Transcript Responses to the Crisis An Urban Perspective

Judy Baker
The World Bank

Cities are being hit hard
• Decline in fiscal resources
• Local Governments constrained
• Job losses and wage reductions in urban industries
 Manufacturing, construction, financial, service sectors
• Reductions in remittances and reverse migration
• Social unrest
 Stark inequalities are more visible in cities
 Urban areas more prone to protests, riots, social
unrest

Urban Poor are particularly vulnerable
• Previous crises show that urban households felt the
impacts disproportionately
• Heavy reliance on cash economy
• Lack of agricultural production for consumption
• Poor will fall into extreme poverty
• Children, women particularly vulnerable

Cities will be part of the solution
• Important driver of growth and job creation
• Infrastructure investments in cities are critical to
growth, jobs, building lasting assets for economic
and social development

Employment impacts of infrastructure:
 First round – Direct employment
 Second round – demand for construction materials
 Third round – spending by workers
• Use of local resources (labor, material, contractors),
has positive impacts on local economy


Goals: growth, job creation, mitigating poverty
impact, social equity
All can be designed to include labor-intensive
approaches
• Urban Infrastructure Funds (UIFs, MDFs)
 Financing instrument for lending to local governments,
utilities, communities
• Slum Upgrading
 Enormous demand (1 billion in slums, poor conditions, at
great risk- health, environmental)
 Investments in water and sanitation, electricity, roads,
drainage, community and social infrastructure
 Local labor can be used
• Affordable housing
 Bank has had limited involvement
 Microfinance for incremental housing (spur investment
at the household level and create supply of rental
housing)
• Rehabilitation, maintenance and operations
 Often neglected
 Repair of roads, maintaining water systems, drainage,
community facilities
 Investing now reduces costs in the long-run
• Urban Agriculture
 Can provide for consumption, generate income,
employment, positive environmental impacts
 Estimated that 15 percent of food production is in
urban
 Issues of health and sanitation, requires TA
• Slum prevention
 Providing affordable land for purchase
 Can spur private investments in housing, transport
networks

Targeted Safety Nets
• Conditional Cash Transfers
 Challenges in urban; targeting, transitory populations
• Public Works Programs
 Can be very effective in crisis
 Need to ensure that works are relevant, wage rates are
set low
 Example: Urban Poverty Project Indonesia




Under Vulnerability Fund (GFRP, IDA Fast
Track, Rapid Social Response)
Infrastructure spending as a fiscal stimulus
Coordinated Response (IFC, MIGA, WB)
Platform includes:
• Direct Finance
• Parallel Finance
• Concessional Finance (OBA for slum upgrading)


Diagnostic Tools being developed (water and
sanitation, energy, transport, ICT, urban)
Funds being identified (GPPs, donors)