World’s most rapidly urbanizing region should create more opportunities and reduce inequality
Singapore, October 3, 2017: Cities across East Asia and the Pacific – the world’s most rapidly urbanizing region – are not delivering infrastructure, jobs, and services at a pace as rapid as urban development, leading to widening inequalities that may hamper economic growth and lead to social divisions, says a new World Bank report called Expanding Opportunities for the Urban Poor.
According to the report, the region’s average annual urbanization rate of 3 percent has helped lift 655 million people out of poverty in the last two decades. Yet the region also has the world’s largest slum population: 250 million people with poor-quality housing, limited access to basic services, and at risk to hazards such as flooding.
Failure to expand opportunities for the urban poor impacts the countries’ growth potential. In high-income countries, such as Japan and Korea, inclusive urbanization created the space for higher economic growth. Throughout the 1970s and 1980s, Singapore’s economy grew at an average of 8 percent annually, largely due to an urban planning strategy that delivered effective infrastructure, affordable housing, and social services.
“Cities across East Asia have propelled the region’s tremendous growth. Our collective challenge is to expand opportunities to all in the cities – from new migrants living in the peripheries to factory workers struggling to pay rent – so that they can benefit more from urbanization and help fuel even stronger growth,”said Victoria Kwakwa, World Bank Vice President for East Asia and the Pacific.
Currently, 75 million people in the region live on less than US$3.10 a day. Three countries account for the bulk of the region’s urban poor: China, Indonesia, and the Philippines. By 2018, half of the region’s population will be urban – more than 1.2 billion people in all, or one-third of the world’s urban population.
Amongst the challenges faced by the urban poor is the lack of access to jobs, public transport and other infrastructure, and affordable housing. In Ulaanbaatar, Mongolia, low-income commuters can spend as much as 36 percent of their monthly expenses on bus fare, due to inefficient public transit routes. In Indonesia and the Philippines, 27 percent and 21 percent of the urban population, respectively, have no access to effective sanitation facilities. Slum residents are also more at risk to disasters, as the communities are often in low-lying flood-prone areas.
The report encourages city governments to have a multi-dimensional approach to planning, incorporating aspects of economic, spatial, and social inclusion to foster economic growth and reduce poverty.
“Rapid urbanization is a challenge and an opportunity. Provide low-income residents with affordable transport services or housing, so they can save for their children’s education. Ensure that social protection programs are in place to help families cope during difficult times, such as in the aftermath of natural disasters,” said Judy Baker, World Bank Lead Urban Specialist and lead author of the report. “Solutions for inclusive urban growth are not one-size-fits-all, but they are practicable, effective, and necessary for the greater good.”
Although 6 out of the world’s 10 mega-cities are in East Asia, urban poverty is more prevalent in secondary cities, which are growing in importance. As of 2010, small and medium cities account for a quarter of all cities in the region.
The report recommends ten guiding policy principles that can be adapted to specific circumstances. They include: connecting the urban poor with job markets; investing in integrated urban planning; ensuring affordable land and housing; recognizing the rights of all citizens to the city; targeting marginalized sub-groups among the urban poor; strengthening local governance and embracing citizen engagement; and investing in better data and information systems, for evidence-based policy making.