ADB Urban Forum Addresses Financing Asia’s Cities for Sustainable Growth
The Forum also featured the launch of the ADB publication "Competitive Cities in the 21st Century: Cluster Based Local Economic Development".
During their mission to the Philippines, Cities Alliance Manager William Cobbett and Communications Officer Chii Akporji also attended a three-day urban forum organised by the Asian Development Bank (ADB) on the theme “Financing Future Cities.”
Asian cities, some already nation-sized in terms of their economy, were positioned as the new workshops of the world, accounting for more than 80 per cent of regional GDP. Half the world’s megacities with populations of over 10 million are in Asia, with ever accelerating urbanisation adding huge pressures on its secondary cities, which are the fastest growing.
While their economic growth has lifted millions out of poverty, these cities are still home to more than two thirds of the world’s poor, many living in grim city slums and most vulnerable to the impacts of climate change and the onset of increasingly severe natural disasters.
The driving questions for the Forum, given this scenario, were: How can these cities ensure their sustainable and inclusive development, one where all Asian city dwellers can enjoy an improved quality of life with access to basic services, shelter and employment that at the same time is resilient to the impacts of climate change while still the vanguard of national and regional economic growth? What are the infrastructure investment and financing mechanisms available to them to facilitate these?
“We must make an earnest effort to so shape our cities that they become the bearers of our preferred vision of the future.”
--Philippine Vice President Jejomar Binay
Over 500 representatives from ministries of finance and urban development, mayors, financial and urban planners, global banking institutions, consulting firms, NGOs, infrastructure companies, bilateral and multilateral development agencies and academia attended the Forum from 15-17 November 2011.
In his keynote address Philippine Vice President and Chair of the Housing and Urban Development Coordinating Council (HUDCC) Jejomar Binay described urbanisation as “one of the fastest growing phenomena in the world today and one of the most serious challenges confronting governments.
At no other point in our history has mankind had to confront the simultaneous impact of growing population, diminishing finite and non-renewable resources, and ever-increasing destruction of the environment.”
He defined what he called “one of our more exciting interventions” on the part of the Philippine government to be the development of a National Slum Upgrading Strategy (NSUS) side by side with a national resettlement framework:
“Last May, the Cities Alliance approved our Housing And Urban Development Coordinating Council’s proposal to develop such a strategy. Both the national and local governments will now undertake the relevant policies and programs for slum upgrading, under the guidelines provided by that strategy, and supported by Cities Alliance.”
Several financing institutions gave their perspectives on partnerships with cities as well as providing case studies of how cities can access investment finance. Michael Redican of Deutsche Bank, in his presentation titled, “Enabling Frameworks for Financing Competitive Cities” argued that contrary to widespread belief, investors do like to support urban interventions that result in great social benefits and outcomes, although their primary motive may be return on investment. He provided the case study of Partnerships UK and its deployment of Regulatory Asset Base Financing for the water sector in some English cities.
A major highlight of the Forum was the launch of the ADB publication Competitive Cities in the 21st Century: Cluster Based Local Economic Development, co-authored by Professor Brian Roberts of the University of Canberra and the late Dr. Kae Choe of the ADB. The book advocates what it calls a City Cluster Economic Development (CCED) approach to more competitive cities by fostering the development of industry clusters. The competitiveness of a city refers to its ability to produce and market a set of products (goods and services) that represent good value (not necessarily lowest price) in relation to comparable products of other cities.
The CCED approach involves an analytical review and seven guiding steps to assess a city’s economic policy environment and its drivers to competitiveness. Based on analytical results, the creation of an economic competitiveness profile for selected urban economies, an industry cluster, and the creation of a strategic foundation that aims to generate more jobs and income opportunities are suggested.
The intended impact of the CCED approach is the creation of more job and income opportunities, in both the urban and rural areas and its rural hinterland. Singapore, Hong Kong and Bangalore are adjudged as highly competitive cities where the focus of economic development has moved away from an emphasis on low-cost infrastructure, low labor costs, and low taxes, toward highly competitive cities and industry clusters with skilled workers, advanced infrastructure, and innovation.
For the ADB the CCED approach provides a new paradigm for urban economic development – proactively supporting private sector development, promoting productivity of industry, and small and/or medium-sized enterprise (SME) clusters and fostering competitiveness of cities. The plan is that the approach can help ADB’s developing member countries target their investments based on their visions for economic growth and poverty reduction.