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Responses to the Crisis An Urban Perspective. Judy Baker The World Bank. Impacts in Cities. 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

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Responses to the crisis an urban perspective

Responses to the CrisisAn Urban Perspective

Judy Baker

The World Bank

Impacts in cities
Impacts in Cities

  • 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

Impacts in cities1
Impacts in Cities

  • 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

Crisis responses urban areas
Crisis Responses: Urban Areas

  • 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

Priority urban investments under crisis
Priority Urban Investments under Crisis

  • 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

Priority urban investments under crisis1
Priority Urban Investments under Crisis

  • 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 investments
Urban Investments

  • 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

Other responses
Other Responses

  • 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

Wbg response infrastructure recovery and assets infra
WBG response: Infrastructure Recovery and Assets (INFRA)

  • 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)