Why cities? Why now?

I believe climate change and urbanization are the defining issues of our time. As compared to a share of 13 percent in 1900, more than half of the world’s population lives in cities today. And this growth has happened in the span of one century. On the upside: Urbanization and economic development are correlated and there are other benefits of density and agglomeration economies. Production is concentrated in cities, which are also centers of demand and social convergence. No country has achieved high income status without significant urbanization. The Commission on Growth and Development finds that, “There is a robust relationship between urbanization and per capita income: nearly all countries become at least 50 percent urbanized before reaching middle-income status, and all high-income countries are 70-80 percent urbanized.”

However, increasing energy use, accelerating CO2 emissions, and increasing environmental pressures, will accompany GDP growth. Mismanaged urbanization will impose environmental costs that will be difficult to reverse. Unresponsive supplies of infrastructure and affordable housing, and unmet socio-economic needs (health, education, jobs) will result in degeneration and increasing numbers of vulnerable population.

For those interested in urban economics, I refer you to Chapter One of the paper on Urbanization and Growth, produced by the Commission on Growth and Development. You will enjoy reading Box 1.1 (The Role of Finance in Cleaning Up Britain’s “Killer Cities” in the 19^th Century, page 10) and Box 1.2 (How Baron Haussman Financed the Modernization of Paris, page 29). These examples are from the 19^th century when these countries were in the midst of the industrial revolution (as a reference, in 1800 only 3 percent of the world’s population lived in cities). As the report remarks, “Developing countries must accomplish in a few decades what today’s industrialized countries achieved over a century or more”.

Given the scale of the challenge and the very dynamic environment, we will need transformational solutions that are driven by both policy and markets-based approaches. And we will need to leverage expertise, resources, and partnerships, to foster sustainable and inclusive development and management approaches that emphasize efficient use of resources and energy.

Why this Community of Practice for Municipal Practitioners? Why Now?

I enjoyed meeting you at the City Creditworthiness Training Program held during October 14-18, 2013 in Nairobi, Kenya. There are numerous financial tradeoffs and decisions that you make, on a daily basis, to respond to the needs of your varied constituencies and to achieve positive outcomes.  As the Program unfolded, I was increasingly impressed by the collective knowledge in the room and your willingness to share experience and engage in a candid dialogue. This was the origin of the idea to create a safe and trusted space where we could continue to discuss issues and exchange ideas. 

As we cultivate this community, my aim is to tap into our collective experience and expertise. And hopefully, to learn from each other and adapt approaches and solutions that work to the context of our own economy and society.

We have planned the next City Creditworthiness Training Program during April 21-26, 2014 in Seoul, South Korea. I am looking forward to meeting the participants and to introducing them to this conversation.

James Close

Manager, PPIAF