SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

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Local government
capacities and
relationships with
central authorities
need to improve
infrastructure, a good urbanization strategy
will make these more adapted to the realities
of cities and towns.
Urban policy priorities and choices depend
on a variety of factors—including the scale and
speed of urbanization, the size of cities, and the
stage of demographic transition, which among
other issues can determine the source of urban
growth. But in general, urbanization strategies
should aim for higher levels of human development,
as well as greater productivity and stable
growth. Necessary ingredients include well-defined
property rights, a good investment climate,
an attractive incentive framework for businesses,
functioning land and labour markets, high
investment in education and training, reliable
electricity and power grids, good transportation
systems, interconnectedness between cities and
outstanding telecommunication networks.
Links between rural and urban development
are still often overlooked. The two are in
fact closely intertwined; each can either limit
or unlock possibilities in the other, such as by
accelerating or slowing the flow of migrants.
China’s 2013 National Human Development Report
on Sustainable and Liveable Cities highlighted
how accelerated urban growth is fuelling a rural
and urban divide. It urged a closer examination
of rural-urban links to gain insights into solutions
to address this phenomenon. These might
include, for instance, roads that improve the
flow of goods and people in both directions, or
banking services that permit the ready transfer
of money earned in cities to dependents in
outlying villages.
Asia-Pacific cities differ vastly from each
other. In terms of development trajectories, for
example, Hong Kong, China (SAR); Mumbai
and Singapore are centres of financial services,
while high-tech drives Bangalore, Chennai
and Hyderabad. Many cities in China and the
Republic of Korea are powerhouses of export-oriented
manufacturing. City-specific strategies
are crucial for them, in addition to a national
urban strategy.
In recent years, small and medium-sized
cities have grown rapidly in many Asia-Pacific
countries. They act as economic growth
centres and are important as bridges between
rural and large urban areas, but their potential
has not yet been fully exploited. Many enjoy
advantages such as low rental costs and limited
traffic congestion. An increased focus on them,
through national and city-specific urbanization
strategies, could generate additional economic
growth and greater efficiency. With adequate
attention, dynamic small and medium-sized
cities could eventually play an important role
in reducing income inequality and promoting
balanced territorial development.
Strengthen municipal government capacities.
The capacities of local governments and their
relationships with central authorities do not
consistently reflect the pace of urbanization
or its many demands. The process of defining
appropriate capacities and links can be a complex
one, more so because many countries lack the
luxury of enacting new systems over a longer
period of time.
A review of current relationships is a starting
point in this direction. It should aim for moving
towards a proactive, bottom-up approach that
goes beyond just designing a new territorial
administrative structure. National, regional and
city governments need to have clearly defined
roles grounded in existing capacities, but also
connected to a vision of developing future capacities,
particularly among local governments, as
they are on the frontlines of managing liveable,
productive, inclusive and sustainable cities.
Over time, success will depend strongly on
a national legal foundation, capable institutions
and adequate financial instruments to manage
decentralization and coordinate among different
levels of government. Effective urban service
delivery rests largely on the devolution of appropriate
responsibilities backed by the resources to
pay for them. Institutions of local governance
need requisite technical and managerial skills,
the ability to engage with the public, and strong
capacities to design, implement, monitor and
evaluate local public policies to transform urban
areas into centres of productivity.
Address chronic budget imbalances among local
government. Each city, regardless of size, needs
a well-defined administrative area over which
it has full autonomy, and a clear formula for
intergovernmental transfers. As capacity for local
administration improves, cities can often boost
local resource mobilization, such as through