Urbanization & Structural Change: An Exploratory Note

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1 Urbanization & Structural Change: An Exploratory Note Banji Oyelaran-Oyeyinka Director Monitoring and Research Division, UN- Habitat Presentation at the UNU-MERIT, Maastricht November 28,

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3 Outline Introduction The Three Key Challenges of Urbanization Relationship of Urbanization & Structural Transformation Research Proposal 3

4 Why is Sustainable Urbanization Important? Urbanization is one of the most significant global trends in the 21 st Century Cities are the locus of significant global challenges Urbanization is a vehicle for national economic and social transformation Urbanization and Structural Transformation are closely related 4

5 The Demographic Challenge An urbanized world: more than 50% of world population is now in urban areas 5 billion people or 60% of world population will live in urban areas by % of world urban population growth between now and 2030 will take place in developing countries Youth bulge in developing countries Ageing in developed countries; High unemployment and/or underemployment 5

6 The Climate Challenge Cities are major contributors to global warming, emitting as much as 70% of human induced greenhouse gases Vulnerability to climate change related disasters: 40% of the world s urban population lives less than 100km from the coast High dependence on fossil fuels: 95% of urban transport uses petroleum, resulting in low density and sprawling urban forms Low levels of access to water, sanitation and waste management, especially in slums Opportunities: Many climate change mitigation and adaptation actions must take place in urban areas 6

7 The Poverty Challenge Large scale urban poverty in the developing world poverty has dramatically reduced at global; The steady increase of slum dwellers In developing countries, characterized by informality, illegality and unplanned settlements. Urban growth strongly associated with slum growth due to the lack of appropriate planning and affordable housing; New forms of poverty and marginalization in the developed world In addition to conventional forms of poverty in European cities, new forms of social exclusion and marginalization: infrastructure-poor, immigrant poverty, young people at risk, and vulnerable elderly 7

8 The Challenge of Urban Slums Nearly 800 million people are living in slums Sub-Saharan Africa: 62% of urban population South Asia: 43% of urban population East Asia: 37% of urban population Latin America and the Caribbean: 27% of urban population 8

9 Slum Household Indicators In urban area, a slum household is considered to be a group of individuals living under the same roof that lack one or more of the below conditions: Access to improved water Access to improved sanitation Access to secure tenure Durability of housing Sufficient living area 9

10 Urbanization & Structural Transformation Structural Change is measured by quantifiable structural shift: GDP or employment share of the sector explained by the level of development; a demographic transition with reduction is measured by quantifiable shift in population F(growth rates); ST& UT: declining share of agriculture in GDP; ST &UT: rural-urban ST&UT: broad sectoral shifts; ST&UT: declining share of agriculture in employment, growth of the service and manufacturing sectors and; 10

11 The Challenge of Informality and Slums About 70% of the total population large metropolis live in slum communities, There is a negative correlation between informal employment and GDP per capita There is a positive correlation between informal employment and poverty across countries Thus, informal workers tend to be less well-off than those who work and live in more formal settings 11

12 World: Urbanization vs GDP per Capita, Percentage urban (%), ,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, ,000 GDP per capita, PPP (current International $) 12

13 Urbanization & Structural Change Planned urbanization leads to economic progress and prosperity Design and planning of urban clusters lead to rapid industrialization Planned urbanization leads to rising living standards 13

14 ST&UT PROSPECTS Cities as players in the global arena cities are the locus for global change and advocacy for new global policies and actions.; Cities are centres of change and innovation The concentration of people, resources and activities favour innovation; Higher interdependence between rural-urban linkages The geography of rural and urban space is changing; better interface of rural and urban areas, including flows of people, money, information; Increased contribution of cities to national economic growth Cities account for 80 per cent of the world s gross domestic product (GDP), 55 per cent in low-income countries, 73 per cent in middleincome countries, and 85 per cent in high-income economies; 14

15 Connect Urbanization to Inclusive Economic Growth Planned urbanization and urban production impact on employment, reduces poverty and raise living standards Planned urbanization creates new consumer class and stimulates wealth creation Make the analytical connection between ST, Urbanization, Poverty reduction and Employment 15

16 Thank you for your attention! END 16

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