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Speeches & Transcripts

Speech of Dr. Mahmoud Mohieldin, Corporate Secretary and President’s Special Envoy at the Forum on Integration and Participation in Promoting Local Development in Saudi Arabia

March 23, 2015

Mahmoud Mohieldin Riyadh, Saudi Arabia

As Prepared for Delivery

Your Highnesses and Excellencies,

Distinguished Guests,

Ladies and Gentlemen,

I am pleased to be here today among this distinguished group, to discuss ways in which to support the efforts of the Saudi government to achieve economic growth and development that includes all the citizens of this noble country.                                                           

In this regard, I would like to emphasize the commitment of the World Bank Group, now more than at any time in the past, to exchanging knowledge and experience in the area of development experiences, application and effects. I am honored to present to you some of these experiences, that aimed to achieve integration and participation in promoting urban and local development.

International experiencess take into account three important concepts when designing and implementing policies for local and urban development. First, the process of urbanization is not new. There are many experiences that one could use to gain an understanding of successful practices in various countries of the world, while there are other unsuccessful experiences, which can be avoided by learning from their mistakes.

Second, urban development is a crucial and necessary factor for achieving comprehensive and sustainable development, because it allows for  the positive outcomes of economic activity and development  to be distributed to people more equitably.

Urban development policies have enabled many countries to transition from the ranks of the lowest-income countries to higher levels of income, and they have helped to diversify economic resources and productive activities through increased focus on manufacturing, value-added activities, and services, which pave the way to sustainable development. The data show that developed urban areas have accounted for 80 percent of growth in high-income countries.

Cities can be divided into three types in terms of urban expansion: major cities, medium to large cities, and smaller cities, and each type of city contributes to different development objectives and functions.

Third, local development policies must give due consideration to human settlement and urban expansion patterns. Effective policies are those that can be applied  equally effectively in rural areas, rapidly urbanizing areas, and areas that have effectively become urban, to a greater or lesser extent,  through planning and good organization.

Local development policies must also take into account the special needs and requirements of the inhabitants of these areas of various sizes, to ensure the effectiveness of these policies and their ability to meet their objectives. Development policies in rural areas should focus on building the institutions that are  responsible for regulating and allocating land, supervising the markets, and providing basic social services such as schools, health facilities, and security.

In addition to developing the above-mentioned institutions, in rapidly urbanizing areas the focus should be on investing in the infrastructure, in order to spread the benefits of development and urbanization over a wider range through the advantages of a large-scale economy.

Local development policies in areas that have effectively become urban, in addition to ensuring the development of suitable and effective institutions and providing the basic infrastructure, should address the issues of unofficial settlements before they occur through developmental targeting, and deal with them effectively if they did occur.

In general, the policies must take into account both the urban and rural aspects of development, creating a system of incentives to encourage investment in large infrastructure projects in order to spur an economic takeoff in the less developed urban areas.

In a recently published development report titled “Reshaping Economic Geography,” the World Bank fostered discussion on local development policies by stressing the importance of connections and bridging the gap between the highly developed and less developed countries. To this end, we must examine the focus on production at the same time that we examine the basic living standards of the inhabitants in areas of concentrated population, as countries can benefit from areas with economic concentration by taking into account the principle of the convergence of living standards among various residential areas.

Labor mobility is one of the most effective mechanisms in the development of less developed areas, and a successful development policy is one that facilitates the movement of individuals and links together various regions of the country without obstructions. In order to achieve this, development policies must be drawn up and implemented that can overcome the geographical differences among various regions.

In this regard, I would like to mention a set of three measures that can be taken to link developmentally advanced and less advanced areas.

First, developing regulatory policies, protecting property rights, and improving the living standards of residents.

  • For example, establishing a minimum standard for the quality of basic health and education services to guarantee access to a reasonable level of health care, education; and protecting property rights through highly advanced and efficient institutions for registering land, real estate, and other property. 
  • Here the role of local authorities and branch offices is highlighted owing to their proximity to the citizens and residents, and their ability to follow up and monitor directly, in addition to their extensive knowledge of the needs of the region.

Second, building and developing the infrastructure, including investment in regional transportation systems, reducing the cost of carrying out economic activities, and increasing investments in communications to help enhance the flow of information.

Third, creating highly targeted incentives to develop less developed areas by establishing special economic areas, developing regulations for industrial development areas, and implementing measures to enhance the investment climate.

I would like to discuss briefly a number of studies that have benefited from the work of the World Bank in various countries, which continue to see regional discrepancies in living standards, as well as between rural and urban areas, and between areas where development has advanced and those where little development has occurred.

For example, these discrepancies include unemployment rates, particularly in rural areas that are far from the centers of production and economic growth. We have also found large discrepancies in countries where productive activities are concentrated in limited areas, leaving the rest of the areas without any sources of development.

We have encountered great differences in living standards in countries in which the agricultural and industrial policies and the labor market regulations have contributed to widening these differences among the various regions, instead of narrowing and addressing them.

The large differences in income levels as well as employment and unemployment rates among and within the various regions can be explained by the disparity in access to basic services and differing levels of investment in human capital. Despite the notable improvement in access to basic services in many countries, the disparity between developed and less developed areas remains, particularly in rural areas.

Likewise, the disparity in coverage of the transportation infrastructure and access to markets makes some areas better connected to markets and others with poor connections.

The reason for the concentration of facilities and jobs in certain areas in these countries is the concentration of private sector activity to a large extent in areas where the geographical setting facilitates communication and access to local and international markets, which may also result in large differences in job opportunities from one area to another.

The large disparity in income levels and unemployment among regions and among various areas within a single region is due to the gap in consumption between rural and urban areas within the same region, in view of the differences among families in terms of education, health care, and access to services.

Policies play an important role in supporting resources and developing a country’s wealth, as well as enhancing the development of less developed areas.

  • Policies can be developed to take into account the disparity in development levels between urban and rural areas and among various residential areas.
  • Expanding the scope of services to include developing infrastructure projects and making serious efforts to develop health and educational services can also help reduce this disparity. In this regard, it is possible to take advantage of the private sector to encourage investments to improve the quality of the services provided and enhance the ability of local authorities and agencies to deliver these services.
  • They can also help to link less developed areas to markets and address the discrepancies by improving transportation among the various areas. This requires government efforts to improve coordination and enhance the efficiency of the highway and transportation facilities to increase competiveness.
  • Creating incentives for companies and individuals to move to where there are opportunities for jobs and making money helps achieve the desired development, because financial incentives for alone are not sufficient; companies and individuals must also be incentivized.

In reviewing the recommendations being prepared by the United Nations concerning development priorities beyond 2015 and through 2030, we find an emphasis on the importance of making cities and areas with concentrated populations and their living standards secure and compatible with the environment, while ensuring access to housing and basic services at subsidized cost, raising the level of the poorest neighborhoods, and promoting the expansion of urban development for everyone, while enhancing capacity for urban planning, supporting positive economic and social links between urban and rural areas, protecting the environment and promoting the optimal use of resources by incorporating environmental considerations into national, regional, and local planning processes.

This will be discussed, along with other objectives that take into consideration economic, social, and environmental development goals, within the framework of the efforts of the U.N. General Assembly next September, in preparation for the announcement of the new sustainable development objectives, which will require substantial financing, sophisticated policies, effective and efficient institutions, and detailed databases to guide the decision makers and carry out supervisory and monitoring activities.

In this regard, reviewing the statement of King Salman on the tenth of this month, we find that there are important principles in the policies adopted by the Kingdom of Saudi Arabia to help achieve the local development objectives in the desired manner, which I will summarize in three points that I have selected from his statement:

First, the statement emphasized that there is no difference between one citizen and another or one region and another, and stressed the importance of listening to our citizens to hear their thoughts and recommendations for serving the county and its citizens.

Second, that development has been a necessary feature of the country since it was founded, and modernization will continue as the society progresses.

Third, he spoke of efforts to limit the effect of the recent fall in oil prices on the country’s income, and continuation of exploration activities for oil, gas, and other natural resources, making efforts to improve the performance of government services and coordinate procedures to ensure access to suitable housing for all citizens, developing education by integrating its various levels and ensuring that its outputs are consistent with the labor market and development plans, and the government’s partnership with the private sector to provide job opportunities.

Your Highnesses and Excellencies,

Distinguished Guests,

In closing I would like to stress that local development policies play a key role in achieving progress and raising living standards, and that the main keys of local development include the ability to communicate, the ease of movement without obstacles between rural and urban areas, between large and small cities, and between highly developed and less developed areas, investing in the infrastructure necessary to achieve this ease of movement, investing in human capital in terms of universal education and health care, enabling local authorities and agencies to cooperate with the central government in providing services, effective partnership with the private sector to provide basic services and improve their quality and benefit from its comparative advantages to achieve these goals, based on the principles of effective monitoring and adequate supervision.

Thank you once again for the kind invitation to participate in this important forum.