THE WORLD BANK URBAN & LOCAL GOVERNMENT STRATEGY

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1 THE WORLD BANK & LOCAL GOVERNMENT STRATEGY New Spatial and Urban Approaches -- MNA Region Consultations -- Marseille, April 17, 2009

2 Demographics Drive the Agenda Today more than half the world s population lives in urban areas 2 billion new urban residents expected by ,000,000 6,000,000 5,000,000 Population 4,000,000 3,000,000 2,000,000 1,000, Urban population Rural population Source: UN World Population Prospects: The 2006 Revision and World Urbanization Prospects: The 2007 Revision Urban Context

3 Urban Growth in Developing Countries 90% of urban growth is taking place in the developing world Urban populations in Africa and Asia will double in the next 20 years 6,000,000 5,000,000 4,000,000 Population 3,000,000 2,000,000 1,000, less developed countries more developed countries Source: UN World Population Prospects: The 2006 Revision and World Urbanization Prospects: The 2007 Revision Urban Context

4 Emerging Global and Local Challenges Global financial crisis and its impact on cities Climate Change Agenda and Urban Vulnerability Energy price and supply volatility How to improve energy efficiency of cities? Increasing market gap between creditworthy municipalities with bankable projects and the rest likely to increase among secondary cities Urban Context

5 The Challenges of Growth Densities Declining: Based on 1990s trends, cities are expected to triple in area, while population is expected to double by 2030 Over a billion people living in slums Climate Change: Cities are estimated to contribute as much as 70% of the world s GHG emissions Cities are the largest consumers of energy posing challenges to promote energy efficiency Urban Context

6 MNA Context & Urban Implications Macro-Context: Low FDI, slow growth, over-reliance on oil, need to diversify economies (cities can play a key role) State fragility, conflict, and volatility o Intra-regional migration and refugees creating pressures on land values, housing supply and affordability, and services o Conflict translating into emergency and reconstruction type operations West Bank and Gaza, Lebanon, Iraq Rapid population growth, coupled with in-migration to cities translates into high urbanization rates in most countries Youth bulge a key feature: Risk of Social Unrest in Cities Focus on Social Capital is Critical

7 MNA Context & Urban Implications Access to land for commercial/residential investment a key constraint (ICA Surveys) Governance systems could be improved Local Governments lack autonomy; Legal/Regulatory Frameworks out of date Service coverage generally good better than other regions Increasing number of natural disasters and vulnerability of low income settlements to rapid urbanization of poverty (Iran, Djibouti, Algeria) Climate change and water scarcity a growing concern in urban centers

8 City Responsibilities Increasing Municipal government agenda expands as city grows Municipal budgets are constant or declining Little support from central government / roles remain undefined Social Services Failing National Health Attract Investment Adequate Education Basic Service Delivery 20 YEARS AGO Reduce Congestion Basic Service Delivery Provide Vocational Training Combat Crime & Violence Reduce Food Security Risks Climate Change Create Jobs TODAY City Management

9 Cities & Economic Growth Source: WDR2009 Cities & Economic Growth

10 Top 20 Cities by GDP in 2005 Top 20 Cities by GDP in 2020 City/Urban area GDP in US$bn City/Urban area Est GDP in 2020 in US$bn Tokyo 1191 Tokyo 1602 New York 1133 New York 1561 Los Angeles 639 Los Angeles 886 Chicago 460 London 708 Paris 460 Chicago 645 London 452 Paris 611 Osaka/Kobe 341 Mexico City 608 Mexico City 315 Philadelphia 440 Philadelphia 312 Osaka/Kobe 430 Washington DC 299 Washington DC 426 Boston 290 Buenos Aires 416 Dallas/Fort Worth 268 Boston 413 Buenos Aires 245 Sao Paulo 411 Hong Kong 244 Hong Kong 407 San Francisco/Oakland 242 Dallas/Fort Worth 384 Atlanta 236 Shanghai 360 Houston 235 Seoul 349 Miami 231 Atlanta 347 Sao Paulo 225 San Francisco/Oakland 346 Seoul 218 Houston 339 Source: Citymayors.com, PWC GDP based on UN Urban Agglomerations

11 Slum Populations Increasing Slum Population as a Share of Urban Population 1,600,000 1,400, % 1,200,000 Urban Slum Population 1,000, , , , % 32.0% 31.5% 31.9% 32.4% 200, Urban Slum Population % Slums Source: UN World Urbanization Prospectus: The 2007 Revision Land Use Planning

12 Policies Do Matter Evolution from 1967 to 2004 (for 3 developed countries and 3 developing countries) (size of bubbles = income) 25 CO2 emissions (metric tonnes per person) China Brazil Germany India Japan United States Urban population (% of total) Urban Environment

13 Urban Transport Choices Direct relationship between density and energy used for transportation. Fuel subsidies drive private transport mode choices in MNA Energy consumption is higher due to pricing issues in MNA Modal split and urban density, % 90% 80% 70% 60% 50% 40% 30% 20% 10% MJ/(p.km) % of non motorised private Modes % of public transport % of private modes Energy used per passenger kilometer 0% USA Eastern Europe Western Europe Africa Latin America Middle East Hich income Asia Low income Asia Urban density (Persons/ha) Urban Environment

14 Linking Urban Design with Energy Consumption Urban Environment

15 Secondary Cities in the Decade Ahead Source : Annez, Huet, Peterson. World Bank Operational Lessons for the Urban Century: Urban Infrastructure Funds in World Bank Lending Operations

16 Cities & New Technologies Geographic Information Systems (GIS) Land management Track service delivery Crime & violence analysis Mobile phones Help cities communicate with citizens and vice versa Mobile-telephone based health or financial services SMS alert systems for crisis/disaster management Internet Facilitate citizen participation Knowledge sharing Improve licensing and permitting processes Municipal Financial Management Information Systems Automated budgeting systems Enhanced tax collection Transparent and efficient management of expenditures, revenues, and assets Urban Context

17 Strategy Objectives Review recent global that have urban consequences & position the Bank to respond to emerging challenges Enhance the urban sector s strategic contribution to the Bank s corporate goal of fighting poverty Elevate and mainstream policy dialogue on urban issues in national strategies and Country Assistance Strategies Apply new instruments using more wholesaling approaches to improve efficiency at the retail level (more standardized and better tested products) Explore how to align the Bank s work with other donors and development partners who have adapted/adjusted their programs over time

18 World Bank Urban Sector Operations Dedicated urban lending unit established in 1972 Between , roughly $37 billion lent for urban projects Urban Portfolio Performance is above Bank average-- greater than 80% satisfactory 5 year average annual lending close to $1 billion in nominal terms for the last twenty years, while declining in the late 90s and increasing under the Infrastructure Action Plan From FY2006 to FY2008, total number of urban sector projects nearly doubled from 22 to 38

19 World Bank Lending Trends Urban Sector Lending by IDA/IBRD and Share of Total IDA/IBRD Lending $6,000 9% $5,000 7% $4,000 $ millions $3,000 5% $2,000 4% 4% $1,000 3% 3% $0 FY75 - FY79 FY80 - FY84 FY85 - FY89 IBRD FY90 - FY94 IDA FY95 - FY99 UD Lending as a share of WB Lending FY00 - FY04 FY05 - FY08 Note: $ adjusted using CPI 1984 = 1 Portfolio

20 World Bank Urban Financing Volume of Financing by Region FY98-08 & Regional Share of Total $3,500 $3,000 14% $2,500 $ millions $2,000 $1,500 6% 6% $1,000 5% 5% 4% $500 $0 AFR EAP SAR ECA MNA LCR UD UD % of Bank Portfolio

21 World Bank Lending Trends CM&G led all other areas of lending, driven mainly by infrastructure Urban Poverty ranks second, representing 20% of the portfolio Urban Environment ranks forth but is growing fastest, while Land and Housing remains very low World Bank Urban Projects by Business Lines FY99-08 Business Line No. USD % No. %USD Rank City Management & Governance 58 2, Urban Poverty & Slum Upgrading 38 1, Cities & Economic Growth Natural Disaster Management Urban Environment & Climate Change Municipal Finance Other Land & Housing

22 New Approaches: Financing Instruments Sector Development Policy Loans: Policy-based lending focused on improving policy frameworks, systems and incentives Programmatic Investment Loans: Bundling institutional reforms with investment funding subnational grant programs, etc. Municipal Development Funds: Wholesaling approaches to expand reach (secondary cities) Can be used as policy instruments e.g. encouraging energy efficiency with performance-based grants to LGUs Standard Investment Operations that Leverage Global Facilities: GPOBA, PPIAF, Cities Alliance, Carbon Finance Funds Subnational Finance Program: Direct lending to cities Financing Instruments

23 New Knowledge Products & Services Urbanization Review Urban Governance Program National Slum Upgrading Programs City-level GHG Index, Vulnerability Assessment Global City Indicators Program Urban ICT Toolkit City Management Certification Programs City Innovations at Development Marketplace Knowledge Products & Services

24 Urbanization Review: A System of Cities Approach A Tool to operationalize WDR 2009 An integrated approach to understanding urbanization Would draw on relevant expertise around the Bank in the areas of: Transport Economic Growth and Poverty Urban and Land Use Planning Demographics and Migration Data Collection & Analysis (built into STATCOM approach) Others Responsive to increasing client demand Analytical framework that can be applied across a number of countries Working with OECD based on their Territorial Reviews Would take a modular approach comprised of: Data Collection Analysis Strategy & Action Plan Development New Urban Tools

25 STANDARDS FOR CITY PERFORMANCE: GLOBAL CITY INDICATORS PROGRAM No single standard exists for cities to measure their performance and benchmark progress against comparators World Bank led initiative with over 10 donor partners began with pilot in 9 cities, target of 160 by end 2009 Single comprehensive system for measuring and monitoring city performance and urban quality of life that will: Enable elected officials, city managers, and public to monitor the performance of cities over time Facilitate comparisons across cities Foster information sharing and learning across and between cities May lead to 3 rd party verification ISO certification Cities actively participate through collection and analysis process

26 Refining Our Six Business Lines Cities & Economic Growth Urban Land & Housing Markets Natural Disaster Management City Management, Finance & Governance Urban Poverty & Slums Urban Environment & Climate Change

27 Six Urban Business Lines Urban Planning, Land Markets & Housing Strengthening land & property registration systems to provide secure land tenure Urban Poverty & Slum -- Improving city planning, in-situ upgrading and affordable housing supply new policybased instrument under development City Management, Finance and Governance Supporting citizen service centers to enhance downward accountability

28 Six Urban Business Lines Cities and Economic Growth -- Attracting Investment & Improving Access to Markets for City Businesses Urban Environment and Climate Change Developing Assessment Tools to Better Target and Reduce City Contributions to GHG Emissions Natural Disaster Management Preventing Flood Damages to City Infrastructure & Businesses and Saving Lives

29 MNA Urban Agenda Going Forward Cities & Economic Growth: Urban Regeneration Growing demand in ECA, Brownfield Redevelopment Regional Development in MNA Many developing country cities now entering the postindustrial economic stage Cultural Heritage: Jordan, Lebanon Urban Environment: Solid Waste Growing city interest in tapping concessional financing through Carbon Finance Unit Amman Solid Waste Project First Sector DPL in Solid Waste Management Morocco Energy Efficient Cities with Energy Anchor Facility to support cities in lowering consumption street lighting, renewal energy alternatives Housing and Land: Jordan, Egypt, Yemen, PNA City Management & Governance: New generation of Municipal Funds (PNA, Jordan, Tunisia) Urban Agenda

30 The Urban Strategy Website

31 Urban Strategy Website: Discussion Forum Register on Website Discussion Forums on Urban Strategy Topics Provide feedback and comments on urban issues

32 Timeline January 2009 ::: Website Launch & Speaker Series March 2009 ::: Concept Note Issued April 15, 2009 ::: CODE Upstream Review Meeting April-June 2009 ::: Consultations with Stakeholders End May 2009 ::: Bank Management Review Mid-July 2009 ::: CODE Review of Strategy Paper July-Sept 2009 ::: Board Discussion on Strategy Paper October 2009 ::: Annual Meetings Launch in Istanbul Nov 2009 Jan 2010 ::: Strategy Dissemination

33 Team Stephen Karam Senior Urban Economist, FEU Task Team Leader Judy Baker Lead Economist, FEU Author: Urban Poverty & Slum Upgrading Alain Bertaud Consultant Author: Urban and Land Use Planning Tim Campbell Consultant Author: City Management & Governance Kim Colopinto Junior Professional Associate Team Member Mila Freire Consultant Author: Urbanization Review Richard Green Consultant Author: Housing Dan Hoornweg Lead Urban Specialist, FEU Team Member Somik Lall Senior Economist, FEU Team Member Barbara Lipman Senior Housing Specialist, FEU Team Member George Peterson Consultant Author: Municipal Finance Robin Rajack Sen. Urban Dev. Specialist, FEU Team Member David Satterthwaite Consultant Author: Urban Environment & Climate Change Shahid Yusuf Economic Advisor, WBIPR Author: Cities & Economic Growth