategies vestments to improve the productivity of firms and Notwithstanding the Cities Alliance's focus on city households in the metropolitan area. (See box 4 on development and slum upgrading strategies, the chal- assessing the local economy in Lagos.) lenge of scale invariably requires the active co-opera- The São Paulo strategy work has been completed, tion and support of policymakers in higher levels of discussed with governments--dissemination included government, both state and federal. To improve our a three-day workshop in Brasilia where the results collective understanding of the major impediments were presented--and parts are being translated into to growth and employment creation, and to study the Portuguese. The Dhaka case study is not yet com- relationship between different tiers of government in plete, as it was interrupted due to political problems. designing possible policy solutions, the Cities Alliance The World Bank will gather lessons learned over has partnered with the World Bank in undertaking a the past ten years and share that knowledge globally study entitled "Urban and the Growth Agenda-- through 2008. The study will support the analytical Assessing and Promoting the Roles of Cities." basis for understanding the essential role of cities in With inputs from case studies in Dhaka, Lagos, and economic growth. In addition, the report will help São Paulo, this two-level exercise aims at capturing the World Bank's client countries and their cities in knowledge on (i) assessing the linkages of urban areas understanding the microeconomics of cities, analys- to national growth, and (ii) identifying specific actions ing the economic potential of cities, and designing to reduce the constraints for economic growth at the strategies based on economic and business tools being city level. The study is intended to strengthen national tested in developed countries. Globally, it will help and local dialogue on the promotion of growth and raise awareness and improve the technical tools used Cities Alliance Annual Report 2007 · 15 Box 4. Lagos: Assessing the Local Economy The work undertaken in Lagos offers insights for cit- ture and productivity are the result. To reduce flooding ies wishing to develop growth and employment strat- and minimise flooding-related expenditures, Lagos egies, particularly those with insufficient detailed could ensure public-private oversight of solid waste data on firms of different sizes and different sec- and drain management parastatals. tors, formal and informal. Lagos is a quasi city-state The large service-sector firms, by contrast, have and one of thirty-six states in Nigeria. It generates grown rapidly since 1999. More than half of these about 20 percent of Nigeria's gross domestic prod- firms regard the licensing requirements as reason- uct (GDP) or 35 percent of Nigeria's non-oil GDP, able, but they are even more concerned about infra- making it of significant macroeconomic importance. structure than the large manufacturing firms. The Given Lagos's population growth rate of 4.8 percent small, medium, and micro enterprises (SMMEs) in per year, and the visible expansion of the informal Lagos are entrepreneurial, displaying growth across sector, employment creation remains a key concern all sectors. Despite constraints affecting all private for Lagos State Government. Fiscal stability, local sector activity in Lagos, 29 percent of SMMEs had infrastructure provision, market efficiency, improved expanded, and profits and turnover increased for 58 business registration practices, and access to finance percent of enterprises. Ninety-three percent of the are all essential and well-known factors for success- SMMEs reported finding permit requirements rea- ful business growth ­ but these alone did not provide sonable. They were not constrained by wages, did not Lagos with options for directly influencing employ- feel they needed to export to grow, and did not fear ment creation through microlevel interventions. export competition. To generate employment, Lagos To better understand the structure of the economy could increase market demand for the products of and employment, and establish an economic intelli- SMMEs through support for marketing and promo- gence unit to monitor economic changes over time, tion. Ninety-one percent of informal sector firms had the Lagos State Government undertook a comprehen- never tried to register, so improving business registra- sive set of firm surveys covering all sizes and spec- tion is unlikely to affect SMMEs or the informal trums of the economy. sector, both dominant generators of employment in Preliminary analysis highlights that the large Lagos. Seventy percent of informal firms reported ex- manufacturing firms in Lagos do not constitute a dy- pansion, 93 percent expected to sell more products namic sector of the economy. They are not chal- the next year, and 53 percent wanted to make new lenged, there are few newcomers, and they have investments. made limited investments in expansion and up- The study not only highlights the determinants of grades. There has been no search for new markets, firm growth in Lagos, but also locations where there and only 18 percent export their products--and even is the highest density of firms that possess the deter- then, largely within Africa only. Given that electricity mining characteristics for growth in Lagos. and access to finance, both major requirements for To map service delivery at the household level, business growth and expansion, require federal-level Lagos also undertook a comprehensive assessment of interventions, Lagos could take steps in the critical access to a variety of services by households and areas over which it has control. One step could be mapped them to geographical coordinates. This de- scaling-up public-private partnerships for infrastruc- tailed household-level data now provides a baseline ture, particularly to reduce flooding. Floods in Lagos for prioritising and spatially targeting infrastructure impact households, firms and infrastructure. Annual investments, planning, and budgeting over the me- flooding affects nearly one-third of the population an- dium term, and monitoring the impacts of service nually. Expenditures on medical treatment for water- delivery. borne diseases, property damage, and lost infrastruc- 16 · Cities Alliance Annual Report 2007 Crowded street in Lagos, Nigeria Nigeria of Government of Courtesy in preparing strategies for growth and employment at tions, institutions, municipal and provincial agencies, the city level. and national programs to improve the alignment of their services with the needs of the corridor's cluster portfolio. Building an economic corridor in northeast China The Cities Alliance has supported the ongoing devel- State of the Cities Reports opment of an economic corridor comprising three large cities in Heilongjiang Province in northeast Chi- Over the past few years, the Cities Alliance and its na--the cities of Harbin, Daqing and Qiqihar. It is members have identified the enormous potential that believed that the future economic growth of these exists in the production of national state of the cities cities can be enhanced through Ha-Da-Qi Corridor- reports. A well-executed process can provide an ex- wide planning and coordinated development. Exam- cellent mechanism for a country to better understand ples of co-operation being promoted include: (i) the main trends and challenges facing local authori- shared infrastructure along the corridor, (ii) cross-cor- ties. Report preparation includes analyses of cities' ridor initiatives to improve inputs for industry clus- economic contributions to the national economy, ex- ters, and (iii) coordinated national and international amination of the state of intergovernmental (includ- marketing of the corridor, its municipalities, and in- ing fiscal) relations, discussions among representatives dustrial zones. of organised local governments, and encouragement The corridor planning process has encouraged for these organisations to engage with their members. government to support industry clusters, not by These activities raise national awareness about the choosing winners and losers, but by helping each main issues facing cities of all sizes, and also engage cluster get the economic inputs needed to grow and different tiers of government. become more competitive. It has emphasised that In 2006 the SouthAfrican Cities Network (SACN) corridors and regions are able to form, expand, and completed its second State of the Cities Report (SoCR), attract business clusters when they provide competi- with the support of Cities Alliance and other part- tive advantages in particular economic categories, ners. The highly acclaimed report highlights the such as innovation, environment, land availability, trends in urban performance and the dynamics of the transportation and logistics, finance, and human re- forces that shape the country's 21 largest cities. It sources. A corridor development entity convenes and explores how city development strategies have stim- works with all the clusters, each at different stages of ulated economic growth, and the extent to which lifecycle development, to identify challenges, priori- cities have provided access to services, amenities, and tise strategic initiatives, and promote the corridor. opportunities for all residents. The report delivers a This entity also helps to coordinate among corpora- positive message about the growth potential of South Cities Alliance Annual Report 2007 · 17 Housing of Department Africa South of Courtesy Brickfields Social Housing Project (completed in 2006) with more than 700 housing units in New Town, Central Johannesburg, South Africa Africa's cities, and provides a wealth of data and anal- Field evaluation in Niger: using CDSs to improve ysis for policymakers. Moreover, the SACN and its development in small African cities members are using the report as an effective advoca- Niger is one of the world's poorest countries, with a cy tool to influence national urban policies.The South GDP per capita of $280, and the bottom ranking on African example also shows the benefits of turning the SoCR into regular state of the cities reporting to chart progress over time and develop effective plan- ning tools. South Africa's widely-read State of the Cities Re- ports have generated interest, particularly among countries in sub-Saharan Africa. The Cities Alliance has now received preliminary and formal requests to support the preparation of country SoCRs for Ethio- pia, Kenya, Nigeria, and Tanzania. The Alliance wel- Alliance comes these opportunities to support SoCR develop- ment and to further explore how it can be used to give voice to local governments, especially insofar as Persson/Cities these have the potential for Cities Alliance members Pelle to make a positive contribution to strengthening local Concluding evaluation discussions with mayors, stakeholders, government and promoting good urban governance. and representatives of the Niger Association of Cities 18 · Cities Alliance Annual Report 2007 the United Nations Human Development Index. Of develop institutional mechanisms to increase the im- Niger's 14 million inhabitants, 3.3 million live in cit- pact of development programmes, and disseminate ies (23.3%). The country is characterised by high the CDS approach to all urban communes in Niger. population growth rates (3.5 % countrywide and over The agreement between the Cities Alliance and 6% in urban areas), a weak economy based mainly on the AMN was client-executed, and managed by a co- agro-pastoral production, a weak natural resource ordinating team located in the office of the prime base with rapidly increasing desertification, and a low minister. The work started in early 2004, and finished level of human development (the literacy rate for near the end of 2005. The process was based on a children under 15 is less than 30%). participatory approach involving household surveys, Since independence in 1960, the country has faced meetings with elected councillors and traditional several military coups, the last in 1999. However, leaders, and extensive discussions with major stake- since the return of democratic rule in 1999, the push holders--a new experience for both communities. for increased democratisation and decentralisation (See box 5 for comments from stakeholders.) has become increasingly important. In 2004 further progress was made with the holding of the first mu- Key challenges. During the initial diagnostics, it be- nicipal elections in the country's history. Some 4,000 came apparent that the two cities faced enormous representatives in 265 newly-established communal challenges: parliaments were elected. · The quality of life for the most vulnerable groups The Association of Cities of Niger (AMN), now was extremely low. representing local governing bodies, submitted a pro- · There was considerable untapped economic po- posal to the Cities Alliance to develop two CDSs, in tential in developing markets and transport-related the secondary cities of Dosso (population 70,000) trade. and Maradi (population 305,000). · The quality of the local infrastructure was poor. The proposal was supported by the World Bank · The institutional and financial capacity of each mu- and the Agence Française de Développement (AfD). nicipality was extremely weak, with only about one Key CDS objectives were to reduce urban poverty, dollar per capita in investment funds available. Box 5. CDSs in Niger Triggered Innovative Action Residents of Dosso told project evaluators that they appreciated the knowledge they gained while involved in the CDS process. A neighborhood chief (chef de quartier--a traditional leadership position) said this: "I learned that there were 10,000 people in my quartier--this was something I didn't know before! It showed us about many aspects of the life of the peo- ple. It also showed that there were many problems, but at least it proposed solutions!" In Maradi, private sector needs were identified in Alliance the CDS. To address the needs of transporters, city hall and a transporters association organised the con- Persson/Cities struction of a truck parking and reloading facility to Pelle improve efficiency and revenue collection from border traffic. The action was taken by people in the city, City and national officials visiting the new truck parking and without any external support. unloading facility in Maradi, Niger Cities Alliance Annual Report 2007 · 19 All outputs from the two CDSs, including detailed urban poverty mapping, were used to inform the Plans de Développement Communal for the two cities. Based on the findings in Niger, the following les- sons have emerged: · The decentralisation of functions needs to be bal- anced with increased fiscal transfers. The decen- tralisation of roles and responsibilities from the national to the local level is currently taking place without the appropriate transfer of resources, such as funds and skilled staff. · Involve the private sector. Much bolder action needs to be taken to bring in the private sector as a strong development partner to stimulate eco- nomic growth and job creation. As in many other African countries, it is the public sector that is ex- pected to play the most significant development role. Early and sustained involvement of the pri- vate sector, however, could increase possibilities for economic growth and job creation, particularly in the expanding agricultural trade and added- value chain. This potential is currently under- recognised by governments and donors. · Coordinate donor assistance and build local re- sources. Niger is highly dependent on grant financ- Alliance ing from bilateral and multilateral organisations. Stronger donor coordination, with budget support Persson/Cities channelled through a monitored government- Pelle donor mechanism, is needed to develop a pro- grammatic approach and minimise donor financ- Shop in Dosso's main market, Niger ing of stand-alone projects. However, such funds can only be catalytic--cities also need to rely more Outcomes. The CDS identified four areas of strategic on local resources, both financial and human, and development comprising better social integration, lo- mobilise private capital. Particular priority should cal economic development, investments in infrastruc- be given to economic growth activities that can ture, and improved urban management. The strategic build local tax revenue. areas were accompanied by a list of priority projects in · Local government should facilitate co-ordinated the form of an action plan: 22 projects in Dosso, and development. The methodology for programming 23 in Maradi. In most cases, specific projects in the local development is scattered, with many pro- action plans were not linked directly to financiers or grammes pursuing different tools. Government finance sources such as government transfers and in- needs to take a lead and design streamlined direc- ternational donors. However, the action plans have tives for local development planning. Donors been widely used by city representatives to attract should support such unified coordination efforts. funding from partners.The most promising possibility · Participation empowers stakeholders and builds is a $16 million World Bank credit, the Local Infra- ownership in the CDS process. The CDS process structure Development Project, focusing on solid is particularly beneficial if a range of stakeholders waste management, central market improvement, are involved from early in the planning process. truck parking and upgrading of informal settlements. Local government authorities, city associations, 20 · Cities Alliance Annual Report 2007 civic groups, NGOs, businesses, and potential fi- nanciers are more likely to support a process in which they have been invited to participate, and have seen their views respected. Broad involve- ment and training also help spread more accurate information about the process and build trust. · Develop realistic expectations and sets of actions. Initiating a CDS process will raise expectations. With early stakeholder involvement, planning au- thorities work to develop realistic expectations and an agreed timeline for implementation. · Cities Alliance should enhance its coordination role at the local level. The Cities Alliance should facilitate the sharing of information about CDS activities with local and national authorities and Alliance members working in-country. Courtesy of Bibliotheca Alexandrina, Alex-Med Coastal view of Alexandria, Egypt Sustainable Financing of Investments Linking cities with domestic capital--lessons learned All Cities Alliance activities, whether undertaken as finance its central market. USAID's Development citywide slum upgrading strategies or city develop- Credit Authority has provided partial credit guaran- ment strategies, should also assist cities, national gov- tees to assist small and medium cities in India to di- ernments, and their development partners in moving rectly access markets. Multilateral institutions, such towards a more modern, self-sustaining financing sys- as the World Bank-International Finance Corporation tem. Learning from CDS and slum upgrading grants Sub-national Technical Facility, and the Asian Devel- in countries as diverse as Niger, the Philippines, Swa- opment Bank's Sub-Sovereign Window, have begun ziland and Vietnam strongly suggests the need for making direct loans and guarantees. systems that assist city governments in raising com- Sustainable financing systems imply that cities are mercial finance, creating infrastructure and paying for empowered with sufficient authority to provide and their use over an appropriate length of time. charge for services, and can design the use of their As the twin global trends of urbanisation and de- assets based on an inclusive medium-term prioritisa- centralisation continue, there is increasing interna- tion of needs.While there are a few good examples of tional recognition that traditional systems of financ- such cities, the majority of cities in developing coun- ing which rely on ad hoc grants or unstable revenue tries are not so empowered--indeed, they are far streams will not succeed in addressing the existing more likely to have limited financial autonomy or backlog of essential civic infrastructure. manoeuvrability, and be beholden to the vagaries of Furthermore, direct lending to cities and financial unstable and unpredictable fiscal transfers from high- institutions by bilateral and international develop- er tiers of government. ment institutions underscore both the importance Yet, international experience shows that empow- and the value of establishing a more accountable ered cities have been better positioned to attract financing relationship with city governments. For ex- commercial finance. In the 1990s larger cities such as ample,Agence Française de Développement supports Ho Chi Minh (Vietnam), 14 cities in India (including a blend of loans and grants to financial institutions, Ahmedabad, Bangalore, and Nagpur), Doula (Cam- such as the Caisse des Prêts et de Soutien aux Col- eroon), Johannesburg (South Africa), and cities in lectivités Locales in Tunisia. AfD also supports direct Michoacán State (Mexico) have reorganised their loans to Ouagadougou, Burkina Faso's capital, to finances to leverage grants with commercial finance. Cities Alliance Annual Report 2007 · 21 Smaller cities have used commercial intermediation to repeatedly access commercial finance for public to pool their financing needs--examples include: the goods, and for the urban poor to obtain financing for Infrastructure Finance Corporation Limited (INCA) home improvements. in South Africa, Financiera de Desarrollo Territorial International experience and the learning from Al- (FINDETER) in Columbia, Tamil Nadu Urban De- liance grants suggest that three types of interventions velopment Fund (TNUDF), and the Karnataka Urban are essential to enable a sustainable financing frame- Development Infrastructure Finance Corporation work: (KUDIFC) in India. · City-level actions that demonstrate a clear revenue This movement from traditional to more modern stream through efficiency improvements, especially financing systems is not merely a change in the means own-source revenue management. of financing, but is one of the most important and es- · National-level policy actions to enable a new mar- sential adjustments to intergovernmental institutional ket for private capital to finance public infrastruc- arrangements required to help cities and countries ture, such as a regulatory framework for municipal manage the consequences and, ideally, reap the ben- debt, removal of fiscal distortions, and systems that efits of rapid urbanisation. This repositioning involves encourage non-collateral-based lending. fiscal systems of transfers that are untied, rational, and · Partnership with the private sector in supporting linked to buoyant taxes. The intergovernmental fiscal mechanisms for pooling demands of small and framework in South Africa, the Mexican decentrali- medium cities. sation of the 1990s, common local body laws in some Indian states, and the Local Government Code in Learning from grants Philippines, embody the principle of empowering municipalities to finance and create infrastructure. As Described below are initiatives supported by the this repositioning involves the transfer of real powers, Cities Alliance to improve the links between city as well as significant responsibilities, it is often resist- financing needs and domestic capital in Zambia, ed, both as a consequence of a reluctance to cede Ghana, South Africa and India. power, but also due to fears of capacity constraints at In the 1970s and 1980s, Zambia's local govern- the city-government level. ment system was one of the best performing in post- In most countries, these kinds of institutional and colonial Africa. Fuelled by high prices for copper, fiscal reforms will require a paradigm shift though Zambia's city and municipal governments were gen- which city governments move from unequal rela- erally well managed and provided services in a sus- tionships with national governments--and aid agen- tainable manner. With the combination of the inter- cies--to that of responsible local authorities dealing national collapse of copper prices and a move towards with local commercial financial institutions on equal increasingly centrist policies in the 1980s, the coun- terms. This kind of systemic change is most effective try's local government system has been in a process of when achieved in a consultative manner, in the form slow decline for about 20 years. of partnerships among cities, national governments, Zambia is engaged in key design work that will and their development partners. allow a well-functioning intergovernmental fiscal sys- The Cities Alliance and its members have sup- tem to emerge, with some additional support from ported this shift at two levels: at a macro level, by the Cities Alliance. This work will include specifica- supporting knowledge products, and on a more micro tion of strategic planning processes--in essence city level by working with cities and national governments development strategies--that will be the basis for in specific city and country contexts. Examples in- funding to city governments through the decen- clude work in Ghana, Zambia, and Russia in the tralised fiscal system. This reform process, which in- Chuvash and Stavropol Republics.This annual review cludes the clear articulation of roles of different levels provides an early opportunity to reflect on the extent of government and parastatals, is the basis for a frame- that these macro and micro interventions have been work for private financing of public infrastructure. able to trigger and support systemic change--mea- The impact of these reforms will be to establish a sured by the improved prospects of city governments clear enabling environment for local governments in 22 · Cities Alliance Annual Report 2007 Edwin Huffman/World Bank Photo Library Zambia, clear rules of access that should empower local governments to access recurrent and capital Box 6. Zambia's Decentralisation Policy grants, and the preparation of credible development strategies based on predictable budgets. Extract from the 2007 Budget Speech of the Honorable Ng'andu The first step towards fiscal empowerment of cit- Peter Magande, Minister of Finance and National Planning, ies was taken in early 2007 by the commitment to Republic of Zambia move finances to local levels and the adoption of an Mr. Speaker, with the launch of the Decentralisation Policy intergovernmental fiscal transfer framework. (See in 2004, the government has continued to progress towards box 6 for a statement on Zambia's decentralisation the devolution of functions to the local levels. With this policy.) This legislative measure provides an excellent devolution, certain functions in some ministries will move platform to move onto the next effort which could to the district level by the end of 2007. Sir, an intergov- be to assist the cities and municipalities to formulate ernmental fiscal transfer system, through which funds shall restructuring plans within the CDS approach. The be transferred to the district councils, has been designed. quantitative impact of this work could be significant, To this effect, this budget has provided for the restructur- with possibilities of stable flows to local governments ing, recurrent and capital grants to assist district councils through a harmonised, budget-support approach. achieve solvency, fund retrenchments and ensure that they do not get back into the debt trap. The government intends to continue with the decentralisation sensitisation process to ensure that each and every Zambian is not left behind in this Children collecting water from a community pump, important national process. Lusaka, Zambia Cities Alliance Annual Report 2007 · 23 Through the late 1990s, Ghana had a good track record of fiscal devolution through the District Assembly systems. Further still, the macro framework allowed for the beginning of a growing debt market for sovereign bonds. Alongside these developments Housing of has been rapid economic growth in Accra and medi- um cities such as Kumasi and Tema. Department The need for a more modern financing framework became apparent to the government, and, accord- Africa ingly, the Ministry of Local Government and Rural South of Development has established significant partnerships across levels of governments and the private sector. Courtesy The government has also used Cities Alliance sup- Construction of Brickfields Social Housing Project in New Town, port to develop a framework for sustainable financ- Central Johannesburg ing. This framework provides a basis for an invest- ment loan that can blend commercial finance with long-tenor multilateral and bilateral support. The investment programmes. The Municipal Finance main issues addressed in the design are to better align Management Act (MFMA) 2003 provides a transpar- responsibilities and powers. ent framework for cities to access commercial finance. To achieve this, the government has drafted a The MFMA itself is an outcome of a national process Local Government Finance Bill, which provides pro- of putting in place an intergovernmental system cess guidelines for selecting cities, based on specific which rewards performance at the municipal level, reforms that they are required to undertake.The steps and provides a borrowing framework and active sup- also include city-level measures to address leaks in port for intermediation for small and medium cities property taxes--at present private collectors are paid through the Infrastructure Finance Corporation Lim- commissions for property tax collections.This has led ited (INCA). to a situation where collectors have concentrated on In this context, the South African National Trea- a few areas where the costs of collection are low and sury is using Cities Alliance assistance to develop a the rewards are high. This has left large sections of policy tool for tracking the financial health of cities so cities ignored. that early action can be put in place for recovery. It Cities Alliance support to the Government of also attempts to avoid moral hazard problems in an Ghana, implemented by the World Bank, provides a intelligent manner. This is work in progress, though it template for reform-driven investments in cities and is designed for South Africa (specific to provisions of is available for implementation. These investments its constitution and the MFMA) and has generic ele- could comprise three defining elements: (i) reforms ments for applications elsewhere, with Brazil, India, (on both the demand and supply side) to enable city and Mexico being obvious examples. governments to design, finance and pay for infrastruc- India is in the midst of implementing a major na- ture; (ii) investment by cities through institution- tional programme, the Jawaharlal Nehru National alised loan-grant blends, based on access criteria for Urban Reforms Mission (JNNURM), to energise its cities (such as collection efficiencies etc); and (iii), major cities through a centrally-sponsored mecha- investment in basic services in slums. nism. As discussed in more detail in the CDS section The process of empowering city governments is of this chapter, key features of the reform include perhaps best illustrated by the South African exam- strategic planning at the city level. The Cities Alli- ple. The Local Government Municipal Systems Act ance is assisting the Government of India in the two 2000 provides the enabling framework for the shar- major objectives of the Mission, namely, reforms at ing of powers and responsibilities. Further, legislation the city level and enabling frameworks to guide cit- has been backed by Municipal Infrastructure Grants ies to a sustainable growth path for financing their requiring municipalities to prepare three-year capital investments. 24 · Cities Alliance Annual Report 2007 Curt Carnemark/ World Bank Photo Library View of Varanasi, India from the Ganges River The positive aspects include: the first policy action itself as the facilitator of a new market, rather than a by the Government of India to move from scattered supplier of grant finance without adequate involve- financing of ad hoc programmes into reform-based ment of the states. capital investment of a significant size, links with the As Thomas Issac, the Finance Minister of Kerala 74th Constitutional Amendment empowering local recently stated: "The role of Government of India governments, and the use of structured partnerships needs a critical examination. It is often thought that with states and cities in an organised manner. fiscal decentralisation to local governments is a state Cities Alliance is assisting the Government of In- issue. But this needs reconsideration. For proper fiscal dia and a World Bank-led partnership with the aim of federalism the imbalance between the state and the mapping out the reform agenda, with specific focus centre has to be first addressed for a balance to be on municipal finance. Since the term for the Mission struck between the state and the local government."7 is seven years, it is useful for the World Bank and oth- On the supply side of finance, the Cities Alliance er development partners to use this opportunity to supported the Russian Republics of Chuvash and support the Indian Government's attempts to bring Stavropol to define their development strategies and greater coherence in the country programmes both clarify demarcation of municipal and oblast responsi- thematically and geographically. bilities--a design which could be replicated for other The challenges for JNNURM are to address what oblasts. This work has been completed and, in the has been until now a list of reforms not entirely rele- case of Chuvashia, also led to a successful domestic vant to local constraints, an incomplete mechanism for financial support to city governments, and a lack of a typology for slum upgrading. Further still, there 7. Speech at the Roundtable on Urban Fiscal Decentralization, Kochi, India, is the need for the national government to position April 2006. Cities Alliance Annual Report 2007 · 25 market financing, thereby linking the investments and Development (OECD) countries through publi- prioritised in the CDS with domestic private capital. cations for the European Union by Dexia. Cities Alli- (See box 7). ance members have expressed the need to generate similar information for developing countries--an information system which allows national govern- Global Knowledge Products ments and cities to track their performance over time The Cities Alliance supports and develops partner- and compare with other frameworks elsewhere in the ships at the global, country, and city levels. For munici- world. pal finance, these include the established Municipal At a global level, the Cities Alliance shares infor- Finance Task Force (MFTF), detailed below, and an mation about municipal finance through the Munici- upcoming urban finance tracker incorporating inter- pal Finance Task Force Web site, launched in 2005. governmental fiscal relations (IGFR) and the role of This resource has become important to a variety of intermediation in financing small and medium cities. users--policymakers, researchers, financial institu- As national governments and cities decentralise, tions--through providing an information-sharing there is a need to track these reforms and provide platform to assist cities in mobilising domestic long- access to information on efforts being undertaken term capital. The Web site provides a platform which globally. Standardised information is routinely being allows practitioners to analyse and share the knowl- provided for Organisation for Economic Co-operation edge and experience of cities which have successfully A Yangzhou, China pilot project provided homeowners with technical support and subsidies to upgrade their houses and found a public implementing agency to improve infrastructure GTZ Longbin/Consultant Zhu. Dr 26 · Cities Alliance Annual Report 2007 Box 7. Chuvash Republic, Russia: Linking CDS with Domestic Market Financing The Cities Alliance financed a CDS grant for the design A joint World Bank-International Finance Corpora- of a regional capital investment strategy and prioritisa- tion (IFC) team engaged with the Republic to identify tion of capital expenditures for the Chuvash Republic, the potential for financial support through an IFC par- Russia. Given the Republic's massive infrastructure tial credit guarantee for the Republic's RUB1 billion investment needs, the Republic is seeking financing bond issue.* The key outputs of Cities Alliance sup- from official and private funding sources on the basis port of $250,000 included the IFC partial credit guar- of its own financial strength that include: antee of 23 percent of the bond's principal, which helped lengthen the bond's maturity, reduce the cost · A regional development strategy, key elements of of capital and improve liquidity. The bond was placed which included a well-defined capital investment successfully in mid-2006 and achieved a one-notch plan. upgrade over the Republic's standalone rating by · Regional-city partnerships for raising infrastructure Moody's. investment, defining the Republic's responsibilities for infrastructure service provision, and prioritisa- tion of capital expenditures. · Review of specific investment projects for access- ing market-based finance. * In July 2007, US$1 = RUB25.4. mobilised long-term private capital, as well as the frameworks necessary, at all levels of government, to facilitate this process. Users from over 50 countries worldwide regularly download information from the MFTF Web site, with the commercial sector being the dominant user group. In parallel the Cities Alliance has supported the initiative of United Cities and Local Governments (UCLG) in establishing a global commission on local finance. This commission is working on two major is- sues: the design of rational fiscal systems, and domes- CAIXA tic sources of financing for small and medium cities. of (See box 8.) Courtesy In summary, the Cities Alliance, during the year un- der review, has supported cities in mobilising domestic IDB-financed housing programme in Vila Sô Neném capital at two mutually reinforcing levels: (i) assistance neighbourhood, Juiz de Fora (Minas Gerais State), Brazil for cities and national governments to reform their en- abling frameworks to develop more self-reliant financ- ing systems through improved intergovernmental fis- cal relations, and (ii) supporting knowledge products that facilitate information sharing. Cities Alliance Annual Report 2007 · 27 Box 8. The UCLG Committee on Local Finance What is the UCLG Committee on Local Finance Assist UCLG members to mobilise their own revenues and Development? and improve their governance: Created at the United Cites and Local Governments · Gather information on successful practices from (UCLG) World Council in Beijing (June 2005), the UCLG members and partners. Committee on Local Finance and Development, · Develop toolkits based on lesson learned, partic- chaired by Gilberto Kassab, Mayor of Sao Paulo, ularly in developing countries. aims to advise UCLG members on matters related · Promote research on local finance reform in devel- to municipal finance and resource mobilisation. The oping countries. Committee meets twice a year and is supported by the Cities Alliance. Promote local government access to finance for local public infrastructure: Why local finance matters · Contribute to the analysis of strategies and frame- Creating more autonomy and flexibility for local gov- works to mobilise long-term capital. ernments to control their finances is a crucial dimen- · Contribute to discussions with financial institu- sion of decentralisation. There is no decentralisation tions on developing access to funding--domestic process without local governments being able to raise and international. sufficient financial resources to fulfil the functions · Develop innovative funding mechanisms for local assigned to them by the law. To provide services to government, namely through actively engaging in their citizens, local governments must be assigned the initiative to create a World Bank of Cities. sufficient own-source revenues and have access to · Develop partnerships with financial institutions external funding. to make them aware of the funding needs of local The scale of the need in terms of local public in- authorities. frastructure in developing countries is necessitating · Provide advice and act as a sounding board to the new thinking on how to finance these investments. Municipal Finance Task Force within Cities Alliance Local governments in developing countries cannot to strengthen the linkages between city finance contribute effectively to the achievement of the Mil- needs and demands, and financing options. lennium Development Goals without accessing or developing additional financial resources. The financ- ing of local public goods or local public infrastructure remains insufficient, unless access to external fund- ing is provided and own-source revenue increases drastically. Besides the mobilisation of domestic private cap- ital, other financial means, like development bank loans and international aid, need to be even more directed to the cities of the South, which face the challenges of rapid urbanisation. UCLG of What UCLG can do Courtesy UCLG intends to address these issues through the UCLG World Council Meeting in Marrakesh, Morocco activities of its Committee on Local Finance and Development. 28 · Cities Alliance Annual Report 2007 CITIES ALLIANCE MEMBERS' REPORTS The 2006 Annual Report incorporated, for the first time, short summaries of the major activities of our members. We have expanded the section this year, further revealing the rich and diverse range of activities in which our members are involved. We are also pleased to high- light the contributions of the Governments of Chile and Ethiopia, two of our new members--with the Philippines--that continue to breathe new life and vitality into the Cities Alliance. Cities Alliance Annual Report 2007 · 29 United Cities and Local Governments (www.cities-localgovernments.org) upport for Local Government. The urban ver- S definition and implementation of the global develop- sus rural population balance witnessed a signifi- ment agenda. cant change in 2007 as city dwellers began to The concerted lobbying efforts of local and region- outnumber country dwellers. As a result, mayors al governments and partners contributed in no small called for greater participation in setting the policy part to the approval of the International Decentraliza- agenda for the issues affecting their constituents.They tion Guidelines by the UN-HABITAT Governing also requested more funds to meet these needs since, Council. These guidelines recognise the need for as United Cities and Local Governments (UCLG) ob- effective decentralisation both as a prerequisite of serves, less than one percent of global development good governance and as an expression of democratic funding is channelled through local governments. practice. In 2007 UCLG celebrates the launch of a Present in 136 of the 192 United Nations mem- new European Union (EU) thematic programme bers states in seven world regions, UCLG's members which is expected to facilitate access to EU funding include individual cities, regions, and national local for local government programmes. government associations. The first UCLG Global Report on Decentralisa- Success in finding effective and practical solutions tion and Local Democracy (GOLD) will be pub- to major policy questions through peer-to-peer work lished this year.The report--the first of its kind--aims within its broad network (70 percent of the world's to periodically assess the progress of and obstacles to local governments participate in decentralised coop- the spread of local democracy and decentralisation. eration programmes) makes UCLG a vocal advocate It will provide analysis of global trends and should for greater involvement of local authorities in the become an advocacy instrument for local authorities. 30 · Cities Alliance Annual Report 2007 Links with Cities Alliance Goals and Activities. a reference in local governments' international advo- UCLG plays an active role in the governance of the cacy efforts and offer tools and reforms aimed at Cities Alliance. As a result, the voice and role of local increasing the integration of sustainable financing in authorities have steadily grown stronger in the Alli- CDS and slum upgrading initiatives. ance and UCLG is actively promoting Millennium At the second UCLG World Congress to be held Development Goal-based city development strate- in Jeju, Korea under the title "Changing Cities are gies, notably through programmes in Latin America Driving our World," local and regional government and Africa. UCLG hopes this initiative leads to more leaders will come together to define their internation- cities implementing projects directly. al agenda for 2007 to 2010. Progress toward the Through its membership, UCLG promotes Millennium Development Goals, facing the challeng- capacity-building initiatives that enable local govern- es of climate change, and promoting peace through ments to increase their role in the execution of slum city diplomacy initiatives are all high on the agenda. upgrading programmes. Furthermore, UCLG is devel- Other sessions will include topics such as innovative oping a policy paper on local finance that will serve as governance and fostering greater social cohesion. UCLG of Courtesy Mayors attending UCLG Executive Bureau meetings in Paris Cities Alliance Annual Report 2007 · 31 Government of Brazil: Ministry of Cities and the Brazilian Federal Savings Bank (www.cidades.gov.br and www.caixa.gov.br) razil's federal government established a Minis- B and the National Fund for Housing of Social Interest. try of Cities in 2003 to address society's de- The law sets national criteria under the guidance of mand for and to fill a gap in designing a coher- the Ministry of Cities and contributes to the policies ent urban policy. The new ministry incorporates and programmes that promote access to dignified citizen input into policy formulation and addresses housing for low-income populations (see figure 1). challenges that arose due to the lack of a national The fund gives grants to cities and states for slum up- urban policy. grading projects. In 2006, $500 million was allocated. Government investment in housing has been grow- New housing policy. In 2004, the new Ministry of ing, compared to the past 25 years. From January Cities designed a housing policy that established that 2003 to December 2006, R$35.14 billion8 were sector's institutional-political framework. The minis- directed to housing. In 2006, the National Fund for try also began working in partnership with the Brazil- Housing of Social Interest had a R$1 billion budget, ian Federal Savings Bank (Caixa Econômica Federal, of which R$850 million was to be invested in urba- or CAIXA), the biggest public commercial bank in nising settlements, with priority being given to palafi- Latin America, to overcome the significant housing tas (shanty houses). deficit, estimated at 7.9 million houses. CAIXA has a leading role in this process since it facilitates housing Urbanisation in precarious settlements. The issue of credit and provides technical and specialised human urbanisation in precarious settlements was in the resources. spotlight after its inclusion in the Brazilian Growth In addition to the institutional activities, citizen Acceleration Programme (PAC). The plan contains participation played a role in passing the law creating the National System for Housing of Social Interest 8. US$1 equals about R$1.9 (reals). Figure 1. Rising numbers of poor households receiving housing financing (2002­2006) Government of Brazil Increases Housing Social Housing Financing for Poor Families Assistance to Poorest Households 800 From 2002 to 2006 the number of poor families in Brazil receiving federal hous- 600 ing assistance more than doubled, from households 309,400 to 630,500 households. of thousands) 400 (in Of these, assistance to the very poorest Number 200 (those earning less than 3 times month- ly minimum wage, a government unit 0 2002 2003 2004 2005 2006 of income measurement) increased by 350 percent. 32 · Cities Alliance Annual Report 2007 R$170.8 billion for the next four years, directed to eliminating infrastructure and energy bottlenecks and improving economic growth and equitable income distribution. Some R$2.3 billion is expected to be invested annually to urbanise precarious settlements and address urban, environmental and land regula- tion issues. In parallel with housing investments, efforts are being made by the National Secretary for Urban Pro- CAIXA grammes to encourage land regularisation in precari- of ous settlements as a way of assuring land ownership Courtesy and housing rights. Through the programme "Papel Passado" that favours sustainable land regularisation, IDB-financed housing programme in Alagados IV and V the Ministry of Cities, with Cities Alliance funding,9 neighborhoods, Salvador (Bahia State), Brazil has supported regulatory interventions countrywide. Some 1.4 million families in 2,300 settlements have cantly expand activities and improve lives in 12 mil- benefited. Of these, 380,000 families have received lion urban households lacking land tenure. land ownership certificates, or have been granted the By adopting such policies, Brazil reassures its com- right to live and to occupy land. With the resources mitment to the Millennium Development Goals allocated by the PAC, it will be possible to signifi- (MDGs), especially MDG Target 11 that advocates improvement in the standard of living of slum dwell- 9. The full name of the programme is: The National Urban Development ers. Brazil, therefore, as a Cities Alliance member, Policy: Support to the National Programme for Land Tenure Regularisation and Socio-Environmental Risk Prevention in Precarious Settlements. contributes actively to reaching this target. Cities Alliance Annual Report 2007 · 33 Government of Chile: Ministry of Housing and Urban Planning (www.minvu.cl) ousing deficit addressed through neighbour- H Success of Development Measured hood recovery. One of the major challenges by Quality of Life facing Chile's Concertación10 governments in the 1990s was the housing deficit, totalling nearly Michelle Bachelet Jeria, President of the Republic of Chile 1,000,000 homeless families. Between 1990 and 2005, the government cut the deficit almost in half as People's quality of life is a country's measure a result of a housing policy based on a "trilogy"--sub- of success. Economic and political progress sidies, savings and credits--and focusing 67 percent is not very useful if peoples' living conditions of fiscal resources on the poorest 30 percent of Chile's do not improve. The success of development population. The model has not been problem-free, is measured by peoples' ability to feel safe in however. Urban segregation, a lack of citizen partici- their neighbourhood, live with dignity in their pation and public space, deterioration of the existing homes, travel expeditiously to their work- housing stock, and insufficient comprehensiveness place and enjoy their free time together with and neighbourhood perspective in the housing policy their family and friends indulging in culture, remain challenges. sports and recreation. 10. Coalition of political parties in government since 1990, following the return to democracy in Chile. Chile of Government of Courtesy Summer Water Festival in Coquimbo, Chile 34 · Cities Alliance Annual Report 2007 In response, the government developed the A participatory process was conducted in each of Neighbourhood Recovery Programme with the goal Chile's thirteen regions. Two-hundred neighbour- of working in 200 neighbourhoods countrywide hoods in 79 communes were identified. Programme from 2006 to 2010. The goals of the programme, implementation began in the last quarter of 2006 in co-financed by the Cities Alliance, are to create 75 neighbourhoods. An additional 72 neighbour- neighbourhoods with a greater degree of social inte- hoods were added at the beginning of 2007 and pro- gration, recover deteriorated public space, and grammes in the final 53 neighbourhoods are expected strengthen community relations. The programme to begin in 2008. It is estimated that 450,000 people will include the coordinated participation of munic- will benefit from the programme. ipalities and other public and private sector institu- tions linked to housing and targeting specific sectors The implementation model for interventions involves of society, including female-headed households, three phases: youth, the elderly, and the disabled. Programmes · Phase 1--Design of the neighbourhood contract: supporting education, health, training and employ- conduct a basic technical study conducted jointly ment will also be supported. with local residents to provide general guidelines for designing a management plan for the neigh- bourhood contract, establish a neighbourhood development council, and undertake confidence building work. · Phase 2: Execution of the neighbourhood con- tract: consider three funding sources: direct pro- gramme financing ($500,000 to $1,500,000 per Chile neighbourhood), other Ministry of Housing and of Urban Planning (MINVU)-financed programmes, and programmes belonging to other public and Government private institutions. of · Phase 3: Conclusion of works and closure of the Courtesy Neighbourhood Contract: Evaluation of pro- Voting for Obra de Confianza (Trust Works), a programme that grammes by MINVU and neighbourhood devel- carries out Quiero mi Barrio (I love my barrio) and seeks to opment councils. re-establish co-existence and collaboration among neighbours to protect, develop and empower the neighbourhood. Cities Alliance Annual Report 2007 · 35 Government of the Federal Democratic Republic of Ethiopia: Ministry of Works and Urban Development merging urban agenda. The Ethiopian Govern- E · Enable the voluntary creation of 10,000 small en- ment approved an urban development policy in terprises. March 2005, and created the Federal Ministry · Provide social facilities for youth to gain knowl- of Works and Urban Development in October 2005. edge and engage in recreation in a productive and These actions demonstrated the importance of an meaningful way. "emerging urban agenda" in terms of national policies and actions. The government's Plan for Accelerated · Ensure the participation of urban residents, public and Sustained Development to End Poverty (PAS- authorities and other stakeholders in all pro- DEP) (2005/06 to 2009/10) includes two urban pro- grammes. grammes--the Urban Development Package and the · Deliver 13,825 hectares of serviced land in all ur- Urban Good Governance Package--which were de- ban centres. veloped by the Ministry of Works and Urban Devel- opment during 2006. Implementation of the Urban Development Package, The Urban Development Package has five strategic by federal, regional and local government authorities, pillars: a micro- and small-enterprise programme; an started in mid-2006 and is continuing as the minis- integrated housing development programme; a youth try's main activity. development programme; provision of land, infrastruc- The Urban Good Governance Package provides ture and services; and strengthening of urban-rural the policy, legislative, regulatory, administrative, sys- linkages. tems, institutional, and capacity building support for the five strategic PASDEP urban pillars. Seven areas It will: are addressed: land management, financial manage- ment, development planning, organisational and · Construct 400,000 houses in 72 urban centres; at human resource development, infrastructure man- least 20 percent of beneficiaries will be women. agement, public participation, and justice reform. · Create employment opportunities for 1.5 million Implementation of the package's seven sub- urban residents in 825 urban centres. Fifty percent programmes and 23 projects commenced in the first of beneficiaries will be women. half of 2007. 36 · Cities Alliance Annual Report 2007 Linkages with Cities Alliance goals. The five pillars of the Urban Development Package will have real im- pacts on urban employment generation, fixed capital formation, slum reduction, poverty reduction and 2007 improvements in health. The Urban Development Office, Package will increase GDP growth and help achieve Millennium Development Goals. The package con- Project tributes directly to Cities Alliance goals by: · Scaling up successful approaches to urban poverty Development reduction through job creation, vocational and Housing technical training, and development of micro- and small enterprises. Ababa Addis · Identifying and providing financial and other re- sources that help cities of all sizes obtain more Inner City Urban Renewal through Housing Development, Addis financial and human resources for improved and Ketema Sub-City Housing Development (Amanuel Site), Addis expanded delivery of infrastructure and services, Ababa, Ethiopia including housing. · Promoting positive impacts of urbanisation such Ethiopian urban centres to facilitate accelerated and as job creation and urban contributions to national sustained urban development. The Urban Good GDP that support urban and rural development Governance Package contributes directly to Cities goals. Alliance goals by bringing cities together in direct dialogue, promoting the developmental role of local The seven sub-programmes and 23 projects of the government, and helping local urban authorities plan Urban Good Governance Package will support im- and prepare for future growth. plementation of good urban governance practices in Cities Alliance Annual Report 2007 · 37 Agence Française de Développement (www.afd.fr) rban development activities. The Agence Fran- U Local Governments at the Centre of AfD's Opera- çaise de Développement (AfD) is strongly tions. Local governments are at the centre of AfD's committed to supporting local and central strategy since most projects are undertaken in the governments as they work towards sustainable man- framework of increased decentralisation.AfD supports agement of their urban settings. AfD is involved in its partner cities in meeting the challenges of poverty over 100 urban development projects worldwide alleviation and access to basic services, economic de- and pledges annually an average of an additional velopment and environmental management. i150 million. For this purpose, AfD focuses on three types of operations. First, AfD supports city governments in Financial Instruments for Urban Development. AfD strategic planning for urban expansion, investment channels its funds through a wide range of financial programming, and sector and economic development instruments that include loans and grants. Central strategy formulation. governments and local governments are eligible for Second, AfD is at the side of cities to finance infra- this assistance. For example, Ouagadougou, Burkina structure for water and sanitation services, roads, Faso's capital, recently received a sub-sovereign loan drainage, waste collection and treatment, and schools. to finance its central market. AfD also offers credit AfD's support extends to new infrastructure and facilities to national financial institutions specialis- infrastructure rehabilitation as well as to sustainable ing in municipal finance, such as the Caisse des Prêts management and maintenance mechanisms, involv- et de Soutien aux Collectivités Locales (CPSCL) in ing the private sector as appropriate. Tunisia, and credit enhancement tools for local gov- Lastly, AfD facilitates the strengthening of local ernments wishing to access directly the financial government capacity to implement strategic plans markets. and maintain and develop infrastructure. This in- 38 · Cities Alliance Annual Report 2007 cludes training technicians, managers and officials; providing technical assistance; and building capacity to mobilise sustainable financial resources. For the latter,AfD supports municipalities in optimising local taxation systems and revenue-earning infrastructure. Likewise, AfD promotes a contractual approach be- tween the central government and the cities, which enhances the local government's capacity to plan and finance investments over several years. As shown in Niger, Senegal and Tunisia, such municipal contracts officially empower municipal authorities tasked with implementing development projects, while allowing the central government to monitor financial and gov- ernance issues. Promoting City-To-City Cooperation. In several in- stances, AfD builds on the experience of French local governments who wish to get involved with their counterparts in the South.These partnerships, mostly AfD and Cities Alliance. Collaboration with the Cit- city-to-city as demonstrated between Lyon and Oua- ies Alliance has become central to many AfD opera- gadougou, Lille and Cotonou, and Paris and Amman, tions. Several city development strategies have been facilitate the exchange of experience, particularly co-financed by the Cities Alliance and AfD. Recent when initiated at the identification stage of an AfD examples include projects in Cotonou, Benin; Dakar, project. This three-sided cooperation has proven very Senegal; and Ouagadougou, Burkina Faso. The coop- efficient, notably in planning and municipal manage- eration will extend in the near future in the field of ment improvement programmes. municipal finance. Cities Alliance Annual Report 2007 · 39 Institut des Sciences et des Techniques de l'Equipement et de l'Environnement pour le Développement (www.isted.com) T he Cities Department of the Institut des Sci- ment d'Intérêt Scientifique pour l'Étude de la Mon- ences et des Techniques de l'Equipement et dialisation et du Développement (Gemdev). Under de l'Environnement pour le Développement the programme, thirty research projects with broad (Isted) coordinates activities to collect partner geographic reach were supported. The research, ini- know-how in the field of development, promote the tiated by the French Ministry of Foreign Affairs, in- exchange of experience among Northern and South- vited proposals with two research thrusts: (i) inter- ern countries, and support the international activities vention in a city (metropolisation, the environment of its members. and cultural heritage, and creating infrastructure, Isted works frequently in coordination with local, city services and community facilities), (ii) the dif- national and international public and private organi- ferent approaches and strategies of city managers sations on the following types of activities: (governance, decentralisation and local democracy; the use of expertise with regard to professional · Creating knowledge opportunities through stud- knowledge and urban culture). ies, thematic working groups and missions of ex- As a result of the PRUD programme, the French pertise. Ministry of European and Foreign Affairs decided to · Strengthening skills through training, research launch, for the next four years (2007­2010), a new programmes and seminars. programme devoted to urban and local governance. · Facilitating networks and partnerships. That programme will support: (i) the African mu- · Sharing and disseminating information through nicipal network, (ii) western and central African local conferences and publications. sustainable development and decentralised policy Urban Development Research Programme. In 2006, strengthening, (iii) urban governance strategies, (iv) Isted published the final evaluation of its urban re- evaluation and follow-up. search programme PRUD (Programme de recherche urbaine pour le développement)11 whose activities Basic services. Isted published the guide Basic ser- were undertaken in conjunction with the Groupe- vices in cities in developing countries: Equitable access and coverage for low-income households in June 2006. Programme Solidarité Eau (pS-Eau) led the working 11. See www.gemdev.org/prud for more information. group to complete this guide. The guidelines note 40 · Cities Alliance Annual Report 2007 the conditions required for poor people to achieve good access to services and suggest three approach- es for water, sanitation, and waste management: · Improving universal services to ensure the same regulations are applied to all without causing ex- clusion. · Establishing partnerships with neighbourhood stakeholders. · Associating users with service management by encouraging users to organise into groups and manage services. The main results were presented and discussed with African local authority delegates in Nairobi during the Africities Summit in September 2006.12 Emerging cities. Based on the results of 25 years of urban development programmes supported by French aid, Isted was requested to conduct a review of urban topics as keys to understanding and action for growing cities. A book and a Web site were launched in July 2007 to help local and national au- thorities discuss activities with French representa- tives, public and private entities, and mayors. 12. Executive summary of this report available at: www.isted.com/pole- ville/services_essentiels/synthese_services_essentiels_2006.pdf. Cities Alliance Annual Report 2007 · 41 Government of Germany: German Federal Ministry for Economic Cooperation and Development (www.bmz.de/en) rban development activities. The German Fed- U Links to Cities Alliance goals. In its urban portfolio, eral Ministry for Economic Cooperation and Germany will continue its focus on the following Development ( BMZ) continued to expand its main approaches to improving urban services: urban portfolio through new programmes, primarily · Capacity development in various fields of urban in Asia. management to implement poverty-oriented pro- Under the theme "Investing in Asia's Urban Fu- grammes. ture," more than 100 representatives of municipal, lo- · Financing and development of new finance facili- cal, provincial and national agencies dealing with ur- ties for urban infrastructure and services. ban development joined donors at a conference held by BMZ and the Asian Development Bank (ADB) to Its main areas will lie on the poverty-oriented im- discuss new ways to improve the living conditions of provement of urban infrastructure and the promo- the 1.6 billion people in Asia's cities. The main out- tion of good urban governance. come of the conference was the establishment of a Germany continued supporting the Cities Alliance joint City Development Initiative for Asia (CDIA). through its financial contribution and secondment of The CDIA will provide technical support to cities to personnel to the Alliance's secretariat. Germany facilitate their access to financing from international would like to contribute further to the dissemination and domestic sources. The CDIA is expected to com- of best practices in pro-poor urban policies and en- plement Cities Alliance efforts as it is envisioned as a courages proposals from partner cities of the Cities mechanism to direct resources to cities following the Alliance. preparation of a city development strategy. Cities Alli- ance member Sida is also joining efforts in support of this initiative. On the occasion of the third ses- sion of the World Urban Forum in Vancouver, BMZ organised a joint BMZ-Cities Alliance networking event on "The Inclusive City." Re- cent and emerging urban strategies to counterbalance the widening so- cio-spatial and economic gap were presented. The discussion among panellists and network participants helped to pinpoint essential re- quirements for practical urban and national development policy. BMZ of Courtesy Beneficiaries of poverty alleviation programme in Egypt 42 · Cities Alliance Annual Report 2007 Government of Japan (www.mlit.go.jp/english/ and www.jbic.go.jp/english/) DS in the Philippines. The Japanese govern- C many member cities that have participated in the ment has supported cities in the Philippines CDS process. Information dissemination to share in conducting city development strategies. The knowledge, challenges, and experiences is part of the CDS programme, now in its third phase, has been no- CDS process. LGUs give presentations on the chal- table for involving mayors, local governments and a lenges they face and look for ways to improve their range of stakeholders in defining city strategies. The projects by learning from the examples of others. League of Cities of the Philippines (LCP), consisting About fifty LGUs are trying to expand and improve of 117 cities, has been the implementing agency. their responses to challenges in the Philippines through CDS phase 1 was initiated by the World Bank in CDS processes. 1998 for seven cities. Participating local government Two notable approaches to CDS in the Philippines units (LGUs) worked on city improvement by plan- include projects in San Fernando and Marikina cities. ning, budgeting, and programming development proj- In San Fernando City, La Union, the city government ects and individual action programmes through the implemented a housing project to relocate informal CDS process. About 30 more cities became involved settlers based on CDS experiences in other cities, since in strategy development during CDS phase 2. informal settlers are common in the Philippines. In CDS phase 3 built on the successes of the first two San Fernando, La Union, 100 houses were built with phases and began with the signing of an agreement World Bank support.The city government is also tack- between the World Bank's Philippines country office ling waste management and traffic issues. and the LCP in September, 2005. To date, 47 cities in In the Philippines, jeepneys (popular transport the Philippines have undertaken a CDS process sup- vehicles) cause traffic congestion and air pollution. ported by the Cities Alliance, in part with Japanese Marikina City, Metro Manila, wanted to reduce urban contributions, and the World Bank. traffic congestion and improve air quality. The city Unique features of Philippines CDS work include government began promoting bicycle transportation the role of LCP as the implementing agency, and the as a safe, inexpensive, and clean alternative. Sixty kilo- metres of bikeways are now planned and the city is conducting classes on safe bicycle riding and bicycle maintenance. Two kilometres of World Bank-support- ed bikeways have been completed, to date. Japan Far left: CDS-3 Investment of Planning Workshop, Philippines Left: Housing Project in Government of San Fernando (La Union), Philippines Courtesy Courtesy of Government of Japan Cities Alliance Annual Report 2007 · 43 Government of Nigeria: Federal Ministry of Environment, Housing and Urban Development wo ministries merged. In recognition of the in- T The Federal Government, in collaboration with the extricable linkages between the environment Lagos and Ogun State Governments, has embarked and human settlements as interdependent and on city-wide redevelopment of the Lagos Mega-City mutually reinforcing pillars of sustainable develop- region. A Lagos Mega-City Development Authority ment, the ministries responsible for the environment was established in March 2007 with responsibility for and human settlements were merged into a single implementing strategies proposed for infrastructure body in December 2006.The new Federal Ministry of development, slum upgrading, sanitation, physical Environment, Housing and Urban Development will planning, security, sanitation, traffic and transporta- pursue successful delivery of MDG 7 target on ensur- tion, funding and institutional reforms. ing environmental sustainability. The first phase of a Rapid Urban Sector Profiling Studies (RUSPS) was initiated for six Nigerian cities. Urban development programmes. Building on the It involves action-oriented urban assessments of needs gains of democratic governance, a National Economic and capacity-building gaps,and focuses on governance, Empowerment Development Strategy (NEEDS) was local economic development, basic urban services, implemented from 2003 to 2007. NEEDS aims to slums, gender, and the urban environment. Project enhance economic growth, human development and components include preparation of feasibility studies, service delivery, especially through positive gover- policy development, project implementation, local nance, zero tolerance for corruption, public service economic development, local leadership, and environ- reform, and improvements in financial planning and mental management. It will provide strategic guide- control. In April 2007, a NEEDS-2 action document lines for balanced and integrated development. emphasising urban upgrading as a strategy for poverty The MDG Debt Relief Fund project commenced reduction was prepared. in the Moferere-Ondo central business district in 2006. It involves redevelopment and upgrading of basic services, an HIV/AIDS community advocacy programme, and general awareness campaigns. Similar projects will start in Bilbis-Tsafe (Zamfara State) and Awka, Umunze (Anambra State) in 2007. Nigeria Environment, of Improving national standards. A National Environ- mental Standards and Regulations Enforcement Ministry Development, Agency was established in November 2006 with re- Urban Federal sponsibility for environmental protection, biodiver- of and sity conservation, and the sustainable development of Courtesy Housing Nigeria's natural resources. Also, a National Building Code was adopted in August 2006 to guide and regu- Oshodi highway in Lagos, Nigeria: a challenge late activities in the building industry, set standards, in urban management and specify sanctions and remedies for infringement. 44 · Cities Alliance Annual Report 2007 The potential of Nigerian cities. While cities in most In addition to on-going activities and to better Western countries drive the national economy, Nige- ensure effective administration, strengthen the ca- rian cities have yet to achieve this role as its cities pacity of city administrators and mobilise increased have inadequate planning, congestion, squalor, and resources for sustainable development and poverty extreme poverty. Nigeria has an estimated popula- reduction, Nigeria will undertake a State of the tion of 140 million, is one of the most rapidly urba- Cities Report in 2007 to assess and analyse the per- nising countries in Africa and has about 60 percent of formance of 20 of its largest cities in terms of liveli- its population living in urban areas.The proportion of hoods, environmental sustainability and service de- urban dwellers in slums rose from 24.09 percent in livery, spatial form and infrastructure, financial 1990 to 50.7 percent in 2005 and is on the increase. resources, and governance, with a view to generating Nigerian cities have enormous potential for economic information for preparation of MDG-based city de- development and poverty reduction if properly ad- velopment strategies. Also imperative for the future ministered and managed, however budgetary alloca- is the need to develop new strategies for increased tions to urban management are grossly insufficient, private sector involvement in the financing and and technical and managerial capability are deficient. management of sustainable urbanisation. Nigeria Environment, of Ministry Development, Urban Federal of and Courtesy Housing Slum settlement in Makoko, Nigeria Cities Alliance Annual Report 2007 · 45 Government of Norway: Ministry of Foreign Affairs (www.regjeringen.no/en/dep/ud.html?id=833) ew urban development policy launched in N urban knowledge production and advocacy.The envi- 2007. In early 2007, Norway's main activity in ronment, gender, humanitarian assistance, and peace urban development was the production of an and reconciliation are singled out in the policy as urban development policy entitled "Cities--hopes broad cross-sectoral perspectives of particular inter- and challenges." The policy will be launched publicly est for Norwegian assistance. These are also perspec- later in the year.The process has been open and trans- tives highly relevant to the future work of Cities Alli- parent, bringing government ministries, universities ance. It is explicitly stated in the policy that Norway and research institutions, civil society organisations, shall contribute to a strengthening of the work of the and corporate business and consultancy firms into ac- Cities Alliance with regard to knowledge develop- tive dialogue and cooperation. On this basis, an infor- ment, urban environment, gender, and rights-based mal Norwegian urban development network has advocacy. emerged. During the process, Norway's ongoing urban development assistance was also mapped. Priorities and partnerships. At the UN-HABITAT The policy emphasises full integration of the ur- Governing Council 21, a main human settlements ban perspective in all Norwegian assistance sectors. It event in 2007, Norwegian priority issues included also promotes a synergetic relationship among bilat- youth, gender, decentralisation, and local democracy. eral, multilateral and civil society players with regard The meeting resulted in the adoption of resolutions to urban development and national and international paving the way for a Youth Opportunities Develop- ment Fund, a gender strategy and further emphasis on decentralisation as important UN-HABITAT tasks and challenges. Identical priorities will also be reflected in Norway's upcoming negotiations with UN-HABITAT for a second programme agreement phase (2008­ 2009). This comes in addition to urban financing, water and sanitation and urban land programmes. Norway has been involved in the Cities Alliance strategy process following the 2006 Universalia eval- uation of the Cities Alliance. To make the Cities Alli- ance more relevant and effective in relation to stake- holders, Norway supports strengthened involvement Solberg of civil society in the work of the Alliance at all levels. In 2007, Norway expects to nearly double its core Jan-Andreas assistance to the Cities Alliance and UN-HABITAT. Community leader explaining savings project run by Rede InterAção to new members and the media in São Paolo, Brazil 46 · Cities Alliance Annual Report 2007 Government of South Africa: Department of Housing (http://www.housing.gov.za/) ousing provision. During the financial year H mal settlements country-wide in order to meet our 2006/7 a total of 271,219 housing opportuni- Millennium Development Goals target. ties were provided through the government subsidy programme. Of this total the vast majority Integrated development planning. In 2006, a specific were built directly by government, while a small pro- programme was introduced to address inadequate portion was built through private sector developers. housing planning at the municipal level. The pro- Thus, the total number of units completed and under gramme provides support to municipalities in the construction since 1994 stands at 2,355,913. compilation of good quality, credible and realistic The right to adequate housing remains enshrined housing plans as part of the overall process of inte- in South Africa's constitution (section 26, Act 108 of grated development planning. The programme pro- 1996), and the government continues to play a lead- vides process and product guidelines for municipal ing role in the provision of adequate housing, espe- housing sector plans, as well as an indication of the cially for the poor, and low-income earners. Yet de- division of roles and responsibilities regarding hous- spite the achievements stated above, the demand for ing planning for municipalities and provinces. Capac- low-income housing is not abating, with the current ity building initiatives to support municipalities will backlog standing at 2.2 million units. remain a priority for the South African government. Since 2005, government has made a concerted The close linkage between the Provincial Planning effort to involve the private sector, including develop- Dispensation and the programme for Housing Sec- ers and financial institutions, in the provision of low- tions of Integrated Development Plans ensures realis- income housing. These efforts have paid off and in tic planning and better collaboration between provin- recent years various excellent examples of "inclusion- cial and local spheres of government, thereby ary" (mixed income, mixed typology) housing have contributing to more effective service delivery on in- been developed through this partnership. tegrated housing programmes, including programmes aimed at the upgrading of informal settlements. Informal settlement upgrading. The Comprehensive Plan for the Development of Sustainable Human Settlements (commonly referred to as Breaking New Ground/BNG), announced by South Africa's Minis- ter of Housing in 2004, foresees a dramatic change in the approach to housing, moving away from the Housing of "mere" provision of shelter to a strategy for develop- ing integrated communities close to social amenities and economic opportunities. In line with this plan, a Department pilot programme that includes at least one informal Africa settlement upgrading project per province is being South of undertaken. These lead projects are taking a phased, area-based approach to services and housing, and in- Courtesy clude social and economic amenities in their plan- Aerial view of Brickfields Social Housing Project in New Town, ning, with a strong focus on community participation. Central Johannesburg, South Africa The experiences from these lead projects will form the basis for the consolidation of a national upgrading strategy to be developed in the current financial year (2007/8), and eventually roll out to all existing infor- Cities Alliance Annual Report 2007 · 47 Government of Sweden: Swedish Interntional Development Cooperation Agency (www.Sida.se/urban) ew urban development policy launched. The N managing these changes. The programme, imple- Swedish International Development Coop- mented by UN-HABITAT, will help meet the signifi- eration Agency (Sida) launched an urban de- cant need for improved spatial and urban planning. velopment policy in 2006 entitled "Fighting Poverty Through the programme, civil society and other in an Urban World." It identifies five strategic focus stakeholders are actively involved in shaping the areas for Sida's urban work and guides Sida staff in development of their own neighbourhoods. integrating urban issues into development coopera- In cooperation with the Ministry of Industry in tion. By demonstrating why appropriate urban devel- Bangladesh, support is given to efforts to relocate opment is the key to economic growth and poverty some 175 highly polluting tanneries from central alleviation at local and national levels, it provides a Dhaka to the outskirts of the city. This is the first useful tool for dialogue with partner countries, de- industrial relocation of this scale in the country and velopment partners, civil society organisations, the environmental issues are in focus.Valuable lessons are private sector--and within Sida. being generated at a national level for managing While the policy text is brief, a more comprehen- future industrial relocations. sive document entitled "More Urban--Less Poor" provides a descriptive and analytical background to Publications and events. In cooperation with the Aga the critical issues related to urban development. This Khan Trust for Culture, "Fighting Poverty in Histori- reader-friendly publication has received worldwide cal Cities" was published. Focusing on Africa, the pa- recognition. per describes how the fight against urban poverty can be combined with and managed by using resources Urban development planning. Recent urban devel- embedded in a rich cultural heritage.The case of Zan- opment work has begun to show results. In Kenya, for zibar is described in detail.Another publication wide- example, urban development was recently proposed ly distributed during the period was Sida's report to be one of the three principal sectors in the 2007 to from the World Urban Forum held in Vancouver in 2010 cooperation strategy between the Kenyan gov- June 2006. ernment and Sida. Two major events supported by Sida during this Sida also supports a programme in Kosovo to period included a workshop in Stockholm, "Financial enhance development planning in six municipalities Services for the Majority: Experiences and Innovative in response to an unprecedented construction boom Methodologies," in December 2006; and a Consulta- and urban growth, and the limited local capacity for tive Group to Assist the Poor working group on hous- ing microfinance. 48 · Cities Alliance Annual Report 2007 Housing finance support. By entering new agree- Donor harmonisation. In line with the ambitions to ments covering the period 2006 to 2008, Sida re- support urban development in harmony with other mains one of the major contributors to the Slum donors, Sida recently joined the Asian Development Upgrading Facility (SUF) and the Community-Led Bank and Germany's Ministry for Economic Coop- Infrastructure Financing Facility (CLIFF). Also, the eration and Development in their efforts to establish successful microfinance programme for housing and a city development initiative for Asia. infrastructure investment in Central America con- On an innovative pilot basis, a fund to support tinues. It is now estimated to have reached at least new technologies within the field of sustainable mu- 550,000 people, corresponding to about five percent nicipal environmental projects is under preparation. of the urban population in the five cooperation countries. Sida of Courtesy Untreated Wastewater from 175 tanneries in Dhaka, Bangladesh flowing into the Buriganga River Cities Alliance Annual Report 2007 · 49 Government of the United Kingdom: Department for International Development (www.dfid.gov.uk) rban development support. The Department U million which has leveraged $65 million more from for International Development (DFID) of the the private and public sector. This has led to the con- United Kingdom (UK) supports urban devel- struction of 7,000 homes and access to sanitation for opment through bilateral grants, support to global over two million slum dwellers. initiatives, and urban content of other sector pro- grammes. DFID programmes in well­performing, low-income countries increasingly emphasise general poverty reduction budget support. The nature of fis- cal decentralisation in each country will determine the share of DFID budget support spent at the city level. International initiatives that DFID supports include annual core funding of $2 million to UN- HABITAT, and specific funding to improve monitor- ing of MDG target 11 that seeks to improve the lives of slum dwellers. DFID supports the Cities Alliance with a commitment of $6.5 million until 2010. Housing finance. With little access to secure housing, and often working in the informal economy, slum dwellers are seldom able to access finance. DFID cur- rently supports two partnerships to bring together private finance for housing for the urban poor. This includes a DFID grant for $13.4 million to the Com- munity-Led Infrastructure Financing Facility (CLIFF), Library which helps mobilise public and private finance for housing improvements. CLIFF has disbursed $10.4 Image DFID Kadija (9) and Mobina (3) beg at a market in Dhaka, Bangladesh to support their family 50 · Cities Alliance Annual Report 2007 DFID also provides $10.9 million to the Slum Up- DFID water and sanitation programmes frequent- grading Facility.This exists to mobilise domestic capi- ly have a significant urban component. For example, tal for slum upgrading and municipal development. the $31.5 million Advancing Sustainable Environ- In November 2006 pilot activities started in four mental Health project in Bangladesh has a large countries: Ghana, Indonesia, Sri Lanka and Tanzania. urban component. International initiatives on water and sanitation also have an urban component, includ- Country programme highlights. DFID's largest bilat- ing rural-urban disaggregated data in the UNICEF/ eral urban poverty programme is in India. DFID cur- WHO Joint Monitoring Programme, and the Water rently has large, long-term urban programmes total- and Sanitation for the Urban Poor initiative. ling $527 million in the focus states of Andhra Pradesh, Madya Pradesh and West Bengal. These are Publications. The UK recognises that making an im- aligned with the Jawarahal Nehru National Urban pact on urban poverty requires working in partner- Renewal Mission, which links investment with urban ship; thus the funding detailed above is directly reform. linked to Cities Alliance goals. DFID also supports DFID's large sector involvement in urban devel- the production and dissemination of publications on opment in India initially focused on service delivery. urban poverty. In DFID's recent white paper, "Mak- The emphasis has moved to strengthening city gover- ing Governance Work for the Poor," the importance nance, improving policy and planning processes, and of improved governance is highlighted as central to community strengthening to make service delivery poverty reduction. Also, the DFID-funded publica- more accountable to citizens. tion "Making Planning Work" was launched at the The UK government is engaged in a sustainable third World Urban Fo- development dialogue with China. The partnership rum in Vancouver in involves high-level dialogue and technical exchanges. 2006. The publication The urban component of the dialogue involves work- covers the importance ing with ministries in China on the critical issues of of establishing effective regeneration of low-income urban areas and better partnerships and shar- urban planning, drawing on new and best practice in ing skills, and includes both countries. 20 case studies. Cities Alliance Annual Report 2007 · 51 Government of the United States: United States Agency for International Development (www.usaid.gov) U rban development activities. The United rity of tenure, and increasing local government reve- States Agency for International Development nue. Through a partnership with Shorebank Interna- (USAID) and its partners worldwide continue tional in Morocco and South Africa, financial sector to support cross-sectoral solutions to improve the institutions were brought downmarket. By bringing capacity of cities and local governments in address- the formal banking sector into urban slums, over $23 ing the challenges of rapid urbanisation. Programmes million in new loans were issued for housing. USAID supported include local economic development, im- supports city-to-city partnerships that bring greater proved service delivery, and sustainable financing of transparency, participation and accountability to local basic infrastructure and services. USAID promotes governments and also improve service delivery in cit- pro-poor local governance policies, economic growth, ies to demonstrate the tangible benefits of a more and more equitable access to services in countries democratic society. In Afghanistan, for example, worldwide. USAID also supports the development USAID will build on the successes of a partnership of employment-based activities that generate jobs programme to improve community services in Kabul and raise working skills among the urban poor and and expand the model to other Afghan cities. By part- youth through public-private partnerships to im- nering with national and local governments, associa- prove the business environment and connect the tions, the private sector, non-governmental organisa- informal sector with the formal economy. For exam- tions and other donors, USAID aims to bring greater ple, the employment rate for graduates of Entra 21, an resources to improve the lives of the urban poor. innovative workforce development programme now operating in 18 countries throughout Latin America Links to Cities Alliance programming. By working and the Caribbean, is 50 percent. across a range of sectors, including democracy and To respond to the demands of urbanisation,USAID governance, economic growth, and health, and by le- also carries out programmes in shelter finance, secu- veraging public and private sector resources to reduce 52 · Cities Alliance Annual Report 2007 the causes and effects of urban poverty, USAID sup- ports the goals of the Cities Alliance. USAID works at the community, local government, and national levels to build capacity and improve policy. At the munici- pal level, USAID's decentralisation and local gover- nance strengthening programmes introduce partici- patory approaches to planning with the aim of increasing transparency and accountability at the local level. By building the foundation of good gover- nance and management at the municipal level, it is possible for local governments to access resources from the private sector to finance improved urban services. In Mexico, USAID's partner, Evensen Dodge International, has demonstrated that sub-national governments can successfully access private capital markets, opening the way for local governments with sound financial management practices to invest more in improving water, sanitation and other essential ser- vices. USAID is expanding its work on innovative financing to build models from regions as diverse as Africa and Asia. USAID of Courtesy Drainage system being put into place with matching contributions from the community of Marwari Basti in Agra, India Cities Alliance Annual Report 2007 · 53 United Nations Human Settlements Programme (www.unhabitat.org) hirtieth anniversary of UN-HABITAT's found- T Partnerships. The Cities Alliance secretariat partici- ing. The year 2006 marked the 30th anniversary pated in these meetings and contributed to and ad- of a meeting inVancouver,Canada that led to the vised on UN-HABITAT flagship reports such as the founding of the United Nations Human Settlements State of the World's Cities. With half of the world's Programme (UN-HABITAT). Today, UN-HABITAT population now living in towns and cities, the 2006/7 has 150 technical cooperation programmes and proj- edition of the report shows that the battle for attain- ects under execution in 48 countries, of which the ing the Millennium Development Goals will be won majority are in the least developed countries. In many or lost in the urban arena. It shows for the first time of these, the Cities Alliance is a key collaborator. that urban growth is almost synonymous with the The United Nations convened the Habitat I con- growth of slums, and that the urban poor are just as ference in Vancouver in 1976 as governments began likely as their rural counterparts to suffer from mal- to recognise the consequences of rapid urbanisation, nutrition, hunger and disease. especially in the developing world. In those days, Other highlights include UN-HABITAT assistance when two-thirds of the world's population lived in to helping more than 30 countries institute new regu- rural areas, urbanisation and it challenges were barely lations for the progressive realisation of land, housing considered by a United Nations created just three decades earlier. The growing global awareness of human settle- ments challenges contributed directly to the resound- ing success of the third session of the World Urban Forum held in Vancouver in June 2006 to mark UN- HABITAT's 30th birthday. More than 10,000 people participated in the World Urban Forum, now a bian- nual event. Asia-Pacific regional conference. In a fitting climax to 2006, the first Asia-Pacific Ministerial Conference on Housing and Urban Development unanimously ad- opted a new mechanism setting up a permanent sec- retariat. Like governments in Latin America and Africa that hold regional conferences, the Asia-Pacific governments agreed to meet regularly at the regional level. High on the agenda will be urban poverty and governmental accountability for addressing poverty issues. TA Friska/UN-HABIT Szilard Rebuilding after a bombing raid in Afghanistan 54 · Cities Alliance Annual Report 2007 (http://visibleearth.nasa.gov/) Earth isible NASA/V © This image of earth's city lights was created with data from the US Defense Meteorological Satellite Program (DMSP) Operational Linescan System (OLS). Originally designed to view clouds by moonlight, the OLS is also used to map the locations of permanent lights on the earth's surface. The brightest areas of the earth are the most urbanized, but not necessarily the most populated. (Compare Western Europe with China and India.) Cities tend to grow along coastlines and transportation networks. Even without the underlying map, the outlines of many continents would still be visible. and property rights, including women's rights. Col- mental impacts of urbanisation. UN-HABITAT is also lectively, over 80 countries in Africa, Asia, Latin supporting UNEP in an initiative to improve the en- America and Arab States were implementing new vironmental dimension of Cities Alliance-supported housing and urban infrastructure development proj- projects. ects in collaboration with UN-HABITAT, the United Over the past months, UN-HABITAT and its part- Nations Development Programme, the European ners worked on Habitat's new Medium-term Strate- Commission, the Cities Alliance, the World Bank, re- gic and Institutional Plan (2008-2013) to ensure that gional banks and bilateral donors. urban poverty and other human settlements prob- In keeping with the resolutions of various UN lems remain properly prioritised within the agency bodies, UN-HABITAT worked to bring the urban di- and high on the international agenda. Progress in ur- mension into the international climate change debate. ban development and poverty reduction is still being This led to a robust cooperation programme with measured. It depends as much on the political will of United Nations Environment Programme to better governments and local authorities as communities promote conservation in both the built and the natu- themselves, and the degree to which all consult one ral environment to help offset the negative environ- another. Cities Alliance Annual Report 2007 · 55 United Nations Environment Programme (www.unep.org) uring the past year, the United Nations Envi- D efficiency and reducing emissions in the energy, con- ronment Programme (UNEP) concentrated on struction and transport sectors, cities will also reduce three environmental issues affecting cities and air pollution, thereby improving citizens' health. A poor urbanites: climate change, the depletion of bio- climate action handbook for cities developed by In- diversity and ecosystems, and inadequate sanitation ternational Council for Local Environment Initiatives and discharge of untreated municipal wastewater. (ICLEI), UN-HABITAT and UNEP seeks to support urban policymakers in monitoring carbon dioxide Climate change. Cities in developing countries are emissions and guiding them in ways they can improve facing the challenge of responding to the impacts of their city's resilience while at the same time reduce climate change. Poor urban dwellers will be most carbon dioxide emissions. highly at risk from impacts such as natural disasters, sea-level rise, increased health risks through vector Ecosystems and biodiversity. Cities draw on their sur- borne diseases, water shortages, and threats to food rounding ecosystems for goods and services, and city security. At the same time, cities in developing coun- by-products and emissions can affect regional and even tries are the world's fastest growing urban areas. global ecosystems.Therefore, cities are important man- Energy consumption, increasing transport needs, and agers of ecosystems and users of biodiversity. building activities will all lead to carbon dioxide emis- The international community has set a target to sions which contribute to climate change. reverse the loss of biodiversity by 2010. Together To assist cities in developing countries respond to with international organisations such as the Conven- such challenges, UNEP has developed a proposal on tion on Biological Diversity, ICLEI, the World Con- African cities and climate change, focusing on both servation Union, and others, UNEP assists cities in adaptation to risks and mitigation of emissions. UNEP meeting this target. During the recent international is also developing a Clean Development Mechanism meeting "Cities and Biodiversity: Achieving the 2010 project for cities, whereby developed country cities Target" (Curitiba, March 2007), cities welcomed reduce greenhouse gases by, for example, investing in UNEP's initiative to form a global partnership to clean energy projects in developing country cities. meet this challenge. UNEP collected case studies and To make the voices of local governments heard in recommendations for cities during a 2006 African re- the global debate, UNEP gathered urban policymak- gional workshop in Nairobi. The collection was pub- ers from Africa during a workshop at the Fourth lished in the booklet "Viumbe hai. African Cities, Africities Summit (Nairobi, September 2006) to for- Ecosystems and Biodiversity." mulate a joint position on climate change. This message was transmitted to the 12th conference of Sanitation and wastewater. Discharge of untreated the parties of the UN Framework Convention on municipal wastewater into rivers, lagoons, estuaries Climate Change (Nairobi, November 2006). and the ocean is one of the most serious threats to the Sustainable urban policy decisions have far- health of coastal populations and to sustainable de- reaching impacts on the global climate, and at the velopment worldwide. Many cities are facing daunt- same time benefit a city. For example, by increasing ing challenges in addressing municipal wastewater 56 · Cities Alliance Annual Report 2007 UNEP of Courtesy Nairobi National Park, Kenya disposal and keeping pace with rapid urbanisation. on the basis of the continued availability of environ- There is an overall need to adopt and implement al- mental resources. Sustainable urban development ternative and sustainable approaches to municipal will also minimise health risks and reduce environ- wastewater management, with the goal of reducing mental impacts at local and global levels. For example, the large proportion of the population without access UNEP is giving technical support to a CDS in Sana'a, to adequate sanitation. Yemen on air quality and water management. As one of the responses to this need, UNEP, jointly UNEP's primary objective of its engagement in with the UNESCO Institute for Water Education and the Cities Alliance has been to improve the environ- the United Nations Division for Ocean Affairs and the mental dimension of Cities Alliance-supported proj- Law of the Sea, has developed a training course enti- ects with the goal of achieving sustainable urban de- tled "Improving Municipal Wastewater Management velopment.To this end, UNEP and the Cities Alliance for Coastal Cities." In 2006, this course was delivered commissioned a study from ICLEI on ways to inte- in China, Egypt, Guam, Papua New Guinea and Saudi grate the environment into city planning. The report Arabia.To date, some 160 professionals from ten coun- will be published in the latter part of 2007. tries have been trained. The content is based on the Also, the November 2006 Public Policy Forum of UNEP/WHO/UN-HABITAT/Water Supply and Sani- the Alliance focused on the theme "Environment, tation Collaborative Council (WSSCC) Guidelines on Poverty and Development in an Urbanising World," Municipal Wastewater Management. UNEP offers the first PPF to deal with the environment. UNEP assistance to former course participants in the formu- organised a session which made the case that ecosys- lation of feasible and environmentally-friendly project tem services are an asset for cities. UNEP made con- proposals. crete recommendations to the 2006 Cities Alliance Consultative Group on how the environment could Linking with cities. The environment is the biggest be included in Alliance-supported projects to the asset of the poor--it is under this premise that UNEP benefit of recipient cities. The forthcoming Cities Al- works with cities and national governments. UNEP liance medium-term plan provides options for opera- promotes city planning which allows cities to develop tionalising this concept. Cities Alliance Annual Report 2007 · 57 Asian Development Bank (www.adb.org) rban development activities. City regions and U projects were generally rated as relevant, effective, megacities serve as magnets for people, enter- and efficient. Because of their complexity and the prise and culture. In the next 20 years, another often lower capacity at the local government level, 1.1 billion people will live in Asia's already congest- urban sector projects require more technical assis- ed cities. Without effective urban management, this tance support than some other sectors. growth will only exacerbate the existing problems of pollution, lack of potable water, slums and traffic Policy decisions, events and other highlights. ADB's congestion, among others. Though Asian cities on av- new Cities Development Initiative for Asia (CDIA), erage provide 80 percent of the economic base of the as part of its Urban Services Initiative, aims to reshape economy, large disparities have emerged as poverty ADB's engagement in the sector to deliver the tech- has urbanised. Today, over 200 million people live in nical and financial resources needed to respond ef- poverty in Asia's cities and many more are vulnerable fectively to client needs. In particular, ADB has intro- to economic and environmental shocks. These seri- duced new lending products including sub-sovereign ous and growing problems have overwhelmed urban lending, local currency financing, and refinancing, managers. The response cannot be simply "business- among others, which are suited for application in this as-usual."We need to develop new modes for engage- sector. The newly established CDIA is an important ment in this sector, reflecting new roles and types of step forward. Germany's BMZ participated in the de- clients. Today's responses must address the factors velopment of this initiative and Sida is supporting key to a sustainable future: economic, environmental CDIA as well. A well-coordinated, multi-donor ini- and social. tiative can contribute significantly towards improving Urbanisation is a mega-trend in Asia and the Asian the living conditions of people in Asian cities. CDIA Development Bank's (ADB's) Long-Term Strategic will facilitate international dialogue, training and ad- Framework, 2001 to 2015 marked it as one of its vice to help Asia's urban decision-makers build prob- main challenges.ADB has a long history of working in lem-solving capacity, to support them in preparing the urban sector. Around 10 percent of ADB lending, municipal infrastructure investment, and to assist in both in amount and number of loans, has been for finding financiers. urban sector projects and totalled over $11 billion. The CDIA is an innovative way to address the There appears to be a strong demand from cities for key elements of the Paris Declaration-- scaling up ADB financing, particularly in China, India and Paki- investments in the urban sector, fostering owner- stan. However, total borrowing from ADB must be ship, aligning support with national priorities, har- consistent with overall macroeconomic and public monising systems of support, and providing for clear debt considerations. and monitorable outcomes. CDIA will give cities Project completion reports show that urban mul- the central role in (i) determining the approach to tisector projects have generally performed well, with building coordination, financial management and 81 percent rated successful or highly successful be- procurement capacities to complement assistance tween 1995 and 2005. The performance of water programmes; (ii) coordinating among donors to ef- and sanitation projects has been somewhat weaker fectively deliver that assistance; and (iii) ensuring (67 percent were rated successful). Urban sector assistance produces the desired outcomes. 58 · Cities Alliance Annual Report 2007 Complementing CitiesAlliance funding, the CDIA will provide technical support to cities to pre- pare and support implementation of city development strategies and cities without slums programmes. As urban projects are multi-facet- ed and multi-sectoral, several ac- tivities go into establishing the enabling framework for, and strengthening the institutions in- volved in, investment projects. CDIA will provide support to ad- dress these issues in (i) national urban strategies; (ii) strengthening agencies prior to implementation of investment programmes; (iii) financial structuring, due diligence and negotiation; and (iv) support to project implementation. Challenges to achieving Cities Alliance's goals in the medium term. ADB aims to support Cities Alliance partners in financing identified investments in their region focused on urban infra- structure development and urban renewal.As a financing institution, it will be challenged to provide Steinberg/ADB expanded financial options, at Florian affordable terms and conditions, for governments and beneficiaries. Governments and Informal settlement near railroad tracks and Manila's commercial international financial institutions will need to find district, the Philippines ways to creatively involve the private sector in these endeavours, as active partners for programmes that reach out to all segments of the urban population. Cities Alliance Annual Report 2007 · 59 The World Bank (www.worldbank.org) ortfolio update. World Bank lending approv- P research on salient topics and highlighted empirical als for urban operations in fiscal year 2007 work from cities around the globe, with a notable amounted to $1.7 billion. The number of ex- contribution from Africa. plicitly urban operations supported has been stable over the last 3 years although within the Bank's over- World Urban Forum 3. Vice President Katherine all programme there are an increasing number of "ur- Sierra led a World Bank delegation to the World Urban ban space" operations. Forum 3 held in Vancouver, Canada in June 2006. In Notable among the twenty-three new urban opera- her keynote address, Ms. Sierra remarked that the task tions approved in the past fiscal year are the following ahead to accommodate the next two billion urbanites projects: Lagos (Nigeria) Metropolitan Development requires attention to the strategic building blocks of and Governance, which highlights transparency and good governance, a healthy business environment, accountability in delivering basic services to the urban well-coordinated cross-sectoral policies, functioning poor in Africa's largest city; Sichuan (China) Urban urban land and labour markets and effective mobilisa- Development Project, which tackles head-on the issue tion of domestic resources. of land supply for urban expansion; Sri Lanka Putta- lam Housing, which takes a comprehensive view of City indicators initiative. The first phase of develop- the needs of those displaced by internal conflict and ing a comprehensive set of city indicators to help cit- provides public services as well as regularising land ies monitor their performance and quality of life is titles; and Bolivia Urban Infrastructure, which seeks to complete. The indicators, intended to be used world- strengthen local government in the area of infrastruc- wide, are collected by participating cities, and on be- ture investment targeted to low-income areas. half of the cities by a City Indicators Facility. The indicators build on UN-HABITAT's extensive Urban strategy update. The Bank has begun updating experience. Pilot cities focus on the Americas and in- its 2000 Urban Strategy seeking to integrate various clude: Belo Horizonte, Porto Alegre, and São Paulo, urban activities into five thematic areas: cities and Brazil; Bogota and Cali, Colombia; Montreal,Toronto, economic growth; land, housing and urban expan- and Vancouver, Canada; and King County, Washing- sion; decentralisation, urban governance and financ- ton, United States. The second phase of development ing of city services; healthy and safe cities, and; pov- of the indicators will be supported for three years erty in the city. through the World Bank's Development Grant Facil- ity. A City Indicators Facility will initially be estab- Highlights from the past year lished at the University of Toronto. New cities will be 4th Urban Research Symposium 2007 which focused added from all regions (www.cityindicators.org ). on urban land use and land markets was sponsored by the World Bank and several partners including Sida, The Global Facility for Disaster Reduction and the Lincoln Land Institute, GTZ and the Cities Recovery (GFDRR), a major partnership of donors, Alliance. The symposium featured commissioned United Nations organisations, and the World Bank, 60 · Cities Alliance Annual Report 2007 and designed to help meet the global demand for in- its deliberations leading to state-of-the-art reviews creased investment in disaster prevention and mitiga- on: urban productivity, regional inequalities and rapid tion, was launched in September 2006. More than 14 growth, policies for housing affordability, and finan- donors have already pledged over $50 million to sup- cial innovations and housing. port national capacity development for disaster risk reduction in natural disaster hotspot countries. New publications: The Bank released a monograph, Thirty Years of World Bank Shelter Lending: What Have Urbanisation and the Growth Commission. The re- We Learned, that describes the Bank's lending for cently established independent Growth Commission housing and a book entitled Financing Cities, which has selected urbanisation as one of the key themes for presents cross-country experience. Alliance Puspa/Cities Erika Informal settlement in the centre of Jakarta, Indonesia Cities Alliance Annual Report 2007 · 61 The Cities Alliance needs to adopt a far more systematic and well-planned approach to strengthening partnerships and knowledge management, including the identification of new partners and opportunities. Alliance Chabrillat/Cities Pascale President of Maradi's Municipal Council, Idi Malé, reviewing a Cities Alliance publication (Niger) 62 · Cities Alliance Annual Report 2007 COMMUNICATIONS AND KNOWLEDGE SHARING ne of the central messages contained in the sec- O Annual Report and was the focus of its November ond independent evaluation of the Cities Alli- 2006 Public Policy Forum. ance, which was considered and adopted at the · The very successful decision to hold the spring November 2006 meeting of the Consultative Group, 2007 Policy Advisory Board meeting in conjunc- was the need for more attention to be paid to knowl- tion with the African Development Bank's review edge management, dissemination, and advocacy. The of its draft urban policy. Cities Alliance Secretariat had already demonstrated · Collaboration with Worldwatch Institute on the the value of this approach through its decision to put worldwide launch of the State of the World 2007: additional emphasis and effort into selected events, Our Urban Future. including the highly successful World Urban Forum III held in Vancouver, and the Africities Summit held in Nairobi in September 2006. Knowledge Sharing Activities Subsequent to these two events, the Cities Alli- ance clearly needs to adopt a far more systematic and Seventh Cities Alliance Public Policy Forum on well-planned approach to strengthening partnerships "Environment, Poverty and Development in an and knowledge management, including the identifi- Urbanising World," Washington, D.C., November 2006 cation of new partners and opportunities. Due to the political situation in Thailand, the venue Other components of this evolving strategy in- for the Cities Alliance annual meetings was moved cluded: from Bangkok to Washington, D.C. This, in turn, ne- · Taking the first steps in strengthening the urban cessitated an adjustment to the Public Policy Forum environment within the Cities Alliance work pro- (PPF), which was reduced to a single day's event. gramme, as had been proposed by the United Na- However, the PPF was still able to benefit from the tions Environment Programme (UNEP) at the active involvement of UNEP in retaining the focus Marrakech Consultative Group meeting. The ini- and theme: "Environment, Poverty and Development tiative was captured in the Cities Alliance's 2006 in an Urbanising World," reflecting the evolving Cities Cities Alliance Annual Report 2007 · 63 the Struggle against Poverty," by Roberto Mousallem de Andrade, Bahia Secretary of State for Urban Development, Brazil, outlined his state government's efforts at impacting urban poverty and successes. Key ingredients for this include: · Community participation at the planning, execu- tion, and post-intervention phases, and deft organ- isation. · Prioritisation of land tenure regularisation to guar- antee rights and promote self-investment. · Social inclusion in the form of well-targeted, Alliance articulated and complementary actions, such as job and income generation, education, health, Husar/Cities crime prevention, culture, and sport. · Post-intervention actions at the community level Arndt to ensure sustainability. Panelists at the November 2006 Public Policy Forum in Washington, D.C. The Secretary's overview was complemented by the detailed and rich presentation of the Ribera Azul Alliance-UNEP Environment Initiative. Sessions were programme, presented by Mário de Paula Guimarães chaired and moderated by members of the Policy Ad- Gordilho, President, Bahia Urban Development visory Board. Company (CONDER), Brazil. This integrated pro- UNEP's Chief of the Natural Resources Branch gramme for the reduction of poverty aims to improve Tim Kasten first presented the preliminary findings of the lives of over 140,000 people, and is executed in an International Council for Local Environment Ini- partnership with Italian Cooperation and the World tiatives (ICLEI) study with the working title, "More Bank. It has proven to be one of the Cities Alliance's Urban, Less Poor and More Sustainable." This study, success stories in terms of its promotion of the core jointly commissioned by the Cities Alliance and messages of coherence of effort and scaling up. UNEP, focuses on the potential environmental bene- Ajit Kumar Jain, Manager of the Mumbai Transfor- fits of urban development, and identifies different mation Support Unit (MTSU), presented a detailed methods to integrate the environment into urban analysis of progress in the transformation of Mumbai planning. This report will be published by the Cities into its goal of becoming a world-class city. This is be- Alliance in the course of the 2008 fiscal year. Mary ing spearheaded by the Government of Maharashtra Jane Ortega, Mayor of the city of San Fernando in the with the support of a wide range of partners, includ- Philippines and chair of the recently established ing the Cities Alliance, United States Agency for World Mayors Council on Climate Change, high- International Development (USAID), the World lighted the need for her city and others to secure reli- Bank and local private sector and community-based able energy supplies, while reducing greenhouse gas organisations. The project is predicated on a number emissions and managing climate change risks. The of core strategies to achieve a higher rate of growth environment-climate change nexus was further ex- and greatly enhanced tax revenues, with improved tended in the presentation by Kai Lee and Danielle infrastructure at the core of a long-term strategy. Mr Nierenberg of the Worldwatch Institute from their Jain focused on the process to date, highlighting the (now published) report, State of the World 2007: Our increasing convergence within such a diverse group Urban Future. of stakeholders, and the speedier approval of projects Three city case studies then helped to ground the through the institutional framework of the Mumbai discussions on the urban environment and the role of transformation. He also pointed to the fact that re- the Cities Alliance and its members. The first, "Gov- forms are not only underway, but are already showing ernment Policy on Urban Development as a Tool for visible results. 64 · Cities Alliance Annual Report 2007 where urban employment issues had been highlight- ed. Participants in the February meetings included representatives of the ILO, the Swedish International Development Agency (Sida), the UK Department for International Development (DFID) and UN- HABITAT. Pascale Chabrillat, Urban Economist, rep- resented the Secretariat. As a result of the talks, a core group (Sida, DFID, UN-HABITAT, World Bank and ILO) was set up to Alliance assess urban co-operation programmes on job cre- ation, with the expectation that this group could strengthen and expand. Group members also dis- Husar/Cities cussed evaluating the impacts of their bilateral or Arndt multilateral development and infrastructure invest- Cities Alliance Consultative Group Meeting, November 2006, ment funding for job creation. With the findings, the Washington, D.C. ILO, with support from the Cities Alliance Secretari- at, will lead group efforts in preparing a concept note The final presentation by Professor Shlomo Angel policy paper on local economic development (LED) of New York University highlighted the findings of and urban employment, and developing a joint work the study, The Dynamics of Global Urban Expansion. programme. Both will be presented by ILO at the This study, commissioned by the World Bank, defines Cities Alliance annual meetings in Manila, 5­9 a new universe of 3,943 cities with populations in November 2007. excess of 100,000, and draws a stratified global sam- ple of 120 cities from this universe. The results high- UCLG Executive Bureau Meeting, Paris, March 2007 light, in a striking and dramatic manner, the visible impacts that urbanisation trends are having on the This year's annual United Cities and Local Govern- built form of cities around the world, made all the ments' (UCLG) Executive Bureau meetings were more apparent as most urban growth is taking place held in Paris, 15 to 16 March 2007, and hosted by at reduced densities. For those countries and regions Bertrand Delanoë, Mayor of Paris and Co-President still urbanising, this is a clear call to anticipate future of UCLG. Some 200 mayors and local and regional urban growth, and undertake realistic plans for urban councilors focused on the impact of climate change expansion. It also highlights the need for local (and and the risks to cities worldwide. Paco Moncayo national) authorities to designate adequate areas to Gallegos, Co-President of the UCLG and Mayor of accommodate projected expansion, invest in basic Quito, led the discussions and highlighted the threats trunk infrastructure and protect sensitive land from to Quito, which is threatened by water shortages as a incursion. result of climate change and shifts in glacial runoff. He advocated that cities work together to tackle the risks of climate change. At the conclusion of the ILO Workshop on Integration of Job Creation in Cities meeting, the Executive Bureau adopted the Paris Alliance Projects, Geneva, February, 2007 Declaration on Climate Change that stresses the As part of its growing engagement with the Cities Al- urgent need to launch concerted, local government liance, the International Labour Organization (ILO) efforts to combat climate change to safeguard popu- organised a two-day brainstorming session in Geneva lations and their futures. to discuss methods to improve the integration of job The Executive Bureau also discussed upcoming creation into Cities Alliance activities, particularly initiatives and events, including the proposed UN city development strategies. The discussions were a "International Guidelines on Decentralisation," follow-up to the November 2006 Cities Alliance which were subsequently approved at the 21st UN- Consultative Group meetings in Washington, D.C., HABITAT Governing Council (GC) meetings in Cities Alliance Annual Report 2007 · 65 Nairobi in April. If adopted by the United Nations the first opportunity for real and focused dialogue with General Assembly in September, the guidelines the African Development Bank (AfDB) on what is would allow local government to enhance their role perhaps the continent's most urgent development in the international development agenda. imperative, rapid and unplanned urbanisation. The oc- Delegates also finalised planning details of the sec- casion was AfDB's Stakeholder Review Workshop to ond UCLG World Congress, with the theme "Chang- revise its draft urban development policy. Other par- ing Cities are Driving our World," to be held in Jeju, ties involved in the two-day meeting included Agence Korea from 28 ­ 31 October 2007. Secondary confer- Française de Développement, GTZ, Municipal Devel- ence themes will include the future of humanity and opment Partnership, UCLGA, UN-HABITAT, UN climate change, local governments as peacemakers, Economic Commission for Africa, the World Bank, and a fairer world through a new model of gover- nongovernmental organisations (NGOs), and repre- nance by 2015. sentatives of the private sector. The draft AfDB policy acknowledged the organi- sation's need for an urban and city focus in the The 21st Governing Council of UN-HABITAT, face of the fundamental facts of urbanisation on the Nairobi, April 2007 continent: This year's Governing Council, the 21st, also marked · 72 percent of sub-Saharan urban dwellers already the 10th anniversary of the adoption of the Habitat live in slums and projections are for 300 million Agenda at the City Summit in 1996 in Istanbul, more city dwellers between 2000 and 2030. Turkey. In her opening remarks, Mrs. Anna Tibaijuka, · Africa is more urbanised than South Asia, with the Executive Director of UN-HABITAT, focused the urban population growing at 5 percent per year, meeting's attention by declaring that, "The year 2007 thus doubling every 15 years. is a year when human beings will become an urban · National policy frameworks are silently hostile to species, homo urbanus. From now on the majority of cities, and there is a need to shift from considering people will no longer be rural but urban. And there is urbanisation as a threat to embracing it as an op- no going back for this demographic shift. The transi- portunity, as is being done in China. tion is irreversible," she proclaimed. · Urbanisation should be seen in a positive light: as Major outcomes of the Governing Council includ- an engine of growth, a platform for better and ed the approval by member states of a resolution pro- more efficient delivery of infrastructure services, a viding International Guidelines on Decentralization: market for private sector development, and a scale "This success constitutes an important step towards and means for improving the environment in and the adoption by the UN General Assembly of an in- around human settlements. ternational legal framework on decentralisation that national governments could adopt," said Smangaliso In opening remarks at the 24-25 April 2007 AfDB Mkhatshwa, President, United Cities and Local Gov- Stakeholder Review Workshop in Tunis, Tunisia, ernments of Africa (UCLGA) and municipal council- Mandla Gantsho, Vice President for Infrastructure, lor of the city of Tshwane (South Africa). Regional Integration and Private Sector Develop- The Cities Alliance Secretariat also participated in ment, said, the AfDB had so far "invested only 15 a number of different side events and publications percent of its support to cities, and in a compartmen- launches with members, including the regional launch talised way--cities have growing independent man- of the State of the World 2007: Our Urban Future in agement while AfDB continues to deal with central collaboration with the Worldwatch Institute. governments in a fragmented fashion and without tailored instruments. As AfDB establishes itself as a knowledge institution, it is important that it moves PAB attends AfDB's review of a draft beyond what may be perceived today as a `rural-only' Urban Development Policy, Tunis, April, 2007 Bank." The spring meeting of the Cities Alliance's Policy In his view, this requires a fundamental shift in the Advisory Board (PAB), held this year in Tunis, afforded African Development Bank's development paradigm 66 · Cities Alliance Annual Report 2007 Alliance Cities AfDB President Kaberuka with PAB Members and Cities Alliance Secretariat Staff with a pro-city outlook placing urbanisation at the Fourth World Bank Urban Research Symposium, core of the work programme. Washington, D.C., May 2007 Key lessons learned from an open and constructive A number of Cities Alliance members sponsored and workshop to drive the repositioning and the revised participated in this year's Urban Research Sympo- urban policy are: sium, which this year focused on the theme, "Urban · The AfDB should assume a leadership role on ur- Land Use and Land Markets." Opening plenary pre- ban development in Africa, supported by strong sentations by two World Bank staff, Laszlo Lovei, Di- partnerships with international, public and private rector, Finance, Economics and Urban Development, institutions. and Praful Patel, Regional Vice President for South · With AfDB assistance, urban development needs Asia, set the global context for the discussions. These to rise on the New Partnership for Africa's Devel- were followed by the presentation of survey papers opment (NEPAD) agenda. commissioned for the symposium that: · Urban development requires large investments in · Clarify ongoing debates on the links between vari- infrastructure and services, as well as the develop- ous aspects of urban land management and wel- ment of innovative financial instruments and op- fare by providing a robust analytic foundation to tions, especially lending to cities and providing existing findings or supporting/questioning exist- guarantees. ing analytic work with empirical applications and · A strong communications strategy is needed with- case studies. in AfDB and with external partners and audiences · Examine the implications of commonly used ur- to share information, pass key messages, and en- ban land and related policies when conventional gage stakeholders. Cities Alliance Annual Report 2007 · 67 wisdom is scrutinised using a common method- The cities of focus were Can Tho, Ha Long, Hai ological framework. Phong, and Nam Dinh. The workshop reiterated the · Highlight priority policy and program design and importance of utilising a participatory approach, the implementation questions which cannot be an- need to integrate economic and physical planning swered due to limited research and data, and pro- and the prioritisation of investments. CDSs were not pose a research agenda that sets out to address viewed as supplanting other plans, but as providing a these questions. holistic process for integrating and implementing the different plans. Future challenges for the implemen- Other urban land-related issues examined at the tation of the process were identified as: (i) scaling up symposium were: i) the impact of land market distor- the use of CDSs to more cities; (ii) institutionalising tions on urban welfare and the quality of life, particu- the legal status of CDSs; and (iii) creating a support larly for the poor; and consequences of these distor- structure for cities aiming at doing their own CDS. tions on the efficacy of World Bank and government interventions; ii) the continuum of property rights that exist in developing country cities and the linkages to Before access to credit, municipal infrastructure and public services; iii) elements of good practice for public land management; iv) institutions for urban land manage- ment and economic performance; and v) practices and experience with public land acquisition, particularly as related to infrastructure and to urban development and redevelopment. City Tho Can City Development Strategy Workshop for of Vietnamese City Leaders, Can Tho, May 2007 Held in conjunction with the annual meeting of the Government Association of Cities of Vietnam (ACVN), workshop Courtesy participants discussed and disseminated the city de- velopment strategy (CDS) experiences of Vietnam- After ese cities. Over 200 representatives of these cities at- tended, with presentations prepared by the National Institute for Urban and Rural Planning (NIURP), technical consultants from the Technical University of Sydney, and Can Tho city representatives. Pelle Person, Senior Programme Officer represented the Cities Alliance Secretariat. City Tho Can of Government Courtesy Can Tho Urban Upgrading Project (Alley 85 Detham, ANCU Ward, Ninhkieu District, Can Tho City) 68 · Cities Alliance Annual Report 2007 Publications Review common thread. There is also a special focus on four cross-cutting themes: About Cities Alliance Brochure, Cities Alliance, · Urbanisation and urban development September, 2006 · Regional development Originally prepared as promotion- · Environment and development al material for Africities 2006 in · Governance and social issues. Nairobi, the brochure has proved A detailed biography of Professor Mabogunje at to be an effective tool for promot- the end of the discussions paints a broad picture of ing awareness about the Cities the range of his intellectual contributions to the ur- Alliance. Using a simple question ban debate. In a postscript to the book, Professor Ma- and answer (Q & A) format, it bogunje shares his views on the topics discussed and outlines basic information about closes with this caution: The path to the `worn-out' the Cities Alliance; it tells how to concept of sustainable development can be realised access grant funding; it provides as a "country puts in place the institutions required to global, national and city-wide facilitate its effective transition to a full-fledged free examples of the impacts of Cities market economy and fosters the consolidation of real Alliance activities so far; and it features a map identi- democratic culture in its society--it is to the extent fying Cities Alliance cities worldwide. The brochure that significant development is made on these two will be revised periodically and is being translated fronts over the next two decades that emerging urban into Arabic, Chinese, French, Japanese, Russian, Por- Africa can stand up to the intense competitiveness of tuguese, Spanish, and Swahili. the 21st century and meet the diverse and pervasive challenges of globalization." Foundations for Urban Development in Africa: The Legacy of Akin Mabogunje, Cities Alliance "Fighting Poverty in an Urban World--Support to Urban and UN-HABITAT, October 2006. Development," Sida, Stockholm, October 2006 Foundations for Urban During the year under Development in Africa: review, the Swedish The Legacy of Akin International Develop- Mabogunje is the first ment Agency (Sida) co-publication of UN- published its new poli- HABITAT and the cy document, "Fight- Cities Alliance. The ing Poverty in an Ur- book was a contribu- ban World: Support to tion to a ceremony of Urban Development." tributes to honour Captured in a short, 8- Professor Akin Mabogunje, Africa's pre-eminent ur- page document with banist and former Cities Alliance Policy Advisory simple direct language, Board member, on his 75th birthday. Researched and the policy is based on a number of supporting docu- edited by a trio of Professor Mabogunje's protégés at ments, the most significant being More Urban--Less the University of Ibadan--Sylvester Abumere, Mi- Poor, the challenging book by Sida's Goran Tanner- chael Filani and Stanley Okafor--the book examines feldt and Per Ljung promoting sustainable cities. The Mabogunje's colossal contributions to development, publication was launched at the Third World Urban to the urban paradigm, and to its African referent in Forum in Vancouver in June 2006. particular, primarily through the discussion of a selec- Guided by key national and international protocols tion of his works. The works examined cover a wide like the Universal Declaration of Human Rights, the range of issues but urban development remains the Millennium Development Goals and the Swedish Cities Alliance Annual Report 2007 · 69 Policy for Global Development, the new policy fo- Cities Alliance supports dissemination of State of the cuses on urban poverty reduction from both a poverty World 2007: Our Urban Future, Worldwatch Institute, and a rights perspective, supporting and encouraging February, 2007 the active participation of the urban poor, the expres- The publication and sion of their needs and their rights to a decent life. Washington, D.C. launch The five key areas of urban development support of Worldwatch Insti- identified are: tute's State of the World · Integration of local and national development 2007: Our Urban Future, · Local governance and urban management a book whose key mes- · Infrastructure and municipal services sages resonate with those · Land and housing of the Cities Alliance, · Environmental sustainability. created a unique oppor- tunity for an advocacy Implementation will involve the participation of a partnership to dissemi- multitude of stakeholders, including central and local nate key messages on urbanisation. governments, communities, civil society and the pri- The Cities Alliance subsequently provided sup- vate sector in participatory processes to define the port to the launches of the book in major cities world- priorities for local government. wide: Nairobi (during the 21st Governing Council meetings), Rio de Janeiro, Frankfurt, New Delhi, "A la Decouverte de l'Alliance pout l'avenir des villes," Rome, Tokyo, and Nelson Mandela Bay. The South Cities Alliance, December 2006 African launch was organised with the South African Cities Network (SACN) around a seminar on Sus- This short, 15- tainable African Cities. Cities Alliance provided sup- page booklet port for the travel and participation of the publica- deftly adapts tion's coordinator, Molly Sheehan, and for the the basic in- distribution of 100 copies of the book to sustainable formation of cities practitioners in Africa. Copies were also distrib- the Working uted to the media, urban municipalities, national and with the Cities provincial government, academic institutions and AllianceGuide non-governmental organisations in South Africa. to the specific The book puts into perspective the challenges as needs of a West/Central African, francophone market well as the opportunities presented by an urbanised segment. The first half of the booklet is dedicated to world in the year 2007, a watershed year when half of addressing the general developmental context for the the world's population became urban. It avers that Cities Alliance work programme--rapid population rapid and often chaotic urbanisation is taking a large growth and the increasing urbanisation of poverty, toll on human health and the quality of the environ- the Millennium Summit of 2000, and the adoption of ment, contributing to social, ecological, and econom- the Cities Without Slums Target 11 of the Millenni- ic instability in many countries. um Development Goals. It also describes the role and Policymakers need to address the urbanisation of work of the Cities Alliance.The second half examines poverty by stepping up investments in education, specific sub-regional issues such as the establishment healthcare, and infrastructure, and by maximising op- of the Cities Without Slums facility for Africa, sup- portunities. "The task of saving the world's modern ported by the Norwegian Government, and how to cities might seem hopeless--except that it is already access it; the creation of the office of the regional ad- happening," said Christopher Flavin, president of the visor in the Secretariat of the Municipal Develop- Worldwatch Institute."Necessities from food to energy ment Partnership, and its mandate; and the charting are increasingly being produced by urban pioneers of the key elements of five proposals from the region inside city limits." Community groups and local gov- submitted to the Cities Alliance for approval. ernments have emerged as pioneers of groundbreaking 70 · Cities Alliance Annual Report 2007 policies to address both poverty and environmental Lerner, the former governor of Paraná, Brazil, and the concerns, in some cases surpassing the efforts of their former mayor of Curitiba, in his foreword to the national governments. report. "It is in our cities that we can make the most Examples of cities taking the lead in shaping a sus- progress toward a more peaceful and balanced planet, tainable future cited in the report are: so we can look at an urban world with optimism instead of fear." · Karachi, Pakistan. The Orangi Pilot Project has linked hundreds of thousands of low-income households in informal settlements with good- Villes en développement, No. 75, Cities Alliance quality sewers. By taking charge of the pipes con- and Isted, Paris, March 2007 necting their houses to lane sewers, local residents This special edition of the In- cut costs to one-fifth of charges made by the offi- stitut des Sciences et des cial water and sanitation agency. Techniques de l'Equipement · Freetown, Sierra Leone. Following the cessation of et de l'Environnement pour le a multi-year civil war, a swelling population has Développement (Isted) news- successfully turned to urban farming to meet much letter spotlights city develop- of its food demand. ment strategies and their key · Rizhao, China. A government programme enabled role in improving urban per- 99 percent of households in the central districts to formance. In her foreword obtain solar water heaters, while most traffic sig- to the newsletter Elisabeth nals and street and park lights are powered by solar Gateau, Secretary-General of cells, limiting the city's carbon emissions and ur- the UCLG, asserts that,"Many ban pollution. UCLG members have created · Bogotá, Colombia. Engineers improved upon the and implemented CDSs iconic bus rapid transit system of Curitiba, Brazil which have reduced poverty to create the TransMilenio, which has helped de- and improved the quality of crease air pollution, increase quality of life, and life." inspire similar projects in Europe, North America, The newsletter highlights and Asia. three best practice examples Cities around the world have also begun to take of the CDS process--all con- climate change seriously, many in response to the ducted with the support of the Cities Alliance--in direct threat they face. Of the 33 cities projected to Lima, Peru, the Philippines, and Alexandria, Egypt to have at least 8 million residents by 2015, at least 21 illustrate the link between CDS and improved urban are coastal cities that will have to contend with a ris- performance. Each experience exemplifies the funda- ing sea levels. mentals of the CDS process as captured in the Cities While no single set of best practices would enable Alliance Guide to City Development Strategies and all cities to successfully address the challenges of pov- similar publications. They are also adapted to indi- erty and environmental degradation, State of the World vidual city needs in the way they use participatory 2007 focuses on areas where urban leadership can processes, assessments, analyses, implementation, and have huge benefits for the planet and human devel- monitoring and evaluation. opment. These include providing water and sanita- The success of the CDS experience in the Philip- tion services to the urban poor, bolstering urban pines, for example, can be attributed in large measure farming, and improving public transportation. Addi- to the participation of mayors throughout the entire tionally, the report recommends devoting more re- process. Mayors are now the most vocal advocates. sources to information gathering on urban issues so Overall local governance in the Philippines has im- that city, national, and international entities can bet- proved, though challenges still remain with regard to ter assess development priorities."A city is a collective the replication and scaling up of city successes. How- dream. To build this dream is vital," observes Jaime ever, this challenge did not arise in the Alexandria Cities Alliance Annual Report 2007 · 71 CDS: which serves as a test of strategic reforms, in- ronment conducive to employment and productivity, cluding CDS and urban upgrading regulations, to be through strategies that are attuned to local economic scaled up nationwide, with a similar process already circumstances. To design efficient city strategies, it is underway in the greater Cairo Metropolitan area. In essential to understand a city's economic base and its Lima the improved coordination among institutions constraints, as well as its competitive advantage. and local actors enabled by the CDS process has Drawing on 15 case studies, and the methods and helped pave the way for city authorities to make experiences of Cities Alliance members and partners, Lima a more competitive and liveable city. this publication offers practical guidance to the basic components of local economic assessments and how to undertake them. It should promote the develop- Understanding Your Local Economy: A Resource Guide ment of better informed city strategies, and help im- for Cities, Cities Alliance and the Netherlands Ministry prove the economic performance of cities as they of Foreign Affairs, June 2007 seek to support the creation of opportunities for the Understanding Your Lo- urban poor. cal Economy: A Resource Guide for Cities, funded Financing Cities: Fiscal Responsibility and Urban by the Netherlands Min- Infrastructure in Brazil, China, India, Poland and istry of Foreign Affairs, South Africa, the World Bank and Sage Publications, was produced by the June 2007 London School of Eco- nomics and Kaiser Asso- Edited by George Pe- ciates with the support terson of the Washing- of a number of Cities ton D.C.-based Urban Alliance members, in- Institute and Patricia cluding the World Bank, UN-HABITAT, and USAID. Clarke Annez of the The Guide addresses the challenges of analysing World Bank, this book local economic conditions and a city's comparative examines the question: and competitive advantages. It presents practical How can the goal of approaches to conducting citywide and regionwide increasing public invest- economic assessments, and includes advice on how ment in urban infra- to choose local economic development (LED) indi- structure be reconciled cators and tools that can assess a local economy's with the need for pru- competitiveness. dent fiscal management? The Guide targets people and organisations in- The backbone of a volved in local economy assessment and city strategy well-functioning city is its urban infrastructure--the development processes. To make it accessible to dif- networks of roads, distribution of electricity, water ferent audience needs, the Guide is split into two sec- supply and waste removal--which allows the resi- tions. The first provides an overview of key issues and dents and firms to work productively under high tools. The second provides detailed guidance useful density conditions. The urban infrastructure chal- for conducting local economy assessments. lenge is a challenge for public finance; in a federal The role of local authorities in developing and system it is also a challenge for intergovernmental delivering sound LED strategies, often as part of city finance. The book argues that large sums will be re- development and slum upgrading strategies, is cru- quired in all countries to invest adequately in urban cial. Cites can better perform, and provide an envi- infrastructure, and to operate and maintain systems once they are built. 72 · Cities Alliance Annual Report 2007 Different countries have approached this chal- UNFPA State of World Population 2007: Unleashing the lenge in different ways--from tight central controls Potential of Urban Growth, United Nations Population on local investment to decentralised fiscal choices. Fund, June 2007 This book discusses the case studies of Brazil, China, Produced in time for India, Poland and South Africa in this regard, analys- the annual celebration ing the fiscal implications of different infrastructure of World Population financing options. Country experiences are recounted Day, the United Nations and assessed from the perspectives of central govern- Population Fund's (UN- ment fiscal managers and local government officials FPA's) flagship publica- who must provide infrastructure services to their tion turned its focus on citizens. Subjects covered include the impact of po- the challenges of urban- litical and fiscal decentralisation, limitations on bor- isation in a very direct rowing, managing moral hazard, the role of the finan- and telling publication. cial sector, and achieving balance between stringent Focusing on the latent financial controls and encouraging local governments potential of urbanisa- to take responsibility for fiscal and market discipline. tion, the report acknowledges that the current con- The case studies show that sometimes forces that centration of poverty, slum growth and social disrup- have nothing to do with intergovernmental relations tion in cities paints a threatening picture. Yet no or finance can create opportunities or tensions in the country in the industrial age has ever achieved sig- framework for fiscal management. They also show nificant economic growth without urbanisation. that the risks can be managed if the framework is well Echoing the message of the Cities Alliance, the UN- structured, and avoiding risk altogether can have a FPA notes that cities concentrate poverty, but they high opportunity cost. On the other hand, inability to also represent the best hope of escaping it. adapt the set of relationships that make up a system The report is a call to action: action now by gov- of both decentralised fiscal responsibility and strong ernments, civil society and the international commu- infrastructure finance to take account of a changing nity to make a huge difference in social, environmen- environment can be a risky strategy. All of the cases tal and living conditions. The report highlights the show systems adapting to changed circumstances. need for three main initiatives: Many of the successes described offer heterodox ap- proaches that worked in one country, while having · Accept the right of poor people to the city, aban- failed in others. None of them were arrived at with a doning attempts to discourage migration and pre- one-off reform, but emerged incrementally. One les- vent urban growth. son from all of the cases is that finding the right · Adopt a broad and long-term vision of the use of framework for balancing competing objectives may urban space. This means, among other things, pro- be less important than knowing when the current viding minimally-serviced land for housing and system needs to change and how to shift it in the planning in advance to promote sustainable land right direction. use, looking beyond the cities' borders to minimise their ecological footprint. · Begin a concerted international effort to support strategies for the urban future. Cities Alliance Annual Report 2007 · 73 CITIES ALLIANCE ORGANISATION I n accordance with the Charter of the Cities Alli- Cities Alliance has continued to grow, with the Gov- ance, its governance and organisational structure ernments of Chile and the Philippines as well as the includes the Consultative Group, the Policy Advi- European Union expected to formalise their member- sory Board, and the Secretariat. ship before the 2007 Consultative Group meetings. The Consultative Group has also set up the six- member Steering Committee, a subset of its mem- The Consultative Group bers, to provide guidance to the Secretariat. The Consultative Group--the Cities Alliance's Meetings board of directors--is responsible for setting the Alliance's long-term strategy, approving its annual Consultative Group meetings are held annually in work programme and budget, and reviewing its conjunction with a public policy forum designed to achievements. The Consultative Group consists of share the lessons learned from experience and inform financial contributors to the Cities Alliance Trust policy orientations and standards of practice in areas Fund and the political heads of United Cities and related to the Alliance's goals. The following Consul- Local Governments (UCLG, the global organisation tative Group meetings have been held: of local authorities) and Metropolis (a world asso- ciation of major metropolises), who have pledged Berlin, December 1999--Inaugural meeting,at which their commitment to achieving Cities Alliance goals. the Cities Without Slums action plan was launched The Consultative Group is co-chaired by the World and the Charter of the Cities Alliance and its 2000 Bank's vice president for sustainable development work programme were approved. and UN-HABITAT's deputy executive director. Prospective financial contributors may serve as as- Montréal, June 2000--First Public Policy Forum sociate members for two years. Membership in the ("Political Dimensions of Support for Cities"), Con- 74 · Cities Alliance Annual Report 2007 sultative Group review of application guidelines and Members as of June 2007 approval of the Cities Alliance Vision Statement. The Consultative Group includes representatives of the following groups: Rome, December 2000--Second Public Policy Forum ("Local Partnerships: Moving to Scale"), Consultative Local authorities Group approval of amendments to the Cities Alliance Charter, the 2001 work programme, and procedures to · United Cities and Local Governments establish the Policy Advisory Board and the Steering · Metropolis Committee. Governments Kolkata, December 2001--Third Public Policy Forum · Brazil ("Sustainable Partnerships for City Development"), · Canada Consultative Group review of procedures for the first · Ethiopia independent evaluation of the Cities Alliance and ap- · France proval of the 2002 work programme. · Germany · Italy Brussels, October 2002--Panel discussion at the · Japan European Commission ("Achieving the Millennium · Netherlands Development Goal of Cities without Slums"), Con- · Nigeria sultative Group review of the independent evalua- · Norway tion of the Cities Alliance and approval of the 2003 · South Africa work programme. · Sweden · United Kingdom São Paulo, October 2003--Fourth Public Policy Fo- · United States rum ("Sustainable Financing Strategies for Cities and Financial Services for the Urban Poor"), Consultative Multilateral organisations Group approval of procedures for developing coun- try membership in the Consultative Group and ap- · Asian Development Bank proval of the 2004 work programme. · United Nations Environment Programme · UN-HABITAT eThekwini, November 2004--Fifth Public Policy Fo- · World Bank rum ("Making City Development Strategies Come Alive in South Africa"), Consultative Group approval of new Policy Advisory Board members and the 2005 The Policy Advisory Board work programme. The Policy Advisory Board of the Cities Alliance is Marrakech, November 2005--Sixth Public Policy Fo- composed of eminent urban experts from each re- rum ("Morocco's Cities Without Slums Programme"), gion. They provide guidance to the Consultative Consultative Group review of procedures for the sec- Group on key strategic, policy, and regional issues ond independent evaluation of the Cities Alliance and and support the implementation of Cities Alliance approval of the 2006 work programme. activities. The Consultative Group established the compo- Washington, D.C., November 2006--Seventh Public sition, terms of office, and operating procedures of Policy Forum ("Environment, Poverty and Develop- the Policy Advisory Board at the December 2000 ment in an Urbanising World"), Consultative Group Second Public Policy Forum meeting. The board discussion and approval of the findings of the second brings together civic leaders and policy advisers with independent evaluation. a formidable range of public and private sector ex- Cities Alliance Annual Report 2007 · 75 pertise that spans the leadership of community- National Slum Dwellers Federation and Mahila Milan based organisations, nongovernmental organisations in a federation of community-based organisations of and their networks, local authority organisations, the urban poor, facilitating their direct participation in community banks, community savings and credit addressing the problems of cities and their relationship schemes, commercial banks, and public sector finan- with informal settlements; and chair of Shack Dwell- cial institutions. ers International, a global alliance of grassroots com- What they have in common is political experience munity federations of the urban poor. and practical knowledge from working with poor cit- ies and the urban poor worldwide. The board meets Jean-Pierre Elong Mbassi is Secretary-General of twice a year--spring and during the Consultative United Cities and Local Governments of Africa, Group meetings--and has eight members: two from based in the interim in Pretoria, South Africa; former Africa, two from Asia, one from the Arab States, one Secretary-General of the Municipal Development from Eastern Europe, one from Latin America and Partnership for Africa; and an experienced practitio- the Caribbean, and one from the industrialised coun- ner in urban management and slum upgrading. He is tries. The members serve on a rotating basis, typically the organiser of the Africities Summit, the most between two and four years. important platform for dialogue on decentralisation The board's annual spring meeting this year was in Africa. held jointly with the African Development Bank (AfDB), on the occasion of the AfDB's review of its Policy Advisory Board Members as of June 2007 Urban Development Policy. Meeting in Tunis, Tunisia in April 2007, board members participated in the Juanita D. Amatong is a member of the Monetary AfDB's Stakeholder Review Workshop, where dis- Board of the Central Bank of the Philippines; former cussions on Africa's urban future were designed to Secretary of Finance of the Philippines; and a former support the revision of the African Development Executive Director of the World Bank Group. With Bank's urban development policy and preparation of an educational background in business, economics, an Urban Development Strategy Paper. They were and public administration, she has worked with inter- joined by a number of Cities Alliance members, in- national consultancies, in academia, and as a tax cluding AfD, GTZ, UCLGA, UN-HABITAT and the economist at the International Monetary Fund. She is World Bank. Board members also had an opportunity a prime proponent of strong local government finance to further discuss Africa's urban agenda with AfDB in the Philippines. President Donald Kaberuka. The board meeting in Tunis marked the annual José Forjaz is the Chief Executive Officer and rotation of Policy Advisory Board members, as in- founder of José Forjaz Arquitectos in Maputo, coming members, Lajana Manandhar, of Nepal, and Mozambique; former Senior Adviser for the Mo- President Nicéphore Soglo, of Benin, filled the re- zambican Minister for Public Works and Housing, gional representative positions of exiting members, dealing with housing policy, human settlements, Sheela Patel and Jean-Pierre Elong Mbassi, respec- planning, training, and institution building; former tively. Cities Alliance partners hope to continue National Director of housing, responsible for re- drawing on the wealth of experience and knowledge gional and urban planning, housing, and social that they and all exiting members have offered since equipment, as well as training programmes for basic the board's formation. and mid-level rural and urban planning technicians; former Secretary of State for Physical Planning; and a former Member of Parliament. Widely published, Departing Members Policy Advisory Board Members he has lectured at universities around the world and Sheela Patel is founding director of the Society for the is now in his fifteenth year as director of the Faculty Promotion of Area Resource Centres (SPARC), in of Architecture and Planning at Universidade Edu- Mumbai, India, which works in alliance with the ardo Mondlane, in Maputo. 76 · Cities Alliance Annual Report 2007 Yousef Hiasat is the Chief Executive Officer of Beitna, Nicéphore Soglo a leading investment and financial firm in Amman; for- Benin's Prime Minister from 1990 to1991 and Presi- mer Minister of Public Works and Housing in Jordan, dent from 1991 to 1996, he was elected Mayor of with responsibility for the country's road networks, Cotonou in 2003 by the city's council. During his government buildings, and construction and housing earlier years in government, he worked within the sectors; former Director-General of Jordan's Housing Ministry of Finance, becoming Minister of Economy and Urban Development Corporation, the public in- and Finance. With an educational background in pri- stitution responsible for housing and urban develop- vate and public law from the University of Paris, Sor- ment policies and housing schemes directed at middle- bonne, and the École Nationale d'Administration in and low-income households; former Principal Adviser France, he has served in numerous international fi- to the Prime Minister of Jordan, on housing and urban nancial institutions, including at the International development issues; founding member and current Monetary Fund, as a member of the World Bank's President of the Morocco-based Near East and North Board of Executive Directors, and as an Executive Africa Urban Forum; and President of the Jordan Ur- Director of the Central Bank of West African States. ban Management Society. He was also involved in drafting the Articles of Agree- ment of the African Development Bank. Lajana Manandhar is Director of the Lumanti Sup- port Group for Shelter NGO in Kathmandu, advo- Paulo Teixeira is a Member of Parliament in Brazil cating for housing and other rights for the urban poor and Chair of the Urban Reform Caucus in the Brazil- at the city, national and international levels. She has ian House of Representatives (Frente Parlamentar da also worked to implement community-based upgrad- Reforma Urbana). He is former Councillor for the ing projects in Nepal's slum and squatter communi- Municipality of São Paulo, Brazil; former Secretary of ties. The `Slum and Squatter Community Empower- Housing and Urban Development of the Municipal- ment Programme', initiated in Kathmandu under her ity of São Paulo, responsible for the development of a leadership, and which has brought change in the liv- large-scale slum upgrading and land tenure pro- ing conditions of slum dwellers through improving gramme; a member of the United Nations Millenni- access to housing and basic facilities, empowering um Task Force 8 on Improving the Lives of Slum women through microfinance and improving rela- Dwellers; and a member of the UN-HABITAT Advi- tionships with government, has now been replicated sory Group on Forced Evictions. He was recently in three cities in Nepal. elected Chair of the Urban Reform Caucus in the Brazilian House of Representatives Clare Short is the United Kingdom's former Secre- tary of State for International Development. A Mem- Ana Vasilache is founding Director of the Partners ber of Parliament for more than 20 years, she contin- Romania Foundation for Local Development, a ues to represent the constituency of Birmingham Bucharest-based NGO that supports democratic pro- Ladywood. Former Director of Youthaid and the cesses of governance and decentralisation and works Unemployment Unit, she also worked at the Home to strengthen the managerial capacities of local gov- Office and as Director of All Faiths for One Race, a ernments in central, eastern, and south-eastern Euro- community-based organisation promoting racial pean countries; and former Head of the Settlements equality in Birmingham.A former Opposition spokes- Management Office in the Ministry of Public Works person on overseas development, Shadow Minister and Regional Planning in Bucharest. She has exten- for Women, and Shadow Secretary of State for Trans- sive experience with planning legislation and design- port, she is a member of the Helsinki Process on Glo- ing and facilitating participatory strategic planning balisation and Democracy and an Associate of the processes. Oxford Research Group. Cities Alliance Annual Report 2007 · 77 The Secretariat The Cities Alliance Secretariat, housed within the World Bank headquarters, carries out the Alliance's mandates and manages its operations. Staff as of June 30, 2007 Akporji, Chii--Communications Officer Aubry-Kendall, Françoise--Resource Management Analyst Carlin, Anne--Communications Consultant Chabrillat, Pascale--Urban Economist Clark, Mark--Consultant/Programme Assistant Cobbett, William--Manager Csorba, Ildiko--Programme Assistant Haer, Andrea--Operations Consultant Henderson, Susanna--Programme Assistant Merrick, Andrea--Programme Officer Milroy, Kevin--Senior Operations Officer Persson, Pelle--Senior Programme Officer Library Puspa, Erika--Knowledge Management Analyst Photo Rajivan, Krishnaswamy--Senior Urban Finance Bank Adviser orld Rama Krishnan, Venkateswaran--Financial Management Specialist Carnemark/W Tebbal, Farouk--Senior Urban Specialist Curt Housing in Yemen 78 · Cities Alliance Annual Report 2007 FINANCIALS Fiscal Year 2007 Highlights Cities Alliance members sponsored 18 new CDS and Figure 2. Active project funding by region slum upgrading projects as part of the $10.1 million work programme approved during fiscal year 2007, Active Project Funding by Region including $4.7 million approved from core funds. $54.1 million total More than $13 million was disbursed during the year, Sub-Saharan Africa including $8.3 million from core funds. As of 30 June Global and 13% 2007, funding committed to active projects totalled Multiregional $54.1 million. (See figure 2 for active project funding 48% East Asia by region.) and Pacific 7% Nearly $43.8 million in core funding has been paid in to date by Cities Alliance members. An additional South Asia 4% $52.7 million has been paid in for non-core (ear- marked) purposes. Eastern Europe and A distinctive feature of the 2007 work programme Central Asia was that direct project beneficiaries (cities and local 2% government associations) will receive the Cities Alli- ance grant funds for nearly half of the approved ac- tivities. A Cities Alliance member will receive and Latin America implement the funding, on behalf of the beneficiaries, and Caribbean for the remainder of the projects. This trend reflects 21% Middle East the Cities Alliance secretariat's increased advocacy and North Africa for "client execution" of Cities Alliance grant funds. 5% During the first eight years of Alliance operations, less than 20 percent of all Cities Alliance projects have Data as of 30 June 2007 Cities Alliance Annual Report 2007 · 79 been directly executed by cities or their local devel- Infrastructure Finance Facility (CLIFF). This fund- opment partners. ing will be implemented by Homeless International Another feature of the 2007 work programme was and its partner organizations in India, Kenya and the the large number of small grants approved for assis- Philippines; and, by Shack / Slum Dwellers Interna- tance to help cities and national local government tional (SDI) for the design of a "global urban poor associations to prepare CDS and slum upgrading pro- development fund." grammes. Half of the 2007 approvals for new projects were for these preparatory assistance grants--five in Sub-Saharan Africa and four in Asia (see figures 3 and Figure 3. Active Projects by Grant Size: 83 Total 4 for data by grant size). Most of these will result in full funding applications to the Cities Alliance over 35 the coming year or two. Combined with a pipeline of 30 30 proposals totalling more than $8 million at the end of 26 25 fiscal year 2007, the 2008 work programme is expect- 20 20 ed to rival the record levels approved during 2006. Projects of In membership news, Ethiopia became the fourth 15 developing country to join the Alliance, signing a five- 10 Number 7 year agreement. The Netherlands renewed its mem- 5 bership, signing a three-year agreement, and France 0 renewed for two years. up to $75,001­ $250,001­ above $75,000 $250,000 $500,000 $500,000* A major new non-core funding contribution of nearly $2.4 million was made by Sweden for the Data as of 30 June 2007 continuation and expansion of the Community-Led *includes non-core funds Figure 4. Active Projects by Region: 83 Total 30 25 25 20 15 13 11 11 10 9 9 5 5 0 Eastern Middle East Global and South East Asia Latin Sub- Europe and and North Multiregional Asia and Pacific America and Saharan Central Asia Africa Caribbean Africa Data as of 30 June 2007 80 · Cities Alliance Annual Report 2007 SOURCES OF FUNDS FY00­FY07 (Unaudited) (US$ as of 30 June 2007) SUMMARY Type of funding Pledges Paid-in Core funding 48,910,000 43,799,711 Non-core funding 54,774,000 45,306,847 Non-core Secretariat funding 7,945,600 7,390,002 Total Funding 111,629,600 96,496,560 Paid Ina Donor Pledges Duration FY07 Cumulative Core funding ADB 1,250,000 2002­2003, 2005­2007 500,000 1,000,000 Brazil 150,000 2004­2006 100,000 150,000 Canada 1,500,000 2000­2001, 2003­2006 0 1,585,293 Ethiopia 250,000 2006­2010 50,000 50,000 France 1,850,000 2000, 2002­2007 417,213 1,607,540 Germany 2,200,000 2000­2007 320,450 2,064,502 Italy 3,580,000 2000­2007 506,720 3,139,625 Japan 2,000,000 2000­2006 0 1,750,000 Netherlands 3,500,000 2000­2004, 2006­2008 250,000 3,000,000 Nigeria 50,000 2005 0 50,000 Norway 3.055,000 2000­2006 560,296 3,172,382 South Africa 250,000 2006­2010 50,000 50,000 Sweden 4,125,000 2000­2007 1,455,020 4,284,404 UNEP 1,000,000 2003­2006 100,000 1,000,000 UN-HABITAT 200,000 2004­2005 0 200,000 United Kingdom 7,100,000 2000­2007 266,247 7,243,546 United States 2,000,000 2000­2007 250,000 1,750,000 World Bank 14,850,000 2002-2008 2,956,093 11,702,419 Total core 48,910,000 7,782,039 43,799,711 Non-core fundingb Canada 75,000 2004 0 73,608 Italy 13,135,000 2001­2008 2,545,068 10,007,016 Japan 5,000,000 2000­2006 0 4,250,000 Netherlands 350,000 2003-2004 0 350,000 Norway 2,300,000 2002­2006 240,127 2,371,929 Sweden 8,454,000 2003­2008 3,110,283 8,655,144 UNEP 15,000 2007 15,000 15,000 United Kingdom 22,620,000 2001­2008 1,334,414 18,129,150 United States 2,125,000 2003­2007 290,000 755,000 World Bank 700,000 2001 0 700,000 Total non-core 54,774,000 7,534,892 45,306,847 Non-core Secretariat fundingc World Bank 3,050,600 2000­2002, 2006­2007 7,600 3,050,600 UN-HABITAT 1,983,000 2000­2008 150,000 1,783,000 Sweden 685,000 2005­2007 273,996 729,402 Other 2,227,000 2001­2009 270,000 1,827,000 Total 7,945,600 701,596 7,390,002 Note: Fiscal year covers the period 1 July through 30 June. (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, the Community Water & Sanitation Facility, and the Slum Upgrading 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. Cities Alliance Annual Report 2007 · 81 USES OF FUNDS FY00­FY07 (Unaudited) (US$ as of 30 June 2007) SUMMARY FY07 Cumulativea Funding source Allocations Disbursements Allocations Disbursements Core activities 4,714,625 8,264,149 45,673,425 33,535,866 Non-core activities 5,371,299 4,874,676 57,755,206 39,611,055 Total Uses of Funds 10,085,924 13,138,825 103,428,631 73,146,921 APPROVALS BY TYPE OF ACTIVITY FY07 Cumulativea Type of activity Core Funds Non-core funds Core funds Non-core funds City development strategies 962,006 56,775 13,686,249 3,069,495 Scaling up upgrading 205,000 3,864,000 11,981,111 40,829,492 CDS and upgrading 2,047,619 847,924 12,956,065 5,998,119 Secretariat 1,500,000 602,600 7,050,000 7,858,100 Total approved grants 4,714,625 5,371,299 45,673,425 57,755,206 APPROVALS BY REGION FY07 Cumulativea Region Core funds Non-core funds Core funds Non-core funds Sub-Saharan Africa 238,281 818,450 8,861,521 3,491,070 Asia 806,644 14,775 10,414,720 3,216,775 Eastern Europe & Central Asia 0 0 2,159,227 0 Latin America & the Caribbean 1,344,700 0 7,412,865 14,377,475 Middle East & North Africa 245,000 0 3,858,231 0 Global/Multiregional 580,000 3,935,474 5,916,861 28,811,786 Secretariat 1,500,000 602,600 7,050,000 7,858,100 Total approved grants 4,714,625 5,371,299 45,673,425 57,755,206 SECRETARIAT EXPENDITURES Expense FY07 FY06 FY05 Cumulative Operational Secretariat staff 1,040,371 910,708 885,442 5,152,942 Consultants, other labour 104,053 52,387 951 570,969 Travel 332,892 342,524 374,504 1,938,356 Other costs 35,374 36,798 24,945 733,784 Subtotal 1,512,690 1,342,417 1,285,842 8,396,051 Management and administration Secretariat staff 859,494 772,551 782,318 4,970,281 Rent, computing, other costs 259,544 293,068 273,658 1,351,414 Subtotal 1,119,038 1,065,619 1,055,976 6,321,695 TOTAL 2,631,728 2,408,037 2,341,818 14,717,747 (a) Data adjusted to include allocations for in-kind Secretariat contributions. 82 · Cities Alliance Annual Report 2007 NEW AND ON-GOING ALLOCATIONS (as of 30 June 2007) Grant Amount (US$) Start Date Country Activity SUB-SAHARAN AFRICA REGION 380,640 Mar­03 Burkina Faso CDSs and local Poverty Reduction Strategy Papers for the local governments of Bobo-Dioulasso, Banfora and Ouahigouya 330,000 Apr­06 Burkina Faso Strategy for Developing Greater Ouagadougou and Improving Basic Infrastructure and City Services in Underprivileged Areas 330,000 Apr­06 Benin Development Strategy for Greater Cotonou 500,000 Feb­07 Cameroon Urban Development and Poverty Reduction Strategy: City of Douala and its Greater Urban Area 580,000 Jul­04 Ethiopia, Participation of Johannesburg and Addis Ababa in South Africa the Johannesburg ­ Addis Ababa Partnership Programme 75,000 Jul­03 Ghana Preparing for a CDS in the Kumasi Region 75,000 Oct­05 Ghana Preparatory Assistance for Ghana Municipal Finance and Management Initiative FY07 75,000 May­07 Kenya Preparation of Cities Development Strategy (CDS) and State of the Cities Report (SoCR) Programme for Kenyan Urban Local Authorities 75,000 Oct­05 Mozambique Slum Improvement Demonstration Project for Maputo City 500,000 May­06 Mozambique Improving Water and Sanitation in Quelimane City FY07 42,000 Apr­07 Mozambique Preparatory Grant for the Development of a CDS and Slum Upgrading Strategy for Chimoio FY07 42,000 Apr­07 Mozambique Preparatory Grant for the Development of a CDS for Vilankulo FY07 89,325 May­07 Namibia Preparatory Study: Participatory City Development Strategies in Namibia FY07 364,450 Mar­07 Regional Building Partnerships for Cities Without Slums in Eastern and Southern Africa increase FY07 270,000 Mar­07 Regional Cities Without Slums: Toward Implementing a Support Program for Countries and Cities of Western and Central French-speaking Africa Increase 246,600 Dec­04 Regional Housing Upgrading Finance Initiative 240,000 May­06 Rwanda Financial Management Modernization and Development Strategy for Kigali 380,000 Apr­06 Senegal Greater Dakar Urban Development Strategy 430,000 Feb­07 Senegal National Programme for Slum Improvement and Slum Upgrading in Senegal's Cities: "Senegalese Cities without Slums" 500,000 Jun­06 South Africa Upgrading for Growth: Implementing the Breaking New Ground Policy within Ekurhuleni's City Development Strategy Cities Alliance Annual Report 2007 · 83 NEW AND ON-GOING ALLOCATIONS--continued (as of 30 June 2007) Grant Amount (US$) Start Date Country Activity 535,000 Jun­06 South Africa The Tshwane Sustainable Human Settlement Strategy and Financing Plan 500,000 Jul­04 Swaziland Development of a Comprehensive Urban Upgrading Program for Mbabane 360,000 Sep­04 Tanzania Action Plan to Upgrade All Informal Settlements in Dar Es Salaam by 2015 FY07 73,956 May­07 Tanzania Establishment of Tanzania State of the Cities Report (Preparatory Phase) 75,000 Jun­06 Zambia Linking CDSs to Zambia's Emerging Intergovernmental Fiscal System ASIA REGION 215,000 Nov­05 Bhutan Bhutan National Urban Development Strategy and Thimphu City Development Strategy FY07 14,775 Dec­06 Bhutan UNEP Co-financing of Bhutan National Urban Development Strategy and Thimphu CDS 298,450 Dec­05 China Urban Upgrading Strategy, Yangzhou 500,000 Oct­05 China Economic Revitalization by Cities in Heilongjiang Province 250,000 Sep­06 China Shanghai Development Strategy in Regional Context 450,000 Feb­03 India Scaling-up the Provision of Universal Minimum Sanitation to Slums in Cities 182,600 Jul­04 India Community-Led Sangli Toilet Construction Activity 495,000 Jul­05 India Transformation of Mumbai into a World Class City 180,700 Feb­05 India Hyderabad City-Wide Slum Upgrading Action Plan 154,700 Mar­05 India Visakhapatnam City Development Strategy and Slum Upgrading Action Plan 184,268 Dec­05 India City Development Strategy for Hubli-Dharwad 237,933 Nov­06 India City Development Strategy for Pro-poor Economic Growth for the Heritage City of Agra FY07 75,000 Jan­07 India Urban Institutional Strengthening and Capacity Enhancement Project FY07 75,000 Mar­07 India Urban Strategy for India 2025 and Mega Cities Strategy FY07 74,419 Apr­07 India Bruhat Bangalore Comprehensive Development and Slum Upgradation Strategy 500,000 Nov­05 Mongolia Citywide Pro-poor Ger Upgrading Strategy and Investment Plan (GUSIP) FY07 75,000 Mar­07 Nepal Preparation of a Proposal--Nepal: Slum Upgrading Strategies and Investment Program 500,000 Mar­05 Philippines Integrated Approaches to Poverty Reduction at the Neighborhood Level--a Cities Without Slums Initiative 84 · Cities Alliance Annual Report 2007 NEW AND ON-GOING ALLOCATIONS--continued (as of 30 June 2007) Grant Amount (US$) Start Date Country Activity 541,100 Oct­05 Philippines City Development Strategies in the Philippines: An Enabling Platform for Good Governance and Improving Service Delivery 500,000 Jul­06 Philippines A Metro Manila `Cities Without Slums' Strategy FY07 357,225 Dec­06 Vietnam City Development Strategy Focusing on Urban Environment Management in Haiphong City FY07 75,000 Apr­07 Vietnam Urban Planning in a Rapidly Urbanizing Setting--Danang FY07 75,000 May­07 Vietnam Preparation of a Proposal on "Viet Nam: City Development Strategy for Thanh Hoa City in a Regional Development Context" EASTERN EUROPE AND CENTRAL ASIA REGION 500,000 Jul­05 Azerbaijan City and Regional Development Strategies in Azerbaijan 71,000 Mar­06 Moldova Moldova--City Development Strategy 230,000 Jul­05 Russian Vologda Development Strategy Alliance Federation 250,000 Sep­05 Russian Stavropol Regional Development Strategy-- Federation Financial Assessment and Investment Review 250,000 Sep­05 Russian Chuvash Republic Regional Development Federation Strategy--Financial Assessment and Investment Review LATIN AMERICA AND THE CARIBBEAN REGION 450,000 Oct­05 Brazil Strategies for the Sustainable Planning, Financing and Implementation of Low-Income Housing and Urban Development Policy (Municipality of São Paulo) 7,208,280 Dec­05 Brazil Bahia Integrated Urban Development Program--Viver Melhor/BIRD: Technical and Methodological Assistance Project 232,000 Apr­06 Brazil Enhancing Territorial Equity and Social Inclusion in Brasilia's Land Markets FY07 75,000 Oct­06 Brazil Preparation of Materials for Dissemination and Capacity-Building in Sustainable Land Regularization Actions--Regularization Toolkit FY07 500,000 Apr­07 Brazil Poverty-Focused City Development Strategy for the Metropolitan Region of Belo Horizonte FY07 498,200 Jun­07 Chile Support for the Implementation of the Programme to Recover 200 Neighbourhoods through Capacity Building and Strengthening among Local Actors and Public Services 324,120 May­04 Colombia Slum Upgrading and Land Tenure Regularization 298,000 Apr­05 Colombia Housing and Land for the Urban Poor Cities Alliance Annual Report 2007 · 85 NEW AND ON-GOING ALLOCATIONS--continued (as of 30 June 2007) Grant Amount (US$) Start Date Country Activity FY07 216,500 Oct­06 Ecuador Urban Expansion Strategy for Intermediate Cities in Ecuador 500,000 Apr­06 El Salvador Preparation of an Urban Development Strategy for the Region La Paz in the Department of La Paz and San Vicente 75,000 Sep­05 Guatemala Program for Slum Upgrading through Financing from the Private Banking Sector--Phase 1-- Project Preparation FY07 55,000 Sep­06 Jamaica Preparation Grant for Squatter Management and Low-Income Housing Policy Development and Program Implementation 879,195 Jul­04 Regional Scaling Up Successful Methodologies in the Latin America and Caribbean Region (Italy) MIDDLE EAST AND NORTH AFRICA REGION 350,000 Dec­05 Egypt Alexandria City Development Strategy for Sustainable Development: Phase II 200,000 Mar­04 Jordan Greater Amman Development Strategy 379,231 Oct­06 Lebanon Al Fayhaa Sustainable Development Strategy 245,000 Apr­03 Morocco Metropolitan Cooperation in the Tetouan Region: the Role of the CDS 490,000 Sep­05 Morocco Partnership Framework Agreement for Ministry of Housing and Supporting and Monitoring of the Program Urban Development "Cities Without Slums" 250,000 Feb­05 Regional Establishing a Regional City Development Strategy Facility at the Arab Urban Development Institute (AUDI), Riyadh, Saudi Arabia FY07 245,000 Jun­07 Tunisia Greater Sfax Development Strategy--Phase 2 200,000 Jan­05 Yemen Medium to Long Term City Development Strategy for Local Economic Development for Hodeidah and Mukalla Cities 250,000 Nov­06 Yemen Sana'a City: Medium to Long-Term City Development Strategy for Sustainable Development GLOBAL AND MULTIREGIONAL ACTIVITIES FY07 150,000 Dec­06 Global Knowledge Dissemination--increase (Web site, publications, etc.) FY07 150,000 Dec­06 Global Knowledge Generation and Learning--increase FY07 75,000 Dec­06 Global Consultative Group and Public Policy Forum meetings--increase (Washington) FY07 100,000 Dec­06 Global Policy Advisory Board Semi-Annual Meeting increase FY07 15,000 Dec­06 Global Technical Peer Reviews--increase 86 · Cities Alliance Annual Report 2007 NEW AND ON-GOING ALLOCATIONS--continued (as of 30 June 2007) Grant Amount (US$) Start Date Country Activity 10,000,000 Oct­02 Global Development of the Community-led Infrastructure Finance Facility (CLIFF)--UK-DFID 2,300,000 Apr­03 Global The Development of the Community-led Infrastructure Finance Facility (CLIFF)--Sida FY07 2,364,000 Feb­07 Global The Development of the Community-led Infrastructure Finance Facility (CLIFF)--increase in Sida funding FY07 90,000 Dec­06 Global Final Project Evaluations--increase 75,000 Dec­04 Global Capacity Enhancement for Direct Sub-Sovereign Borrowing 127,000 Jul­05 Global Municipal Finance Task Force 75,000 Jan­05 Global Strengthening CA Collaboration with UCLG 250,000 Feb­06 Global Developing MDG-based CDSs 250,000 Feb­06 Global UCLG Committee on Local Finance and Development (formerly Municipal Finance Commission) 517,000 Apr­06 Global Mainstreaming Cities Alliance Engagement with UCLG 685,000 Feb­05 Global Secondment to Cities Alliance Secretariat (Sweden) 10,000,000 Jul­05 Multiregional Slum Upgrading Facility (SUF)--Pilot Programme 242,500 Mar­05 Global Incubating Local Economic Development (LED) Partnerships 525,000 Mar­05 Global Advancing the Cities Alliance Knowledge Generation and Dissemination Agenda (DFID)-- including MFTF and Urban Finance co-financing 610,000 Oct­05 Global Enhancing Urban Development in National Policy Dialogues 100,000 Jan­06 Global CA Urban Environment Initiative 75,000 Jan­06 Global Peer Review on Slum Estimations FY07 71,474 Jul­06 Global World Urban Forum: Sustainable Urban Financing FY07 100,000 Aug­06 Regional Optimising Cities Alliance Participation in Africities Summit 2006 Cities Alliance Annual Report 2007 · 87 ACTIVITIES CLOSED OR CANCELLED DURING FY07 Grant Amount Completion (US$) Date Country Activity SUB-SAHARAN AFRICA REGION 215,000 Mar­07 Regional Building Partnerships for Cities Without Slums in Eastern and Southern Africa 215,000 Feb­07 Regional Cities Without Slums: Toward Implementing a Support Program for Countries and Cities of Western and Central French-speaking Africa 500,000 Feb­07 South Africa South African Municipal Water and Sanitation Partnership Initiative 75,000 Sep­06 South Africa Preparation of the South African National Upgrading Support Programme 500,000 Dec­06 South Africa Support for the Preparation of 2006 State of South African Cities Report ASIA REGION 478,300 Cancelled India Cauvery Agamana--Extension of Water Supply and Sanitation Services to the Urban Poor in Bangalore City 70,000 Jun­07 India Tamil Nadu Urban Land Market Assessment for Chennai, Coimbatore, and Tiruppur 75,000 Dec­06 Pakistan Towards a CDS System in Punjab 248,320 Aug­06 Democratic City Upgrading Strategy for Urban Dili Republic of Timor Leste 250,000 Jun­07 Vietnam CDSs in Medium Cities 500,000 Aug­06 Regional City Networking and Investment Marketplace Development initiative in Asia EUROPE AND CENTRAL ASIA 458,427 Jun­06 Latvia Cities Programme--CDS for Economic Development LATIN AMERICA AND THE CARIBBEAN REGION 500,000 Jun­06 Brazil National Urban Development Policy: Support to the National Program for Land Tenure Regularisation and Socio-Environmental Risk Prevention in Precarious Settlements 256,445 Mar­06 Jamaica Kingston and St. Andrew Sustainable Development Plan 88 · Cities Alliance Annual Report 2007 ACTIVITIES CLOSED OR CANCELLED DURING FY07--continued Grant Amount Completion (US$) Date Country Activity MIDDLE EAST AND NORTH AFRICA REGION 74,000 Sep­06 Egypt Preparatory Assistance Proposal for Egypt Urban Sector, Slum Upgrading and City Development Strategies 75,000 Sep­06 Iran Preparatory Assistance to the Ministry of Housing and Urban Development for the Institutionalization of the CDS into the Urban Planning Process in Iran 250,000 Feb­07 West Bank Establishment of an Integrated Strategic Planning and Gaza Process for the Neighboring Towns of Ramallah, Al-Bireh and Beitunia GLOBAL AND MULTIREGIONAL ACTIVITIES 249,666 Apr­07 Global Building a Solid Foundation: Overcoming the Obstacles to Scalability of Housing Microfinance for the Poor 75,000 Oct­06 Global CLIFF Independent Evaluation 240,000 Dec­06 Global CA Independent Evaluation 2006 125,000 Jun­07 Global CA Management Succession Cities Alliance Annual Report 2007 · 89 ABBREVIATIONS AND ACRONYMS Note: All monetary amounts are US dollars unless otherwise indicated. ACVI Associazione Volontari per il Servizio Internazionale ACVN Association of Cities of Vietnam ADB Asian Development Bank AfD Agence française de développement (French Development Agency) AfDB African Development Bank AMN Association of Cities of Niger BMZ Bundesministerium für wirtschaftliche Zusammenrbeit und Entwicklung (German Federal Ministry for Economic Cooperation and Development) CAIXA Caixa Econômica Federal (Brazil's Housing and Urban Development Bank) CDIA City Development Initiative for Asia CDS city development strategy CLIFF Community-Led Infrastructure Finance Facility CONDER Urban Development Company of the State of Bahia (Brazil) CPSCL Caisse des Prêts et de Soutien aux Collectivités Locales (Tunisia) DFID Department for International Development (United Kingdom) EU European Union FINDETER Financiera de Desarrollo Territorial (Colombia) GC Governing Council (UN-HABITAT) GDP gross domestic product Gemdev Groupement d'Intérêt Scientifique pour l'Etude de la Mondialisation et du Développement (France) GOLD Global Report on Decentralisation and Local Democracy (of UCLG) GTZ Gesellschaft für Technische Zusammenarbeit (German Agency for Technical Cooperation) ICLEI International Council for Local Environment Initiatives 90 · Cities Alliance Annual Report 2007 IDB Inter-American Development Bank IFC International Finance Corporation (World Bank Group) IGFR intergovernmental fiscal relations ILO International Labour Organization INCA Infrastructure Finance Corporation Limited (South Africa) HIV/AIDS human immunodeficiency/acquired immune deficiency syndrome ISTED Institut des Sciences et des Techniques de l'Equipement et de l'Environnement pour le Développement (France) JBIC Japan Bank for International Cooperation JICA Japan Internacional Cooperation Agency JNNURM Jawaharlal Nehru National Urban Renewal Mission (India) KUDIFC Karnataka Urban Development Infrastructure Finance Corporation (India) LCP League of Cities of the Philippines LED local economic development LGU local government unit (Philippines) MDG Millennium Development Goal MFI microfinance institution MFMA Municipal Finance Management Act (South Africa) MFTF Municipal Finance Task Force MINVU Ministry of Housing and Urbanism (Chile) MTSU Mumbai Transport Support Unit (India) NEEDS National Economic Empowerment Development Strategy (Nigeria) NEPAD New Partnership for Africa's Development NGO nongovernmental organisation OECD Organisation for Economic Co-operation and Development PAB Policy Advisory Board (Cities Alliance) PAC Programa de Aceleração do Crescimento (Accelerated Growth Programme in Brazil) PASDEP Plan for Accelerated and Sustained Development to end Poverty (Ethiopia) PPF Public Policy Forum (Cities Alliance) PRUD Programme de recherche urbaine pour le développement (France) pS-Eau Programme Solidarité Eau RUB Russian rouble RUSPS Rapid Urban Sector Profiling Studies (Nigeria) SACN South African Cities Network SBS Swaziland Building Society SDI Shack/Slum Dwellers International Sida Swedish International Development Cooperation Agency SMME small, medium and micro enterprises SoCR State of the Cities Report SOGEGOL Société Générale de Solidarité SPARC Society for the Promotion of Area Resource Centres (India) SUF Slum Upgrading Facility (UN-HABITAT) TNUDF Tamil Nadu Urban Development Fund (India) UCLG United Cities and Local Governments UCLGA United Cities and Local Governments of Africa UK United Kingdom UN-HABITAT United Nations Human Settlements Programme UNEP United Nations Environment Programme Cities Alliance Annual Report 2007 · 91 UNESCO United Nations Educational, Scientific and Cultural Organization UNFPA United Nations Population Fund UNICEF United Nations Children's Fund USAID United States Agency for International Development WHO World Health Organization WSSCC Water Supply and Sanitation Collaborative Council WUF World Urban Forum 92 · Cities Alliance Annual Report 2007 Project Coordinators: Chii Akporji and Anne Carlin Design: Naylor Design, Inc. 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