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Urban Development Overview

Cities are growing at an unprecedented speed. In emerging economies, the urban population is expected to double in 30 years (2000-2030), adding 2 billion more people. Built-up urban areas will increase by 1.2 million square kilometers, nearly tripling the global urban land area in 2000.

More than 80 percent of global GDP is generated in cities. If managed well, urbanization can promote sustainable growth by increasing productivity, allowing innovation and new ideas to emerge, saving energy, land and natural resources. 

However, rapid urbanization brings challenges, including meeting accelerated demand for basic services, infrastructure, jobs, land, and affordable housing, particularly for the nearly 1 billion urban poor who often live in informal settlements. 

Cities also consume close to two-thirds of the world’s energy and account for more than 70 percent of global greenhouse gas emissions.

As cities develop, their exposure to climate and disaster risk increases, as well. Almost half a billion urban residents live in coastal areas, increasing their vulnerability to storm surges and sea level rise. 

Shocks to urban systems can have a catastrophic impact on a city’s ability to meet the most basic needs of its citizens, and reverse decades of economic development gains especially in small, fragile states.

Building cities that “work” – green, inclusive, resilient, and competitive – requires intensive policy coordination and investment choices. The World Bank’s technical and financial assistance for urban development has increased significantly: total commitments have doubled, to an annual average of US$4.11 billion (FY09-13) from US$2.15 billion (FY04-08)

Last Updated: Mar 25,2014

The World Bank’s urban strategy emphasizes strong systems and urban governance to enable sustainable urban growth with opportunities for all. The Bank report “Planning, Connecting, and Financing Cities — Now : Priorities for City Leaders” helps city leaders make informed decisions to support the urban agenda:

Green cities: plan for low-carbon, climate resilient growth, access necessary financing, improve solid waste management systems, and address pollution and livability challenges.

Inclusive cities: improve access to land, affordable housing, jobs and basic services, economic opportunities, scale up efforts to upgrade slums, enhance community participation, and tackle urban poverty and social exclusion.

Resilient cities: strengthen cities’ resilience, their ability to cope and better manage climate and disaster risk, economic shocks and social conflict.

Competitive cities: attract investment and jobs by improving land markets, connectivity and regulation at the sub-national level, create an enabling environment for business, and better leverage land and real estate assets.

Strong city systems and governance:  strengthen land and housing markets, enhance municipal finances and service delivery, and increase the capacity to carry out integrated territorial development policies and land use planning.

Last Updated: Mar 25,2014

The World Bank has launched several groundbreaking initiatives, including Urbanization Reviews, diagnostics of 30 countries covering 53 percent of the global urban population, to help better understand how different actors coordinate their investment decisions in urban settings; and the City Creditworthiness Academy, technical assistance and capacity building activities for city governments, to help transition to creditworthiness to self-finance new investments.

Projects support green, inclusive, resilient and competitive cities across the world, and at various stages of urban development.

Green Cities:  In Morocco, the Solid Waste Development Policy Loan Program (a series of loans in 2009, 2011 and 2003 for US$133 million, US$139 million and US$130 million respectively) helped transform the country’s solid waste sector by emphasizing broader social, environmental and economic sustainability in addition to cleanliness in cities.

Inclusive Cities: In Honduras, the Barrio Ciudad Project (2005-2103, US$15 million, IDA) contributed to improving the quality of life for 56,000 direct and 925,000 indirect beneficiaries in 21 poor urban neighborhoods in eight rapidly growing cities. Improvements for households include achieving universal access to potable water in 2013 from 90 percent in 2005, and increasing access to sanitary sewage systems to over 81 percent in 2013 from 25 percent in 2005. Activities to prevent crime and violence at the community level were also incorporated.

Resilient Cities: In Vietnam, the Ho Chi Minh City Environmental Sanitation Project (2001 – 2012, US$248 million IDA) supported the transformation of a once-polluted canal running through the city’s central business district into an attractive place for people and businesses, while controlling wastewater and floods. 1.2 million people now benefit from a modern sanitation and flood control system that is a model for other waterway clean-up projects.

Competitive Cities: In Russia, the St. Petersburg Economic Development Project (2003-2014, US$ 101.0 million, IBRD)  contributed to the city's local economic development through a combination of policy measures to develop SMEs, land/real estate markets, and city financial management and investments to rehabilitate nine major cultural heritage sites.

Strong systems: In Tanzania, the Strategic Cities Project (2010-2015, US $163 million, IDA, with a US$ 50 million additional financing under preparation) is the Bank’s first support for the government’s decentralization policy. All urban infrastructure are being procured, managed, implemented and maintained by local governments in a decentralized manner. Tanzania’s first integrated GIS-based computerized urban management and revenue system was introduced, including tax reporting, revenue collection and urban planning. Infrastructure realized so far includes 123km of roads, 15.10km of drainage, 3 landfills and 6 bus/lorry terminals, with an estimated 620,837 direct beneficiaries to date..

Urban governance: In Pakistan, the Punjab Municipal Services Improvement Project (2006-2013, US$ 50.0 million IBRD) introduced a culture of performance management across 105 local governments in Punjab, Pakistan. It has helped operationalize systems and business processes, which in turn have led to improved governance, transparency, and accountability.

Last Updated: Mar 25,2014
Planning, Connecting, Financing: Priorities for City Leaders

Developing countries are urbanizing fast. To meet the challenges, city leaders must move quickly to plan, connect, and finance resilient and sustainable growth. This report provides a framework.

Around The Bank Group

Find out what the Bank Group's branches are doing on urban development.