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Keynote Address at the World Congress Competitive Cities Congress:
Leadership and the Competitive Wealth of Cities




by
James D. Wolfensohn
President
The World Bank Group

Washington, DC, May 19, 2000

Well thank you very much indeed Jack Miller and I want to thank the world
congress and KPMG for their partnership in making this possible, but most
importantly I want to thank all of you for having decided to come and
join us because this conference has its success in the interactive
quality of the dialogue. Certainly so far as the bank is concerned, we do
not come here with any notion or suggestion of lecturing or any
suggestion that we have the solution to all the problems. We do have some
experience that we want to share but we believe that the challenges that
we face now are different from the ones we had in the past, different in
terms of quality and therefore meetings like this become extremely
important so that we can exchange ideas and get the best experience and
the best commentary that is possible by having practitioners together
along with those of us that try to serve them.

In the broad, the issue which we are facing at the World Bank, as you
know, is the issue of povertya very central issue in terms of the
activities in cities. And we start with a global purview of 6 billion
people on the planet and for us the most important segment being 4.8
billion who live in developing countries

Within that framework, we already have 3 billion people that live under
$2 a dayroughly half the worldand a billion two hundred million people
that live under $1 a day- in what we call absolute poverty. And in the
past, absolute poverty historically has been more concentrated in rural
areas than in urban areas but we are now finding that there is a move in
Latin America and in South Asia towards greater concentrations in urban
areas. So that in itself presents us with difficult issues in management.
And if the situation of static- we are seeing a gradual development of
greater concentration of power and greater electoral representation in
urban areas and a growth in the dimension of centralized government in
cities.

But things are not stable. In the next 25 years, the 6 billion people
will grow to 8 billion and the concentration of those people will be
substantially in developing countries. The 4.8 billion that I mentioned
in developing countries will grow to 6.8 billion so virtually all the
increase in the population will be in the developing countries- around
97%.
But the other demographic shift is that, in the next 25 years, 2 billion
more people will go to cities. So as we look at the problems today and
find ourselves confronted with, in some case, dramatic, in some cases,
manageable, problemsas we move forward we have to move to this
understanding of the greater concentration.

Let me just give you the numbers: the urban population in 1900 was 33
million; in the year 2000, 2.9 billion; by 2020, it will be 4 billion
400,000; and by 2025, it will be 4.9 billion. The growth is exponential
and in the number of cities that we have over 1 million peoplein 1950 we
had 80, the year 2000 we have 365 and by the year 2020, we will have over
500. And in terms of 'megacities', there weren't any cities of ten
million or more in 1950. There are 13 in the year 2000 and there will be
26 in the year 2020.

I give you these numbers not to confuse you but simply to get the message
across that the scale and concentration of people and the agglomerations
of poverty in terms of numbers is increasing dramatically. But it goes
beyond that because it is not just the numerical increase that occurs.
That also changes the quality of the problems that we need to deal with
as you get more people in your cities; as you get a growth in very urban
centers of people coming towards the cities without the services and
without the framework of the cities to support them, we clearly are
facing in the next 25 years, very different challenges than we have had
before.

We used to talk of rural and urban populations; today the problems are
together. The interrelationship of trade, the dependence of rural areas
on urban areas, indeed the dependence of countries on city areas, in
terms of being the gateway, in terms of being the motive power of the GDP
of the country, all focuses on not just a quantitative increase in the
challenges that face us but a qualitative increase as wellqualitative
because your task become much more complicated. If you have 100 people,
it is different than having 100,000 people; if you have 100,000 people,
it is different than having a million. I need hardly tell you since you
are in the business.

And so what we need to do is to try and find new ways that we can address
these questions, and there are a few things which are fairly clear to us.

At a global level, what we are discovering is that to deal with issues of
poverty and to deal with issues of development, there is no sense of
having top-down dynamics if you are making a decision at the federal
level about what is going to happen in the country; it does not work.

What we have to do is to think about our citizens and poor people not as
an object of charity, not as something that we have to deal with as a
problem but as part of our resources that we can engage in the solution.
We have to trust them. We have to be out there creating mechanisms in
which we can reach segments of our cities and our societies in replicable
ways, in human ways, in ways that we can get programs going that can draw
on the strengths of the local citizens through democratic means, through
local means of coming together to try and bring about development.
And in what I have seen from my travels nowI regret to say in more
than100 countries now, and of course when you visit more countries you
visit many many more cities, and I am just back from Ho Chi Minh city and
I am just back from Bangkok - it is remarkable what you see what is
happening in these cities in terms of both infrastructure improvement and
decentralisation of the management process, with more and more
requirements on the part of city management to have effective management
structures and more requirements to have decentralized structures drawing
on the strength and capacity of the cities

Not just in a single project a project here and a project therebut in a
much more complicated holistic way in terms of trying to regard the
development of the city, in terms of the phasing of the way you do
things, and the interrelation of the way that you do things, the issue of
management of cities becomes a very complex problem. It is not just a
question of having a budget and identifying how many projects you can do.
The issue is involved in what are the interrelationships of the project.
What is the sequencing of the projects? How does one thing depend on
another? How do you build capacity to bring yourself along, and to bring
about effective governance and development?

And it is not just one year to another because with the growth of cities
you cannot be thinking in terms of one budget cycle to the next. You must
now be thinking in both medium and long term at the same time. This is
not just trying to give an academic approach to management which you get
at a business school. It is a necessity in terms of how you effectively
run a city and very often the capacity in terms of city management is not
geared to that level of management expertise. People are elected; they
have decided they want to give service from whatever be their local
activity and then all of a sudden, they are confronted, along with city
management, with management issues that would be daunting for anybody.

So the first thing that we need to think in terms of, after you have the
notion of the identification of the problem, is the question of capacity-
building and management capacity at the city-level. And that comes from
exchange of ideas and complaints, and here, as the Chairman said earlier,
we are starting to get many more opportunities as a consequence of
technology and information exchange.

To give you an example, every Saturday morning, we link with 300 cities
and towns in 7 countries in Latin America in a joint venture with the
Monterrey Institute of technology. In some cases, this is by video-
conference; in some cases, it is by radio; in some cases, it is by
downloading a signal into a television set; and, in some cases, it is on
internet with print.

What do we do?

We have courses which deal with how to run a fire department, and how to
run a budget. What are you do in collecting garbage what are the issues
in relation to paying for water? What are the problems with dealing with
innerslums and poor areas? How do you deal with problems of waste? What
are the environmental problems? These are detailed and practical examples
about how you run cities and towns.
And what is interesting is that this is not a process which just happens
on a Saturday morning. With the 300 sites that are linked, the responses
do not have to be synchronous- happening at the same time. You can come
in on a Sunday or on a Wednesday and take a look at what the courses and
the texts that are distributed, and then you can come back during the
week with information and questions and it is now forming a community
where towns speak to towns, where people are linked together where there
is a possibility of using modern technology of this type to really to
bring together a community of people that can together solve problems.

We are also at the Bank looking at, what we call, a Global Development
Gateway. And the idea of the Gateway is to bring together, in one place,
information about what is going on in development on a global basis. So
if you are interested in a subject like water purification, or pre-school
education or organisation of the local community groups, you will be able
to come into the network to find out who are the people that are working
in this and in what countries they are working, and you would be able to
identify what is best-practice and worst-practice, and in fact in the
prototype that we are developing, we have a segment called a mayors page.

It will be a page for mayors in three languages so that you will be able
to come in, in the morning, and find out information that is of interest
to mayors. What is going on in the international community. It will have
a list of subjects. You will be able to interact on that list of
subjects; there will be chat pages. You will be able to come in and
connect with people who are in the same business, and you will build up a
body of information and knowledge that is available.

Then, of course, there are the facilities for Distance Learning of other
types and programs and courses that will be run generally.

The reason I am focusing on this is that no plans for cities and towns
work unless you have the capacity to run it. You can have wonderful ideas
but if you do not have the people and the information, it is very
difficult to idealise running a city. And some of you are better at it
than others. And the point is that if we can bring the information
together, then there is a real chance of moving forward.

The second point is that in terms of resources, we are working at the
bank to see if we can develop in terms of our interface a greater
possibility of working with them and through them to enfranchise cities
as part of the management structure of the national network.

This is not something just to be appealing to you this morning because
you represent cities. It just makes pure common sense. The way to bring
about management is to get the management groups closer to the citizens
and what we have to do is to convince centralised governments that a
responsible city management can be a key to national development.

And so we are seeing an increase in our own investment in cities trying
to convince governments of the critical importance of cities in the
management process. And this is something where you can help us you can
help us, because you are an important political faction in national
debates. And you have to use that pressure in your own countries to tell
the government leaders - the central, federal and national government
that a parceling out of funds with accountability and transparency is the
best way to get distributive management to get to the people. And you
have, because of the demographics, an absolutely unanwerable, other than
through positiveness, question to put.

How else are you going to deal with the 2 billion people coming into the
cities

if you do not strengthen city government and the city distribution of
services. It is not just a request that is made just because you are
representing cities. There is no other way. You are at the front line of
dealing with the questions of development and poverty.

And our task at the Bank frankly is to learn with you as to how it is in
the years ahead that we can relate more to your needs and give you the
services that you need and learn from you in terms of the distributing
mechanisms that you have.

Together, the approach has to be holistic; it has to be one that, I have
said, deals not just with projects but with integral management of your
cities. It is not just a project here and a project therethat does not
work. You cannot forget transportation when you put in schools and
business centers; you cannot build schools without teachers; you cannot
build health clinics in the wrong place; you need to arrange for delivery
of services; you cannot deliver water without some form of taxes to pay
for it.

All these things you know are interrelated and what I am simply saying to
you is that, as an institution, the services of the bank are available to
you. This is the second global conference. We are looking in other ways
at a cities without slums initiative, as I guess you know. We are looking
at extentions in terms of city management. We are here to be of help for
you but I must tell you that for us and for you, it is a new process.

I am now visiting much more city councils and mayors than I have done. As
short a time ago as five years, I did not do it; I do it now. Because I
have come to realise that the leadership role for many cities in terms of
representing the country, in terms of creating a door in which people
come to see if they are going to invest in the country; as a place where
central services; as a place that gives the initial impact and now with
the input of peoplenow with the services necessary to deal with the
influx of 2 billion people, to deal with the questions of the very urban
areas and to deal with the newly huge relationship between urban and
rural areasall makes it essential for us to be at the cutting-edge at the
city-level,

My invitation to you is that we should work more together; that we should
use technology for capacity-building; and that you should try to use your
influence on your national authority to convince them that in terms of
management and in terms of project implementation, the role of cities has
never been more important than it is now.
I want to welcome you to this conference; I am sure that you will have
three excellent days of discussion; and I can assure you that my
colleagues and me at the Bank today are very eager to work with you in a
constructive spirit as we move forward.

Let me say that in no city has there been a greater relationship between
the World Bank and a Mayor than in the city of Washington, and having
just survived the meetings of the committees of the World Bank amd IMF as
a result of the care and attention given to it by Mayor Williams, I want
publicly to say that if we had not had a great city administration, the
World Bank might be a different place today.

So I want to thank Mayor Williams and let me pass it over to our Chairman
to introduce him and finally once again welcome you to this conference.