STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

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providing adequate infrastructure and urban services, improving the quality of life, making society more equitable, and ensuring environment sustainability. Of course, there are instances where non-democratic leadership is associated with a degree of economic prosperity, but this is the exception rather than the rule. Indeed, non-democratic regimes are coterminous with pathologies such as predation and expropriation, and in the long-run undermine the institutions underlying that prosperity. 18 It has been noted that autocratic governments often distribute benefits to an elite group, while democratic governments distribute benefits more widely to gain the support of the general public. 19 Favourable business environment A business-conducive environment is needed for a vibrant private sector, attracting and retaining investment (including foreign direct), creating jobs and improving productivity – all of which are important for the promotion of growth and for expanded opportunities for the poor. 20 Cities such as Singapore, Hong Kong, Seoul, Busan, Kuala Lumpur, Tokyo, Yokohama and Osaka all feature favourable business environments, with beneficial effects on prosperity. In Africa, it is easier to do business in St Louis (Mauritius), Johannesburg, Kigali, Tunis and Gaborone than in Kinshasa, Conakry, Asmara, N’Djamena or Bangui, which are located in countries that rank low in business environment. Generally, cities in the former group of countries tend to be more prosperous than those in the latter. Rwanda has consciously deployed a business-friendly environment, in the process bringing a higher degree of prosperity to its capital, Kigali. In recent years, Rwanda has undertaken reforms to streamline business procedures, create a favourable legal framework, reduce bureaucracy, and improve service delivery in order to promote both domestic and foreign investment. For instance, in Kigali, registering a business takes only three days and costs less than five per cent of the average income in an environment devoid of corruption, making the city “a very easy place for a global firm to operate”. 21 Access to basic amenities An efficient mass transit system is essential for the seamless movement of people and goods within and between cities, which in turn is vital for the prosperity of cities. In Lagos, the bus rapid transport (BRT) system has attracted new patronage, lowered average fares, creating 1,000 jobs as well as indirect employment for over 500,000 people. 22 97 FACT POLICy From Comparative Advantage to Urban Prosperity A system that ensures that local officials are elected is ranked by local experts as the fifth most important policy-related factor that enhances urban prosperity. The election of local or city officials presupposes the existence of stable democracy through which citizens are empowered to elect and remove their leaders through an open, free and fair ballot. Political institutions like democracy are essential if the conditions for prosperity are to be laid out and nurtured. FACT Across the four developing regions surveyed by UN- Habitat, a favourable business environment is perceived to be most important in Asia – possibly pinpointing the role played by cities in the region, creating an enabling environment for businesses and attracting foreign direct investment. FACT In South Africa, the Gautrain is expected to reduce road traffic between Johannesburg and Pretoria by 25,000- 30,000 cars per day; this is one of the busiest roads in South Africa where traffic increases an average seven per cent every year. 23 In Bogotá, the BRT provides fast and reliable transport for over 1.4 million passengers per day, in the process reducing traffic congestion and enhancing environmental quality. 24 Access to basic amenities and infrastructure, including improved public transport and ICT, is a factor that will enhance the prosperity of any city. This factor is considered as most important in African and Asian cities. Cities with a POLICy favourable business environment and entrepreneurial culture are more likely to be prosperous. In addition to the foregoing, access to basic amenities can deliver major prosperity-enhancing benefits such as: supporting economic growth; contributing to achievement of Millennium Development Goals through improved health and education; improving quality of life especially for youth and women; enhancing environmental quality through improved access to water and sanitation, which in turn reduces morbidity and mortality, and fosters greater productivity.
State of the World’s Cities 2012/2013 SOME IMPEDIMENTS TO THE URBAN PROSPERITy Based on the UN-Habitat local expert survey, there are seven main impediments to urban prosperity, as follows: poor governance and weak institutions; corruption; lack of appropriate infrastructure; high incidence of slums and poverty; high costs of doing business; low levels of human capital; and high crime rates (Figure 3.1.2). The hard-won prosperity gains made by cities in terms of productivity, infrastructures, quality of life, equity, social inclusion and environmental sustainability can be jeopardized or eroded, either individually or collectively, by these impediments. Poor governance and weak institutions What this implies is that countries in Africa and Arab States must do more to improve urban governance and institutions. Indeed, in many developing countries, the institutions required for urban prosperity, if they exist, are weakly developed. Proper institutions are crucial Poor governance formal (Constitution, FACT and weak laws and regulations) and institutions act as major informal (social norms, impediments to higher customs and traditions) urban prosperity. rules that determine how people, organizations and firms make decisions POLICy The impact of poor governance and weak institutions on urban prosperity appears to be more pronounced in cities in Africa and Arabs States, where over 40 per cent of experts cite this factor as the single most important impediment. FACT Corruption is considered by local experts as the second most important hindrance to enhanced urban prosperity. FACT Corruption can be detrimental to urban prosperity in a variety of ways. of an economic, social political nature, maximize potentials and optimize resources. 25 Sound institutions matter for the prosperity of cities, as they provide the superstructure that enables, or otherwise, underlying factors to operate and deliver a maximum of benefits to the largest possible majority of the population. Institutional inadequacies take the form of weak (if not altogether lacking) legal and institutional frameworks26 , disregard for the rule of law, poor enforcement of property rights, excessive 98 bureaucracy, and proliferation of corrupt practices among others. All these are incompatible with urban prosperity. Corruption Local experts surveyed by UN-Habitat unanimously concur that corruption is a major threat to the prosperity of cities. This is in line with the view that corruption is the single largest obstacle to development. 27 Corruption can be found operating on a grand scale, often penetrating the highest policy-making organs of government, including urban authorities, or take a petty sort of nature, involving everyday public and social interactions. Corruption acts a deterrent to direct (and even indirect) foreign investment, as it will influence foreign firms’ decisions to locate in a particular country or city. Corruption acts like a tax, only imposed for private instead of public benefit. 28 One of the reasons that foreign firms are attracted to cities such as Bridgetown (Barbados), Santiago (Chile), Gaborone (Botswana), Doha (Qatar), San Juan (Puerto Rico), St Louis (Mauritius), Kigali (Rwanda) or Victoria (Seychelles) is because they all located in countries with low levels of corruption. Corruption undermines the ability of city authorities to provide fair municipal services, as it distorts planning and allocation processes. Corruption is particularly evident in large-scale urban infrastructure projects, and distorts infrastructure spending in various ways. 29 It can increase public expenditure on new infrastructure, since such capital projects can be easily manipulated by politicians and highlevel officials to obtain bribes. Corruption can reduce the resources normally available to urban authorities for improved provision of basic services such as water, sanitation, education, health and recreation, which are all essential for urban prosperity and the achievement of the Millennium Development Goals, many of which are urban-related. Corruption can also result in shoddy delivery of urban services. When contractors offer bribes to secure contracts, they are likely to cut back and compromise on quality in order to recoup part or whole of the bribe offered. Inadequate infrastructure Cities with deficient infrastructure will be adversely affected on many fronts; they are less likely to be prosperous, sustainable or productive. For instance, inadequate water and sanitation facilities will lead to deterioration of the urban environment, increasing the disease burden of the
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PRODUCTIVITY ENVIRONMENTAL SUSTAINA
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Copyright © United Nations Human S
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Foreword This is a time of crises.
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Acknowledgements CORE TEAM Director
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Chapter 1.1 Conceptualizing Urban P
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State of the World’s Cities 2012/
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Part Two
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Chapter 2.1 Productivity and the Pr
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STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

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