Urban development needs 'complete paradigm shift'

By Richard Jones 17 August 2016

Tall buildings in Colombo, the largest city in Sri Lanka. Creating smarter, sustainable and more efficient cities requires more than just access to finance. Photo by: Asian Development Bank / CC BY-NC-ND

About 120,000 people move to cities each day worldwide and, in most cases, the existing infrastructure is not enough to accommodate the surge in urban dwellers. How can governments, development partners and urban planners change the way cities are developed, financed, governed and managed so that new infrastructure would be smarter, sustainable and more efficient?

“We need to have a complete paradigm shift about how we look at urbanization and how we deal with cities,” Andrew McIntyre, senior urban development specialist at the Asian Development Bank, told Devex. “That new balance between maintaining the old and making it more efficient, making it smarter, is one shift.”

This is among the challenges that the New Urban Agenda will aim to address when United Nations member states converge in Quito, Ecuador, in October to discuss and agree on the outcome document that will guide global urbanization for the next 20 years. The new agenda will also have an impact on the development priorities and programs of multilateral donors, including ADB.

But beyond providing access to finance, McIntyre said that is “absolutely essential” to involve and educate people to make them understand that they are part of the paradigm shift.

Below are more highlights of our conversation with McIntyre on how ADB’s urbanization policy and Finance++ approach could help create smarter, sustainable and more efficient cities in Asia and the Pacific.

What role does ADB — and multilateral financing in general — play in green urbanization? How can private capital be better mobilized to spur “green growth” to really promote sustainable urban development toward Habitat III?

Attracting both private and public financing into rapidly growing urban areas — and not just the megacities but also the secondary cities across Asia — is critical to ensuring that they’re competitive, they’re inclusive, and they’re green. We need to make sure that we have economic growth but that we maintain livability through inclusive approaches to development. That is critical.

In ADB, we have an approach called Finance++ where we [would like to amplify our] major investments in clean energy, water supplies, sanitation, [and] better transport and mobility … by looking at two “pluses”: The first plus is leveraging that investment finance with additional finance and modalities and bring in bilateral, multilateral, private sector or [public-private partnership] partners. The other plus is best-practice research, knowledge partnerships and sharing knowledge between cities. So those two pluses really do leverage our investment so much further. It’s what we see as really differentiating ourselves [from other actors] in the Asia-Pacific region to make our investments much more attractive and effective.

How does your approach differ from the newly emergent Asian Infrastructure Investment Bank and New Development Bank? Is there a risk of a duplication of efforts here?

The ADB Institute estimated that from 2010 to 2020 we’re going to need something like $750 billion per year in required investments. Whatever it is, the figure is huge. I don’t think there is any reason for overlaps at all: There is more than enough demand for everybody. I guess we all have our different areas of expertise and ADB’s differentiation is the Finance++. We have 50 years of good knowledge, good experience of leveraging with other partners, including AIIB. We have a lot of experience on safeguards policies and establishing country safeguard systems, as well as working with high-tech research companies and knowledge partners. So we have that track record there and working with financing partners such as AIIB is part of that.

How can financial services be leveraged to work with urban migration and population growth, rather than working against it? How can it really be channeled for good in this area?

Well, part of it is in terms of this population actually having more knowledge about their community, having more understanding. It’s not just the access to finance. … That obviously is a critical issue but we can have finance and lots of projects but unless we actually involve the populations, the communities, the governance [the approach] won’t work.

Educating people and getting people involved in and understanding development, not just as objects of change but being a part of that overall change, is absolutely essential; and ADB is very insistent on [facilitating] this. Obviously, I think we need to do a lot more and have more innovative approaches to doing that. We have more ways to integrate people now than we ever had before, so it’s a smart approach to making communities smarter and part of their own development. I think it’s an opportunity that we never had before and without it we’ll be left behind.

So in that light, what’s the next frontier for innovation at the bank to ensure that urban growth is both sustainable and equitable?

It’s doing what we’ve done in the past and doing it better, being more efficient and more effective. I talked about Finance++: Knowledge is really part of it, making sure that the knowledge and development out there is applied in conjunction with the finance side of things. We are looking at smart technology, smart systems [and] smart approaches that integrate with our [environmental, economic and inclusive] approaches.

I think there is a danger that with this smart approach. People [would] think that it’s just going to get things done fast; but you can’t change people that fast. Governance doesn’t change overnight. It’s about the next decade, maybe as long as 15 years, and we have to keep that in mind. Consistency of governance, consistency of approach, consistency of applying the parameters that we have is essential. We don’t want to just change back and forth just to be able to hit a project deadline, so having that internal consistency is essential.

And in terms of ADB’s urbanization policy, how does it link with climate policy as well? With the growing population and increasing rates of urban migration, how do you see the bank’s policy in these areas shifting in the years ahead?

With 120,000 people moving to cities every day, huge amounts of new infrastructure needs to be built just to keep up with that. However, the infrastructure that is there is falling apart in many cases — a lack of systems, maintenance, funding and finance to run them. That new balance between maintaining the old and making it more efficient, making it smarter, is one shift.

At the same time, it’s about new infrastructure to address the increasing population. We can’t keep expanding outside of the cities, we do need to look at cities as metropolises. … We need to have a complete paradigm shift about how we look at urbanization and how we deal with cities. The urban tools that we had before don’t work when you get to cities [with more than 2 million inhabitants]. We need to look at the macro scale in terms of the physical infrastructural environment and how it fits into that, but then also the micro scale — looking down at the city block and realizing that it’s not just one or two players and essential linkages, but about a completely new, strategic, holistic approach to managing massive complexity and rapid change. I don’t think we have gotten on top of that yet — it is a huge issue, we are still learning and still developing tools to manage that, but obviously we can’t fund everything.

Another concept that I really like is that of Jaime Lerner’s “urban acupuncture” as explained by Pedro Ortiz in the Cities Seminar at ADB’s 2016 Annual Meeting, where carefully considered interventions are undertaken that have immediate local effects and that eventually lead to longer-term areawide impacts. By looking at the city holistically and strategically, urban acupuncture depends on sustaining good relationships between urban planners, designers and the city government and most importantly citizens themselves. You can prepare a plan today and set targets next week, but where do we put our limited investments to make the most impact? That’s still a challenge for us at the micro level.

And in what ways should local actors be working on doing things such as improving land rights or tackling gender equality issues or inequalities? You mentioned upgrading slums: How can you scale up efforts to help local authorities deliver on these key issues?

It’s a really complex issue. At ADB, we have our safeguard policy and many [nongovernmental organizations] have complimented us on that. But this can cause reticence to pursue high-risk investments such as slum revitalization. By contrast, you’ve got a number of cities [that] undertake full-scale slum upgrading and are not considering safeguards in the same light. There’s a fine line there, but I don’t believe it’s insurmountable. I think we need much more innovation on how it can be done more effectively while still fitting in with our policy; but it’s not easy. We have got to get the tools and approaches right first before we scale it up. We have slum rehabilitation programs or informal settlement upgrading; we have seen land sharing, housing side solutions, land formalization. Getting back to the Finance++ where the knowledge side comes in, we need to look at that, we need to get best practice, we need to be experimenting, and we need to have some time and space to look at how that can be better applied.

What do you want to see on the #NewUrbanAgenda? Over the next six months Habitat for Humanity, Cities Alliance and Devex will join forces to explore the future of our increasingly urbanized world in the run up to Habitat III in October. Spread the word, share your views below or tag @devex and #NewUrbanAgenda.

About the author

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Richard Jones@richard_devex

Richard oversees editorial content for campaigns and media partnerships at Devex. Previously an associate editor, he covered the full spectrum of development aid in Europe, the Middle East and Africa, supervising a team of correspondents and writers, penning articles and conducting high-level video interviews at events across the EMEA region. Currently based in Barcelona, Richard brings to bear 12 years of experience as an editor in institutional communications, public affairs and international development. His development experience includes stints in the Dominican Republic, Argentina and Ecuador.


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