Page 1 The Human Settlements Conditions of the World's Urban Poor

Table of Contents Preface

Executive summary

 I. Introduction

 II. The concept and scale of urban poverty

 III. The urban economy

 IV. Trends in the human settlements conditions of the urban poor

 V. Reaching the urban poor

 VI. Reducing the human settlements problem of the urban poor

 VII. Agenda for future work

 VIII. Conclusions and recommendations

I. Introduction

 A. The growth of human settlements

 B. The urbanization of poverty

 C. The challenge of the human settlements conditions of the world s urban poor

II. The concept and scale of urban poverty

 A. Income and housing poverty

 B. The scale and characterization of urban poverty in developing countries

 C. Regional experiences of urban poverty

o 1. Asia

o 2. Sub-Saharan Africa and Latin America and the Caribbean

 D. Concluding perspective

III. The urban economy

Page 2  A. The economic role of cities

 B. Urban bias and post-1980 changes

 C. New directions in urban economic development and policy frameworks

 D. The productivity of housing

 E. Conclusions

IV. Recent trends in the human settlements conditions of the world s urban poor

 A. Latin America and the Caribbean

o 1. Urbanization and the growth of human settlements

o 2. The nature and extent of urban poverty

o 3. Housing and environmental conditions

o 4. Other infrastructural provision

o 5. Land availability

o 6. Summary

 B. Sub-Saharan Africa

o 1. Urbanization and the growth of human settlements

o 2. The nature and extent of urban poverty

o 3. Housing and environmental conditions

o 4. Other infrastructural provision

o 5. Land availability

o 6. Summary

 C. North Africa and the Middle East

o 1. Urbanization and the growth of human settlements

o 2. The nature and extent of urban poverty

o 3. Housing and environmental conditions

o 4. Land availability

o 5. Summary

 D. South Asia

Page 3 o 1. Urbanization and the growth of human settlements

o 2. The nature and extent of urban poverty

o 3. Housing and environmental conditions

o 4. Other infrastructural provision

o 5. Land availability

o 6. Summary

 E. India

o 1. Urbanization and the growth of human settlements

o 2. The nature and extent of urban poverty

o 3. Housing and environmental conditions

o 4. Other infrastructural provision

o 5. Land availability

o 6. Summary

 F. East Asia and the Pacific

o 1. Urbanization and the growth of human settlements

o 2. The nature and extent of urban poverty

o 3. Housing and environmental conditions

o 4. Other infrastructural provision

o 5. Land availability

o 6. Summary

 G. China

o 1. Urbanization and the growth of human settlements

o 2. The nature and extent of urban poverty

o 3. Housing and environmental conditions

o 4. Other infrastructural provision

o 5. Land availability

o 6. Summary

Page 4 V. Reaching the urban poor

 A. The changing international policy context for urban development and shelter

 B. The sites-and-services programme in Zimbabwe

o 1. The mobilization of financial resources and the question of affordability

o 2. The social impact of the programme

o 3. Conclusions

 C. Brazil: the FUNACOM programme in Sao Paulo

o 1. The mobilization and allocation of resources

o 2. The organizational arrangements and the process of self-management

o 3. The impact of the FUNACOM programme

o 4. Conclusions

 D. An evaluation of the Employees Housing Programme (EHP) in the Republic of Korea

o 1. The resource base for the EHP

o 2. The social impact of the EHP

o 3. Conclusions

 E. India: An evaluation of a series of Slum Improvement Programmes

o 1. The scope of the Slum Improvement Projects (SIPs)

o 2. The social impact of the SIP projects

o 3. Conclusions

 F. Conclusions: Assessing the experience of projects/programmes aimed at improving the human settlements conditions of the world s urban poor

VI. Reducing the human settlements problem of the urban poor

 A. The scope for public/private partnerships

 B. The potential for employment generation in human settlements development through construction activity

 C. The potential for employment generation from HBEs

 D. Public participation and capacity-building

 E. Increasing the access to residential land

Page 5  F. Improving access to housing finance

 G. Improving access to appropriate building materials

 H. Improving infrastructure and sanitation

 I. The effect of building and planning codes and regulations on the human settlements conditions of the urban poor

 J. Renting as opposed to ownership: Options for the urban poor

VII. Agenda for future work

 A. Countering urban poverty

 B. Shelter, good governance and the enabling role

 C. Specific policy areas in need of development

o 1. Improving the effectiveness of the land market

o 2. Encouraging the development of institutional housing finance for the urban poor

o 3. The enhancement of local materials production

 D. Strengthening shelter strategies for the poorest groups

 E. Harnessing the benefits of research

 F. The future role of local authorities

 G. The role of CBOs and NGOs

 H. The role of the private commercial sector

VIII. Conclusions and recommendations

 A. The incidence of urban poverty

 B. The human settlements conditions of the world s urban poor

 C. The shortcomings of past policies and initiatives for improving the conditions of the urban poor

 D. The key principles of the GSS and the new agenda for development

 E. Summary of recommendations

o 1. The supply of residential land

o 2. Sources of institutional housing finance

o 3. Improving access to, and affordability of, building materials for the urban poor

Page 6 o 4. The opportunities for employment generation

o 5. Encouraging the availability of accommodation for rent

o 6. Acknowledgement of the role of shelter also as a workplace

o 7. Encouraging partnerships between governments, local authorities and communities

Bibliography

Page 7 The Human Settlements Conditions of the World's Urban Poor

List of boxes Box 1. Housing careers among the poor

Box 2. Living conditions of the urban poor

Box 3. Troops tread gently as takeover of Rio shanty towns gains pace

Box 4. SAPs and housing investment in Uganda

Box 5. The slum environment in Bangladesh

Page 8 Box 1. Housing careers among the poor

Preamble

The visual imagery of housing poverty in urban areas in developing countries is clear and well known. Fetid slums are widespread in the form of overcrowded tenements and ramshackle buildings erected by the poor on patches of invaded land. Living conditions are frequently unhealthy and households compete and struggle for work, for meagre incomes, for basic food, and for access to shelter and inadequate urban services. This visual imagery expresses part of the reality, and it is so plain and obvious that neither the relationship between poverty and housing nor the way that housing careers are pursued is adequately documented. Although the literature on housing in developing countries has numerous examples of sociological surveys of slums, of upgraded slums with improved urban services, and of sites-and-services projects, few authors go beyond the factual reporting of statistical categories which shed some light on generalized living conditions. Consequently the housing literature has insufficient analysis of the causal connections between housing poverty and income, and it lacks a perspective on changing housing careers among the poor.

By the late 1980s it was becoming increasingly obvious to international aid donors, to policy-makers, and to housing observers that, notwithstanding extensive efforts to improve the living conditions of the poor, the level of effective achievement in relation to need and expectations was disappointing. In their review of low-income settlements, Hardoy and Satterthwaite (1989) reported the realities on such issues as low-income access to housing policy performance, the health-housing relationship, squatting, eviction, social segregation, and pollution. They found large gaps between what actually happened in these matters and what policy-makers said should happen. The legal and institutional structure of government and its housing agencies were not coping; local government was deficient in resources and responsibilities; and in some instances the authorities bulldozed squatter settlements and repressed the poor. Amidst living conditions where crowding, disrepair and insanitary environments prevailed, land rights were, nevertheless, traded in active commercial markets, even though many settlements had their legitimacy in question among the urban governing authorities.

It is in the context of the foregoing that the housing careers of the poor have been experienced in the 1950 to 1995 period. Below follows some examples of housing careers and life experiences in developing countries.

Monica Cheboi was born in 1968 in the rural area of the Rift Valley in Western Kenya. As a child she lived in a rural self-help house without piped water, windows and an adequate roof. She married young and had a son in 1986. When her husband deserted the family Monica relocated to Mombasa on the Kenyan coast, leaving her son in the care of her parents in the Rift Valley. She had a job in the Kenyan telecommunications industry, but was retrenched under structural adjustment policies in the early 1990s. Alone, Monica Cheboi first rented a room in a crowded courtyard house in Mombasa, later moving to a three-roomed rented house in a forest clearing some 15 km from Mombasa. Her work was trading in second-hand clothing in the city markets, but her job in the Kenyan telecommunication sector was later reinstated. Housing is important in Monica's life, and she has been willing to make sacrifices on other things in order to have private and individualized accommodation, absorbing over 30 per cent of her income.

Carmen Gomez was born in 1950 in San Miguel Allende, some 80 miles north-west of Mexico City. In her adult life Carmen's housing has been in self-help dwellings. Like Monica Cheboi, Carmen's marriage broke up and she was left to bring up her two children working in an art gallery in San Miguel Allende, a town of 100,000 population. Over a period of some 20 years Carmen and her grown children (who have families) have added rooms to their self-help (squatter) house, to meet their needs and to fit

Page 9 their life styles. By the 1990s the municipal authorities had provided sanitation, electricity and water services to San Rafael, the squatter area where Carmen lives some 2 km from the centre of San Miguel Allende. It is estimated that some 70 per cent of Mexican households live in self-help housing, thereby living rent-free and spending parts of their savings on incremental improvements to the dwelling. Since the mid-1970s Mexican authorities have been more disposed to 'regularize' land tenure, purchasing land and selling it with legal title to the occupants. Housing improvements are thus a central feature in the lives of many poor Mexican households.

Sim Sock Lee was born in Singapore in 1969. Apart from the years 1990 to 1992 when Sock Lee studied for her postgraduate degree in Australia, she has lived in a public housing apartment built by the Singaporean government's housing agency, the Housing and Development Board. The Housing and Development Board built housing estates in high-rise form near the central area and in new towns. The housing was at cross-subsidized rents for the poor and in home-ownership tenure for moderate and middle-income groups. Sock Lee's family were able to buy their apartment from the Housing and Development Board using their credits in the mandated social security fund, the Central Provident Fund. Some 80 per cent of Singaporean families live in Housing and Development Board housing which is sanitary, modern and well integrated with urban development. Sim Sock Lee had a good education in the Singaporean education system, including in the Economics Department at the National University of Singapore. Following her postgraduate education in Australia, Sock Lee obtained an appointment at the Singapore Polytechnic, teaching economics and finance. She is now preparing for marriage and the purchase of a Housing and Development Board apartment.

Source: Pugh, C. in personal communications with Monica Cheboi, Sim Sock Lee and Carmen Gomez, and study programmes of housing in Kenya, Mexico and Singapore.

Page 10 Box 2. Living conditions of the urban poor

UNCHS (Habitat) and ILO have earlier detailed "the horrors which face many millions of people every morning when they wake from a mosquito-disturbed sleep. Their night may have been spent on a mat in a room with four, six, or up to ten others, with inadequate ventilation (either because windows are too small or because they have been boarded up to prevent burglary as poor preys on poor), and an earthen floor which allows dampness to rise. Their morning ablutions will comprise either a wash from tepid and cloudy water in a tin or a queue to use the only bathroom in a tenement house shared by 50 or 100 people. The toilet queue is too long, so a visit to the rubbish dump to defecate in the morning mist, or to the Augean public latrine where privacy is marginally better, is in order. The working clothes are rescued from their place over a string extended above the bed and the man sets off on the routine of queuing for crowded transport to his place of employment many miles away, often without breaking his fast.

His wife is left to feed the children on last night's left-overs or some rice porridge cooked in cloudy water over a charcoal stove on the floor by the door, then to do the household chores and fetch water, before she clears a small space and begins the daily business of preparing food for city workers, or laundering clothes, or smoking fish, or sewing up garments for a manufacturer to export to Europe. At dusk she cooks the day's meal, squatting on the floor before the round of washing her children from a soapy bowl in the space outside the room. On wet days, the whole household is caked in mud, on dry days, the dust blows into the food and water, carrying cysts and parasites to plague them. The earth on which they tread harbours parasites, eager to enter a human host through bare feet, the dusty air they breathe brings hepatitis A and meningitis, the fumes within it come from the sulphuric acid plant at the copper mine or the chemical works down the hill, adding coughs to malarial fever. Their water is a breeding ground for mosquito larvae, salmonella, shigella, and E. coli, sometimes in as high a density as found in the human intestine .. waiting to strike the children down with malaria or diarrhoea. Their neighbours on the steep slopes suffer added danger from land-slips in the heavy rain; down by the river, flooding is regular and brings added dangers from sewage and other pollutants. Such, and similar, are the living conditions of poor people in the cities and towns of developing countries."

Source: UNCHS/ILO, 1995.

Page 11 Box 3. Troops tread gently as takeover of Rio shanty towns gains pace

"The Brazilian army's intervention in the slum suburbs of Rio de Janeiro moved into top gear at the weekend when more than 1,000 troops sealed off two of the city's biggest shanty towns.

In Mangueira, home to one of Rio's most famous samba schools, three tanks pointed their gun-barrels at the densely populated hillsides as the soldiers entered the favela. One soldier was shot and slightly wounded by a lookout of the local drugs gang, the Commando Vermelho (Red Command).

Fifty-two people were arrested and taken for questioning to a special operations centre, where 24 prominent judges have been detailed to supervise the army's interrogations.

Tanks were also placed at the entrances to Dende, on Governor's Island, which houses the city's international airport. Locals were forced to kneel at gunpoint as they were searched for drugs and arms. Dende is another established fiefdom of the Red Command.

The occupations followed limited interventions on Friday evening in five smaller favelas bordering middle-class districts of the city, to put a halt to the normally thriving weekend cocaine trade.

The haul of the army operation, for which a total of 65,000 troops have been placed on alert, has so far been limited. In Mangueira, two pistols, two revolvers, a grenade and 7 lb of marijuana were seized on Saturday. Nor have any of the top drug gangsters yet been taken. Indeed the prolonged 'psychological' phase of army mobilisation which preceded the weekend interventions appears to have been designed to allow the top drug-runners to escape and thus reduce the likelihood of armed confrontations in the densely populated favelas.

The army command stressed in its first communiqué of the operation that its success or failure should be measured not by arms captured or drugs seized but by the eventual decline in the level of violence.

After soldiers barricaded the main entrances to the favelas, police special forces conducted a sweep of the narrow alleyways before the army moved in to set up control points.

The army promises to have completed the pacification of the favelas by Christmas, restoring the state's presence in districts which have been for several years no-go areas under the control of the drug traffickers, and paving the way for unspecified 'social services' in the shanty towns.

So far the troops have met no significant resistance and have not opened fire. Residents said the soldiers were asking permission to enter and search houses rather than forcing their way in.

The political opposition, headed by the Workers' Party leader Luis Inacio Lula da Silva, has not opposed the mobilisation, the biggest since the previous military regime left power in 1985, although several senior members have expressed strong reservations about the decision to enter the favelas.

"It is a lot of fireworks for little results", said a prominent parliamentarian, Jose Fortunati. "The real causes of the violence are not being touched. The corrupt structure of the Rio police is being left as it was".

Several lawyers have criticised the detention of people who could not produce identification, but others have supported the action.

"The population is living in a state of total insecurity", the president of the São Paulo Institute of

Page 12 Lawyers, Rubens Approbato Machado, said."

Source: Guardian, 21 November 1994.

Page 13 Box 4. SAPs and housing investment in Uganda

The context for adjustment

The ascendancy to power of Amin in 1971 ushered in an era of economic mismanagement and repression. Rival tribes were decimated; intellectuals and entrepreneurs terrorised; and natural resources squandered. The 'Liberation War' in 1979 inflicted further destruction on property, infrastructure and human life.

The aftermath of war was characterised by more civil strife, political intrigue, social unrest and economic disequilibria. In the meantime, however, the population over the decade had increased by 36 per cent, rural-urban migration intensified and a series of demoralized public sector services providing health, eduction, utilities and shelter was overwhelmed.

External factors were also negative. Uganda suffered the full brunt of oil price increases in 1973/1974; the adverse terms of trade in primary products reduced income from trade, and the political isolation of the country in the late 1970s was followed by the effects of global recession in the 1980s. It was against this background that Uganda embarked upon its Structural Adjustment Programme.

The adjustment programme

Adjustment in Uganda may be divided into two phases, the first between 1981 and 1984 and the second following 1987. The first phase involved exchange realignment, elimination of price controls, the removal of subsidies, the increase of interest rates and the institution of produce price incentives. While there was commendable success in terms of GDP growth, balance of payments and reduced inflation (and smuggling) the programme could not be sustained through 1984 due to scarce financial inflows, intensifying civil war and over reliance on the exchange rate.

The second phase involved the 1987 Economic Recovery Programme, supported by IMF's Structural Adjustment Facility and an Economic Recovery Credit from the International Development Association (IDA). This programme was enhanced in 1989 and a second IDA Economic Recovery Credit was approved in 1990.

The elements involved in the programme included liberalization of the foreign exchange market; the introduction of user charges in public institutions and on utilities; liberalized commodity trade; the privatization of some parastatals; the 'retrenchment' of some civil servants and the 'demobilisation' of soldiers. It has included periodic devaluation of the currency and the removal of price controls. Reforms in revenue collection have been effected and tough monetary and fiscal measures instituted.

Impacts on the shelter sector:

The effect of the SAP and other macro-economic measures has been to create an economic environment which has adversely impacted on the shelter sector in a number of ways:

By reducing public subsidies to agriculture and reducing support for publicly provided rural services, the SAP has fuelled rural-urban migration effectively, leading to a doubling of the urban population in twenty years. The effect of the SAP, therefore, has been to compound the problems associated with rapid urbanization.

Currency devaluations and inflation (40 per cent in 1991/1992) have increased the cost of construction materials. Even locally produced materials, such as cement, have increased four or five times in price between 1988 and 1993. The SAP has encouraged the process of land 'commodification'. Land

Page 14 prices have spiralled, sometimes more than doubling in price between 1989 and 1991.

The imposition of tight monetary controls and in particular the adherence to a 'positive' interest rate (i.e. a rate higher than inflation), has rendered the terms and conditions for borrowing money prohibitive to all but a few.

The effects of these increases in costs (in materials, land, and the cost of borrowing), together with the general financial climate of job losses and contracting investment, have stifled investment in the shelter sector, thereby negating the effectiveness of a shift towards a private-sector led shelter strategy.

The SAP has further undermined (indeed accelerated), the incapacity of state organizations to perform their role in the shelter delivery process. It has effectively discontinued the direct provision of accommodation (through the National Housing and Construction Corporation); it has reduced the capacity of State agencies to provide essential services such as water, electricity, sanitation and infrastructure; and by increasing user charges for these services, it is reducing access for the urban poor. The overall effect of the policies and austerity measures introduced by the Uganda Government throughout the 1980s, a series of measures strongly influenced by the IMF, has been to create circumstances in the shelter sector where the provision of adequate housing has become a luxury item for the Ugandan citizen.

Source: Nuwagaba, 1994.

Page 15 Box 5. The slum environment in Bangladesh

The overwhelming first impression in a slum in Bangladesh is of dirt, and the slum dwellers themselves see the dirt as a big problem. When asked about their problems they usually mention dirt first and in almost every Slum Improvement Programme, the people spoke about dirt having been their major problem before the project came.

There are almost no paved roads or footpaths in the slums and in the rainy season mud is often knee-deep or worse. There is no organized drainage in slum areas so rivulets of dirty water and raw sewage trickle across paths and into living space, and stagnant filthy pools collect in low-lying areas. During the rainy season the raw sewage becomes indistinguishable from the surrounding mud.

There is no garbage collection, and there are no rubbish bins, so garbage is strewn everywhere and left in festering heaps. Slum dwellers often work as trash pickers or in some other kind of recycling and bring garbage to their houses to carry on their work. Huge numbers of flies are attracted by the garbage.

In sweeper colonies (where the lower-caste population lives), pigs are usually kept, and they run free throughout the slum area. In smaller towns, where slum conditions are less congested, chickens, goats, and even cows are kept. They are rarely penned in, and there is little concern about their faeces, although cow dung is often collected and used as fuel.

Source: Haaza (not dated).

Page 16 The Human Settlements Conditions of the World's Urban Poor

List of figures Figure 1. World population (1950-2025)

Figure 2. Average annual population increase, urban and rural areas (1955-2025)

Figure 3. Average annual population increase, by region (1995-2025)

Figure 4. Average annual increase in number of households, by region (1995-2025)

Figure 5. Conceptualizing poverty

Figure 6. Share of population living in informal settlements, selected cities of sub-Saharan Africa

Page 17 Figure 1. World population (1950-2025)

Source: Based on United Nations, 1994. Graphics by I. Jensen.

Page 18 Figure 2. Average annual population increase, urban and rural areas (1955-2025)

Source: Based on United Nations, 1994. Graphics by I. Jensen.

Page 19 Figure 3. Average annual population increase, by region (1995-2025)

Source: Based on United Nations, 1994. Graphics by I. Jensen.

Page 20 Figure 4. Average annual increase in number of households, by region (1995-2025)

Source: Based on United Nations, 1994. Graphics by I. Jensen.

Page 21 Figure 5. Conceptualizing poverty

Source: UNCHS, 1994.

Page 22 Figure 6. Share of population living in informal settlements, selected cities of sub-Saharan Africa

Source: Based on Mbogua, 1994.

Page 23 The Human Settlements Conditions of the World's Urban Poor

List of tables Table 1. Urban population and level of urbanization, by region (1950-2025)

Table 2. Natural population increase and urban growth, by region (1975-2015)

Table 3. Labour force and production, by sector and region (1965-1990/1992)

Table 4. Income and production, by sector and region (1970-1993)

Table 5. Population growth rates, household growth rates, and household size, by region (1995-2025)

Table 6. Impact of economic reform on workers in four major reform patterns (types of transitions)

Table 7. Poverty in developing countries (1985-2000)

Table 8. Urban poverty in developing countries (1988)

Table 9. Poverty in developing countries, urban and rural areas, by region

Table 10. Profile of human deprivation: Urban-rural differences in access to services, by region

Table 11. Various aspects of poverty in four Asian metropolises (1980-1982)

Table 12. Economic growth, selected countries of Latin America (1980-1992)

Table 13. Urban population and level of urbanization, selected countries of Latin America and the Caribbean (1975-2025)

Table 14. Urban population growth, selected countries of Latin America and the Caribbean (1965-2025)

Table 15. Population growth, selected cities of Latin America and the Caribbean (1965-2015)

Table 16. The growth of self-help housing, selected cities of Latin America

Table 17. Urban population and level of urbanization, selected countries of sub-Saharan Africa (1975-2025)

Table 18. Urban population growth, selected countries of sub-Saharan Africa (1965-2025)

Table 19. Population growth, selected cities of sub-Saharan Africa (1965-2015)

Table 20. Distribution of water supplies and toilet facilities, Accra, Ghana

Page 24 Table 21. Urban population and level of urbanization, selected countries of North Africa and the Middle East (1975-2025)

Table 22. Urban population growth, selected countries of North Africa and the Middle East (1965-2025)

Table 23. Population growth, selected cities of North Africa and the Middle East (1965-2015)

Table 24. Housing investments, Turkey

Table 25. Urban housing need and production, Turkey (1984-1989)

Table 26. The growth of squatter population and dwellings, Turkey (1950-1990)

Table 27. Urban population and level of urbanization, selected countries of South Asia, including India (1975-2025)

Table 28. Urban population growth, selected countries of South Asia, including India (1965-2025)

Table 29. Population growth, selected cities of South Asia (1965-2015)

Table 30. Urban poverty projections, Bangladesh (1990-2000)

Table 31. Katchi abadis in Pakistan, by province (1988)

Table 32. Dhaka Metropolitan Areaa housing subsystems by location, income group and land tenure.

Table 33. Housing programmes under the 1.5 Million Houses Programme, Sri Lanka (targets and performance)

Table 34. Utility services available in katchi abadis, Lahore, Pakistan

Table 35. Population growth, selected cities of India (1965-2015)

Table 36. Estimates of urban poverty, India (1970s and 1980s)

Table 37. Estimating the housing shortage, India, millions (1961-1991)

Table 38. Select indicators on the housing situation, India (1961-1991)

Table 39. Type of housing structures, by expenditure class, India (1983)

Table 40. Prevalence and cost of rental housing, by expenditure class, India

Table 41. Urban population and level of urbanization, selected countries of East Asia and the Pacific, including China (1975-2025)

Table 42. Urban population growth, selected countries of East Asia and the Pacific, including China (1965-2025)

Table 43. Population growth, selected cities of East Asia and the Pacific (1965-2015)

Page 25 Table 44. Official urban poverty lines, Indonesia (1976-1990)

Table 45. Urban housing shortage, Indonesia

Table 46. Quality of urban housing stock, Indonesia (1961-1983)

Table 47. Population growth, selected cities of China (1965-2015)

Table 48. Urban household income distribution (per cent of all households), China (1982-1988)

Table 49. Incomes and expenditures per capita, China (1982-1992)

Table 50. Incidence of urban poverty, China (1985-1987)

Table 51. Urban dwelling conditions, per household and capita, China (1982-1988)

Table 52. Urban household dwelling conditions (per cent), China (1982-1988)

Table 53. Basic conditions of urban public utilities, China (1965-1992)

Table 54. Housing units constructed under the EHP, Republic of Korea (1990/1991)

Page 26 Table 1. Urban population and level of urbanization, by region (1950-2025) Region Urban population (millions) Share of population living in urban areas (per cent) 1950 1975 1995 2000 2025 1950 1975 1995 2000 2025 Latin America & Caribbean 69 196 358 401 601 41.6 61.3 74.2 76.6 84.6 Sub-Saharan Africa 20 70 184 233 661 11.3 21.0 30.8 34.0 51.4 North Africa & Middle East 27 90 208 246 465 26.3 45.3 59.3 62.5 75.3 South Asia 11 33 82 105 284 9.9 16.8 25.4 28.4 47.6 India 62 132 251 292 630 17.3 21.3 26.8 28.6 45.2 East Asia & Pacific 36 104 223 264 486 16.8 27.0 39.3 42.7 59.0 China 61 160 369 443 832 11.0 17.3 30.3 34.5 54.5 Developing countries 286 785 1,675 1,983 3,957 17.0 26.3 37.4 40.5 56.9 Industrialized countries 452 753 909 943 1,108 54.1 68.8 73.4 74.7 82.4 World total 738 1,538 2,584 2,926 5,065 29.3 37.7 45.2 47.5 61.1 Source: Based on United Nations, 1994

Page 27 Table 2. Natural population increase and urban growth, by region (1975-2015) Region Percentage of urban population growth due to natural population increase 1975-1995 1995-2015 Latin America & Caribbean 65 70 Sub-Saharan Africa 55 55 Middle East & North Africa 60 65 South Asia 50 45 India 60 45 East Asia & Pacific 45 45 China 30 25 Developing countries 50 50 Note: The estimates are based on the assumption that the rates of natural population increase in rural and urban areas are identical. Source: Calculations based on United Nations, 1994.

Page 28 Table 3. Labour force and production, by sector and region (1965-1990/1992) Regiona Percentage of labour force in Agriculture Industry Services 1965 1990-1992 1965 1990-1992 1965 1990-1992 Latin America & Caribbean 45 25 22 25 33 50 Sub-Saharan Africa 78 67 9 8 14 25 Arab States 59 40 15 21 26 39 South Asia 69 51 13 17 16 28 India 73 62 12 11 15 27 East Asia 52 24 20 34 28 42 South East Asia & Pacific 70 58 10 14 20 28 China 81 73 8 14 11 13 Developing countries 71 58 12 15 17 27 Industrialized countries .. 10 .. 32 .. 58 World total .. 48 .. 18 .. 34 a: The regions used in this table differs slightly from those used in the rest of this report: Djibouti; Somalia and Sudan are classified as part of "Arab States" rather than "sub-Saharan Africa"; The Islamic Republic of Iran is classified as part of "South Asia" rather than "North Africa and the Middle East"; Turkey and Cyprus are classified as part of "Europe" rather than "North Africa and the Middle East"; "East Asia and the Pacific" is split in "East Asia" and "South East Asia and the Pacific"; and Israel is classified as an industrialized rather than a developing country. Source: Based on UNDP, 1995.

Page 29 Table 4. Income and production, by sector and region (1970-1993) Region GNP/capita 1993 ($US) GDP, 1993 Percentage of GDP from Billions of ($US) Per cent of world total Agriculture Industry Services 1970 1993 1970 1993 1970 1993 Latin America & Caribbean2,950 1,406 6.08 12 .. 35 .. 53 .. Sub-Saharan Africa 520 269 1.17 27 20 28 33 46 47 Middle East & North Africaa 1,742 780 3.37 ...... South Asiaa 340 88 0.38 41 27 18 23 37 52 India 300 225 0.98 45 31 22 27 33 41 East Asia & Pacifica 1,816 1,005 4.35 32 14 31 36 37 49 China 490 426 1.84 34 19 38 48 28 33 Developing countriesa 998 4,199 18.17 .. 19b .. 34b .. 57b Industrialized countriesa 15,594 18,913 81.83 ...... World total 4,420 23,113 100.00 ...... a: Calculated on the basis of other data from the same source. b: Data from UNDP, 1995 Source: Based on World Bank, 1995 (primarily); UNDP, 1995 (see note b).

Page 30 Table 5. Population growth rates, household growth rates, and household size, by region (1995-2025) Region Average annual population growth rate (per cent) Average annual household growth rate (per cent) Average number of persons per household 1995- 2005 2005- 2015 2015- 2025 1995- 2005 2005- 2015 2015- 2025 1995 2025 Latin America & Caribbean 1.59 1.43 1.28 2.70 2.55 2.37 4.31 3.32 Sub-Saharan Africa 2.80 2.72 2.64 2.54 2.70 2.86 5.99 5.57 North Africa & Middle East 2.23 2.10 1.90 2.86 2.84 2.74 5.59 4.72

South Asia 2.54 2.27 2.06 2.66 2.60 2.41 6.58 6.13 India 1.70 1.53 1.33 2.32 2.29 2.16 5.62 4.69 East Asia & Pacific 1.55 1.36 1.20 2.55 2.38 2.22 4.48 3.54 China 0.91 0.78 0.75 2.52 2.56 2.42 3.67 2.46 Developing countries 1.72 1.59 1.48 2.54 2.52 2.41 4.72 3.81 Industrialized countries 0.36 0.31 0.28 1.15 1.08 0.96 2.73 2.27 World total 1.44 1.34 1.25 2.09 2.08 1.98 4.07 3.43 Source: Based on United Nations, 1994; UNCHS, 1996.

Page 31 Table 6. Impact of economic reform on workers in four major reform patterns (types of transitions) Type of worker Industrial postsocialista Latin Americanb Sub-Saharan Africanc Asian agrariand Formal sector - + - - Informal sector + - + + Urban + - - + Rural - + + + Women +/- - - + Skilled workers + + + + Unskilled workers - - - - Estimated number of workers affected (millions) 195 155 70 1,000 a: Characterized by radical institutional reform, huge drops in GDP, and substantial redeployment of labour across sectors and from the public to the private sector. Typical of former centrally planned economies. b: Combines stabilization and substantial liberalization, especially of trade. Associated with moderate redeployment of labour and some decline in GDP. Consistent with the experience of most Latin American countries, but also of some countries in the Middle East, North Africa as well as the Philippines. c: Normally preceded by macroeconomic decline. Characterized by profound restructuring within a small modern sector and by a relatively weak rural supply response. Typical of sub-Saharan Africa. d: Marked by steady growth in GDP, some institutional reform, and (over time) potentially a large redeployment of labour. Typical pattern in primarily agrarian economies such as China, India and Viet Nam. Note: A plus sign indicates a gain, and a minus sign a loss, relative to the average worker. Source: World Bank, 1995a, pp. 98, 99, 107.

Page 32 Table 7. Poverty in developing countries (1985-2000) Region Percentage of population below the poverty linea Number of poor (millions) 1985 1990 2000 1985 1990 2000 Latin American & Caribbean 22.4 25.5 24.9 87 108 126 Sub-Saharan Africa 47.6 47.8 49.7 184 216 304 Middle East & North Africa 30.6 33.1 30.6 60 73 89 South Asia (incl. India) 51.8 49.0 36.9 532 562 511 East Asia (incl. China) 13.2 11.3 4.2 182 169 73 All developing countries 30.9 30.2 24.3 1,046 1,128 1,103 a: The poverty line used ($370 annual income per capita in 1985 purchasing power parity dollars) is based on estimates of poverty lines from a number of countries with low average incomes. In 1990 prices, the poverty line would be approximately $420 annual income per capita. The estimates for 1985 have been updated from those in World Bank (1990) to incorporate new data and to ensure comparability across years. Source: Adapted from World Bank, 1992.

Page 33 Table 8. Urban poverty in developing countries (1988) Region Number of poor (millions) Incidence of urban poverty (per cent) Latin American & Caribbean 77.3 27 Sub-Saharan Africa 55.5 42 North Africa & Middle East 59.5 34 South and East Asiaa 136.5 23 All developing countries 328.8 28 a: Including India and China. Source: World Bank, 1988a.

Page 34 Table 9. Poverty in developing countries, urban and rural areas, by region Region Percentage of population in absolute povertya(1980-1990) Number of poorb(1980-1990) (millions) Total Urban Rural Total Urban Rural Latin American & Caribbean 40 31 61 180 95 85 Sub-Saharan Africa 54 23 65 300 35 260 Middle East & North Africa 25 22 30 65 30 35 South Asia 52 26 59 155 25 125 India 40 33 42 350 85 260 East Asia & Pacific East Asia 6 .. 11 5 .. 5 South East Asia & Pacific 35 24 40 165 35 130 China 9 0 13 105 0 110 Total developing countries 31 28c 37 1,300 300 1,000 a: The number of people living in absolute poverty is based on absolute poverty lines in the countries, expressing in monetary terms the income or expenditure level below which a minimum, nutritionally adequate diet plus essential non-food requirements are not affordable" b: Calculated on the basis of other data from the same source. c: The number of poor calculated on the basis of regional percentages as well as the total number of urban poor stated in the source, indicate that 21 per cent rather than 28 per cent of the urban population in developing countries are living in absolute poverty. Source: Based on UNDP, 1994.

Page 35 Table 10. Profile of human deprivation: Urban-rural differences in access to services, by region Regiona Population (millions) without access to Life expectancy at birth 1992 (years) Health servicesb 1985-93 Safe waterc 1988-93 Sanitationd 1988-93 Urbane Total Urbane Total Urbane Total Latin America & Caribbean .. .. 30 90e 70 150e 68.6 Sub-Saharan Africa 30 200 40 270 60 290 51.3 Arab States 0 40 10 60 60 70 62.8 South Asia .. 150 10 100 30 210 59.9 India 0 130 40 190 90 650 60.4 East Asia & Pacific .. 100e 40 240e 50 300e .. East Asia .. 0e 0 20e 0 60e 71.5 South East Asia & Pacific .. 100e 40 220e 50 240e 63.9 China 0 120 0 370 140 990 68.5 Developing countries .. .. 180 1,290 500 2,660e 63.2 Industrialized countries ...... 74.4 World total ...... 65.7 a: The regions used in this table differs slightly from those used in the rest of this report: Djibouti; Somalia and Sudan are classified as part of "Arab States" rather than "sub-Saharan Africa"; The Islamic Republic of Iran is classified as part of "South Asia" rather than "North Africa and the Middle East"; Turkey and Cyprus are classified as part of "Europe" rather than "North Africa and the Middle East"; "East Asia and the Pacific" is split in "East Asia" and "South East Asia and the Pacific"; and Israel is classified as an industrialized rather than a developing country. b: Health services access: "The percentage of the population that can reach appropriate local health services on foot or by local means of transport in no more than one hour." c: Safe water access = "The percentage of the population with reasonable access to safe water supply, including treated surface water, or untreated but uncontaminated water such as from springs, sanitary wells and protected boreholes." d: Sanitation access = "The percentage of the population with reasonable access to sanitary means of excreta and waste disposal, including outdoor latrines and composting." e: Calculated on the basis of other data from the same source. Source: Based on UNDP, 1995.

Page 36 Table 11. Various aspects of poverty in four Asian metropolises (1980-1982) Itema Manila Jakarta Calcutta Madras Total population (millions of persons) 6.4 8.0b 9.2 5.0 Area (km²) 646 550 800 1,170 Urban density (persons per hectare) 98 200 115 43 Urban growth rate (per cent) 3.8 4.0 3.0c 3.5b Average household size (number of persons) 5.4 5.0 5.1 5.2 Average annual income ($ per capita per year) 296c 132e 104b 104b Absolute poverty level ($ per capita per year) 266d 124 132 132 Percentage of population below absolute poverty level 35 60 60 45 Percentage of population in substandard housing (slums) 45 40 33 60 Percentage living in squatter or illegal settlements 30 .. .. 25 Education levels (literacy rates) 85 78 65 66 Percentage of labour force in the informal sector 50 65 54 60 Percentage with access to water (home connection) 43 47 48 40 Percentage with daily garbage collection 70 25 55 78 Percentage with access to human waste disposal systems 60 42 45 58 a: Although the data are drawn from authoritative and reliable sources, they may not be internationally comparable because of the lack of standardized definitions and concepts used by different countries in collecting data. The data are, nonetheless, useful to describe orders of magnitude, to indicate trends and to characterize certain significant differences among countries. b: 1975; c: 1980; d: 1982; e: 1984. Source: AsDB, 1994, p. 192.

Page 37 Table 12. Economic growth, selected countries of Latin America (1980-1992) Country Annual growth in GDP (per cent) 1980-1984 1985-1989 1990-1992 Argentina -3.0 -2.3 1.1 Brazil -0.5 2.5 -2.6 Chile -0.1 4.8 4.2 Colombia -1.5 3.0 1.3 Mexico -0.6 -1.2 1.4 Peru -2.4 -2.5 -3.8 Venezuela -3.5 -0.9 6.1 Source: UNECLAC (quoted in Gilbert, 1994).

Page 38 Table 13. Urban population and level of urbanization, selected countries of Latin America and the Caribbean (1975-2025) Country Urban population (thousands) Per cent of population living in urban areas 1975 1995 2000 2025 1975 1995 2000 2025 Brazil 66,065 126,599 141,979 204,791 61.2 78.3 81.2 88.9 Mexico 36,948 70,535 79,580 117,222 62.8 75.3 77.7 85.8 Colombia 14,434 25,526 28,447 41,532 60.7 72.7 75.2 84.1 Argentina 21,029 30,463 32,762 43,083 80.7 88.1 89.4 93.4 Peru 9,319 17,175 19,437 30,653 61.5 72.2 74.5 83.5 Venezuela 9,911 20,281 22,828 33,791 77.8 92.8 94.5 97.2 Chile 8,101 11,966 12,962 17,684 78.4 83.9 84.7 89.4 Ecuador 2,926 6,698 7,833 13,456 42.4 58.4 61.9 75.6 Cuba 5,977 8,389 8,896 10,882 64.2 76.0 78.1 86.0 Guatemala 2,211 4,404 5,394 13,389 36.7 41.5 44.1 61.8 Dominican Republic 2,289 5,051 5,789 8,890 45.3 64.6 68.1 79.6 Bolivia 1,975 4,505 5,432 10,370 41.5 60.8 65.2 79.0 Haiti 1,069 2,266 2,775 7,076 21.7 31.6 34.9 53.9 South America 137,578 249,332 278,575 406,678 64.2 78.0 80.5 87.9 Central America 44,719 86,011 98,150 157,262 57.2 68.0 70.3 79.6 Caribbean 13,751 22,184 24,465 36,768 50.5 62.0 64.3 74.1 Total 196,048 357,527 401,190 600,708 61.3 74.2 76.6 84.6 Source: Based on United Nations, 1994.

Page 39 Table 14. Urban population growth, selected countries of Latin America and the Caribbean (1965-2025) Country Average annual urban population growth Per cent Thousands 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 2015-2025 1995-2005 2005-2015 2015-2025 Brazil 4.52 3.74 2.88 2.15 1.56 1.14 3,004 2,617 2,198 Mexico 4.55 3.58 2.99 2.25 1.60 1.27 1,757 1,520 1,393 Colombia 3.84 3.19 2.59 2.07 1.61 1.23 580 543 477 Argentina 2.17 2.03 1.71 1.41 1.16 0.92 459 428 376 Peru 4.59 3.49 2.72 2.40 1.94 1.50 461 462 425 Venezuela 4.56 4.21 3.09 2.23 1.67 1.25 500 457 394 Chile 2.81 2.11 1.83 1.53 1.31 1.10 196 193 183 Ecuador 4.34 4.74 3.71 3.00 2.31 1.75 230 231 214 Cuba 2.97 1.85 1.57 1.07 0.84 0.70 94 82 73 Guatemala 3.60 3.21 3.80 4.17 3.95 3.21 222 313 363 Dominican Republic 5.54 4.48 3.59 2.54 1.81 1.36 144 128 113 Bolivia 2.80 4.22 4.20 3.58 2.76 2.12 190 200 196 Haiti 3.92 3.62 4.04 4.12 3.95 3.53 113 161 208 South America 3.83 3.35 2.68 2.11 1.61 1.22 5,781 5,310 4,643 Central America 4.45 3.55 3.10 2.51 1.96 1.62 2,425 2,367 2,333 Caribbean 3.39 2.57 2.27 1.90 1.70 1.50 460 491 508 Total 3.94 3.34 2.76 2.19 1.70 1.34 8,666 8,168 7,485 Source: Based on United Nations, 1994.

Page 40 Table 15. Population growth, selected cities of Latin America and the Caribbean (1965-2015) City City population (thousands) Average annual population growth (per cent) 1995 2015 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 São Paulo, Brazil 16,417 20,783 4.8 3.1 2.0 1.5 0.9 Mexico City, Mexico 15,643 18,786 4.9 2.6 0.8 1.0 0.8 Buenos Aires, Argentina 10,990 12,376 1.9 1.2 0.7 0.7 0.5 Rio de Janeiro, Brazil 9,888 11,554 2.9 1.5 0.8 0.7 0.8 Lima, Peru 7,452 10,526 5.1 3.9 3.4 2.2 1.3 Bogotá, Colombia 5,614 7,677 5.3 3.2 3.1 2.1 1.1 Santiago, Chile 5,065 6,255 3.0 2.5 2.0 1.3 0.8 Belo Horizonte, Brazil 3,899 5,540 5.3 3.8 3.2 2.3 1.2 Porto Alegre, Brazil 3,349 4,648 4.0 3.3 2.8 2.1 1.2 Recife, Brazil 3,168 4,381 2.9 2.2 2.7 2.0 1.2 Guadalajara, Mexico 3,165 4,209 4.8 3.2 2.2 1.7 1.2 Salvador, Brazil 2,819 4,134 4.4 3.7 3.5 2.5 1.3 Fortaleza, Brazil 2,660 4,034 4.3 3.8 3.9 2.8 1.4 Source: Based on United Nations, 1994.

Page 41 Table 16. The growth of self-help housing, selected cities of Latin America City Year City population (thousands) Squatter population (thousands) Squatters as per cent of city population Mexico City 1970 7,314 3,438 47 1976 11,312 5,656 50 1990 15,783 9,470 60 Lima, Peru 1969 3,003 805 24 1981 4,601 1,150 25 1991 4,805 1,178 37 Buenos Aires, Argentina 1970 8,353 434 5 1980 9,766 957 10 Caracas, Venezuela 1964 1,590 556 35 1971 2,200 867 39 1985 2,742 1,673 61 Source: Gilbert, 1994.

Page 42 Table 17. Urban population and level of urbanization, selected countries of sub-Saharan Africa (1975-2025) Country Urban population (thousands) Per cent of population living in urban areas 1975 1995 2000 2025 1975 1995 2000 2025 Nigeria 14,676 43,884 55,751 146,948 23.4 39.3 43.3 61.6 Ethiopia 3,061 7,371 9,516 37,929 9.5 13.4 14.9 29.9 Zaire 6,860 12,766 15,865 52,129 29.5 29.1 31.0 49.8 South Africa 12,314 21,073 24,550 48,673 48.0 50.8 53.1 68.6 United Rep. of Tanzania 1,602 7,230 9,608 30,344 10.1 24.4 28.2 48.3 Kenya 1,775 7,817 10,347 32,616 12.9 27.7 31.8 51.5 Sudan 3,033 6,915 8,742 27,075 18.9 24.6 27.3 46.4 Uganda 933 2,670 3,504 13,818 8.3 12.5 14.2 28.8 Ghana 2,955 6,333 7,901 21,934 30.1 36.3 39.2 57.7 Mozambique 905 5,481 7,800 21,468 8.6 34.3 41.1 61.1 Madagascar 1,253 4,003 5,308 17,378 16.1 27.1 30.8 50.5 Côte d'Ivoire 2,168 6,211 7,869 23,611 32.1 43.6 47.0 64.1 Cameroon 2,022 5,938 7,521 19,504 26.9 44.9 49.3 66.9 Zimbabwe 1,202 3,619 4,502 10,874 19.6 32.1 36.0 55.4 Malawi 402 1,505 1,894 7,083 7.7 13.5 15.6 31.7 Angola 1,087 3,569 4,729 14,799 17.8 32.2 36.2 55.6 Mali 1,000 2,909 3,821 12,277 16.2 27.0 30.4 50.0 Burkina Faso 394 2,809 4,386 14,376 6.4 27.2 37.5 66.4 Zambia 1,686 4,071 4,807 11,467 34.8 43.1 44.7 59.9 Somalia 1,164 2,382 3,004 9,760 21.3 25.8 27.9 45.9 Niger 507 1,558 2,078 8,160 10.6 17.0 19.2 36.5 Senegal 1,643 3,512 4,280 10,505 34.2 42.3 45.1 62.2 Rwanda 175 483 610 2,367 4.0 6.1 6.7 15.0 Total 69,925 183,530 232,756 660,919 21.0 30.8 34.0 51.4 Source: Based on United Nations, 1994.

Page 43 Table 18. Urban population growth, selected countries of sub-Saharan Africa (1965-2025) Country Average annual urban population growth Per cent Thousands 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 2015-2025 1995-2005 2005-2015 2015-2025 Nigeria 5.89 5.80 5.46 4.74 4.14 3.46 2,585 3,488 4,234 Ethiopia 4.68 4.43 4.56 5.40 5.95 5.49 511 976 1,570 Zaire 4.12 2.59 3.72 4.68 5.18 4.54 741 1,327 1,869 South Africa 2.77 2.63 2.82 3.15 3.00 2.35 765 987 1,008 United Rep. of Tanzania9.98 9.13 6.54 5.65 4.88 4.17 529 764 1,018 Kenya 7.78 8.21 7.18 5.61 4.91 4.12 567 830 1,083 Sudan 6.52 4.05 4.37 4.90 4.90 4.17 424 684 908 Uganda 6.00 4.85 5.95 5.58 5.76 5.55 193 345 577 Ghana 3.77 3.45 4.32 4.56 4.43 3.69 356 537 667 Mozambique 9.04 11.27 7.61 6.40 4.02 3.57 471 492 635 Madagascar 5.18 5.88 6.08 5.70 5.10 4.25 297 449 592 Côte d'Ivoire 7.56 5.58 5.23 4.79 4.65 4.22 370 570 800 Cameroon 7.68 5.83 5.24 4.71 4.03 3.40 347 456 554 Zimbabwe 6.44 5.83 5.50 4.33 3.79 3.08 191 249 285 Malawi 7.56 6.49 7.16 4.89 5.73 5.27 92 181 285 Angola 5.31 6.05 6.20 5.54 4.84 4.20 255 369 499 Mali 4.90 5.22 5.75 5.49 4.99 4.28 205 311 420 Burkina Faso 4.32 8.59 12.08 8.29 5.07 3.48 342 398 417 Zambia 7.18 5.24 3.78 3.40 3.64 3.50 162 244 334 Somalia 3.50 4.61 2.69 4.86 5.10 4.48 145 247 347 Niger 7.37 6.04 5.51 5.93 5.87 5.23 121 213 326 Senegal 3.32 3.92 3.82 4.03 3.87 3.26 170 241 288 Rwanda 7.12 5.95 4.47 4.96 5.63 5.73 30 57 101 Total 5.08 4.93 4.96 4.79 4.44 3.86 10,953 15,956 20,830 Source: Based on United Nations, 1994.

Page 44 Table 19. Population growth, selected cities of sub-Saharan Africa (1965-2015) City City population (thousands) Average annual population growth (per cent) 1995 2015 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 Lagos, Nigeria 10,287 24,437 10.3 5.9 5.8 5.2 3.7 Kinshasa, Zaire 4,214 9,855 8.2 4.8 4.2 4.1 4.6 Abidjan, Côte d'Ivoire 2,797 6,611 11.8 5.6 5.4 4.7 4.1 Cape Town, South Africa 2,671 4,508 3.5 3.7 3.3 2.8 2.5 Khartoum, Sudan 2,429 5,782 6.4 5.6 4.7 4.5 4.4 Maputo, Mozambique 2,227 5,760 7.5 7.4 7.4 6.3 3.5 Addis Ababa, Ethiopia 2,209 5,850 4.5 4.8 4.0 4.6 5.4 Luanda, Angola 2,207 5,548 7.8 6.4 5.9 5.1 4.3 Nairobi, Kenya 2,079 5,361 6.9 5.2 6.3 5.3 4.4 Dakar, Senegal 1,986 4,080 5.1 5.1 4.7 3.9 3.4 Source: Based on United Nations, 1994.

Page 45 Table 20. Distribution of water supplies and toilet facilities, Accra, Ghana Percentage of households Source of drinking water: Inside plumbing 46 Water vendor and truck 23 Natural sources 13 Other 18 Type of toilet: Flush toilet 16 Pit latrine 27 Pan/bucket 20 Othera 37 a: Includes those without a toilet as well as those with facilities other than those mentioned. Source: Ghana Living Standards Survey, 1989 - cited by Songsore, 1992.

Page 46 Table 21. Urban population and level of urbanization, selected countries of North Africa and the Middle East (1975-2025) Country Urban population (thousands) Per cent of population living in urban areas 1975 1995 2000 2025 1975 1995 2000 2025 Islamic Republic of Iran 15,278 39,716 46,171 92,491 45.8 59.0 61.9 74.9 Egypt 16,877 28,170 32,054 60,519 43.5 44.8 46.4 62.2 Turkey 16,651 42,598 50,701 79,102 41.6 68.8 74.8 87.0 Algeria 6,460 15,591 18,586 33,675 40.3 55.8 59.7 74.1 Morocco 6,520 13,071 15,096 26,917 37.7 48.4 50.9 66.2 Iraq 6,765 15,258 18,308 36,435 61.4 74.6 77.1 85.4 Saudi Arabia 4,257 14,339 17,388 37,618 58.7 80.2 81.8 88.2 Syrian Arab Republic 3,352 7,676 9,508 23,311 45.1 52.4 54.9 69.6 Yemen 1,147 4,877 6,550 19,674 16.4 33.6 38.4 58.4 Tunisia 2,797 5,093 5,806 9,784 49.9 57.3 59.9 73.6 North Africa 34,199 66,744 77,401 143,323 42.6 50.4 52.9 68.2 Middle East 55,918 141,619 168,274 321,311 47.1 64.7 68.1 78.9 Total 90,117 208,363 245,675 464,634 45.3 59.3 62.5 75.3 Source: Based on United Nations, 1994.

Page 47 Table 22. Urban population growth, selected countries of North Africa and the Middle East (1965-2025) Country Average annual urban population growth Per cent Thousands 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 2015-2025 1995-2005 2005-2015 2015-2025 Islamic Republic of Iran 5.00 5.48 4.31 3.26 3.09 2.23 1,500 1,946 1,832 Egypt 2.77 2.61 2.58 2.69 2.72 2.34 856 1,131 1,248 Turkey 4.59 4.72 4.90 3.13 1.81 1.32 1,537 1,142 972 Algeria 3.71 4.88 4.13 3.38 2.46 1.96 615 598 595 Morocco 4.38 3.91 3.17 2.80 2.39 2.13 415 458 511 Iraq 5.29 4.53 3.78 3.56 2.94 2.33 639 728 751 Saudi Arabia 8.63 8.05 4.50 3.74 3.28 2.78 637 789 902 Syrian Arab Republic 4.64 4.11 4.35 4.33 3.93 3.06 405 552 607 Yemen 5.94 7.40 7.61 5.77 4.66 3.86 367 493 620 Tunisia 4.34 3.23 2.85 2.57 2.22 1.81 147 161 161 North Africa 3.66 3.59 3.21 2.95 2.59 2.20 2,252 2,604 2,802 Middle East 5.14 5.13 4.39 3.38 2.75 2.17 5,588 6,162 6,220 Total 4.55 4.57 3.99 3.25 2.70 2.18 7,840 8,766 9,021 Source: Based on United Nations, 1994.

Page 48 Table 23. Population growth, selected cities of North Africa and the Middle East (1965-2015) City City population (thousands) Average annual population growth (per cent) 1995 2015 1965-1975 1975-1985 1985-19951995-2005 2005-2015 Cairo, Egypt 9,656 14,494 2.8 2.4 2.3 2.1 2.0 Istanbul, Turkey 7,817 12,345 5.0 4.2 3.8 3.2 1.5 Teheran, Islamic Republic of Iran 6,830 10,211 5.5 3.1 1.6 1.7 2.3 Baghdad, Iraq 4,478 7,324 5.5 3.0 2.0 2.6 2.4 Algiers, Algeria 3,702 6,276 4.2 4.2 4.2 3.4 2.0 Alexandria, Egypt 3,577 5,546 2.5 2.4 2.4 2.3 2.2 Casablanca, Morocco 3,289 5,114 3.9 3.2 3.2 2.5 2.0 Tripoli, Libyan Arab Jamhirya 3,272 6,044 11.1 11.1 5.4 3.6 2.6 Ankara, Turkey 2,826 4,095 4.6 2.8 2.3 2.3 1.5 Riyadh, Saudi Arabia 2,576 5,117 12.0 7.1 6.3 4.1 2.8 Damascus, Syrian Arab Republic 2,052 4,047 4.4 3.5 2.6 3.4 3.5 Esfahan, Islamic Republic of Iran 1,915 4,618 6.8 2.5 7.0 5.8 3.2 Source: Based on United Nations, 1994.

Page 49 Table 24. Housing investments, Turkey Year Housing investment as percentage of GNP total fixed capital investment 1976 3.97 17.44 1978 4.70 21.67 1980 4.20 21.55 1982 2.42 12.82 1984 2.57 14.40 1986 3.72 16.10 1988 6.34 26.27 Source: State Planning Organisation, 1990 - quoted in Turel, 1991

Page 50 Table 25. Urban housing need and production, Turkey (1984-1989) Year Urbanahousing need (number of dwelling units) Urbanahousing production Number of dwelling unitsb Percentage of housing need Percentage of public sector 1984 272,000 122,580 45.1 4.4 1985 280,000 118,200 42.2 2.7 1986 290,000 168,600 58.1 3.6 1987 298,000 191,109 64.1 3.4 1988 305,000 205,483 67.3 2.8 1989 318,000 246,164 77.4 .. Totals 1,763,000 1,052,000 59.7 3.4c a: Municipalities with populations of more than 2,000. b: According to occupancy permits. c: 1985-1988 only. Source: Tokman, 1990.

Page 51 Table 26. The growth of squatter population and dwellings, Turkey (1950-1990) Year Number of squatter dwellings Estimated squatter population Percentage of urban population living as squatters Urban areas Ankara Urban areas Ankara Urban areas Ankara 1950 .. 12,000 .. 62,400 .. 21.8 1955 50,000 .. 250,000 .. 4.7 .. 1960 240,000 70,000 1,200,000 364,000 16.4 56.0 1965 430,000 .. 2,150,000 .. 22.9 .. 1970 600,000 144,000 3,000,000 748,000 23.6 60.6 1980 1,150,000 275,000 5,750,000 1,450,000 26.1 72.4 1990 1,750,000 350,000 8,750,000 1,750,000 33.9 58.3 Source: Based on Keles, 1990 - quoted in Aksoylu, 1994.

Page 52 Table 27. Urban population and level of urbanization, selected countries of South Asia, including India (1975-2025) Country Urban population (thousands) Per cent of population living in urban areas 1975 1995 2000 2025 1975 1995 2000 2025 India 132,272 250,681 291,901 629,757 21.3 26.8 28.6 45.2 Pakistan 19,733 48,742 61,257 161,579 26.4 34.7 37.9 56.7 Bangladesh 7,108 22,034 28,603 78,430 9.3 18.3 21.3 40.0 Nepal 649 2,996 4,148 13,959 5.0 13.7 16.7 34.3 Afghanistan 2,040 4,026 5,920 18,059 13.3 20.0 22.2 39.9 Sri Lanka 2,998 4,108 4,722 10,660 22.0 22.4 24.2 42.6 Total (excl. India) 32,592 82,079 104,878 283,540 16.8 25.4 28.4 47.6 Total (incl. India) 164,864 332,760 396,779 913,297 20.2 26.4 28.5 46.0 Source: Based on United Nations, 1994.

Page 53 Table 28. Urban population growth, selected countries of South Asia, including India (1965-2025) Country Average annual population growth Per cent Thousands 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 2015-2025 1995-2005 2005-2015 2015-2025 India 3.58 3.51 2.98 3.15 3.25 2.96 9,125 12,869 15,913 Pakistan 3.90 4.47 4.78 4.64 4.27 3.32 2,800 3,984 4,499 Bangladesh 6.95 6.36 5.28 5.21 4.35 3.42 1,457 1,943 2,240 Nepal 5.98 8.38 7.52 6.40 5.16 4.24 257 365 474 Afghanistan 6.09 1.87 5.07 6.54 4.68 4.18 356 440 607 Sri Lanka 3.06 1.27 1.91 3.06 3.64 2.99 145 239 272 Total (excl. India) 4.58 4.61 4.85 4.89 4.33 3.43 5,029 6,992 8,125 Total (incl. India) 3.77 3.74 3.41 3.61 3.56 3.10 14,154 19,862 24,039 Source: Based on United Nations, 1994.

Page 54 Table 29. Population growth, selected cities of South Asia (1965-2015) City City population (thousands) Average annual population growth (per cent) 1995 2015 1965-1975 1975-19851985-19951995-20052005-2015 Karachi, Pakistan 9,863 20,616 5.2 4.8 4.5 4.0 3.5 Dacca, Bangladesh 7,832 18,964 7.8 8.6 5.9 5.2 3.9 Lahore, Pakistan 5,085 10,767 4.3 3.7 3.9 4.0 3.6 Chittagong, Bangladesh 2,410 5,212 1.9 4.9 3.9 4.0 3.9 Kabul, Afghanistan 2,034 5,384 6.0 6.3 5.1 5.7 4.3 Faisalabad, Pakistan 1,875 4,106 5.2 3.5 3.9 4.2 3.8 Source: Based on United Nations, 1994.

Page 55 Table 30. Urban poverty projections, Bangladesh (1990-2000) Year Total urban population (millions) Population below poverty line Per cent Thousands Poor Ultra Poor Poor Ultra Poor 1990 22.9 50 30 11,450 6,870 2000 37.3 45 25 16,760 9,000 Source: CUS, 1990.

Page 56 Table 31. Katchi abadis in Pakistan, by province (1988) Province Number of katchi abadis Total land State land Private land Population (millions) Punjab 902 9,376 8,875 501 1.6 Sind 1,300 26,000 24,300 1,700 3.8 North West Frontier Province 55 2,826 2,826 .. 0.3 Baluchistan 65 4,943 1,509 3,434 0.3 Total 2,322 43,145 37,510 5,635 6.0 Source: Government of Pakistan, not dated.

Page 57 Table 32. Dhaka Metropolitan Areaa housing subsystems by location, income group and land tenure. Type of housing sub-system Location where the type is predominant Predominant income groupb Predominant structure/house type Predominant type of land tenure Population density (persons/acre) Share of city population (per cent)d Share of city's residential land (per cent)d Squatters (including pavement dwellers and vagrants) Inner, intermediate and peripheral zones (along the rail line between Candaria and Mahakhali, University areas, Kamlapur, etc.) EP Most rudimentary shacks and shanties Illegal de facto (mostly P) 1500-8500 2.5 0.5 Refugee Rehabilitation Colonies/squatter resettlement camps (Government Assisted Housing) Intermediate and Fringe Zones, Mohammadpur, Mirpur, Bashabo, Dattapara (Tongi), Chanpara (Demra) EP, PO, some LM Kutchashacks, thatched houses, semi-pucca single storey P, L, D 300-1500 6 2 Bustees: private rental type (rental houses, row houses, rental mass units) Extensively located in inner, intermediate and fringe zones EP, PO Kutchathatch, semi-pucca F, P, D 1000-2500 35 11 Bustees: private owner-occupied houses Extensively located in inner, intermediate and fringe zones PO, LM Kutchathatch, semi-pucca,pucca F 500-2000 5

Conventional urban tenement slums, rental and owner-occupied Mostly inner city zone PO, LM Semi-puccaandpucca buildings, old and dilapidated, (1 storey plus) F 300-1500 15 4 Employees housing (industrial, institutional, private households Mostly suburban and intermediate zone PO, LM Kutcha, semi-pucca, pucca, flats P, F 300-5000 7 2 Other low-income housing (free lodging, rural commuter, etc.) Diverse locations PO Varieties Various, mainly F 100-300 1.5 0.5 Sub-total 70 20 a: The study area, Dhaka Metropolitan Area, also includes population of Dattapara and Demra Squatter Resettlement Camps. The total area covered under Dhaka Metropolitan Area in this study is 60 square miles with an estimated population of 4 million for early 1987. Total residential land is estimated at 30 square miles. b: EP = Extreme-poor income group; PO = Poor income group; LM = Lower-middle income group. c: P = Public land; L = Leasehold under consideration; F = Freehold; D = Disputed land. d: The data in the last two columns are estimates. Source: Islam, 1992.

Page 58 Table 33. Housing programmes under the 1.5 Million Houses Programme, Sri Lanka (targets and performance) Name of Sub-programme Targets Programme performance during its first three years ('000 units) Notes (original target) Status by January 1996a('000 units) Agency responsible for reaching target Income groups Number of units ('000) 1990 1991 1992 Built Shortfall from target NHDA Rural Housingb Rural poor 450 25 30 31 Assistance through grants, loans and advice 300 -150 NHDA NHDA Urban Housingb Urban poor middle 150 5 5 .. 6 0 4 1 As rural, but more community than individual orientated. Flats in Colombo 50 2 -93 NHDA Disaster Housing All effected 140 33 14 8 Special assistance to relieve impact of disasters (natural and man-made) 100 0 NHDA/MRRSD/REPIA Provincial Housing Poor, middle 100 16 15 44 Land and service provision, some housing loans 100 0 NHDA and Provincial Councils Mahaweli Housing Poor, middle 100 4 3 2 Settlement associated with irrigation programme 20 -80 Mahaweli Plantations Housing Poor, middle 100 18 13 5 Now part of the privatisation of plantations 30 -70 Plantations Housing and Social Welfare Trustc Employee Housing All employees 120 2 1 2 Individual housing through use of pension funds 10 -110 NHDA Individual Housingd All incomes150 58 57 69 Effectively a residual group, it includes all of the informal sector 300 +150 NHDA Private Developers Middle, upper 25 0 0 0 Commercial units produced by developers 1 -24 Private Sector Co-operative Housing Poor 160 39 76 29 Loans through co-operative societies, banks 150 -10 Co-operatives and banks Total 1,500 201 209 190 1,063 -437 a: Estimate as of March 1993 by study team. b: These components of the Million Houses Programme reached 260,000 households in rural areas and 40,000 households in urban areas. c: This programme target is likely to be achieved but over a slightly longer time frame. d: Technical assistance given to private sector informal self-build housing programme is also included. Source: Adapted from Fernando, 1994.

Page 59 Table 34. Utility services available inkatchi abadis, Lahore, Pakistan Type of services Per cent of households Water supply Water tap; inside house 80 Community water tap 8 Hand-pump inside house 12 Latrines Sewerage system 25 Pit latrines 20 Dry conservancy 55 Drainage Sewerage system 24 Pucca drains 63 Katcha or no drains 13 Domestic fuel Piped gas 8 Cylinder gas 4 Kerosene oil 41 Wood or coal 42 Cow-dung cakes, etc. 5 Electricity Connection available 97 Connection not available 3 Garbage disposal Refuse depots accessible 32 Refuse depots inaccessible 17 Refuse depots not available 51 Source: Katchi abadis survey, 1988 - cited in Zaidi, 1990.

Page 60 Table 35. Population growth, selected cities of India (1965-2015) City City population (thousands) Average annual population growth (per cent) 1995 2015 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 Bombay 15,093 27,373 3.5 3.7 4.3 3.5 2.6 Calcutta 11,673 17,621 2.5 2.3 1.7 1.8 2.4 Delhi 9,882 17,553 4.5 4.3 3.9 3.2 2.6 Madras 5,906 9,451 4.9 2.7 2.3 2.2 2.5 Hyderabad 5,343 10,663 3.6 4.3 5.3 4.2 2.9 Bangalore 4,749 8,324 4.3 4.8 3.4 3.0 2.7 Ahmedabad 3,688 6,124 3.8 3.3 2.6 2.5 2.7 Pune (Poona) 2,940 5,407 4.2 4.0 4.0 3.4 2.8 Lucknow 2,029 4,057 2.2 3.4 5.0 4.0 3.0 Based on United Nations, 1994.

Page 61 Table 36. Estimates of urban poverty, India (1970s and 1980s) Source of estimate 1970-1971 1983 1987-1988 Urban Total Urban Total Urban Total Planning Commission estimate Per cent .. .. 28.10 37.40 19.40 29.20 Direct all-India estimate Per cent 45.89 55.05 38.33 46.46 36.52 42.70 Millions 50.07 301.76 65.96 333.27 74.96 336.42 Aggregation of State estimates Per cent 46.17 56.25 39.74 48.11 37.76 45.85 Millions 49.94 305.90 68.39 343.26 76.57 357.83 Note: Estimates are computed taking the per capita consumption expenditure of Rs. 56.64 as the poverty line at 1973-1974 prices for urban areas. Source: Minhas and others, 1991 - quoted in Kundu, 1993.

Page 62 Table 37. Estimating the housing shortage, India, millions (1961-1991) Particulars 1961 1971 1981a 1991 Urban Total Urban Total Urban Total Urban Total Population 78.9 439.2 109.8 547.4 157.7 685.2 217.6 846.3 Number of Households 14.8 83.5 19.0 97.0 30.7 124.8 39.5 151.0 Total housing stock 14.1 79.3 18.5 93.0 28.0 116.7 38.7 147.2 Pucca 6.5 15.0 11.8 26.0 18.1 36.9 28.2 61.3 Semi-Pucca 4.9 29.0 4.3 31.9 6.8 40.1 6.9 45.6 Kutcha 2.8 35.3 2.4 35.1 3.1 39.7 3.7 40.4 Usable housing stockb 11.4 68.8 16.1 81.7 24.9 102.7 .. .. Housing shortagec 3.6 15.2 2.9 14.5 7.0 23.3 4.8 18.5 a: The figures for population, households and housing stock in 1981 include the estimated values for those states where the population census could not be conducted. The number of households in urban areas is obtained after adjusting for congestion, the number of actual households being 29.3 million. b: Usable housing stock =pucca + semi-pucca + serviceable Katcha. c: Housing shortage = Number of households - usable housing stock. Source: NBO, 1990; Government of India (1992a).

Page 63 Table 38. Select indicators on the housing situation, India (1961-1991) Particulars 1961 1971 1981 1991 Urban Total Urban Total Urban Total Urban Total Population/housing stock 5.64 5.55 5.88 5.89 5.70 5.87 4.18 4.34 Population/usable housing stock 7.04 6.43 6.76 6.64 6.74 6.75 .. .. Persons per room 2.62 2.62 2.78 2.77 2.53 2.71 .. .. Households per housing unit 1.06 1.05 1.06 1.07 1.06 1.07 1.32 1.29 Size of households 5.33 5.26 5.73 5.64 5.20 5.55 5.51 5.60 Households in one-room units (per cent) 53.05 49.00 50.10 47.82 45.80 44.72 39.55 40.49 Vacant houses (per cent) 7.23 5.80 7.47 6.31 6.41 5.33 8.53 6.36 Houseless population (per cent) 0.37 0.29 0.43 0.36 0.39a 0.34a 0.08 0.06 a: These figures exclude Assam. Source: UNCHS, 1993c; Government of India (1992a).

Page 64 Table 39. Type of housing structures, by expenditure class, India (1983) Monthly per capita expenditure class (Rs.) Types of housing structure Average floor area per capita (m²) Kutcha Semi-Pucca Pucca 0-30 20.1 24.2 54.1 3.3 30-40 46.6 34.6 18.5 4.3 40-50 41.7 35.3 22.8 3.9 50-60 38.4 33.7 27.7 4.5 60-70 33.6 37.6 28.2 4.6 70-85 28.7 35.7 35.1 5.0 85-100 25.5 32.1 41.7 5.5 100-125 20.6 31.8 47.1 6.7 0-125 averagea 26.5 33.6 39.7 5.7 All expenditure classes 16.4 25.7 57.2 7.8 a: The expenditure classes with a monthly expenditure below Rs. 125 per month comprise 40 per cent of the total urban population. Source: Kundu, 1993 (based on NSSO, 1987).

Page 65 Table 40. Prevalence and cost of rental housing, by expenditure class, India Monthly per capita expenditure class (Rs.) Average per capita monthly rent (Rs.) Households living in rented houses (per cent) Monthly expenditure spent on actual rent (per cent) Actual Imputed 0-30 3.9 8.1 10.9 13.0 30-40 3.5 6.8 14.8 9.9 40-50 3.7 6.4 19.0 8.2 50-60 4.3 7.8 15.9 7.9 60-70 4.8 8.7 19.8 7.4 70-85 6.2 10.0 23.6 8.0 85-100 6.9 12.1 27.5 7.5 100-125 8.8 16.4 30.8 7.8 0-125 averagea 7.0 12.5 26.1 .. All classes 17.3 24.0 37.6 .. a: The expenditure classes with a monthly expenditure below Rs. 125 per month comprise 40 per cent of the total urban population. Source: Kundu, 1993 (based on NSSO, 1987).

Page 66 Table 41. Urban population and level of urbanization, selected countries of East sia and the Pacific, including China (1975-2025) Country Urban population (thousands) Per cent of population living in urban areas 1975 1995 2000 2025 1975 1995 2000 2025 China 160,047 369,492 443,057 831,880 17.3 30.3 34.5 54.5 Indonesia 26,259 69,992 85,819 167,393 19.4 35.4 40.3 60.7 Viet Nam 9,021 15,479 18,399 46,135 18.8 20.8 22.3 39.1 Philippines 15,294 36,614 44,005 77,622 35.6 54.2 59.0 74.3 Thailand 6,244 11,787 13,555 28,756 15.1 20.1 21.9 39.1 Myanmar 7,282 12,188 14,640 35,759 23.9 26.2 28.4 47.3 Republic of Korea 16,947 36,572 40,651 50,987 48.0 81.3 86.2 93.7 D.P.R of Korea 9,356 14,650 16,392 25,094 56.5 61.3 63.1 75.2 Malaysia 4,616 10,814 12,820 22,942 37.7 53.7 57.5 72.7 Cambodia 731 2,123 2,809 8,567 10.3 20.7 24.1 43.5 South-East Asia 72,214 163,131 196,671 395,326 22.3 33.7 37.3 55.4 East Asia 31,179 58,670 64,908 85,327 53.8 75.6 79.0 87.0 Pacific Islands 895 1,668 1,977 4,847 20.1 24.2 25.8 40.5 Total (excl. China) 104,288 223,469 263,556 485,500 27.0 39.3 42.7 59.0 Total (incl. China) 264,335 592,961 706,613 1,317,380 20.1 33.1 37.2 56.1 Source: Based on United Nations, 1994.

Page 67 Table 42. Urban population growth, selected countries of East Asia and the Pacific, including China (1965-2025) Country Average annual urban population growth Per cent Thousands 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 2015-2025 1995-2005 2005-2015 2015-2025 China 1.89 4.19 4.36 3.45 2.69 2.09 14,912 15,783 15,544 Indonesia 4.50 5.24 4.81 3.90 2.83 2.13 3,258 3,299 3,183

Viet Nam 3.66 2.65 2.82 3.66 4.01 3.45 669 1,068 1,328

Philippines 4.21 4.40 4.52 3.47 2.42 1.73 1,486 1,390 1,224

Thailand 4.71 3.88 2.58 2.93 3.23 2.89 395 589 714

Myanmar 3.69 2.16 3.06 3.86 3.94 3.16 561 840 957

Republic of Korea 6.26 4.56 3.28 1.84 0.94 0.56 734 429 279

D.P.R. of Korea 5.28 2.26 2.28 2.12 1.75 1.56 341 343 360

Malaysia 4.97 4.54 4.16 3.23 2.42 1.97 405 401 407

Cambodia 0.95 4.35 6.61 5.51 4.77 4.01 151 215 278

South-East Asia 4.16 4.18 4.13 3.65 2.97 2.37 7,029 7,937 8,253

East Asia 5.26 3.64 2.79 1.81 1.13 0.84 1,151 834 681

Pacific Islands 5.91 3.26 3.06 3.56 3.82 3.48 70 108 141

Total (excl. China) 4.49 4.02 3.75 3.19 2.58 2.09 8,250 8,878 9,075

Total (incl. China) 2.83 4.12 4.12 3.35 2.65 2.09 23,162 24,661 24,619

Source: Based on United Nations, 1994.

Page 68 Table 43. Population growth, selected cities of East Asia and the Pacific (1965-2015) City City population (thousands) Average annual population growth (per cent) 1995 2015 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 Seoul, Republic of Korea 11,641 13,139 7.0 3.5 2.0 0.9 0.3 Jakarta, Indonesia 11,500 21,170 3.9 4.5 4.5 3.8 2.4 Metro Manila, Philippines 9,280 14,711 5.9 3.3 3.0 2.9 1.8 Bangkok, Thailand 6,566 10,557 4.0 3.2 2.2 2.3 2.5 Hong Kong 5,574 5,849 2.1 2.5 1.0 0.4 0.1 Pusan, Republic of Korea 4,082 4,584 5.9 3.8 1.6 0.7 0.5 Yangon, Myanmar 3,851 7,407 4.3 4.7 3.3 3.3 3.4 Ho Chi Minh, Viet Nam3,555 6,439 3.8 2.4 1.8 2.6 3.4 Bandung, Indonesia 2,977 5,292 3.2 3.5 3.5 3.3 2.5 Surabaja, Indonesia 2,742 4,762 2.9 3.2 3.2 3.1 2.5 Medan, Indonesia 2,222 4,094 5.5 3.9 3.9 3.6 2.6 Source: Based on United Nations, 1994.

Page 69 Table 44. Official urban poverty lines, Indonesia (1976-1990) Year Per capita poverty line Population living below the poverty line Urban population as percentage of total population Rp. $ Millions Per cent 1976 4,522 11 10 39 19 1978 4,969 12 8 31 20 1980 6,831 12 10 29 22 1981 9,777 15 9 28 23 1984 13,731 13 9 23 27 1987 17,381 11 10 20 32 1990 20,614 11 9 17 31 Source: CBS, 1989; 1992; Swasembada magazine, 1988.

Page 70 Table 45. Urban housing shortage, Indonesia Number Total urban housing stock 10,826,000 Total number of households 11,690,000 Estimated shortage of dwellings 864,000 Source: CBS, 1990; Suhandjaja, 1991.

Page 71 Table 46. Quality of urban housing stock, Indonesia (1961-1983) Quality of dwelling 1961 1983 Number of units per cent Number of units per cent Permanent dwellings 431,000 20.0 2,419,000 37.5 Semi-permanent dwellings 539,000 25.0 2,096,000 32.5 Temporary dwellings 1,185,000 55.0 1,935,000 30.0 All dwellings 2,155,000 100.0 6,450,000 100.0 Source: Suhandjaja, 1991.

Page 72 Table 47. Population growth, selected cities of China (1965-2015) City City population (thousands) Average annual population growth (per cent) 1995 2015 1965-1975 1975-1985 1985-1995 1995-2005 2005-2015 Shanghai 15,082 23,382 0.5 0.8 2.0 2.6 1.9 Beijing 12,362 19,423 1.1 1.4 2.4 2.7 1.9 Tianjin 10,687 16,998 3.4 2.8 2.8 2.8 1.9 Shenyang 5,310 8,588 1.1 1.3 2.3 2.8 2.1 Wuhan 4,399 7,182 1.5 1.6 2.5 2.9 2.1 Guangzhou 4,056 6,591 0.2 0.6 2.1 2.8 2.1 Chongqing 3,525 5,788 1.1 1.3 2.4 2.9 2.1 Taipei 3,417 5,700 4.1 3.1 3.2 3.0 2.1 Chengdu 3,401 5,623 2.5 2.3 2.7 2.9 2.2 Harbin 3,303 5,425 1.5 1.4 2.3 2.9 2.2 Xian 3,283 5,472 1.8 2.2 3.1 3.0 2.2 Dalian 3,132 5,402 0.8 3.2 5.0 3.4 2.2 Jinan 3,019 5,250 1.1 3.7 5.4 3.4 2.2 Nanjing 2,965 4,919 1.4 1.7 2.6 3.0 2.2 Changchun 2,523 4,228 1.7 2.0 2.9 3.0 2.2 Taiyuan 2,502 4,189 2.3 2.2 2.8 3.0 2.2 Source: Based on United Nations, 1994.

Page 73 Table 48. Urban household income distribution (per cent of all households), China (1982-1988) Monthly income (yuan) 1982 1983 1984 1985 1986 1987 1988 Below 20 0.92 0.61 1.67 11.05 5.67 4.24 8.31 20-25 3.68 2.97 25-35 25.63 20.32 10.52 35-50 45.40 46.56 38.89 24.78 14.81 11.70 50-60 14.20 16.42 22.67 19.53 16.17 13.36 7.61 60-70 10.17 13.12 26.25 16.04 17.86 15.74 10.26 70-80 10.96 14.82 14.60 12.53 80-90 7.01 10.24 12.09 12.46 90-100 4.11 7.20 8.49 11.91 100-110 2.63 4.60 6.08 9.21 110-120 3.89 3.05 4.35 7.25 120-130 1.83 3.03 5.32 130-140 1.24 2.04 3.82 140-150 0.69 1.11 2.95 Above 150 1.62 3.17 8.36 All income groups 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Note: Before 1985, the data are from a survey of families of staff and workers in cities. Since 1985, the data include retired people, self-employed labourers, personnel other than workers or labourers, and residents in county towns. Source: Lin Zhiqun, 1991b (Updated by the Beijing Housing Reform Office).

Page 74 Table 49. Incomes and expenditures per capita, China (1982-1992) Yeara Average annual income per family member (yuan) Average annual living expenditureb per family member (yuan) 1982 535 471 1983 573 506 1984 660 559 1985 749 673 1986 909 799 1987 1,012 884 1988 1,192 1,104 1989 1,388 1,211 1990 1,523 1,279 1991 1,713 1,453 1992 2,032 1,672 Note: Before 1985, the data are from a survey of families of staff and workers in cities. Since 1985, the data include retired people, self-employed labourers, personnel other than workers or labourers, and residents in county towns. b: Living expenditure income refers to the total income of a family that can be used to sustain the daily life of that family. Source: Lin Zhiqun, 1991b (updated by the Beijing Housing Reform Office).

Page 75 Table 50. Incidence of urban poverty, China (1985-1987) Poverty lines Size of urban population below poverty line (millions) 1985 1987 1988 Unadjusted Adjusteda Unadjusted Adjusteda Unadjusted Adjusteda U1 (50% of mean income)b 19.52 25.79 15.17 17.91 17.95 21.07 U2 (Y375 adjusted)c 22.31 28.20 11.98 14.11 16.84 19.80 U3 (Y300 adjusted)d 17.07 22.57 7.96 9.43 13.49 15.85 a: Unlike the Chinese official estimates, household distributions are adjusted for household size. b: U1 = 50 per cent of mean income (i.e. Y349 in 1985, Y458 in 1987 and Y560 in 1988). c: U2 = Y375 (1985 value, i.e. Y436 in 1987 and Y526 in 1988). d: U3 = Y300 (1985 value, i.e. Y349 in 1987 and Y421 in 1988). Source: Ahmad and Wang, 1991.

Page 76 Table 51. Urban dwelling conditions, per household and capita, China (1982-1988) 1982 1983 1984 1985 1986 1987 1988 Usable floor area m²/household .. 32.0 33.0 39.1 41.8 43.3 43.5 Living floor area m²/household 23.3 24.1 25.5 29.2 30.9 31.9 31.9 Service floor area m²/household .. 7.9 7.5 9.9 10.9 11.3 11.6 Number of rooms per household .. 1.9 2.1 2.2 2.4 2.4 2.4 Usable floor area m²/capita .. 7.9 8.2 10.0 10.9 11.5 12.0 Living floor area m²/capita 5.6 5.9 6.3 7.5 8.0 8.5 8.8 Service floor area m²/capita .. 2.0 1.9 2.5 2.8 3.0 3.2 Source: Lin Zhiqun, 1991b.

Page 77 Table 52. Urban household dwelling conditions (per cent), China (1982-1988) 1982 1983 1984 1985 1986 1987 1988 Unalloted householdsa 2.53 1.81 0.97 1.50 0.69 0.48 0.38 Over-crowded householdsb 21.76 19.93 16.07 12.54 10.20 7.92 6.71 Households with inconvenient space distributionc 9.27 10.00 9.59 8.71 7.60 7.55 7.77 Households with floor space of: 4-6 m² 29.20 27.18 25.55 19.44 21.21 19.07 15.90 6-8 m² 20.46 21.80 23.73 22.63 21.67 22.22 21.14 over 8 m² 16.78 19.28 24.09 35.18 38.63 42.76 48.12 Total 100.00 100.00 100.00 100.00 100.00 100.00 100.02 a: Unalloted households: households for whom no housing has been allocated because none is available; for example, newly married couples may have to live in their parents' units that are already overcrowded. b: Over-crowded households: households which live in dwellings with a floor area below the average minimum standard; (i.e. per capita living floor area of less than 4 m²). c: Households with inconvenient space distribution: households living in a dwelling where separate bedrooms are not available for male and female children over 13 years or for married couples. Source: Lin Zhiqun, 1991b.

Page 78 Table 53. Basic conditions of urban public utilities, China (1965-1992) Item 1965 1978 1980 1985 1990 1992 Running water supply Total quantity of running water supplied per year (billions of ton) 2.63 7.88 8.83 12.80 38.23 42.98 Domestic consumption (billions of ton) 1.03 2.76 3.39 5.19 10.01 11.73 Domestic water supply per capita (tons) 19.7 44.0 46.8 55.1 67.9 67.9 Percentage of population with access to tap water (per cent) 74.0 81.0 81.4 81.0 89.2 92.5 Public transport Total number (in thousands) of public vehicles (buses and trolley buses) 11 26 32 45 62 77 Total number of public vehicles (buses and trolley buses) per thousand people 0.16 0.33 0.35 0.39 0.48 0.59 Length of paved road (thousands of km) 24 27 29 38 95 97 Surface area of paved road (millions of m²) 210 225 253 359 892 952 Coal gas and liquified gas for public use Total quantity of artificial coal gas supplied per year (billions of m³) 0.7 1.7 2.0 2.5 17.5 15.0 Domestic consumption (millions of m³) 320 666 833 1,071 2,741 3,053 Length of gas pipe lines (thousands of km) 2.4 4.7 5.6 10.6 16.3 20.9 Total quantity of natural gas supplied per year (millions of m³) .. 691 589 1,621 6,423 6,289 Domestic consumption of liquified gas (thousands of tons) 0.1 176 270 547 1,428 2,020 Population with access to natural gas (per cent) 3.0 13.9 16.8 22.4 42.2 52.4 Afforestation of cities Area of green space (thousands of hectares) 26 82 86 159 475 534 Area of green space per thousand people (hectares) 0.43 1.06 0.96 1.37 3.22 3.45 Area of parks and zoos (thousands of hectares) 14 15 16 22 40 46 Health and sanitation Garbage removed (millions of tons) .. .. 31 45 68 83 Faeces removed (millions of tons) .. .. 16 17 24 30 Length of sewer (thousands of km) 13 20 22 32 58 68 Note: Figures for 1986 and later are based on the total population, while figures before 1986 are based on the population under the administration of City Construction Departments. Per capita figures are based on the non-agricultural population of the total population in cities. Source: Lin Zhiqun, 1991b.

Page 79 Table 54. Housing units constructed under the EHP, Republic of Korea (1990/1991) Total number of units Housing for sale Housing for rent units per cent units per cent Local Government 33,969 25,971 76.5 7,998 23.5 KNHC 36,641 24,409 66.6 12,232 33.4 Private builders 26,851 15,721 58.5 11,130 41.5 Total 97,461 63,101 64.7 31,360 35.3 Source: Jang, 1994.

Page 80 The Human Settlements Conditions of the World's Urban Poor

List of acronyms AsDB Asian Development Bank CBO Community-based organization CBS Central Bureau of Stratistics, Indonesia CONAMUP Coordinación Nacional de Movimiento Urbano Popular, "the national coordinating body of popular movements", Mexico CSO Central Statistical Organisation, Government of India CUS Centre for Urban Studies, Dhaka, Bangladesh DANIDA Danish International Development Agency EDI Economic Development Institute, The World Bank EHP Employee's Housing Programme, Republic of Korea EIUS Environmental Improvement of Urban Slums, India FEDEVIVIENDA Federación Nacional de Organizaciones de Vivienda Popular, "the national federation of self-help community organizations", Colombia. FUNACOM "The municipal programme to support housing for low-income persons through self-management", São Paulo, Brazil FUNAPS "The municipal fund to support housing for low-income people", São Paulo, Brazil GDP Gross domestic product GNP Gross national product GSS Global Strategy for Shelter to the Year 2000 Habitat II Second United Nations Conference on Human Settlements HBE Home-based enterprise IDA International Development Association, The World Bank ILO International Labour Organization IMF International Monetary Fund KIIE Korean Institute of Industrial Economics, Republic of Korea KNHC Korean National Housing Corporation, Republic of Korea KRIHS Korean Research Institute for Human Settlements, Republic of Korea KRISS Korean Research Institute for Social Sciences, Republic of Korea NBO National Building Organisation, India NCHSE National Centre for Human Settlements and Employment, New Delhi, India NCU National Commission on Urbanisation, India NGO Non-governmental organization NIUA National Institute for Urban Affairs, New Delhi, India NSSO National Sample Survey Organisation, India ODA Overseas Development Administration, United Kingdom SAP Structural Adjustment Programme SEWA Self-Employed Women's Association, Ahmedabad, India SIP Slum Improvement Project SPARC Society for the Promotion of Area Resource Centres, Bombay, India SSE Small-scale enterprise SUP Slum Upgrading Programme

Page 81 UNCED United Nations Conference on Environment and Development UNCHS (Habitat) United Nations Centre for Human Settlements (Habitat) UNDP United Nations Development Programme UNECLAC United Nations Economic Commission for Latin America and the Caribbean UNESCAP United Nations Economic and Social Commission for Asia and the Pacific UNICEF United Nations Children's Fund UNV United Nations Volunteers USAID United States Agency for International Development WHO World Health Organization

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Page 99 The Human Settlements Conditions of the World's Urban Poor

Notes 1. Lindenberg, 1991; Little and others, 1993; Sen, 1994; World Bank, 1993a.

2. The World Bank projection from 1988 that these 425 million would amount to more than half of the world's poor population was based on the assumption that rural poverty could be considerably reduced during the same period. Later projections by the World Bank indicate that rather than declining from about 1 billion in absolute poverty in 1985 to some 825 million in 2000 (World Bank, 1990), the total figure is expected to grow to 1.1 billion (World Bank, 1992).

3. It should be kept in mind that access in terms of time may not be the same as easy access. Since population densities are higher in urban than in rural areas, this type of an indicator tends to overestimate the provision of services available in urban areas.

4. Balicasan, 1994 (the Philippines); Firdausy, 1994 (Indonesia); Gunatilleke and Perera, 1994 (Sri Lanka); Khundker and others, 1994 (Bangladesh); Kim, J-G., 1994 (Republic of Korea); Mathur, 1994 (India); Ratanakomut and others, 1994 (Thailand).

5. See for instance Berg and others, 1994; Kakwani and others, 1993; Stewart, 1995.

6. See UNCHS, 1987; 1988; 1989c; World Bank, 1991; 1993b; UNDP, 1991.

7. Little and others, 1970; Lipton, 1977; and others.

8. Harris and Todaro, 1970; Todaro, 1976; Todaro, 1992.

9. Fei and Ranis, 1964; 1975; Ohkawa and others, 1985; Schiff and Valdés, 1992.

10. The shortcomings of the project approach is discussed in more depth in UNCHS, 1991b.

11. See for instance Alonso, 1995; Harris, 1994; Henderson, 1995; Krugman, 1995; Porter, 1995.

12. See UNCHS, 1989c; 1992b; UNCHS/ILO, 1995.

13. World Bank, 1991; 1993b; UNCHS, 1987; 1988; 1989a.

14. For an extended elaboration of the argument see Stretton, 1976; Pugh, 1990.

15. See Amin and Thrift, 1994; Pugh, 1995; Sassen 1994.

16. Personal communication from Dr. C.L. Odimuko to UNCHS (Habitat), February 1995.

17. See for instance Boakye, 1994; Kitunka, 1993; Korboe, 1994.

18. The urban population estimate by this source is considerably higher than that presented in tables 27

Page 100 and 28. It is estimated by the Centre for Urban Studies (CUS, 1990) to be 22.9 million (21 per cent) in 1990 and 37.3 million (29 per cent) in 2000, compared to the United Nations (1994) estimates of 16.9 million (16 per cent) and 28.6 million (21 per cent).

19. According to Government of India guidelines in connection with the Environmental Improvement of Urban Slums (EIUS) programmes, the norm is one tap per 150 people.

20. Pornchokchai, 1985; Krongkaew and others, 1986 -- both quoted in Hutuserani and Tapwang, 1990.

21. These case studies draws heavily on Rakodi and Withers (1994), Zimbabwe; Denaldi (1994) and Guedes and Devecchi (1994), São Paulo; Jang (1994), the Republic of Korea; and Sundaram (1994), India.

22. In Africa: Korboe, 1994; Syagga, 1992; Ziss and Schiller, 1982; and in Latin America: Strassmann, 1970.

23. See Gilbert, 1988; Nientied and others, 1987; Strassmann, 1987; UNCHS/ILO, 1995.

24. See Beneria, 1992; Molapo, 1994; Moser and Peake, 1987; NIUA, 1989.

25. See Boonyabancha, 1990; Useche de Brill, 1990; Sundaram, 1990a.

26. See Leynes, 1992; Tokman, 1992.

27. These are chonsei, wolsei and sakwolsei (although the latter only accounts for about 5 per cent of tenancies). Chonseiis the arrangement whereby the tenant pays a deposit to the landlord on commencement of the tenancy, but no rental payments; so that rent is equivalent to the opportunity costs of the deposit, plus devaluation over the tenancy period, after which the deposit is returned. Wolsei describes a more familiar situation where rental payments are paid regularly over the tenancy period together with a deposit. Sakwolsei is the circumstance where the deposit is equal to the sum of monthly payments over the period of the tenancy - a hybrid of the other two forms. Chonsei accounts for almost 60 per cent of private tenancies in South Korea and wolsei for about 37 per cent. In 1990, 55 per cent of households in urban areas in Korea were tenants (Kim W-J., 1994).

Page 101 The Human Settlements Conditions of the World's Urban Poor

Comments on country groupings The regional groups referred to in this publication are a combination of those used in the 1995 Human Development Report (UNDP, 1995) and those used in the 1995 Word Development Report (World Bank, 1995). In principle, it follows the Human Development Report in classifying countries as either industrialized or developing, and the World Development Report in delineating regions.

The regions used in this publication are:

 Industrialized countries: All countries of Europe, including the countries of the former U.S.S.R.; North America; as well as Japan, Australia and New Zealand. It does not, however, include Israel as is the case in the Human Development Report.

 Latin America and the Caribbean: All countries of South and Central America, including Mexico; as well as the island nations of the Caribbean.

 Sub-Saharan Africa: All countries on the African continent apart from the North African countries of Algeria, Egypt, Libyan Arab Jamahirya, Morocco, Tunisia and Western Sahara.

 North Africa and the Middle East: The North African countries of Algeria, Egypt, Libyan Arab Jamahirya, Morocco, Tunisia and Western Sahara; as well as all coutries in Asia west of, and including, the Islamic Republic of Iran (this includes Turkey and Cyprus which are classified as part of Europe in the World Development Report).

 South Asia: The countries of Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka. Due to the size of its population, India is considered a separate region. If a table or text includes India in the region of South Asia this is stated explicitly.

 India.

 East Asia and the Pacific: All countries in Asia east of, and including, Myanmar, i.e. all countries of East Asia "proper" (Democratic People's Republic of Korea, Hong Kong, Macao, Mongolia and the Republic of Korea, but excluding China and Japan), South East Asia, and the Pacific (excluding Australia and New Zealand). Due to the size of its population, China is considered a separate region. If a table or text includes China in the region of East Asia and the Pacific, or in the East Asian subregion, this is stated explicitly.

 China.

Page 102 The Human Settlements Conditions of the World's Urban Poor

Data notes "Billion" is 1,000 million.

"Tons" are metric tons, equal to 1,000 kilogrammes.

"Dollars" or "$" are US dollars unless otherwise stated.

The symbol "/" in dates, such as "1994/1995" means that the period of time may be less than two years but straddles two calendar years and refer to a survey year or fiscal year.

The symbol ".." means not available.

The number "0" or "0.0" in tables and figures means zero or a quantity less than half the unit shown.

The countries listed in the regional tables of chapter IV — "Urban population and level of urbanization" and "Urban population growth" — are selected on the basis that they had a total population of more than seven million in 1995. The countries are listed in descending order according to total population in 1995.

The cities listed in the regional tables of chapter IV — "Population growth of selected cities" — are those that are projected to have a population of more than four million in 2015, provided that they are listed in United Nations (1994), i.e. that they had a population of at least 750,000 in 1990. The cities are listed in descending order according to population in 1995.

Page 103 ABOUT The Human Settlements Conditions of the World's Urban Poor HS/391/96 E ISBNE 92-1-131487-9 (electronic version) Text source: UNCHS (Habitat) printed publication: ISBN 92-1-131300-7 (published in 1996). This electronic publication was designed/created by Inge Jensen. This version was compiled on 2 January 2006. Copyright© 2001 UNCHS (Habitat); 2002-2006 UN-HABITAT. All rights reserved. This document has been reproduced without formal editing. The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the United Nations Secretariat concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Reference to names of firms and commercial products and processes does not imply their endorsement by the United Nations, and a failure to mention a particular firm, commercial product or process is not a sign of disapproval. Excerpts from the text may be reproduced without authorisation, on condition that the source is indicated. UN-HABITAT publications can be obtained from UN-HABITAT's Regional Offices or directly from:

UN-HABITAT, Information Services Section, G.P.O. Box 30030, Nairobi 00100, KENYA

Fax: (254) 20-7623477 or (7624266/7) E-mail: [email protected] Web-site: http://www.unhabitat.org/

Page 104 The Human Settlements Conditions of the World's Urban Poor

Preface More than one billion people are currently living in absolute poverty, with incomes too low to meet their daily requirements in terms of food, clothing and other basic needs. A similar, or even larger number of people do not have access to safe and healthy shelter. The latter half of the twentieth century has seen the continuous transfer of the world's population into urban areas. In 1950, less than 30 per cent of the world's population was urban. By 1995 this figure has increased to 45 per cent. Within the next ten years, more than every second human being will live in cities and towns.

We are, however, not only living in an urbanizing world. We are also living in a period which can best be described as the age of the 'urbanization of poverty'. By 1985 some 330 million urban dwellers in developing countries had incomes so low that they were characterized as living in absolute poverty. Ten years later, in 1995, the figure is estimated at 430 million. At the same time, more than 600 million urban residents in developing countries live in health-threatening houses and conditions characterized by lack of basic services such as piped water, sanitation and health care.

There is a considerable regional variation to this general picture. While three quarters of the poor in Latin America and the Caribbean, and in North Africa and the Middle East, live in urban areas, a similar proportion of the poor live in rural areas in sub-Saharan Africa. The trend, however, is general. Rapid urban growth in all regions is accompanied by a relative (and in most cases also an absolute) increase in the number of urban poor. The explosive growth of informal settlements in many sub-Saharan cities is a visible manifestation of this.

There are many reasons for the increasing 'income poverty' and 'housing poverty' in urban areas. One of these is the process of urbanization itself. When this occurs at a time of world-wide economic recession — and as we are increasingly realizing that present policies for human settlements development fail to cater for the special circumstances of the groups affected by extreme poverty — it is not surprising that a large proportion of the 65 million people that are added to the urban populations of developing countries each year end up unemployed or underemployed, living in very poor shelter conditions.

It is against this reality that the Fourteenth Session of the United Nations Commission on Human Settlements requested the United Nations Centre for Human Settlements (Habitat) to report to the second United Nations Conference on Human Settlements (Habitat II) on the human settlements conditions of the world's urban poor. This publication has been prepared in response to that request to present recommendations on how to address the shelter problem of the poorest groups within the context of enabling shelter strategies.

The dual problems of urban poverty and inadequate human settlements conditions in developing countries constitute two of the most fundamental challenges to politicians and policy-makers throughout the world. The growth of the informal sector is a symptom of the inability of the formal sector to absorb the labour potential of an increasing number of urban dwellers. Yet, the informal sector is also the most important arena for shelter provision, and in many cases the only arena open to the urban poor.

Page 105 The Global Strategy for Shelter to the Year 2000 (GSS) was adopted by the General Assembly of the United Nations in December 1988 to address these issues. It calls for the introduction of enabling shelter strategies: for facilitating the actions and potential of all participants in the shelter delivery process. This implies a change from policies of government intervention to policies of enablement. Yet, as is acknowledged in the GSS, this process of liberalization embodies certain dangers to the urban poor. Increased demand for land and housing is accompanied by increased 'commercialization' of these markets. As choice is a positive function of income, many among the poor may end up with no choice at all. Thus, although liberalization is a necessary condition for the success of the GSS, it is by no means a sufficient one.

This is not an argument for abandoning the enabling approach. Yet, if we are to improve the human settlements conditions of the poorest groups it means going beyond enabling shelter strategies. Enabling shelter strategies does not imply that the public sector should withdraw from shelter provision completely. In fact, it is only by enabling the "not-so-poor" to help themselves, that governments can make resources available for direct assistance to the poorest groups.

These circumstances serve to highlight the strategic significance of the Habitat II Conference — the 'City Summit' — in seeking genuine, worldwide support for a global strategy which seeks to improve shelter conditions and the quality of life in urban areas, whilst at the same time combatting the problems of urban poverty effectively.

The challenge ahead, for Habitat II and the world community at large, is truly staggering. Yet, as human beings, we cannot afford to fail.

We gratefully acknowledge the contribution of Mr. Richard Groves, of the University of Birmingham, in preparing the background report on which this publication is largely based; and of Mr. Inge Jensen, of UNCHS (Habitat), in developing the research design, co-ordinating the activities and preparing the final publication. Dr. Wally N'Dow Assistant-Secretary-General, United Nations Centre for Human Settlements (Habitat) and Secretary-General, United Nations Conference on Human Settlements (Habitat II)

Page 106 The Human Settlements Conditions of the World's Urban Poor

Executive summary I. Introduction 1. The latter half of the twentieth century has seen the continuous transformation of the world's population into urban dwellers. In less than ten years urban dwellers will form the majority. Urban population growth in the developing world has increased at three times the rate of the industrial countries and has led to a situation where the growth rate of cities has outpaced the capacity of urban economies to generate employment. Hence, there is often large scale unemployment and underemployment in the informal sector in the cities of developing countries and urban poverty is a rapidly increasing phenomenon.

2. The growth rate of cities and towns means that twice as many people will become city dwellers over the next generation than in the last. This is a daunting prospect and it means that urban poverty and the human settlement conditions of the world's urban poor are two of the most fundamental challenges to politicians and policy-makers throughout the world.

3. The growth rate in the number of households is even higher than that of population growth, due to decreasing household sizes. In China, the growth rate in the number of households is more than 2.5 times as high as that of population growth. It is only in sub-Saharan Africa that the rate of population growth is higher than the rate of household growth, i.e. the average household size in sub-Saharan Africa is actually increasing. These trends have significant impacts on both the quantity and quality of housing demand.

Page 107 The Human Settlements Conditions of the World's Urban Poor

Executive summary II. The concept and scale of urban poverty 4. Poverty is a complex notion. It may be regarded from both a long and short-term perspective. Much poverty may be seen as a structural problem of evolving demographic and economic systems. But, macro-economic fluctuations and exposure to the global economy also means increased short-term volatility with effects on urban labour markets. Nonetheless, evidence now exists that policies do make a difference and variable regional economic performances have meant improvements in some parts of the world alongside increasing problems in others.

5. It is important to distinguish between concepts of income (or subsistence) poverty and housing and urban poverty. Much progress has been achieved in measuring and interpreting income poverty, but recent authors have suggested that the concept of poverty is more complex than income measures suggest. Intrinsically, it is a part of social, economic and political processes.

6. The addition of the notion of well-being assists in our understanding of the quality of life to aspects of poverty and at the same time differential abilities, depending on 'entitlements' and 'endowments', can increase or diminish one's vulnerability to poverty. Housing and urban poverty are not merely extrapolations of income poverty, they are influenced by factors other than issues related to affordability, such as the health, safety and security of residents or macro-economic considerations such as interest rate changes or inflationary conditions.

7. While the incidence of poverty is falling in most regions (with the exception of sub-Saharan Africa), the numbers of those living in poverty are increasing and are likely to be higher (at 1.1 billion) by the year 2000 than they were in 1985. The current number of the urban poor is estimated at 430 million.

8. The poor are comprised of: large families with high dependency ratios; those who are underemployed; a disproportionate number of women; those lacking basic education and who are illiterate; and those with low status and lacking social support (e.g. street children and other destitutes).

9. Whilst urban poverty is increasing, human development indicators show that progress is being made in respect of health and welfare criteria. Gender inequalities remain deeply rooted within most societies, however, and the international agencies are strongly advocating equality of opportunity and empowerment for women.

10. Whilst the incidence and volume of poverty is decreasing in Asia, and particularly East Asia, economic performance and the incidence of poverty are in strong contrast in Latin America and sub-Saharan Africa. The number of people living in poverty in sub-Saharan Africa is likely to increase by 40 per cent between 1990 and 2000.

Page 108 The Human Settlements Conditions of the World's Urban Poor

Executive summary III. The urban economy 11. The pace of urban economic change has accelerated since the early 1980s. Agglomeration economies in city regions are more exposed to international economic influences and are therefore more volatile than they were. Nonetheless, they contribute about 60 per cent of the gross domestic product ( GDP) in developing countries, are at the heart of technological changes and will be the focus of the growing concentration of poverty.

12. Dramatic effects are occurring in the urban economies of developing countries. In India, the liberalization of the economy has induced major injections of international capital into the manufacturing sector and is seeing the rapid introduction of new technology, new production methods and modern management practices. In China too, the encouragement of 'open door' economic policies since 1979 is resulting in significant amounts of foreign investment in major Chinese cities.

13. Theories of urban bias influenced aid programmes away from urban investment during the late 1970s and early 1980s. These policies have since been replaced by market liberalization policies. New directions in urban economic development favour a whole-sector approach in an integrated way with the promotion of the national economy; the enhancement of institutional housing finance; joint public/private sector funding for infrastructure and the reform of public sector finance.

14. Whilst not particularly new, the international agencies are laying emphasis on the productive role of housing in the urban economy. Low-income housing investment has a multiplier of about 2 if backward and forward linkages are taken into account. If one adds the non-monetized contributions of housing to the urban economy then housing and the domestic sector are more significant than is normally supposed. This raises the significance of housing in the debate on development.

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Executive summary IV. Trends in the human settlements conditions of the urban poor 15. Chapter IV reviews the human settlements situation of the urban poor in respect of the growth of urbanization; the nature and extent of urban poverty; housing and environmental conditions; infrastructural provision; and access and availability of urban land. Whilst in East and South East Asia it is possible to discern improvements in the housing and environmental circumstances of the urban poor, in most other regions in the developing world conditions for the urban poor appear to be deteriorating.

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Executive summary V. Reaching the urban poor 16. The international policy context for shelter and urban development is changing. The GSS has since been influenced by the 'urban agendas' of the United Nations Development Programme (UNDP) and the World Bank, and by the United Nations Conference on Environment and Development ( UNCED). Future emphasis is to be placed on improving the operation of essentially privatized markets through deregulation and institutional support for the private sector. Regularization and improvement of the informal sector are to be important, whilst state agencies are to withdraw from a direct role in production, allocation and management in favour of an enabling role. The urban management capacity of state agencies is to be enhanced, concentrating attention on such factors as reforming institutional and legal frameworks, improving the delivery of urban land and encouraging partnerships.

17. In reviewing the effectiveness of several case studies in providing low-cost accommodation for the urban poor, the chapter concludes that governments are continuing to acknowledge the importance of the GSS and are making progress in some areas (e.g. the development of partnerships with low-income communities), but less in others (e.g. the enhancement of the role of the private commercial sector). The effects overall of economic austerity on the private sector and the contraction of the public sector have meant modest progress.

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Executive summary VI. Reducing the human settlements problem of the urban poor 18. In conceiving and developing enabling strategies, public/private partnerships are essential in ensuring the maximization of the comparative advantages of each sector. Partnerships have been established in a wide variety of circumstances and there is great scope for the enhancement of partnerships particularly between low-income communities, non-governmental organizations (NGOs) and the public sector.

19. The scaling-up of programmes involving low-cost shelter and urban infrastructural development offers great potential for employment generation for low-income groups and for women in particular. A shift in favour of labour-intensive construction methods and greater encouragement of the indigenous building materials industry will also create further employment opportunities.

20. Home-based enterprises (HBEs) are very common in developing countries and their primary purpose is to sustain the incomes of low-income households. Whilst ensuring that safeguards are enforced, the acknowledgement of shelter's role as an important workplace for low-income groups will mean further opportunities for encouraging employment generation and raising incomes.

21. Major benefits can be gained for local shelter strategies by encouraging public participation and thereby harnessing the efforts of low-income communities. For example:

 a participatory approach encourages communities to improve their quality of life as a whole and not simply in terms of shelter and the physical environment;

 the process of successful participation engenders trust between local authorities, NGOs and local communities;

 from the government's point of view it deploys resources commensurate with the huge scale of the problem; and

 community participation can increase the cost effectiveness of a programme.

22. Ensuring an adequate supply of residential land at affordable prices is an absolute pre-requisite for the development of an effective shelter strategy. Developing countries experience many problems in this area and there is often a need for major reforms.

23. The absence of formal institutional housing finance is a major constraint to the development of an efficient housing market. Even where it exists, however, it fails to give much help to the urban poor. Nonetheless, important initiatives are taking place. These appear to offer substantial scope for the development of financial facilities for the urban poor which may also have wider application in developing countries.

24. There has been growing concern in recent years over the supply of building materials in

Page 112 developing countries. There is a need for governments to develop a strategic approach to the development of the building materials sector, and to diversify production to include small-scale enterprises (SSEs) and other actors in the informal sector. It is also important that support is available to encourage entrepreneurship and that credit for SSEs is available. There is also the potential for employing local labour in the production of building materials on an enhanced scale.

25. The absence, or poor quality of infrastructural facilities for the urban poor is a pervasive problem. The consequences for the health and safety of those in slum and squatter settlements and for the public health of millions of other urban dwellers are alarming. Local authorities need to ensure that efforts are made to improve infrastructural facilities in slum settlements and that by the adoption of a community participation approach, and by ensuring the training and recruitment of female labour, they can maximise the beneficial impact of these capital works programmes on poor communities.

26. Building and planning codes are often a hindrance rather than a help in trying to secure an improvement for the urban poor. Standards need to be reformulated in a way which recognises the need for safeguards in terms of safety, security and health of households and communities, but also in a way which reinforces the efforts of the community. At the same time much greater emphasis needs to be placed on improved training and management capabilities in local authorities.

27. In view of the likely future increase in demand for low-cost residential accommodation in the cities of developing countries, there is a need to ensure a healthy privately rented housing market. This implies a review of fiscal and financial policies affecting the rental sector; modifications to planning and building regulations to encourage house extensions and arrangements for letting; and safeguards to protect the interests of vulnerable tenants. Local authorities will need to make direct provision for the most vulnerable groups.

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Executive summary VII. Agenda for future work 28. The most pressing need for action is to explore systematically ways of countering the growth of urban poverty. Hence this report strongly endorses the Urban Poverty Partnership Programme conceived by UNCHS (Habitat), the International Labour Organization (ILO), UNDP and the United Nations Volunteers (UNV). It also repeats the recent call by UNCHS (Habitat) and ILO which urges a major shift in attitudes and approaches and links shelter provision and public-works programmes to poverty-reduction strategies through the use of labour-intensive initiatives.

29. A second issue of concern is the capacity and competence of urban administrations to deliver effective public services within an enabling framework in the area of shelter and urban infrastructural provision. This will require a major international initiative in training, guidance and support for local authorities.

30. Specific policy areas in need of development include: the legal and institutional environment for the ownership, transference and management of land; personal savings and the development of private sector institutional housing finance; and the underdevelopment of local materials production, marketing and distribution.

31. There is also a need to strengthen shelter strategies for the poorest groups by encouraging governments not to abrogate their responsibilities to the poorest; and by ensuring that such resources as are available are used in the most effective way.

32. There is a need to harness the benefits of research and to restore the policy dialogue between researchers and practitioners.

33. In future local authorities will be expected to undertake three principal roles in human settlements development: they will be expected to anticipate population growth and urban expansion and to implement a planned strategy of development; they will need to plan carefully infrastructural provision; and they will be expected to formulate local shelter strategies which enhance the operation of the private market.

34. NGOs will be encouraged to work closely with local communities in acting as enablers, mediators, advisors and trainers.

35. The enabling approach envisages a broader role for the private commercial sector. This implies that local authorities will increasingly need to seek solutions in partnership with private-sector organizations.

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Executive summary VIII. Conclusions and recommendations 36. Whilst the overall incidence of poverty is decreasing, in many parts of the developing world both the volume and incidence of poverty are increasing. Women have borne the brunt of the problems of poverty. The policy implications in respect of poverty alleviation strategies include:

 the need to safeguard human resources development programmes during macro-economic adjustment;

 to develop longer term programmes to tackle the structural causes of poverty; and

 to develop capacity for short-term employment programmes.

37. Those experiencing housing and urban poverty are likely to outnumber those living in income poverty in urban areas. Moreover, the shelter sector is under-developed in the supply of satisfactory housing. The generally bleak picture of human settlements conditions also calls into question the effectiveness of the role of governments in safeguarding the interests of the urban poor.

38. The failure of government policies highlights the productivity of the poor themselves and underscores the need for a major shift in policies and approaches. Projected rates of urban growth further demonstrate the need for change along the lines of the GSS.

39. There is a need for:

 UNCHS (Habitat) to mount a sustained international effort to improve competence and service delivery in urban land use planning and management;

 continued technical and advisory support in the promotion and development of institutional housing finance for the urban poor;

 governments to review their indigenous materials industry to become more efficient and effective;

 diversification of building-materials production to include SSEs and the informal sector;

 governments to scale-up their housing and urban development activities to increase employment opportunities for the urban poor;

 governments to review current policies with regard to rented accommodation to create a favourable environment for responsible renting strategies;

 local authorities to review development control and building regulations in order to promote low-cost shelter development;

 acknowledging the importance of HBEs and develop a small-enterprise development strategy for HBEs; and

Page 115  the development of genuine partnerships between governments, local authorities and low-income communities and a determination to succeed in developing effective local strategies for the improvement of the human settlements conditions of the world's urban poor.

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Chapter I. Introduction The Global Strategy for Shelter to the Year 2000 (GSS), which was adopted by the General Assembly of the United Nations in December 1988, recognized that despite efforts in "many countries to prepare national shelter strategies and to adopt other measures that will promote achievement of the goal of shelter for all ... more than 1 billion people have shelter unfit for human habitation" (UNCHS, 1988). It further recognized that "this number will increase dramatically, partly as a result of population and urbanization trends." The main objective of the strategy was to facilitate adequate shelter for all by the year 2000.

As we are approaching the year 2000, the shelter situation is worse than ever. An increasing number of people are living under inadequate shelter conditions. The problem is most acute, and most visible, in the inner-city slums and in the sprawling squatter settlements on the urban fringe of the rapidly growing cities of developing countries. As urban populations in most developing countries are growing rapidly, it is becoming evident that present policies for human settlements development fail to cater for the special circumstances of the groups affected by extreme poverty. This, and a worldwide economic recession has meant that the absolute number of people living in poverty is increasing. The largest increase occurs in the urban areas of developing countries. It is against this realization that this report is prepared, to review and consolidate the existing knowledge on the human settlements situation of the world's urban poor.

Before reviewing the human settlements conditions in which the urban poor live, leading into discussions on the various aspects of enabling strategies and their potential for employment generation, however, it is appropriate to outline the demographic and economic factors contributing to the urbanization of poverty in developing countries.

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Chapter I. Introduction A. The growth of human settlements The latter half of the twentieth century has seen the continuous transformation of the world's population into urban dwellers. Both figure 1 and table 1 illustrate how the world's urban population has grown from less than 30 per cent of the total in 1950 to more than 45 per cent in 1995. United Nations projections indicate that more than half of the world's population will live in urban areas by 2005. Three decades from now, by 2025, more than 60 per cent of the population will live in urban areas.

Not only is there a global population shift towards urban areas. We are also experiencing a shift towards developing countries. Some 67 per cent of the world's population were living in developing countries in 1950. By 1995, this figure has increased to 78 per cent. Projections indicate that by 2025, 84 per cent of the global population will be living in these countries (United Nations, 1994). The consequence of these two trends is that an increasing proportion of the world's population live in urban areas of developing countries. By 1950, the urban populations amounted to only 17 per cent of the population in developing countries. In 1995 this figure has increased to more than 37 per cent. Projections indicate that 57 per cent of the population in these countries will live in urban areas in 2025.

Figure 2 provides an even more striking illustration of the fact that we are living in an urbanizing world. During the 19651975 period the absolute population increase in rural areas of developing countries accounted for more than half of the global population increase. Two decades later the picture had been reversed, more than half of global population growth occurred in the urban areas of developing countries. During this period the average annual urban population growth of developing countries has increased from 24 million to 51 million people. During the next decade (19952005) the urban population of developing countries is expected to grow at an average of some 65 million persons per year. The next decades will see a further strengthening of this trend. In fact, as rural populations are projected to contract by 2015, urban population growth in developing countries is expected to account for more than 100 per cent of the total net growth during the 20152025 period, reaching a population growth of some 86 million each year.

It is important to note that less than one half of the urban population growth in developing countries is caused by rural-urban migration. Table 2 illustrates this. The data in the table should be treated with caution as they are based on the rather questionable assumption that population growth rates in urban and rural areas are identical. In most countries, however, urban households tend to be about 810 per cent larger than those in rural areas (UNCHS, 1987). The figures in the table are thus likely to be high. This having been said, the table indicates that about half of urban population growth is due to natural population growth in the urban areas themselves. The remainder is due to rural-urban migration and to the reclassification of settlements (mostly rural areas that are reclassified as urban areas).

Table 1 reveals the strong inter-relationship between urbanization and industrialization and in so doing it contrasts the post-war growth in human settlements between the industrialized and the developing countries. It shows that the industrialized countries were already largely urbanized by 1950 and that the process has consolidated in the interim. By way of contrast, the urban population in developing countries

Page 118 has grown by 500 per cent from a total of less than 300 million in 1950 to more than 1.7 billion in 1995. This amounted to a rate of growth about three times that of the developed world. Despite this growth, the proportion of the population currently living in towns and cities in developing countries is only half that of the industrialized countries (37 per cent as compared with 73 per cent in 1995).

Throughout the developing world, however, the rate of urbanization is by no means uniform. Table 1 also illustrates the proportion of urban population by regions in developing countries and compares these figures with global percentages. It shows the narrowing of the gap between developing countries and the world as a whole. By 1995, one in three Africans and Asians are city dwellers, whilst three quarters of Latin Americans are living in cities already. The trends, however, are similar. The proportion of the population residing in urban areas is projected to increase in all regions. Furthermore, the growth rate is highest in the regions currently with the lowest level of urbanization (see table 5 ).

Another striking feature of the process of urbanization in developing countries is the enormous growth in the number of very large cities. In 1950 only 31 cities in developing countries had a population of one million or more. By 1995 this figure had increased to a total of 196 cities with an estimated population of 575 million (United Nations, 1994). Indeed, two-thirds of the population throughout the world living in very large cities of five million people or more, are now living in developing countries.

The above figures set out the statistical dimensions of urban demographic growth. It can be argued that it is the conjuncture of demographic growth and economic factors which are the underlying causes of the presence and growth of urban problems in developing countries. These countries have been experiencing a 'demographic transition', characterized by a stage-by-stage change in population circumstances of concurrent high birth and high mortality rates, resulting in relatively stable populations, to a stage where mortality rates have fallen more rapidly than birth rates, consequently leading to a long-term rapid growth in population. Added to this has been the economics of rural/urban migration whereby many of the landless rural population, as well as those seeking opportunity, have moved to urban areas.

During this demographic transition, the reality confronting the economics of urban development lies between two extreme possibilities. On the one hand, an 'optimistic' scenario might result in a 'wage and poverty' transition in which rates of saving and investment would be sufficient to absorb increased labour supplies, consequently increasing the efficiency of labour markets, enhancing the relative incomes of the poor, and reducing the incidence of poverty. By contrast, a more 'pessimistic' scenario is one where the rates of saving, investment and job creation are outpaced by high population growth leading to large and inert underemployment in the informal sector.

In actual fact, the outcome for most developing countries has fallen between the two polarities. Nonetheless, the process of urbanization has resulted in urban incomes increasing faster than those in rural areas with the result that almost any position on the spectrum between optimistic and pessimistic outcomes creates problems of affordability for the urban poor. High rates of economic growth (as in the South-East Asian countries, for example), place inordinate pressures on urban institutions and the delivery of services; whereas low growth rates (as in Africa), retard the 'wage and poverty transition'.

When discussing urban growth it should be kept in mind that the definition of 'urban' and 'rural' differ considerably from one country to another, and within one country over time. The important issue is thus not the precise percentage of the population living in urban areas, but rather the trend. And, "What is perhaps more significant ... is the underlying economic and social changes it reveals — that a steadily declining proportion of the world's population make a living from agriculture, forestry, hunting and fishing" (UNCHS, 1996). Tables 3 and 4 illustrate how all regions experience a shift from agriculture, both in terms of value and employment. The tables also indicate that the regions with the lowest percentage of

Page 119 the labour force in agriculture, i.e. East Asia (24 per cent), Latin America and the Caribbean (25 per cent) and North Africa and the Middle East (40 per cent) are also the ones with the highest per capita income. Table 4 also indicates the relative economic importance of the various regions of developing countries. The combined GDP of sub-Saharan Africa, South Asia, India and China amounts to less than a quarter of the GDP of developing countries and less than 4.5 per cent of the world's total GDP, while the population of these regions account for nearly 70 per cent of the population of developing countries and 54 per cent of the global population.

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Chapter I. Introduction B. The urbanization of poverty Poverty in the developing countries has long been associated with rural areas. The unprecedented urbanization illustrated above, coupled with the effects of global recession, has resulted in a significant increase in the scale of urban poverty. Between 1970 and 1985 the absolute number of the world's poor increased by 22 per cent, During that period, whilst the percentage increase amongst the rural poor was 11 per cent, the equivalent increase in urban poverty was 73 per cent (UNCHS, 1992d).

If the rate of urbanization in developing countries has had a significant effect on urban poverty hitherto, however, its impact in the future may be dramatic. The population projections in table 1 indicate that the total urban population in developing countries is likely to double before 2020 and reach 4 billion by the year 2025. This implies that towns and cities are likely to absorb approximately twice the population over the next 30 years than they have over the last 30 years. Given current levels of urban poverty, shortages in the provision of shelter and other essential urban services, and the poor environmental quality of many cities of the developing world, this is a formidable prospect.

By moving beyond population growth, to the growth in the number of households, we get a better impression of the challenges ahead in terms of housing demand. Figures 3 and 4 compare regional population increase (urban plus rural) with the increase in the number of households. The result is striking. While sub-Saharan Africa is projected to have the largest population increase during the next decade, followed by India, the largest increase in number of households is expected in China. In fact, the growth rate of households in China is more than 2.5 times that of its population growth, while on the other hand the growth rate of households in sub-Saharan Africa is actually lower than its rate of population growth (see table 5). In absolute terms, the increase in the number of households in the industrialized countries are actually larger than its population increase. During the 19952000 period, 1.06 new households will be created for each person added to the population. This stands in contrast with the developing countries where the corresponding figure is 0.30. The reason for these striking differences is changes in household size. While average household sizes in sub-Saharan Africa and South Asia are expected to remain high during the next three decades, household sizes in the other regions will be reduced significantly. One result of this is that although the absolute population growth is expected to be reduced slightly from an annual average of some 87 million a year during the 19952005 period to about 83 million during the 20152025 period, the average annual increase in the number of households is projected to increase from 32 million to 35 million. As most of this increase will occur in urban areas, the challenge in terms of urban housing supply is immense.

United Nations (1993b) has noted that only "One in every four newly formed households has access to standard authorized housing .... On average, nine new households were formed for each new standard dwelling built in the low-income developing countries during the 1980s" while two new households were formed for each new standard dwelling built "in the middle-income countries". In fact, the housing crisis of developing countries is so severe that in many cases one-room dwellings have been split up into units in which several households live simultaneously or alternate with one another in night and day shifts.

Page 121 While by 1980 'only' one third of all poor were living in urban areas (40 million out of 120 million households) this situation is projected to be reversed by the year 2000. By that time the number of poor urban households is projected to grow by 76 per cent to 72 million, while the number of poor rural households will have been reduced from 80 million in 1980 to 56 million in 2000 (UNDP, 1990). This trend leads UNDP to state that the "persistent problem is that attempts to tackle urban poverty directly — by creating jobs and providing public services unavailable in rural areas — simply attracts more of the rural poor, and their migration wipes out any gains" (UNDP, 1990). This, however, is not an argument for not doing anything to the problem of urban poverty. People are not becoming poor because they move from rural to urban areas. In most cases they simply remain poor, despite moving.

Moreover, when it is acknowledged that the highest rates of urbanization are already taking place in the poorest regions of Africa and Asia (see table 5 ), it is also likely to mean that the twin problems of urban poverty and inadequate human settlements conditions in urban areas of developing countries constitute two of the most fundamental challenges to politicians and policy-makers throughout the world. These circumstances serve to highlight the strategic significance of Habitat II — the 'City Summit' — in seeking genuine, worldwide support for a global strategy which seeks to improve living conditions and the quality of life in urban areas, whilst at the same time combatting the problems of urban poverty effectively.

The formulation of effective strategies, however, begins with the assembly of reliable information and the application of rigorous analysis. Chapter II, therefore, begins with a discussion of the concept of urban poverty. Whilst the nature of poverty is seen to be a universal phenomenon it is acknowledged also as a product of situational circumstances reflecting differing political economies. Moreover, as analyses of poverty have moved on from the quantifiable approaches associated with development economics, more recent anthropological studies have highlighted different perceptions of poverty and so the concept itself has become more complex. The chapter also distinguishes between poverty as a measure of income, and housing and urban poverty, the primary focus of the current study. Some indications of the scale of urban poverty are presented as well as those groups most affected.

As a consequence of these discussions and the figures presented above, this report focuses attention on the problems of urban poverty and human settlements conditions in developing countries. Yet, in focusing on developing countries, the incidence of urban poverty in other regions should not be forgotten. For example, in Central and Eastern Europe and in the countries of the former Soviet Union political and economic change during the last decade have resulted in imploding economies and a dramatic fall in the standard of living for many people in these countries. Nor have the more affluent Western countries altogether escaped the effects of world recession. The exposure of the older, heavy industries in these countries, especially those in the manufacturing sector, to greater international competition has resulted in structural economic changes and growing levels of unemployment. Coupled with a change in political philosophy towards welfare provision in several countries in Europe and North America during the 1980s this has resulted in cuts in social welfare programmes and the re-emergence of significant members of homeless and destitute people. This phenomenon has resulted in a process of 'social exclusion' for those groups.

The impact of the changing nature of the international economy upon localized economies is one of the themes of chapter III. This chapter highlights the significance of the economic role of cities and city-regions and the changes taking place in the urban economy as a result of the increasing influence of Structural Adjustment Programmes (SAPs), and other macro-economic factors, and the liberalization and deregulation of the global economy. Emphasis is also laid upon the productive role of housing and its significance to the urban economy. In addition to its quantifiable economic role, the non-monetized contribution of housing and the domestic sector, and its implications for gender roles, is also discussed.

Page 122 All of this contributing to the view that the economic role of the shelter sector and related infrastructure provision remains undervalued and underdeveloped in the urban economies of many developing countries.

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Chapter I. Introduction C. The challenge of the human settlements conditions of the world's urban poor Following the context of these initial chapters, the remainder of the report is largely concentrated upon the challenge to politicians and policy-makers presented by the human settlements conditions of the world's urban poor. Chapters IV-X outline the circumstances prevailing in each region of the developing world and attempts to identify trends that affect the urban poor. The outcome is a catalogue of miserable conditions on an extensive scale throughout the developing world. In some regions there is evidence of improvement (e.g. China and some other countries in East Asia and the Pacific), but in others (and particularly sub-Saharan Africa), there is considerable evidence to the effect that human settlements conditions are deteriorating with adverse consequences for the health, safety and security of the population, and most particularly for the urban poor.

The changing policy response of the international agencies in respect of human settlements development is set out in chapter V. This embraces the new agenda of the enablement framework of the GSS and incorporates the refinements of policy development in the interim, including a growing sensitivity towards gender issues, enhanced environmental awareness, the need for sustainable solutions, and an increasing concern over the increasing numbers living in poverty. Moreover, to give a flavour of the responsiveness of government policies to these strategic guidelines, several case studies of recent shelter initiatives for the urban poor are reviewed within the context of this 'new agenda'.

In light of the expressed concern over human settlements conditions in many developing countries and the simultaneous view that the shelter sector and related aspects of infrastructure provision and public works remain underdeveloped, chapter VI highlights the potential for development across a spectrum of policy issues central to the operationalization of the enablement framework of the GSS. Most importantly, this includes a discussion of the scope afforded for employment generation both in respect of construction and related activities associated with human settlements development, as well as ways in which an acknowledgement of the use of shelter as a workplace can also be fostered in order to further employment, and subsequently generate higher levels of income.

Chapter VII is concerned with establishing an agenda for further research and supportive activities necessary to sustain progress in addressing the problems of the human settlements conditions of the world's urban poor. It also anticipates the changing nature of the roles of the various actors in the shelter delivery process, involving the public sector, the private commercial sector, NGOs and community-based organizations (CBOs) with regard to improving human settlements conditions.

The conclusions and recommendations of the report are stated in the final chapter.

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Chapter II. The concept and scale of urban poverty Poverty is not such a straightforward notion as it might seem. It can be conceptualized, operationalized and measured in a variety of ways. It is also political, in the sense that it is closely related to policy issues in economic, social and political systems. Although it makes some sense to proceed by examining poverty in a global and analytical way, it should be kept in mind that the political and economic context is also relevant. The attributes of poverty will vary according to whether their context is in developing or in industrialized countries. Moreover, anti-poverty programmes will be influenced by national and local institutional conditions of culture, social functioning, and politics. In the current world, conditions of poverty are dynamic rather than static. Changing economic structures create new classes of winners and losers; macro-economic performances in some countries are cyclical; and welfare systems themselves are subject to change and reform with consequences which alter the boundaries between social inclusion and exclusion.

Poverty should thus be looked upon from contrasting long and short-term perspectives. Long-term perspectives are related to stages of economic development and the nature of society. For example, in industrialized countries mass poverty has been eliminated but the remaining poverty is more difficult to reduce. It is related to unemployment, old age and disability, and sometimes to distortions in welfare systems which create states of dependency. By contrast in many developing countries long-term poverty is often related to the relationship between the 'demographic transition' and the economy. One aspect of the demographic transition is that some 35 million young workers are placed on to the labour market every year. Unless saving and investment rates are sufficient to increase capital (i.e. factories, offices and equipment), to absorb the increased supplies of labour into formal sector employment, young people will be dependent upon the largely low-earnings in the informal sector to make a living. In other words, much poverty is a structural condition of evolving demographic and economic systems. For countries which are experiencing the transition from socialism to capitalism, the long-term circumstances of poverty are different again. For these countries, labour markets and price systems are in a process of liberalization, thereby altering the patterns of living costs and income distributions. Consequently inequality and poverty increases, and state roles tend to be in transformation from centralized command over resources to some social policy provisions.

It is thus clear that various societies have long-term structural conditions which influence the level and nature of poverty. The long-term conditions are made more complex from the operation of successive periods of short-term changes. Markets are volatile in the modern world; macro-economic fluctuations mediate their influences through labour markets changing short-term patterns of income distribution; and technological and other changes lead to changes in city-regional industrial capacity (see chapter III). All of this means that poverty is short-term as well as long-term in its incidence and patterns. At the policy level it is necessary to formulate policies so that they appropriately relate to both long-term and short-term conditions. Much evidence now exists to indicate that policies make a difference. In the context of macro-economic policies for (austerity) stabilization some Latin American countries experienced an increased incidence of poverty and some increased inequality in the 1980s. However, Chile, which experienced successive rounds of economic recession in the 1970s and 1980s, adopted

Page 125 targeted policies towards the low-income groups to ensure social safety nets for the poorest in health, education, housing, nutrition, and employment (Casteñada, 1992). Accordingly, progress with human development indicators in Chile accelerated: whereas infant mortality in 1960, for example, was 119.5 per 1000 live births, by 1988 it improved to 18.5 per 1000. Some highly performing countries in Asia also maintained continuing progress in human development and in the reduction of poverty.

Table 6 provides a useful overview of the impact of various types of economic reform on workers. As can be seen from the table, urban workers — and female workers in particular — in the "Latin American" and "sub-Saharan African pattern" have been affected by the reforms negatively, while the effects on the agrarian economies of Asia have been more positive. In all reform patterns, however, the unskilled workers are the ones that loose. As unskilled workers are more likely to live in poverty, and as women are over-represented among the poor (estimated to 70 per cent) the main conclusion of the table is that economic reforms have had an adverse effect on the poor, and in particular on the poor in Latin America, the Middle East and Africa.

From the perspective of the mid-1990s it is possible to obtain a useful overview of the nature of policies which lead to reductions in poverty and progress in the improvement of human indicators. Countries with this experience include Hong Kong, the Republic of Korea, Singapore and the Chinese Province of Taiwan. The common denominator of these countries may be summarized as that the countries have had: (1 )

 long-term economic and political stability over some 3050 years;

 liberalized, export-led, economic policies;

 state roles in institutional reform, including establishing appropriate property rights for both market and state economic functioning, with 'market friendly' effects; and

 effective human resources development in health, education, and on-the-job formation of skills in flexible and adaptable labour markets. This human resources development will have been within sustained public policies with important roles from government agencies in social policy and welfare.

The above discussion on variable global regional performances and policies is necessarily generalized rather than revealing contrasts between the averages and the conditions of the poorest in any developing country. In order to obtain a broader view, it is possible to summarise the living conditions of the poorest. In large congested cities the poorest will pursue their shelter needs in a variety of ways. Some will rent room space in a shift system, paying for a few hours respite from the outside world. Others will occupy crowded rental accommodation or dwell on pavements. The more settled poor will seek self-help housing solutions, often commencing their housing careers on the edge of large cities with a small hutment without basic services. Some groups are particularly vulnerable to conditions of poverty, to grossly under-supplied housing and to the dynamics of urban land and housing markets. Low city-wide supplies of housing force the poorest — and most vulnerable — groups into the lowest end of housing markets. This can especially affect women-headed households, low-income large families, and new migrants from rural to urban areas. Vulnerability extends even to housing improvement schemes where policy-makers improve basic sanitation and infrastructure services. Improvements can heighten the competitiveness of housing markets with moderate-income groups displacing the poorest as rents and costs rise affect housing improvement (UNCHS, 1991c). Generally the poor experience changing housing careers in urban areas, with some improving their conditions and others remaining in the lowest ends of housing markets. The flavour of housing careers is depicted in box 1 below. The examples indicate that relationships between poverty, housing and the urban human settlements condition are

Page 126 complex and dynamic. These relationships are subject to some preliminary discussion in the next sections, with further elaboration of urban dynamics in the next chapter.

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Chapter II. The concept and scale of urban poverty A. Income and housing poverty The ideas of housing poverty and urban poverty are not simply extrapolations or straightforward applications of the idea of poverty. They are subject to factors and determinants that do not arise in the simplified idea of income poverty. This section will thus explore the conceptual foundations of income, housing, and urban poverty, beginning with income poverty.

At the technical level much progress has been made since the 1970s in measuring and evaluating income poverty, including its scope, its depth, its geographical incidence and the inequality within poverty (see Lipton and van der Gaag, 1993; van der Hoeven and Anker, 1994). Various operational measures of poverty are available, each having its relative merits. The simplistic approach is to define a subsistence or calorific budget level and cast this as an 'absolute' poverty line, in developing countries sometimes specified as $1 daily, as is the case with the poverty line used by the World Bank (see table 7 ). From this poverty line, it is possible to compare performances through time and comparatively among countries. The measure is not free of dilemmas, for example, of relying upon differing cultural and situational conditions, consequently introducing elements of a relative poverty line into the definition. A 'relative' poverty line allows for purchases which are culturally or socially 'essential' and related to norms in the wider society, including among the non-poor. Both absolute and relative poverty lines can be used to establish 'headcounts' of the numbers in poverty.

The above measures of income poverty omit some important considerations, however. In themselves they indicate virtually nothing about the intensity of poverty, about the necessary redistributions of GDP which would be necessary to eliminate poverty, and about the inequality within poverty which is important for asking the question: How poor are the poorest of the poor? Thus, various poverty indexes have been devised to elaborate the operational concepts of poverty. A 'shortfall index' calculates the average income level of the poor (this being below the poverty line), and from this it is possible to specify the proportion of GDP which would be necessary to redistribute resources nationally to eliminate poverty. In greater elaboration, poverty can be measured in relation to the inequality in income distribution among the poor, this having the advantage of incorporating sensitivity to the intensity of poverty. It is also, of course, possible to classify poverty into such categories as geographical region, ethnicity, age, and gender, consequently revealing more. All the foregoing operational conceptualizations of income poverty have their uses, but they do not tell us all we would need to know about poverty. For example, as suggested above, they do not establish an analytical relationship between income poverty on the one hand and housing and urban poverty on the other. Also, poverty has to be understood in some basic philosophical and political ways in order to deepen our understanding of the meanings which can be attached to poverty.

Viewing poverty in a political way is to see it as significant in economic, social and political processes. Several recent authors argue that in these broad political dimensions poverty is much more than a matter of operationalizing it to forms of measurement. Chambers (1995) asks questions about how the poor themselves understand the significant aspects of their poverty. He finds that they are concerned with their vulnerability to unemployment, to disease and to such contingencies of life that would

Page 128 undermine their security. Moser (1995) commences from the position that countries are routinely subject to economic review and sometimes to correction, but far less so to a social audit of their performances. She wishes to introduce social audits based on some general administrative reforms in the public sector. Reforms are necessary because the public sector tends to be divided into social agencies in a fragmented way. The requirements for a social audit are for overall reviews, drawing together the fragmented agencies to address such things as poverty, quality of life, and human development. In other words Moser advocates a 'holistic' and 'unified' view in establishing and implementing social audits. Wratten (1994) also favours a holistic approach, noting that the mere measurement of poverty does not in itself engage the participation and integration of the poor into social, economic and political processes. Poverty is thus seen as a broad-based concept woven deeply into social, economic and political fabrics.

Broadened views of poverty originate not only in studies of political and social systems. They have also become part of the philosophical study of human well-being. The philosophy of wellbeing is important because the way poverty is understood influences social perceptions and, sometimes, policy formulation. As noted by Kymlicka (1990), since the 1960s there has been a range of competing theories of the political philosophy of well-being. These include the economics-based ideas of utilitarianism (i.e. the pursuit of 'happiness' in society), a recourse to formulations founded upon egalitarianism (the major one of which is Rawl's theory of social justice), and Sen's ideas of 'capability welfare' (Sen, 1992; 1994).

Poverty should, however, not only be considered in the context of 'haves' and 'have-nots'. Within the overall framework of enabling shelter strategies it should also be considered in view of the 'can-dos' and 'cannot-dos'. A majority of past interventions to improve the human settlements conditions of the urban (and rural) poor have in practice ended up as subsidies for the 'not-so-poor', and even to members of the middle-income group (UNCHS, 1991b). It is thus of utmost important to identify who the poor are (and who they are not). Figure 5 illustrates how this can be done, by making a distinction between the 'poor' and the 'lower-income group' and between 'destitutes' and 'working poor'. By destitute is meant "those in utter destitution, who only in very favourable circumstances will be able to achieve an improved life. They are often handicapped in some way, or are either very young or old" (UNCHS, 1994). These are the ones for whom enabling shelter strategies means little or nothing. It is only by assisting the not-so-poor to help themselves, that resources can be made available to assist this group. Such direct assistance must be shaped by other principles than affordability and cost recovery. The term "working poor" does not imply that the people in this category are actually employed, but rather that they are employable: "Within an enabling environment the working poor will be able to make a living, house themselves and obtain some services for which they can pay. The 'working poor' includes different groups, for instance people who work long hours for very low pay or who are engaged in low renumerative business. They have recently been joined by workers in the lower grades of government and private sector employment. A large category of the working poor are women who are heads of households. They have typically low levels of education and lack marketable skills and easy access to credit" (UNCHS, 1994). Most standard measures of poverty are closely tied to income and household budget levels. Extending the topic from poverty to well-being adds other human development indicators such as mortality and literacy rates. UNDP has since 1990 calculated a human development index based on a composite of GDP per capita, health and education indicators, as well as measures of income distribution (UNDP, 1990). Housing is a central aspect of urban poverty and well-being. Yet, to date it has not been included in the human development index, despite the work undertaken by the United Nations and World Bank on developing housing and urban indicators. The really significant point in all of this is that, though related, income poverty and housing poverty are not the same thing. Undoubtedly, low income is frequently a major cause of housing poverty, but such housing-related conditions as low supplies,

Page 129 ineffective land policies, inappropriate building codes, and imbalances in tenure and finance can also be significant in assessments of housing poverty and affordability. The criteria which determine the existence of housing poverty include high rent/repayment-to-income ratios, substandard and unfit housing conditions, and substantially blocked access to adequate housing. All the foregoing matters are central in discussions of housing poverty, all to some extent affecting the quality of life of pavement dwellers, squatters, slum dwellers, and public policy responses to low-income housing problems. Housing poverty is also significantly influenced by general economic conditions including inflation, unemployment, rapid changes in the structure of the economy (a phenomenon of the post-1970 world), and changes in the rate of interest. High rates of inflation, recession-induced unemployment, the redistribution of the advantaged and the disadvantaged in structural change and increasing rates of interest can all bring adverse effects to the housing sector, and sometimes increase housing poverty. More is said about these housing and urban poverty effects later in the chapter. Meanwhile, in the light of these notions of housing poverty it is clear that housing has to be conceptualized as something more complex than mere shelter.

If housing professionals and policy-makers are to formulate policies and practices in urban housing as whole sector development, then housing should be understood as linking 'top-down' and 'bottom-up' perspectives. Accordingly, it is related to development policies and performances, to long and short-term macro-economic conditions, to urban economic and demographic development, and to the land-fixed nature of urban growth and change. It is thus closely associated with policies and delivery systems in land, in infrastructure services, in finance capital markets, and in regional-local governance which often comprises vertical and horizontal intergovernmental and inter-agency relations. All of this brings housing both within multi-objective and multi-institutional relevance, with associated issues from the political economies of efficiency, distributional justice, poverty, pragmatic feasibilities, and broad concerns for income and housing poverty. Income poverty is primarily about the necessities for subsistence and the adequacy of resources for dignified living conditions. Housing poverty is about the price-access to sanitary housing, to affordable rent-income ratios, and to satisfactory health and environmental conditions in low-income living areas. Housing is also related to the generation and distribution of 'urban welfare'. Urban welfare is associated with primary income from earnings and other monetized sources. But it also includes the values of social benefits (and costs), housing-related externalities in locational (dis)amenity and environmental conditions. Urban welfare is generated in conditions of changing inequalities, and property rights in land, housing and other assets can influence levels and distributions of urban welfare.

Thus conceived, housing and urban welfare has a number of useful applications. It adds significance and information in reviews of urban poverty; it can be used in developing integrated urban social policies; and it enlightens the constituent elements in housing and urban sector development. These are the themes in the remaining part of this chapter and in the chapter that follows.

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Chapter II. The concept and scale of urban poverty B. The scale and characterization of urban poverty in developing countries From the earlier discussion it should be borne in mind that the term 'urban poverty' has more complicated conceptual foundations than simply measurement of income poverty in urban areas. It includes wider notions of urban welfare with its associated meanings to housing poverty and the price-access to urban utilities and infrastructure. Nevertheless, headcounts of absolute poverty can provide some relevant indications of poverty. Table 7 provides the most recent World Bank estimates and projections of global and regional poverty over the period 1985 to 2000. This shows that although the incidence of poverty in developing countries as a whole has fallen and is expected to continue to fall before the year 2000, the total number of those in poverty is expected to be higher by the year 2000 (at 1.1 billion), than it was in 1985. The greatest incidence of poverty is to be found in sub-Saharan Africa and in South Asia (including India) where almost half the population were classified as living in poverty in 1990. In terms of absolute numbers the greatest concentrations of poverty are in South Asia (including India). According to the figures in table 7 , half of the worlds's poor population (some 562 million people) live in this region. By the year 2000 it is anticipated that the incidence of poverty is likely to fall in all regions with the exception of sub-Saharan Africa, which has more severe problems than other regions, because of low economic growth and high rates of demographic growth and urbanization. In numerical terms, however, the number of those experiencing poverty is likely to grow in Latin America and the Caribbean, North Africa and the Middle East and substantially in sub-Saharan Africa.

As outlined in chapter I, the numbers experiencing absolute poverty in urban areas are increasing much faster than those in rural areas and continued rapid urbanization suggests this trend is likely to continue. The estimates in table 7 do not differentiate between rural and urban poverty, but if a consistent rate of urban poverty to that which existed in the late 1980s (i.e. 25 per cent), were applied to the urban population in developing countries in 1995, then the current number of city dwellers living in poverty would be about 430 million. This compares well with a previous World Bank estimate (1988a) that by the year 2000 some 425 million people will be living in absolute poverty in urban areas. (2 ) By that time 90 per cent of all poor in Latin America will be living in urban areas. Similar figures for Asia and Africa are estimated at 45 and 40 per cent. Table 8 provides a World Bank estimate on the incidence of urban poverty by the late 1980s. The largest number of urban poor is to be found in Asia, while the incidence of urban poverty is higher in sub-Saharan Africa, where nearly every second urban dweller live in poverty.

Table 9 contains estimates from UNDP on the extent of poverty in developing countries (UNDP, 1994). In contrast to the World Bank's data — which are based on one common poverty line for all countries — the UNDP estimates are based on poverty lines in the individual countries. As can be seen from tables 7 , 8 and 9 , there are no general agreement on the extent of poverty. The extent of poverty in Latin America and the Caribbean and in sub-Saharan Africa, in particular, differ considerably between the various estimates, with UNDP's estimates about 100 million higher than the World Bank's for each of the two regions. The UNDP estimates of urban poverty, however, are lower than those of the World Bank for sub-Saharan Africa (63 per cent of World Bank figures) and for North Africa and the Middle East (50 per cent of World Bank figures).

Page 131 The use of one common poverty line for urban and rural areas tends to underestimate the scale of urban poverty. This is particularly the case in the current situation of rapid urbanization, when an increasing number of developing countries experience negative population growth in rural areas. The relatively higher cost of housing and/or food in urban areas should be taken into account when defining poverty lines, even despite the fact that access to services such as health care, safe water and sanitation tends to be considerably better in urban than in rural areas (see table 10 ) (3 ) . Yet, despite these reservations, some 180 million urban dwellers are living without access to safe water (12 per cent of the urban population, compared to 40 per cent of the rural population), and a staggering 500 million without access to proper sanitation facilities (31 per cent of the urban population, compared to 82 per cent of the rural population). In fact, some 600 million urban dwellers live in life- and health-threatening houses and conditions characterized by overcrowding and lack of basic services such as piped water, sanitation and health care (WHO, 1992). This figure is about twice as high as the figures presented by the World Bank and UNDP on the volume of urban poverty.

What does all of this mean in terms of portraying poverty and in response to the question: Who are the poor? Some earlier references to housing careers and poverty were set out in box 1 . The World Bank's portraits of poverty (World Bank, 1990) include a family of seven in Ghana living in a meagre hutment without basic services, with their income derived from subsistence activities; and a Peruvian household living in a shanty-town shack without sanitation and electricity services. The Peruvian household obtains its water from a standpipe some 450 metres from the shack, and the adult earners are dependent upon intermittent work at low pay in the informal sector. Box 2 provides a telling description of the daily life of many poor urban dwellers.

Generally, we may say that the poor include the following:

 large families with high dependency ratios (i.e., high proportions of the young and the aged who are not in gainful employment);

 sections of the population which are un- or underemployed: This means vulnerability to fluctuating employment opportunities in the low end of labour markets in the informal sector;

 the poor are disproportionately women (about 70 per cent), including growing numbers in female-headed households;

 the illiterates: the poor generally lack basic education and are often illiterate: some 20 per cent of the poor urban males are illiterate and some 45 per cent of the females; and

 those with low status and no social support, such as street children and other destitutes.

Poverty is thus seen as a consequence of gender inequality, low productivity in the informal sector, vulnerabilities in changing labour markets, a lack of basic education, and the absence of social support. These are all aspects of long-term economic and social development, and as argued earlier and subsequently in this chapter, are largely a matter of the quality of development policies and the structural realities of comparative stages of economic development.

Although structural poverty, is — as we have seen — a problem of substantial volume in developing countries, it should be appreciated that some real progress has been made in the well-being of millions in many countries. Various reviews of progress in human development (e.g. Lindenberg, 1991; UNDP, 1995) indicate that in overall performance the developing countries have made as much progress in health and educational improvement in a generation than the richer countries did in a century of development. Since the 1960s infant mortality has been halved in developing countries and school enrolments have increased by some 50 per cent. Life expectancy in the developing countries has

Page 132 improved by some 17 years, reaching 61 years, compared with industrial countries at 76 years. These are, of course, averages and as such they hide wide differences in performances among countries. The improvement has been achieved notwithstanding some increased inequality among nations, and in relative terms the GDP per head of the population in developing countries is only 5 per cent of the levels in the industrial countries. Nonetheless, some of the poorest countries (e.g. Sri Lanka) have performed comparatively well on human development indicators. Such countries have achieved this with long-term political and administrative commitments to welfare and human resource development.

Gender inequality in human development is becoming increasingly significant in reviews of progress with human development indicators. It is the leading feature in the 1995 Human Development Report ( UNDP, 1995). Some 70 per cent of the world's poor are female and it is predicted that this ratio will rise. Some of this reflects gender disparities in human resource development, especially in education, health and training. As suggested by UNDP, even though education and health are improving among women, in social and economic processes economic opportunity are still not enough open to women. The UNDP calls for equalities of opportunity and the empowerment of women. Kymlicka (1990) goes further. He emphasizes that reformist attention needs to be given to the gender inequalities in domestic labour (especially in childrearing responsibilities), and in the relationships between the out-of-home 'public' world and the 'at-home' private world. Gender inequalities are deeply structured within most societies, and many of them have adverse consequences for overall social and economic development. Nevertheless, policies and cultural differences do have some effect upon gender inequalities. The human development index (UNDP, 1995) is recomposed to measure a gender sensitive companion index. The resultant gender development index reveals that some countries are consequently re-ranked with their gender development index above their human development index rankings, and others are re-ranked negatively on the gender development index.

This section has revealed some of the conceptual and statistical dimensions of poverty, also indicating answers to the question: who are the poor in developing countries? It has been seen that poverty is very much related to informal sector low incomes, to large dependency ratios in families, to low levels of education and skill, and to deeply structured gender inequalities. Though closely related, income poverty, housing poverty and urban poverty are not the same thing conceptually. Income poverty is based upon income, whilst housing poverty is related to rent and repayment ratios (along with overcrowding and substandard conditions), and urban poverty to the price-access to essential utility services. The existence of squatter settlements and slum living conditions is suggestive of the co-existence of affordability and low housing supply problems. At the policy level the implications are towards long-term development to have positive effects upon income growth (especially in the bottom 40 per cent of the distribution of household incomes), upon whole housing sector development to improve supplies, and upon extending basic urban services.

The following discussion will continue the discussion on affordability and supply issues. Meanwhile it is appropriate to review some contrasting regional urban poverty experiences.

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Chapter II. The concept and scale of urban poverty C.1. Regional experiences of urban poverty: Asia As indicated earlier Asia includes countries which have pursued successful long-term development policies (i.e. Hong Kong, the Republic of Korea, Singapore and the Chinese Province of Taiwan. Furthermore, during the 1980s the two most populous countries in world, China and India, both experienced satisfactory economic growth. It is thus not surprising that in Asia as a whole both the incidence and the volume of poverty have decreased over the last decade. Yet, some 730 million people in Asia remained in absolute poverty in 1990. Economic growth may tend to reduce poverty, though not consistently at all times and in all places. The performance in poverty reduction has been uneven.

Table 11 provides a useful representation of poverty, housing and urban living conditions in four of Asia's large metropolises, Manila, Jakarta, Calcutta and Madras. It can be seen that notwithstanding progress in reducing poverty and promoting human development, very substantial problems continue to exist. For example, it is estimated that some 60 per cent of Calcutta's population is living in absolute poverty; that urban population growth in Jakarta are high at 4 per cent per annum; that in Madras some 60 per cent of population lives in substandard housing; that 50 per cent of the labour force in Manila is in the informal sector; and that some 58 per cent of Jakarta's residents do not have satisfactory access to human waste disposal systems. Statistical magnitudes are one thing, and the life's experiences of the poor another. In many Asian cities urban living conditions can be described as a drama involving millions. For example, in China with the post-1978 progress of the country towards some market liberalization and modernization, rural income has been stagnating in the mid-1990s. This is leading to massive migration and the development of squatter settlements in Beijing's Henan, Kingiang and Zhejiang districts.

A number of studies on urban poverty commissioned by the Asian Development Bank (AsDB) indicate that the incidence of income poverty has decreased in various countries. (4 ) Moreover, in its most recent review of economic prospects for development, the World Bank concluded that, "South Asia and particularly East Asia and the Pacific are expected to achieve appreciably more growth than the estimated minimum needed for the number of poor to fall" (World Bank, 1993c). This is consistent with the estimates illustrated in table 7 above which anticipated a significant decrease in both the incidence and volume of poverty in the region by the year 2000, with a dramatic fall taking place in East Asia. Nonetheless, as chapter IV demonstrates, the housing and environmental conditions of the urban poor in cities throughout the Asian region remain miserably inadequate, which suggests that — alongside policies to sustain economic growth — sectoral policies in land, infrastructural development and housing also require urgent attention.

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Chapter II. The concept and scale of urban poverty C.2. Regional experiences of urban poverty: Sub-Saharan Africa and Latin America and the Caribbean Within the context of the increasing globalization of the world economy the most vulnerable regions in terms of economic performance and political instability are sub-Saharan Africa and Latin America and the Caribbean. In sub-Saharan Africa, for example, the region's share of global trade has fallen from 3.8 per cent in the 1970s to just 1 per cent in the 1990s. As a result, the total external debt more than tripled between 1980 and 1989, and in it 1992 was equal to the GNP of the region as a whole. In 1990 debt service payments amounted to 22.1 per cent of the total value of the exports of goods and services as compared with 10.9 per cent in 1980 (Saitoti, 1993). Many countries of the region have entered into SAPs with the World Bank and the International Monetary Fund (IMF). Yet, the outcome is that sub-Saharan Africa has become a net exporter of financial services: "Between 1983 and 1990 the fund's [IMF] net operations in sub-Saharan Africa have resulted in a massive net transfer of resources from Africa, amounting to a cumulative figure of US $ 4.6 billion" (Saitoti, 1993). Despite the relatively early development of industrialization and urbanization in Latin America, the region was hit by economic crisis in the early 1980s. This was characterized by international indebtedness, the stagnation of production, high and sometimes hyper inflation, falling incomes and growing impoverishment. "Between 1980 and 1989, the overall gross national product of Latin America and the Caribbean declined by 8.3 per cent ... only Chile, Colombia and Cuba managed to grow. Most of the rest experienced major recessions with per capita income in Argentina, Ecuador, Peru and Venezuela declining by around one-quarter, and in Nicaragua by one third" (Gilbert, 1994). These financial difficulties meant that many countries in Latin America and sub-Saharan Africa were among the first to enter into SAPs with the World Bank and IMF. These programmes generally had two components. The first component was stabilization in the form of austerity packages to correct imbalances in the balance of payments and excessive inflation. The second component consisted of the liberalization of markets, export-led growth, exchange rate re-adjustment (usually devaluation), privatization, and reforms in taxation and public expenditure. Experience shows that the stabilization policies did not always in themselves provide growth because growth depended upon a wider set of conditions. These included human capital formation, skills development, entrepreneurship and related matters, as reviewed in earlier discussions in this chapter.

What were the consequences of stabilization and structural adjustment upon poverty in Latin America and sub-Saharan Africa? First, it should be appreciated that this question cannot be answered in clear-cut and uncontroversial ways. Problems arise in the methodology used for assessment (Berg and others, 1994). It is not easy to establish base lines for comparing countries with and without adjustment policies; countries entered adjustment from different positions at varying times; and it is difficult to establish an agreed set of classifications and criteria for assessment. For each of these reasons it is virtually impossible to attribute the results between adjustment policy and general economic causes and effects. Second, it should be recognized that for many developing countries the 1980s was a difficult

Page 135 decade, regardless of whether countries entered into formal adjustment and stabilization policies. For example, energy prices increased in the early 1980s, exports sometimes decreased in the face of international economic recession, the terms of trade deteriorated in many developing countries, and financiers withdrew their sources of funding. Yet, as was outlined in table 6 , the impact of these policies have, in general, been rather negative for the poor (and in particular for female unskilled workers in urban areas).

Table 12 illustrates the economic performance of selected Latin American countries during the period of macro-economic adjustment. It may be seen that whilst there is evidence of an upturn in economic activity in the late 1980s and early 1990s, this is not universal and some economies have reacted more favourably to deregulation and exposure to international competition than others.

Economic performance in many sub-Saharan African countries over the same period has also been very poor with per capita incomes falling in several countries, and some countries also experiencing reduced levels of public expenditure and investment (Stewart, 1995). Whilst human development indicators have continued to improve, albeit at a slower rate than in the 1970s (5 ) , the World Bank figures ( table 7 ) show that — in contrast to trends for the developing world as a whole — both the incidence and volume of those living in poverty increased in Latin America and sub-Saharan Africa during the latter half of the 1980s.

As to future prospects for economic growth, the World Bank (1993c) anticipates that the future rate of growth in Latin America and the Caribbean will be sufficient to create a reduction in the incidence of poverty, but its projections show an increase in the numbers of those living in poverty to 126 millions by the year 2000 (see table 7 ). For sub-Saharan Africa the prospects are grim: "Under current growth projections ... sub-Saharan African countries are expected to grow by only 3.3 per cent, whereas the minimum growth rate that would be needed to reduce the number of poor is 4.7 per cent.... Thus, under current conditions and expectations, the number of poor in sub-Saharan Africa is likely to rise still further during the next decade" (World Bank, 1993c). Table 7 forecasts a 40 per cent increase in the number of absolute poor in sub-Saharan Africa, to over 300 million by the year 2000. As chapter IV illustrates, the declining economic fortunes of countries in Latin America and especially those in sub-Saharan Africa have resulted in deteriorating housing and environmental conditions for the urban poor.

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Chapter II. The concept and scale of urban poverty D. Concluding perspective This chapter have elaborated upon and reviewed the conceptual and statistical aspects of poverty. Although the incidence of poverty in most parts of the developing world has been falling and indicators of human development are improving, it has been established that urban poverty remains a formidable problem. Its problematical nature has several aspects. First, and quite obviously, the number of people living in absolute poverty is enormous, exceeding one billion worldwide. Second, urban poverty is deeply structural, related to the demographic transition and stage of economic development in many developing countries. Having this deep structural nature, urban poverty requires long-term development policies for its sustainable reduction. In some newly industrialized countries (e.g., Hong Kong, the Republic of Korea, Singapore and the Chinese Island of Taiwan), sustained development over a period of about three decades has led to reduced incidence and volume of poverty, lesser inequalities and good progress in human development indicators. Also, some poorer countries such as Sri Lanka have adopted public policies which have been relatively successful in improving human development. Third, notwithstanding the foregoing, macro-economic fluctuations (and sometimes special stabilization and structural adjustment policies), have led to some shorter term 'cyclical' poverty. It was not until the late 1980s that the World Bank, the IMF and national governments began to appreciate the value of making macro-economic adjustment in favour of the poor and with special safety nets. In the 1970s and 1980s Chile had revealed the potential effectiveness of well targeted and reformed social safety net programmes. Finally, it has been seen that the idea of 'urban poverty' has larger meaning and complexity than merely the measurement of income poverty in urban areas. In addition to income poverty, urban poverty includes lack of or limited access to amenities and basic services, and an appreciation that housing poverty has characteristics which are additional to income or subsistence poverty.

One aspect which does bind income and housing/urban poverty in close relationship to each other is the matter of affordability. In housing, affordability can be understood in analogy to the blades of a pair of scissors. One blade is the level of income, and among the urban poor in developing countries this is closely identified with low wage occupations and the intermittent and low earnings in the informal sector. The other blade is represented by the supplies and standards of housing which are available. The extensive existence of squatter settlements and crowded slums in developing countries indicates that housing supplies are inadequate. This raises the question as to the effective development of the housing sector as a whole. Affordability is a question of the nexus between housing supplies from the housing sector and income levels from low-wages and informal sector earnings, that is the nature of the intersection point on the analogous pair of scissors. In practical terms affordability is about rent/price-to-income ratios, occupancy rates, the qualities of housing, and security in being able to make medium-term choices in houses. At the policy level, the income side of the affordability issue can be improved by the sort of economic growth which is likely to increase the relative and absolute share of income going to the 40 per cent of household with the lowest incomes. The housing poverty side of the affordability issue is a matter of improving the volumes of housing from the housing sector. Thus, a policy framework is needed to enhance housing supplies, and more is said about this below. To summarize: The concept of housing poverty is useful when — in an increasing number of cities, particularly in

Page 137 sub-Saharan Africa — an increasing number of households from the middle-income group are forced to live in informal-sector housing, without security of tenure nor proper access to basic services. Although these households may not be classified as living in income poverty they should be characterized as living in housing poverty, even in the absolute sense of the word.

The affordability issue also involves the scope and quality of utility and infrastructure services in the urban living areas of the poor. It is a question of access to piped water, adequate sanitation services, and the reversing of the degradation of environments in urban living areas. In this case, affordability is far more complex than in our housing analogy of a pair of scissors. Utility and infrastructure services confer both private (individualized) benefits to households and social (collective) benefits to wider communities in the reduction of disease and the improvement of amenity in living areas. The private and social benefits are inextricably mixed together in the provision of services. As delivery systems, the resourcing and financing of affordable infrastructure services will often involve co-ordination between public finance from government, private finance from households and firms, and self-help from households. In terms of policies, innovations in developing public-private sector municipal funds and community-based self-help are occupying the attention of the World Bank and UNCHS (Habitat). Examples of good joint ventured progress and community-based development occur in Mexico's 'Solidarity' programme. Infrastructure and utility services in neighbourhoods are jointly financed by central and local government, government utility agencies, and organized groups of households which provide monetary contributions and self-help labour.

In the future, urban poverty issues are increasingly likely to fall within comprehensive and integrated policy frameworks. This is influenced partly by the 'new agenda' developments by the World Bank and UNCHS (Habitat) since the mid-1980s. (6 ) The 'new agenda' gives emphasis to the economic productivity contributions from the housing and urban sectors (see chapters III and VI). It also has its setting in the political economy of 'enablement' and partnerships among government agencies, private sector firms, CBOs, and households. The idea underlying enablement is the mobilization of resources, saving and investment within legal, financial and institutional frameworks for housing and urban sector development. Thus, there are perceived to be greater chances for the reduction of poverty in enablement frameworks which enhance urban agglomeration economies, which extend the productivity of the housing sector, and which develop policies aimed at improving urban welfare and urban environmental conditions, including neighbourhood infrastructure services. Or, as it was phrased earlier in this chapter: It is only by enabling the working poor to help themselves that resources can be made available for direct interventions to assist the poorest group, the destitutes. Of course, as yet, many countries have not fully (or even partially) developed the comprehensive integrated enablement frameworks envisaged in the new agenda. Nevertheless, such policies are increasingly becoming part of the development agenda in a number of developing countries.

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Chapter III. The urban economy Urban economic change has accelerated since the early 1980s. Urban growth rates have been high in developing countries. Current changes are, however, also characterized by structural economic change in which markets have become more volatile set in contexts of rapidly changing compositions of demand and supply. City-regions are thus experiencing significant re-allocations of industrial capacity, new patterns of wage and income relativity in labour markets, and more intensive competition as locales for production and market power. All of this comes in a context of increased macro-economic fluctuations among some countries and a strong trend in the international economy towards the deregulation and liberalization of markets. The change has various social and political consequences. New inequalities and vulnerabilities are arising in urban labour markets with new patterns of winners and losers. At political levels there are new constraints and opportunities. National governments face constraints in economic policy because internationally countries face competitive disinflation and economic and political risks if they do not pursue policies for liberalization and enhanced growth. On the other hand, city-regions are able to take their own initiatives to promote the extension of their industrial capacity and to enhance their competitive positions. Subsequent discussions provide examples of city-regional initiatives for enhancing competitiveness.

From the foregoing it is clear that a variety of issues can be derived from the economically changing context of city-regions and their human settlements. The issues can be exhibited from a set of questions. What is there in the economic nature of the urban and housing sectors which can improve overall production, productivity and employment? This question is, of course, especially relevant to developing countries where economic growth is important in itself and for its potentiality to reduce some aspects of poverty. How do such things as structural-spatial economic change affect patterns of poverty and inequality? The patterning of poverty and inequality can be referred to at various levels of application. Inequalities and poverties can occur within specific city-regions; they can occur in the re-ranking of economic and social performance among city-regions; and, as indicated in chapter II, they occur in global regional perspectives, for example, in comparisons between sub-Saharan African countries and those newly industrializing countries of East Asia and the Pacific. These questions become relevant themes in what follows in this chapter. Their relevance and significance is raised from some preliminary discussions of the nature of modern urban development.

The nature of modern urban development can be ascertained from an understanding of the economic role of cities and from post-1985 urban research studies. In this, modern urban development will be seen to have a wide diversity of significant characteristics. Urban areas have made substantial contributions to the generation of income and employment. During the 19501980 period, however, theories of 'urban bias' and urban over-development suggested that urban areas were advantaged by economic policy distortions relative to rural areas. That is not all. The theory of urban bias indicates that these policy distortions increased poverty, especially rural poverty among small farmers. But since 1980 economic policies have been largely reformed in the direction of market liberalization. Accordingly, as will be seen, there is substantially reduced urban bias, and, on the positive side, there is a growing appreciation that overall economic development depends upon the qualities and efficiencies of urban

Page 139 development. This opens up the question of the relationship between urban agglomeration economies and national and international economic development. It is a two-way relationship, both from the urban to the wider national and international economies, and from these wider economies to the urban economy. The two-way relationship has dynamic characteristics in a period of intensive and extensive structural change and with greater international integration of national and city-regional economies. All of this has to be explained and brought to relevance, commencing with a review of the role of cities and urban areas.

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Chapter III. The urban economy A. The economic role of cities The real economic significance of cities was not fully appreciated in the period from the 1960s to the late 1980s owing to the influence of the theory of 'urban bias' (see the discussions below). As reasoned by Peterson and others (1991) new perspectives on urban economic development have become relevant. Cities contribute some 60 per cent of GDP in developing countries; they are at the heart of technological and social change; they absorb labour supplies as a consequence of rapid economic growth; and, as indicated in the two previous chapters, in the future they will be the locale for the growing concentration of poverty owing to demographic change towards urban areas. In an economic regime of liberalized markets, moreover, urban and rural development become mutually supportive. Rural areas supply cash crops to urban areas; they purchase inputs from the cities; and they add inter-sector flows of savings for urban capital development. Meanwhile urban areas supply necessary manufactured goods for farming and urban expenditures add to rural growth.

In some countries changes in the urban economy have been dramatic since the early 1980s. Industrial countries have witnessed a recomposition of activities, with increased employment in service industries and reduced employment in manufacturing. This has led to a re-allocation of industrial capacity among city-regions in a process of continuous structural-spatial adjustment. Change is also occurring in the countries transforming from socialism to capitalism, led by price liberalization and the privatization of capital. This alters patterns of income distribution in labour markets and it leads to new geographical patterns of trade and investment, consequently affecting the relative growth (and regress) of some city-regions. The most dramatic changes, however, are occurring in the developing countries, and this can be illustrated in examples drawn from China and India, the two most populous countries in the world.

Faced with a balance of payments crisis and depleted reserves of international currencies in 1990 1991, India accelerated its commitment to fundamental economic reform for integration into the international economy. Although India's economic reforms for structural change date only from 1991, as reported by Harris (1994), already some impacts are appearing in city-regions. In Bombay and other metropolitan centres some manufacturing industries (e.g., textiles) are in relative decline; other industries are showing signs of development (e.g. engineering and services), and within several of the major conurbations industrial plants are decentralizing to the suburbs. More generally in some of India's cities, joint capital from both East Asia and the West is introducing new technology, new production methods, and modern management practices in manufacturing. Swissair has located its computerized air ticketing in Bombay. This is an example of large international firms unbundling their activities and processes in production and relocating some on an international geographical scale. In Falner, Rajasthan, this formerly sleepy town has sprung to economic life whilst, by contrast, in Mizapur, Uttar Pradesh, the carpet industry is under competitive pressure from other Asian countries.

In China, examples of significant urban change have occurred in many cities, especially in Guandong province, and the city of Shenzhen, bordering Hong Kong. Structural change in Guandong is often associated with new urban development, occurring on greenfield sites and falling within China's post-1978 'open door' economic policies, aimed at a step-by-step market liberalization. Guandong

Page 141 became the location of some of China's special economic zones, with Shenzhen having status as a special economic zone in 1984. Shenzhen grew from a poor city of some 320,000 population in 1979 to a city of some 3 million by 1995. In the process of growth Shenzhen's per capita income grew to seven times the national average, as Shenzhen became China's showcase of new management practices, decentralized economic decision making and accelerated foreign investment. However, by the mid-1990s Shenzhen has begun to experience competitive pressures from other cities in China.

Outside Guandong, Shanghai represents an example of localized initiatives from city government to create a planned impetus for long-term economic restructuring over the period from 1990 to 2030. Shanghai was not one of the special economic zones during the 1980s: Instead with the advent of the national government decentralizing economic autonomy to the provinces and cities in the 1990s, Shanghai's leading politicians set their own programmes for reform. They had to deal with a crumbling infrastructure, a declining industrial base, and a delayed start to economic regeneration relative to cities in China's special economic zones. New programmes were introduced, with a focus upon creating a gigantic new industrial estate in Pudong, which is as large in area as Shanghai itself. International finance capital markets were tapped to secure some $710 million per annum in 'construction bonds'. Additionally new infrastructure is being built and old improved in the Shanghai region. Policy-makers are attracting direct investment, partly by offering stable prices on land leases. Being aware that economic restructuring increases vulnerability in some sections of the labour market and requires some upgrading of skills, policy-makers have introduced some basic social security and training programmes. The economic reforms have genuine impetus, reflected in the attraction of some $3.5 billion in foreign funds to Shanghai in 1992.

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Chapter III. The urban economy B. Urban bias and post-1980 changes Economic policies have themselves influenced the balance between rural and urban development in developing countries, and also the nature of urban development. During the 1960s many developing countries had opted for modernization, often via import substitution and protectionism, thereby assuming a favour towards urban economic development. In the 1970s some development economists (7 ) , formulated theoretical and political arguments criticizing the inherent bias in protectionist policies. Lipton (1977; 1984) addressed the question as to why poor people stay poor, and answered it by asserting the cause as 'urban bias'. The economic arguments for urban bias run along the following lines; protected industries produce goods and services at higher prices than if they were exposed to foreign competition. Some of these goods are inputs into rural food production consequently raising farm costs to higher levels than under international competition. The urban-rural price distortions also mean that rates of increases in prices of manufactured goods are greater than they would be under free trade, and greater than rates of increase in food prices. In other words, the terms of trade between urban and rural products are policy-biased in favour of the urban formal sector where manufactured goods are produced. In addition, protectionist policies often lead to over-valued exchange rates, thus having detrimental effects on potential agricultural exports. Accordingly income and employment growth in rural areas are restricted. At the political level, coalitions of urban employers and workers could also bias the political conditions in their favour.

There are various implications from the theory of urban bias and from protectionist policies. First, many bilateral aid agencies became aware of the reasoning and sought to counter some of the bias by favouring development aid for rural areas. This remained relevant until the late 1980s when the economic role of urban areas was more thoroughly appreciated (see the subsequent discussions). Second, the existence of large volumes of rural-urban migration — along with theories which sought to explain it, such as the Harris-Todaro model, (8 ) seemed to reinforce the bias and place development dilemmas on policy-makers. That is to say, it was argued that the protectionist policies induced urban migration, consequently adding to the costs and burdens of supplying housing, infrastructure and utility services. Third, some countries went further by imposing price controls on rural products, this being adverse to farmers and, at worst, leading to lower supplies of food and dependence upon imported food products. Fourth, the protectionist and agricultural price control policies tended to cut across research findings which revealed that in the early stages of modernization agriculture plays a key role in overall development. For example, various authors (9 ) indicate that a dynamic and liberated agricultural sector can enhance inter-sector supplies of savings and investment to finance the high capital demands of urbanization. Also, the presence of a price liberated agricultural sector leads to less economic distortion and to a more evolutionary and gradualist experience in rural-urban migration.

Although not considered by the authors of urban bias (e.g. Lipton, 1977; 1984), it can be argued that protectionist policies were also adverse to urban as well as rural poverty. Once the scope of discussion is broadened to include urban informal sector development various economic and social implications follow, some of which countervail the original more restrictive reasoning in the theory of urban bias. For example, the wages and incomes of the formal sector increase relative to the informal

Page 143 sector, but the formal sector does not grow sufficiently rapidly to absorb the available labour supplies. This arises partly because formal sector prices are 'too high' and 'distorted'. In consequence, the formal sector is both protected and constricted leading to large numbers being pushed into the informal sector where income growth is often limited and individual earnings are pressed down by very large competitive supplies of labour. With lesser protection in the formal sector and greater inter-sector competition, then larger flows of urban spending on food would have otherwise increased cash crop production for urban markets. This line of reasoning in fact extends Lipton's (Lipton, 1977): it is not just that poverty increases as a rural phenomenon, but rather that it also increases as an urban informal sector occurrence.

What happens when the protectionist framework which supports urban bias is dismantled? The question has large significance because programmes for economic stabilization and structural adjustment in the 1980s favoured the liberation of markets and the reduction in restrictions on imports. In effect the economic reforms will tend to cause the relative prices of food to rise and those of formerly protected manufactured goods to fall in some developing countries. Prices and markets will be more integral with the international economy and its competitive influences. The reform for openness in trade and price deregulation removes a sub-set of distortions which led to urban bias, to unbalanced urban-rural development, and to some distorted urban economic development. These are but one aspect of economic impacts upon city-regions under structural change, however, other important aspects are elaborated in what follows.

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Chapter III. The urban economy C. New directions in urban economic development and policy frameworks The World Bank's strategic urban policy paper (World Bank, 1991), marked a change of direction. The dominant approach in the 1972 to 1985 period had been in furthering project-by-project approaches (1 0 ) . These were variously represented in developing countries in sites-and-services schemes, slum upgrading projects, and one-off infrastructure schemes. The change in direction was towards a whole urban sector approach with integral relations to the wider economy. This raised to relevance the relationships between the urban sector on the one hand and the financial, fiscal, and 'real' economy linkages on the other. Examples will serve to illustrate the meaning of the change. In finance, the housing sector would grow progressively with the development of housing finance systems: and, in infrastructure, possibilities would arise in formulating policies to create joint venture municipal funds bringing together public and private finance. Fiscal policy linkages would be exemplified by the development of property taxes in the context of the reform of overall public finance in developing countries. The most important linkages were perceived in the 'real' economy. 'Real' economy linkages were seen as particularly important in the ways urban agglomeration economies could add to macro-economic growth and often to the alleviation of urban poverty. The World Bank's strategic policy paper did not comprehensively elaborate the nature and specifics of changing agglomeration economies in the context of modern structural economic adjustment. However, the subject of structural economic change in cities and its relationship to agglomeration economies has subsequently been developed by a number of other authors. (1 1 )

This new approach argues that the global integration of city-regions is as significant as that of nations. The integration is closely associated with changes in the nature of agglomeration economies under structural economic adjustment. It is appropriate to distinguish between 'old' and 'new' agglomeration economies, separated by adaptation to global integration and the locational aspects of structural economic adjustment. Old agglomeration economies have been passive, mainly dependent upon cost-access to inputs and markets. By contrast new agglomeration economies are dynamic, having locational significance in city-regional groups of industries connected by economically efficient buyer and supplier relationships. The new agglomeration economies are more evident in information-based rather than materials-based industries. Information-based industries depend upon innovation and specialized (localized) networks and skills.

The new agglomeration economies and their characterization of structurally changing city-regions are more evident in industrial than in developing countries. However, the transition to new agglomeration economies and economic adjustment is now beginning to influence city-regions in developing countries, including, for example, manufacturing and services in Bombay (Harris, 1994). The transition has a number of important spatial results and characteristics. First, under the earlier economic regime of import substitution and protectionism the old agglomeration economies favoured the growth of primate, very large city-regions. This was because firms would tend to locate in areas where they had secure domestic markets. Now, with the advent of economic liberalization, some primate cities will have reduced dominance as new growth and activities are attracted to smaller cities in a process of competitive economizing for export-led growth. Second, the level and quality of infrastructure has importance in

Page 145 city-regional global integration. In particular internationalized city-regions require coordinated and effective transport facilities to move goods by land, sea and air. Inappropriate and inadequate infrastructure can act as a barrier to international competitiveness. Lesser developed infrastructure — a widespread feature in developing countries — also means that old agglomeration economies still characterise most developing countries, especially in manufacturing.

The foregoing clearly has relevance to human settlements conditions in a structurally adjusting world economy. Industrial capacity is locationally redistributed. Labour markets and relative earnings adjust to international competitive pressures. Economic performance among city-regions is subject to re-ranking and change. It is possible for local, as opposed to central, leadership to take initiatives to seek development in the new agglomeration economies (see the earlier discussion on initiatives in Shanghai). All of this influences affordabilities in housing and infrastructure in the context of dynamic changes in urban housing markets. These dynamic changes will raise some price-access barriers in city-regions with high growth rates, affecting the urban poor and other groups. Other aspects are also relevant to housing. The modern urban development context is influenced by the spatial dimension having importance in productivity and efficiency. Housing also has a role to play in productivity, a subject to which we now turn.

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Chapter III. The urban economy D. The productivity of housing In housing the idea of 'welfare' is normally associated with welfare state roles, with various types of subsidy, and in developing countries, with self-help approaches. From an economic perspective housing is variously regarded as a social expense of development and as a means of furthering consumption benefits. The consumption benefits would include the convenience of useful shelter, the potential to transform shelter into a 'home', and the means of having current enjoyment. By contrast, as an investment housing generates future economic returns and as production it is a set of goods and services which generates additions to national income and employment. Recent research by UNCHS (Habitat) and ILO (1 2 ) convey a central message and argument that housing is a production good and that the generation of income and employment from housing is a central aspect of housing-related welfare. All of this is argued not simply as a technical proposition, but also as an integral part of policy development in the changing political economy of housing. Nonetheless, the argument rests upon a number of technical propositions about housing.

The technical propositions are scarcely new: They have been in the housing literature, dispersed in a fragmented way, since the early 1960s. However, the UNCHS (Habitat) research bring the technical propositions to synthesis and coherence, and turn them towards particular relevance to developing countries. How are we to conceive and understand the technical propositions? Consider the spending of 100 rupees or pesos on housing. In the first instance this buys 100 worth of resources in the built or improved house. However, within macro-economic processes the workers, and other recipients of income will go out and spend some of their incomes received. This will generate further income (via their expenditure) and in housing this will tend in the final result to 'multiply' income by a factor of 2 (see section VI.B). A factor of 2 is high in sector comparisons and often in housing it has the advantage that not much is drained away in import content because housing tends to use localized resources. But this is not all. The expenditure of the 100 worth of resources has 'backward linkages': It can add to production and productivity in the housing materials and equipment industries. Consequently this adds further to income and employment generation. There is also some additional income and employment generation in 'forward linkages'. Examples of forward linkages would include HBEs — workshop activities in housing are especially significant in developing countries — renting out rooms, and expenditure on furniture and household equipment. In aggregate all of this can be very significant, but would have to be compared with similar processes in other sectors. Housing can be regarded as 'income'- and 'employment-rich', however, and at the same time, this does not stop at 'the house', it includes major and minor housing-related infrastructure and public works.

In developing countries poverty is associated with conditions in the informal sector. Low-income housing is identified with squatter settlements and sites-and-services (and relatedin situslum upgrading). The informal sector provides a large proportion of the employment and construction activities in low-income housing. It is organized largely in the form of SSEs. One outcome of this is the probability that employment is generated to a larger extent in low-income housing than in high-income housing. The welfare is thus for the SSEs as well as for residents.

Page 147 All of this leads to the conclusion that rental values of housing do not express its full productivity. This is very significant. In standard treatments for measuring internal rates of return, capital-output ratios and other indicators of productivity it is rental values which are taken as the indicators of output. Consequently in terms of the arguments and evidence in the United Nations research, internal rates of return do not take such large amounts of capital to support them as is normally supposed. These arguments receive legitimacy in the fundamental reviews of urban and housing policy by the World Bank and UNCHS (Habitat). (1 3 ) The World Bank and UNCHS (Habitat) have been developing the productivity argument in urban economic development and the GSS, aimed at boosting whole housing sector development and providing decent shelter for the poor. A welfare-production view of housing can act persuasively for the more general argument that urban economic development improves the wider economic performance of nations.

Further arguments can be added to the UNCHS (Habitat) research, revealing that the sources of productivity in housing are wider than income and employment multipliers. In this we can pursue two lines of argument. First, good standard housing provides rooms for self-education, study and exercising training skills, all of which are important in the development processes in developing countries. As noted in earlier discussions, structural economic change leads to dynamic change in labour markets and in the requirements for skills. Housing has two roles in this. Rental tenure is important in providing flexibility for changing patterns of employment, including the spatial distribution of employment; and, as noted above, good standard housing provides study space for acquiring new and necessary skills.

A second production theory of housing has special significance for gender issues and the way we perceive subsidies in housing. As established in the foregoing discussion housing is an asset with capital value and it is contributory to the production of goods and services. The goods and services include the 'domestic sector', i.e. home-based production of meals, laundering, nurturing of children, and other things. In developing countries in particular, the list would extend to subsistence products and to home-based economic activities which are associated with sales in the informal sector and contracted work for firms. These products require the capital value and resource use of housing and land as well as domestic labour. Thus 'at-home' production is regarded as being achieved by combining the inputs of domestic labour, domestic capital (i.e. the housing and its equipment) and domestic sector land. (1 4 )

This further production view of housing as domestic capital has a number of implications; first, much of the exchange and production which occurs 'at home' is non-monetized and although some of this does not enter into official economic statistics it nevertheless has economic value. Various aspects of domestic production are undervalued, however, and at times not valued at all, and sometimes they are ignored in economic analysis and policy making. Second, it is to be appreciated that firms do not compensate child rearers (who are mainly women), for their costs and labour time in child rearing. Thus, the human capital produced in child rearing is not compensated. Therefore housing and domestic labour are net contributors to subsidies rather than net recipients, when viewed from the inter-sector flows of resources from the domestic sector to the wider production economy. The domestic sector provides below-cost human capital to the wider economy. All of this reveals that the domestic sector and housing have more complex and controversial relationships to the wider economy than is normally supposed. This has implications for housing policy and for the political economy of women's roles. It heightens the relevance of the argument that housing involves production as well as consumption, consequently raising its importance in development, and, "it implies that shelter provision is not only a goal, but more importantly, it is a tool of development policy" (UNCHS/ILO, 1995).

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Chapter III. The urban economy E. Conclusions It has been seen that structural-spatial change in city-regions is a process of creation and destruction, i.e. creating new winners and losers. In its phase from the early 1980s to the mid 1990s it has led to increasing inequality within city-regions, also some increased inequality among city-regions, and some opportunities for local leadership to enhance localized agglomeration economies. (1 5 ) This adds further to the characteristics of the economic adjustment and poverty issues which were identified and discussed in chapter II. In these earlier discussions it was revealed that policies make a difference to outcomes. On the one hand, growth-orientated policies can add to the long-run security of vulnerable social groups and the general community. On the other hand, economic reform sometimes mediates austerity packages as short-term trade-offs for longer term improvements. As indicated in the example of Chile it is possible to formulate policies which are designed effectively for targeting and providing social safety nets for the poor. Such policies may be increasingly necessary in a period of structural-spatial change: the change affects patterns of income distribution in labour markets, leading to increasing inequalities in some city-regions, along with vulnerability to underemployment among some groups.

In this context it is relevant to ask the question as to the scope and direction of urban policy? This question has received the attention of the World Bank (1991) and UNDP (1991). The World Bank and the UNDP favour a 'new agenda', specifying a framework of 'enablement'. Enablement frameworks are aimed at whole sector development, drawing together government agencies, firms, NGOs and communities in the pursuit of economic productivity and welfare. This recognizes that it is neither feasible nor desirable for the state to be the sole provider of economic enhancement and social security against destitution and the contingencies of life. Other agencies such as firms, households, and CBOs have important roles. Nevertheless the state has important roles in creating reformed institutional frameworks, in creating and protecting property rights, in attending to the changing dynamics of poverty, and in sometimes dealing with the inadequacies of the market. The 'new agenda' has relevance and significance in these issues. It addresses such issues as urban poverty, environmental degradation, decentralization (economic, administrative and political), public participation, and seeks to bring economic vitality to cities. As discussed in this chapter, urban agglomeration economies and housing sector economic productivity can add to the economic vitality of city-regions. Under conditions of enablement the economic and wellbeing components of urbanization would be largely embedded in the social and economic organization of city-regions.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor This chapter outlines the human settlements conditions of the world's urban poor. As the vast majority of those living in absolute poverty are located in the developing countries (see chapter II), the discussion in this chapter is restricted to the regions of Latin America and the Caribbean; sub-Saharan Africa; North Africa and the Middle East; South Asia; India; East Asia and the Pacific; and China. The chapter includes a discussion on the growth of human settlements; the nature and extent of urban poverty; housing and environmental conditions; the provision of infrastructure; and the difficulties of access to land.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor A. Latin America and the Caribbean 1. Urbanization and the growth of human settlements One of the most distinctive characteristics of Latin America, compared with the other regions of the developing world, is its high level of urbanization. As can be seen from table 13 , nearly three quarters of the region's population is currently living in urban areas. More than half of the region's urban population (55 per cent) can be found in the two countries of Brazil and Mexico. Both of these countries have more than three quarters of their population living in urban areas. A country like Venezuela, with an urban population of 93 per cent, has one of the highest levels of urbanization in the world. There are, however, a few countries where the level of urbanization is still relatively low, like Haiti (32 per cent) and Guatemala (42 per cent). Among the countries of South America, Ecuador and Bolivia have the lowest levels of urbanization with 58 per cent and 61 per cent respectively.

The rates of urban population growth in the region are relatively modest, as can be seen in table 14 . The current (19952005) growth rate of the region as a whole is 2.2 per cent per year. It is highest among the Central American countries 2.5 per cent, and lowest among the countries of the Caribbean. The countries with the lowest level of urbanization are the ones with the highest urban growth rates. Both Haiti and Guatemala are currently experiencing urban growth rates of more than 4 per cent per year, while the rates in Ecuador and Bolivia exceed 3 per cent. The lowest growth rates among the countries listed can be found in Cuba (1.1 per cent), Argentina (1.4 per cent) and Chile (1.5 per cent).

As table 14 indicates, urban growth rates will remain relatively high throughout the first quarter of the next century. The rates are, however, projected to decline to an annual average of 1.3 per cent during the 20152025 period. By the year 2025, 85 per cent of the region's population will be living in urban areas. All the major countries of the region will by then have predominantly urban populations. Furthermore, the urban population of the region is expected to grow from about 360 million in 1995 to 600 million in 2025. The largest increase, in absolute terms, is expected in Brazil where the urban population is projected to grow from 127 million in 1995 to 205 million in 2025. In relative terms, however, the largest growth is projected to occur in Guatemala and Haiti, where the population of urban areas will more than triple during the next three decades.

Although the urban growth rate is relatively modest compared with other regions of the world the absolute growth is staggering. Each remaining year of this century the region will experience an urban population increase of 8.7 million. This happens at a time when the rural population is actually contracting. In fact, among the thirteen countries listed in tables 13 and 14 , only five will experience rural population increase during the 19952000 period.

Another distinctive feature of urbanization in Latin America is the number of very large cities. By 1995, there are seven cities in the region with a population of more than four million people (see table 15 ), and an additional thirty-five cities with a population of between one and four million. United Nations projections indicate that by 2015, a total of thirteen cities in the region will have populations in excess of four million. Compared to the other regions of the developing world, however, the current growth rates

Page 151 of major cities are relatively low. Only one of the cities listed currently have an annual growth rate of more than 2.5 per cent. The growth rates of the largest cities are actually lower than urban growth rates. The table also indicates that the growth rates have declined considerably since the 19651975 period, when most of the largest cities had annual growth rates in excess of four per cent. During the 19851995 period, average annual growth rates were still in excess of 2 per cent in most of the large cities. There are, however, some exceptions. Mexico City, Buenos Aires and Rio de Janeiro all had annual growth rates of less than 1 per cent during the last decade. Projections for the next two decades indicate that the growth rates of the largest cities will continue to decline.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor A. Latin America and the Caribbean 2. The nature and extent of urban poverty The growth of urbanization, coupled with the severity of the recession and the effects of the macro-economic adjustment policies which have been applied throughout Latin America have resulted in serious consequences in terms of urban poverty. In Brazil, Guedes and Devecchi (1994) argue that "the economic crisis has increased the gap between rich and poor. Recent census figures show that the top tenth of the population controls nearly half the nation's wealth, and the bottom 10 per cent owns less than 1 per cent". They estimate that 65 per cent of the total population of 150 million is now living below the poverty line.

Tello (1990 — quoted in Gilbert, 1994), describes a similar situation in Mexico, where between 1982 and 1989, "Per capita GDP fell 14 per cent, and the decline in earnings was very unevenly distributed. While the country's population expanded from 71.4 million in 1981 to 81.2 million in 1987, the country's poor grew from 32.1 to 41.3 million". In Argentina, which until the 1980s had enjoyed the highest per capita GNP in the region, the effects of the 1980s were much the same: "The traditional high average qualified labour force has broken down. In the last decade there was a strong reduction of workplaces in the modern industrial sector, the wages in the public sector decreasing to at least a third of the historical average. More recently the acceleration of the privatisation process has demanded flexibility of the traditional labour legislation. All that has meant increasing under-employment, unemployment and exploitation" (Fernandez-Wagner, 1994). The impact of these measures has particularly affected the major cities. Coulomb (1994), referring to Mexico City, acknowledges the fact that adjustment policies have reduced the inflation rate to less than 10 per cent, have cut the budget deficit and registered a positive net balance of capital flow. The price, however, has been paid by labour: "The Minimum Salary has lost over half its purchasing power in 10 years; unemployment or under-employment (disguised under the term 'informal sector') involves over half the population in Mexico; drastic cuts in public spending, particularly in the social budget, have reduced indirect salaries by over 40 per cent in just eight years. In terms of income, half of Mexico City's population currently lives below the 'poverty line'; when measured in terms of the satisfaction of basic needs, poverty affects two-thirds of the city's inhabitants". Pasternak-Taschner (1994), makes a similar claim in respect of São Paulo in Brazil, "Adding up the houses in squatter settlements, slums, and the illegal developments in the periphery, approximately 65 per cent of the real city was illegal". Guedes and Devecchi (1994), claim that the result of these processes in Brazilian cities is that, "human development has been abandoned to a daily individual struggle for survival".

In Colombia, Kellett and Garnham (1994), refer to an official study conducted on the basis of the most recent census in 1985 that "13.3 million people (45 per cent of the population) were in situations of

Page 153 poverty and of these 7.4 million were classified as living in absolute poverty". They also quote two more recent studies giving contradictory views as to whether the circumstances of the poor are improving or not. A more recent official study, conducted in 1991, claims that 22 per cent of the population was living in "conditions of poverty", whilst a second study (Molina, 1991) calculates that "44 per cent of the urban households of the country earn less than 2.9 times the minimal monthly wage and half of them, or 22 per cent, live in such poverty, that their incomes are less than 0.87 of the minimal wage".

The World Bank has undertaken a number of its poverty assessment exercises in Latin America. In Venezuela (with about 90 per cent of its population living in urban areas), poverty was seen to be primarily an urban phenomenon. Three-quarters of the poor were urban dwellers and approximately 50 per cent of urban dwellers were deemed to be poor (World Bank, 1993c). Of particular concern to the Bank were, "the desperate conditions of the majority of residents in the squatter settlements that surround the major cities" (World Bank, 1993c). Poverty was found to be strongly correlated with illiteracy, low educational attainment, poor health and malnutrition, and amongst female-headed households, where one third of those living in extreme poverty in urban areas were headed by women. Poor households were also larger with a higher dependency ratio than non-poor households.

In Chile, the World Bank's assessment of poverty — using subsistence measures — identified up to 45 per cent of the population living below the poverty-line (World Bank, 1993c). Poor households were characterized by an average household size of 5 persons (compared to the national average of 4.25); they were relatively young, with almost half the members under 15 years of age; a third contained at least three young children and more than half one child under five. Nuclear families predominated and female-headed households, especially in urban areas, were particularly vulnerable to poverty.

Whilst the incidence of poverty in Ecuador was higher in rural than in urban areas, approximately 46 per cent of urban households were classified as living below the poverty line, 16 per cent of whom were considered to be "absolutely poor" (World Bank, 1993c). The low-income group included disproportionately large numbers of the indigenous Indian population and female-headed households. The poorest workers in the urban context were street vendors, craftsmen and domestic workers. Ecuador had made considerable progress during the oil boom of the 1970s in improving living standards and ameliorating the circumstances of the poor. These gains, however, were partially lost by the economic crisis of the 1980s, by declining oil prices, a major earthquake and other climatic shocks.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor A. Latin America and the Caribbean 3. Housing and environmental conditions The impact of these adverse economic changes on the housing sector in Latin America has been dramatic. Some countries, most notably Argentina and Uruguay had sophisticated housing markets with established institutional structures and a relatively mature construction industry (Fernandez-Wagner, 1994). These formal markets have been devastated by the economic consequences of the 1980s. At the same time many countries were pursuing 'interventionist' policies in the housing market either by direct housing provision or the provision of housing loans, usually through a State housing bank. Whilst these interventions rarely benefitted the urban poor in a direct way, they often benefitted the low-income groups, if only partially. The most notable example is the role of the National Housing Bank of Brazil. Between 1964 and 1986 the Bank funded the construction of 4.8 million units, a quarter of which were for popular housing targeted towards low-income groups (Pasternak-Taschner, 1994). An increasing number of defaulters (estimated at 50 per cent of borrowers in 1984), resulted in the bankruptcy of the Bank in 1986 with an estimated deficit equal to 6 per cent of GDP (Pasternak-Taschner, 1994). The collapse of the Bank and subsequent legislation devolving increasing legal and financial autonomy to State and municipal governments has led to a situation where the Federal Government of Brazil has effectively withdrawn from housing market intervention. The Brazilian Housing Bank was not the only government housing bank affected in this way. Following high inflation and the withholding of repayments as a political gesture, the Uruguayan Mortgage Bank experienced considerable difficulties in the late 1980s. It has now modified its role and status (Garcia Miranda, 1994). The National Mortgage Bank in Argentina was de-commissioned in 1990 (Fernandez-Wagner, 1994), following similar financial difficulties.

Whilst the economic changes of the 1980s have seriously undermined some of the more formal markets and financial institutions, the impact on housing and environmental conditions has been equally serious. The backlog of housing need is growing in every country. In Brazil the housing deficit was recently estimated at 12 million dwellings (Fridman, 1994), whilst about 60 million Brazilians (approximately 40 per cent of the population), live in unsatisfactory housing (Bolay, 1994). In Mexico, the shelter deficit (which includes families without shelter as well as those in inadequate housing conditions), was estimated to be 6.1 million units in 1990 (UNCHS, 1993e). Fernandez-Wagner (1994) observes a deteriorating housing situation in Argentina between 1980 and 1984 as recorded by official estimates, and although statistical evidence is not readily available, he assumes an even greater increase in the deficit since then. In Colombia, the deficit was assessed at 525,000 units in 1990 (Kellett and Garnham, 1994); and in Bolivia, it increased from 267,000 in 1985 to 364,000 units in 1992 (Richmond, 1994).

The current housing shortage is further aggravated by evidence of a deterioration of housing and environmental conditions. Thus in Argentina, Fernandez-Wagner notes that the quality of completed dwelling units fell between 1970 and 1980, so that approximately half the units completed in that year were either 'precarious' or 'deficient' in some form. He estimates the proportion of these types of informal dwellings to have increased during the 1980s. Similarly, in Bolivia, according to Richmond (1994), the estimate of homes in need of improvement and basic services almost doubled between 1986 and 1992,

Page 155 from 556,000 units to 1,087,000; and in Colombia, 1.7 million households, or a third of the entire population, were officially regarded as living in substandard housing, defined in terms of space, absence of infrastructure or poor quality of construction in 1991 (Kellett and Garnham, 1994).

The deterioration of housing conditions may also be expressed in terms of the increasing significance of the informal sector as a proportion of the housing stock. Table 16 shows the growth of squatter settlements as a proportion of the population in a selected number of Latin American cities. This trend towards an increasing proportion of squatter settlements in the major cities, with marked social segregation between rich and poor, is a widespread phenomenon throughout Latin America.

While the housing shortage may seem enormous the future increase in households numbers makes the housing problem truly staggering. The household growth rate of the region is nearly twice that of population growth (see table 5 ). The reason for this is the rapid decrease in household size. The number of households in the region is projected to increase with some 15 million during the 19952000 period, i.e. an increase of 15 per cent. The challenge is further aggravated by the fact that nearly the entire increase will occur in urban areas. If this household growth is translated into housing demand the challenge ahead for the urban areas of the countries of Latin America and the Caribbean is truly staggering.

In fact the increase in the number of households in Brazil alone during the 19952000 period amounts to some eight million, equivalent to about two thirds of the current housing deficit. Although the case of Brazil is exceptional, with its relatively small households (3.5 persons compared to 4.3 persons for the region as a whole), similar figures apply to the other countries of the region as well. In Mexico, a total of 1.8 million new households are created during the 19952000 period. Similar figures for Colombia, Argentina, Peru and Venezuela are 0.8 million, 0.8 million, 0.5 million and 0.6 million respectively (UNCHS, 1996).

This brief outline of the impact of recession on the operation of housing markets in Latin America and the subsequent deterioration of housing conditions provides little prospect of improved circumstances for the urban poor. Some authors have argued that the economic shocks of the 1980s, combined with the advocacy of an enabling role through the GSS, are encouraging national governments to abrogate their responsibilities for providing help with shelter for the urban poor. As far as Mexico is concerned, for example, Coulomb (1994) states, "Nowadays, the key word in National Housing Programme policies is the normative, administrative and fiscal 'deregulation' of housing production, financing and marketing, including those for low-income housing. The 'modernization' of public organizations responsible for low-income housing consists of relieving them of any involvement at the level of the conception or production of projects and converting them into mere credit institutions. The Government of Mexico declares that low-income housing planning is no longer its domain, that the supervision of construction should be privatized and that its new role as 'facilitator' specifically consists of permitting the free play of market forces".

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor A. Latin America and the Caribbean 4. Other infrastructural provision As one might expect in the light of the above discussion there is little evidence of an improvement in the provision of infrastructure, especially for the urban poor. Bolay (1994), quoting the most recent data from Peru, reveals that only 46 per cent of urban dwellings are equipped with sanitary installations and only 17.5 per cent are legally provided with electricity. In Bolivia, according to the 1992 census, between 30 per cent and 40 per cent of the housing stock lacks access to the basic services of water, sanitation and drainage (Richmond, 1994). This picture is, by now, a familiar one with growing numbers living in informal settlements which, because of their illegality, are not supplied with basic services. Such figures, however, do not convey the insanitary and dangerous circumstances in which many people live. In São Paulo, for instance: "Six million people live in precarious housing conditions: many families have been forced to move out from the formal rental market to slums or tenement houses and the so-called informal city represents almost 60 per cent of the total population ... one million people survive in squatter settlements along streams, creeks, and slopes; sanitary conditions are inadequate for the majority; drinking water is becoming ... more scarce and expensive. Sewage is partially treated (30 per cent) and the two main rivers that cross(es) the central part of the city are mainly (used for) waste disposal; (and) the large number of irregular settlements along streams and slopes, has created an ever-increasing number of disaster-prone areas" (Guedes and Devecchi, 1994). Moreover, where one finds widespread poverty and inequality, desperation, crime and violence, are often not far away (see box 3 ).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor A. Latin America and the Caribbean 5. Land availability The increased emphasis on market forces has also led to growing land speculation and to increasing land prices in major Latin American cities. In a detailed study of the dynamics of urban land markets in major Brazilian cities, Fridman has argued that with declining returns on financial investments, the higher income groups seized upon the faltering real estate market and prior to the collapse of the housing finance system they switched investment into commercial real estate developments such as high rise shopping and commercial complexes and up-market residential developments in central city locations. In 1984, over 20 per cent of total construction activity in São Paulo was in luxury real estate developments (Fridman, 1994).

Whilst the trend in São Paulo preceded other cities, luxury real-estate developments became commonplace in the latter half of the 1980s, land prices began to increase and competition for land became acute. Thus land prices, and subsequently rents, were increasing at a time when the incomes of the middle- and low-income groups were falling and the result was a flight of population from the inner-city areas to the periphery and an enhancement of illegal settlements. This intra-urban movement has characterized most major Brazilian cities during this period.

Whilst this particular conjuncture of events was confined to Brazilian cities, the phenomenon of increasing land costs was not, and has led to a situation where the urban poor are unable to afford even the most modest plot. Coulomb comments on the situation in Mexico: "Given the current costs of land and materials in Mexico City, only households with an income of over three times the minimum salary can afford low income housing. This means that over 80 per cent of all households have no alternative but the unauthorized occupation of land without services and self-construction of make-shift housing" (Coulomb, 1994). The problem may not be one of absolute lack, though. UNCHS (Habitat) has earlier identified the unavailability rather than lack of land as a specific obstacle to an effective housing supply: "Most cities in Mexico, in particular those of medium size and the newly developed cities, are characterized by their low population density and a large number of vacant plots, mostly held by speculators" (UNCHS, 1993e).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor A. Latin America and the Caribbean 6. Summary Latin America has a large proportion of its population in cities, particularly in large cities. Whilst the rate of urbanization has slowed during the 1980s, declining public expenditure and the changing role of national governments has meant a withdrawal from interventionist polices. As yet, however, there is little evidence that alternative policies have been able to make any positive contribution to the particular circumstances of the urban poor. In the meantime, the numbers of the urban poor are increasing, their housing and environmental conditions are deteriorating, and their prospects for an improvement in their shelter circumstances appear to be diminishing.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor B. Sub-Saharan Africa 1. Urbanization and the growth of human settlements Table 17 gives a clear indication of the rapid increase in urbanization taking place within sub-Saharan Africa. The table shows that the level of urbanization is modest by global standards. In overall terms the urban population of sub-Saharan Africa has nearly tripled between 1975 and 1995 from 74 to 184 million, while the level of urbanization has increased from 21 to 31 per cent. The countries with the largest urban populations are Nigeria (44 million), South Africa (21 million) and Zaire (13 million). The countries with the highest level of urbanization in the region (among those listed in tables 17 and 18 ) are South Africa (48 per cent); Cameroon (45 per cent); Côte d'Ivoire (44 per cent), Zambia (43 per cent) and Nigeria (40 per cent). The least urbanized countries are Rwanda (6 per cent), Uganda (13 per cent), Ethiopia (13 per cent), Malawi (14 per cent) and Niger (17 per cent).

Because of the limited urban base, however, some of the countries experience among the fastest rates of urbanization in the world. The most rapidly urbanizing countries in the region include Burkina Faso, with a projected annual average rate of urban population growth of 8.3 per cent between 1995 and 2000; Mozambique, 6.4 per cent; Niger, 5.9 per cent; Madagascar and the United Republic of Tanzania, 5.7 per cent; and Kenya, 5.6 per cent. As can be seen from table 18 , not one single among the countries listed have annual urban growth rates of less than 3 per cent per year. In fact, among the countries listed only two have growth rates of less than 4 per cent per year.

The rapid urban growth is projected to continue well into the next century. Six of the countries listed will in fact have higher average annual urban growth rates for the 20052015 period than for the 19952005 period, while only nine countries are projected to have an average growth rate of less than 4 per cent per year during the 20152025 period. These continued high growth rates imply that the absolute growth becomes truly staggering. The average annual urban growth rates for the region is projected to increase from 11.0 million per year during the 19952005 period to 20.8 million per year for the 2015• 2025 period.

Nigeria's urban population is expected to grow with some 2.6 million each year between 1995 and 2005. This figure is expected to reach 4.2 million per year during the 20152025 period. In Ethiopia and Zaire — the two most populous countries of the region after Nigeria — urban population growth rates are still increasing, with the result that the current (19952005) annual urban population increase with some 511,000 and 741,000, will triple to 1.6 million and 1.9 million respectively, during the 20152025 period.

The current urban population explosion occurs at a time when rural populations are growing with similar numbers. Yet, while urban population growth is increasing rural population growth is stagnating or decreasing. In fact, the annual urban population increase in absolute terms during the 19952000 period is higher than the rural increase in 15 of the 23 countries listed.

Within some of these countries the capital cities function as primate cities and are experiencing

Page 160 similarly high average annual rates of population growth. Thus, the annual population growth rate for Maputo (Mozambique) is 6.3 per cent; for Nairobi (Kenya), 5.3 per cent; Lagos (Nigeria) 5.2 per cent, Luanda (Angola) 5.1. per cent, and Abidjan (Côte d'Ivoire), 4.7 per cent (see table 19 ). These are amongst the fastest growing cities in the world, and as the table illustrates, the growth is expected to remain at high levels during the next two decades. The projected growth of Lagos is truly striking. Its current populations of 10.3 million is projected to increase with nearly 150 per cent, to 24.4 million during the next two decades. All other cities listed, apart from Cape Town, are projected to more than double their populations between 1995 and 2015.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor B. Sub-Saharan Africa 2. The nature and extent of urban poverty White summarizes the factors influencing urbanization in Africa as follows: "(1) population growth and the rural exodus; (2) the drought; (3) the price of petroleum ... ; (4) the slowdown of the global economy; (5) the adverse trend in the terms of trade for exporters of primary goods; (6) domestic policies which favour the urban dweller over the rural dweller" (Stren and White, 1989). Almost without exception these factors have had an adverse effect on the economies of the countries of sub-Saharan Africa. Even the more robust economies have tended to falter in terms of economic growth. In South Africa, for example, "The past three decades have seen a consistently declining rate of growth — from an average of 5.56.0 per cent during the sixties, to 1.9 per cent during the seventies and less than 1 per cent during the eighties. This is further exacerbated when the high population growth rate is taken into account — in short, per capita income in real terms is declining and national savings are at an all time low. When equity is considered this is still further exacerbated. South Africa has one of the worst income distributions in the world. In 1988, the top 10 per cent received 48 per cent of income while the lower 50 per cent received only 11 per cent of the income" (Kruger and Davies, 1994). In Kenya, a similar situation emerges, but for different reasons. Kenya's annual rate of economic growth declined from 8.2 per cent in 1977 to 0.4 per cent in 1992. The factors accounting for the rapid decline in the 1990s were "political uncertainty since the advent of multi-party politics in 1990 ... the sharp depreciation of the Kenya Shilling, whose exchange rate to the US$ stood at Ksh 18.5 in 1988 but fell to Ksh 65 by 1992. Inflation rates also galloped from 5.6 per cent in 1986 to 27.5 per cent in 1993. To compound all this, a foreign exchange crisis resulted from an aid embargo instituted by the IMF and the World Bank in October 1991" (Gatabaki-Kamau, 1994). The consequences of these political and economic difficulties at the household level have meant increased unemployment and a rapid fall in the value of wages. Unemployment in 1993 was 20 per cent compared with 15.9 per cent in 1985 and between 1981 and 1991 real wages fell by 31 per cent. Moreover, high inflation rates meant that between 1990 and 1992, low-income households, which constituted almost 60 per cent of Nairobi's population, had to absorb a 40 per cent increase in food prices (Gatabaki-Kamau, 1994). Similar evidence of increasing urban poverty is suggested by the growing evidence of child malnutrition in Nairobi: "28 per cent of children under three were malnourished in a 1972 squatter settlement, in 1980 an estimated 50 per cent of children in Kibera (an unauthorized settlement in Nairobi) were malnourished, while in 1987, 4060 per cent of children under five in Nairobi were experiencing malnutrition" (Ndombi, 1988 — quoted by Amis, 1990). These political and economic difficulties are continuing in Kenya where a number of international donors have suspended aid in 1995.

In order to restructure national economies to withstand the adverse effects of political and economic changes, the IMF and World Bank have obliged many African countries to embark upon SAP s. It is often difficult to distinguish between the effects of SAPs and other factors impacting on the economy, but in broad terms the effects of economic restructuring have enhanced economic growth but

Page 162 at the cost of diminishing living standards, most markedly amongst the urban poor. Ghana adopted an SAP in 1983 and whilst supporters maintain that the programme has restored economic growth (3 per cent per annum over 10 years), and had a positive impact on public sector accountability and forward planning, Korboe points out that: "Per capita GNP remains no more than US$400, terms of trade are reported to have declined by some 25 percentage points between 1987 and 1990, and the average debt service ratio for the period 19861990 was a high 42.7 per cent. Poverty remains rife overall: approximately 45 per cent of the population live below the notional 'poverty line', and average calorie and protein intake both fall short of levels recommended by the World Health Organization [WHO]" (Korboe, 1994). In Zimbabwe, the government pursued stabilization policies through the 1980s and only adopted a fully fledged SAP in 1991. Implementation of the measures coincided with a severe drought making it difficult to disentangle the effects of one from the other. However: "in 1991, GDP grew 4.9 per cent in real terms, but in 1992 it fell by 7.7 per cent. The balance of payments was adversely affected by the loss of agricultural and agriculture related exports and the need for food and water- related imports, while the government failed to reduce its budget because of the need for drought relief .... Inflation became more rapid, as a result of increased prices of imports following devaluation, decontrol of prices, etc. It increased from an average of 13.2 per cent per annum between 1980 and 1990 to 42.1 per cent in 1992 and 21.6 per cent in the first six months of 1993" (Rakodi, forthcoming). Furthermore, job losses were substantial and unemployment increased to an estimated 40 per cent in 1993, while the cost of living more than doubled between 1990 and June 1993 (Rakodi, forthcoming).

These examples serve to illustrate the adverse impact of political and economic changes during the 1980s on some of the stronger economies of sub-Saharan Africa. At the other end of the economic spectrum is Mozambique which after years of civil war is one of the poorest countries in the world with a per capita GNP of just $90 (World Bank, 1995a). In its poverty assessment of Mozambique the World Bank concluded that poverty was pervasive and that around two-thirds of the population lived in absolute poverty. Poverty in urban areas was estimated to be between 30 and 50 per cent of the population and in peri-urban areas slightly higher at 4060 per cent.

But while per capita incomes continue to fall in most countries of sub-Saharan Africa and urban poverty is widespread and increasing, there is little systematic evidence to measure its extent. Instead commentators tend to refer to the proportion of the population living in informal settlements as a surrogate indicator. Figure 6 illustrates the point. It demonstrates that in each of the cities illustrated the informal sector is larger than the formal sector. Neither are these examples exceptional. To these may be added Nigeria, where between 70 and 80 per cent of the urban housing stock is estimated to be in the informal sector (Achunine, 1993; Oruwari, 1994); Uganda, where a National Household Budget survey carried out in 1989/1990 estimated 89 per cent of the population as "low-income earners" (Kitunka 1993); and also in South Africa where approximately 8 million households are currently estimated to live in illegal shack settlements in and around urban areas (Oelofse and Pikholz, 1994).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor B. Sub-Saharan Africa 3. Housing and environmental conditions The rapidity of urbanization in the sub-Saharan countries has generally outstripped the capacity of urban institutions to cope with it. In terms of shelter provision there is an urban housing backlog in every country experiencing rapid urbanization and this backlog steadily increases as the demand for shelter continues to outstrip supply. In Nigeria the shortage of urban housing is estimated at more than one million units, with about a quarter of the shortfall occurring in Lagos (Achunine, 1993).

One should be cautious of direct comparisons, but estimates are even higher in South Africa, where the Housing White Paper (Government of South Africa, 1994), estimates an urban housing backlog of 1.5 million units; in Kenya, the figure was 280,000 in 1987 (Mbogua, 1994); in Zambia, in 1988, it was estimated at 208,500 units (Boakye, 1994); and in Ghana 375,000 units in 1993 (Derkyi, 1994).

When the projections for urban population growth are taken into consideration, the awesome nature of the task of providing adequate accommodation for all becomes fully apparent. Nigeria's National Housing Policy, published in 1992, identifies a requirement for 700,000 housing units per annum in order to meet shelter needs by 2000. About half of these are needed in urban areas (Egunjobi, 1994). Despite these formidable requirements it seems that the policy of the Government of Nigeria has changed since the most recent military coup. Rather than continue with the enabling strategy embodied in the National Housing Policy, the Government has reverted to a policy favouring direct shelter construction by the public sector. (1 6 )

A number of projections have been made to calculate the required level of urban housing provision in South Africa by the year 2000. These range widely, but estimates fall broadly between 2.3 and 3.4 million units, resulting in an average programme of almost 275,000 units per annum (Kruger and Davies, 1994). According to the Housing White Paper (Government of South Africa, 1994), 39 per cent of urban housing is 'informal' (about 1.5 million units); 5.2 per cent of households live in hostels and 13.5 per cent of households live in squatter settlements, either on the periphery of urban settlements or interspersed within urban areas. There is also an enormous shortfall in the provision of amenities; 25 per cent of urban households do not have access to piped water, 48 per cent do not have access to flush, or ventilated pit latrines, whilst 46 per cent are not linked to the electricity supply grid.

Estimates for other countries also illustrate the enormous gap which currently exists between need and supply. In Kenya it is estimated that 60,000 units are required in urban areas per year compared with a current rate of development of about 20,000 (Mbogua, 1994). In Ghana, Derkyi sets housing need per annum at 90,000, whilst supply amounts to 7,500 (Derkyi, 1994).

Yet, housing demand is not going to decline. Each year for the rest of this century the number of households in sub-Saharan Africa will increase with some 2.8 million (see figure 4 ). In Nigeria, where two thirds of current population growth occurs in urban areas some 1.5 million households will be added

Page 164 during the 19952000 period. During the first decade of the next century this figure will increase to some 3.7 million, and projections for the 20102025 period indicate a further increase to some 5.4 million new households per year. An increasing majority of these new households will appear in urban areas.

Yet, the rate of increase in the number of households in the region is only slightly higher than that of the population, as the average household size remains high. The fact that sub-Saharan Africa remains, together with South Asia, the region of the world with the highest average household size has direct implications for housing demand. The units required in this region, with an average household size of 6.0 persons in 1995, is qualitatively different from the ones demanded in Latin America and the Caribbean where the average household size is 4.3 persons per household. This difference is likely to be strengthened over the next three decades when the average household size in sub-Saharan Africa is projected to decline only slightly to 5.6 persons per household as compared to 3.3 persons in Latin America and the Caribbean (see table 5 ). In fact, in several of the countries of the region average household sizes are projected to increase over the next three decades. In Nigeria, for example the average household size is expected to increase from 7.3 to 8.1 persons between 1995 and 2025. Likewise, in Côte d'Ivoire (from 6.9 to 8.1 persons per household), Ghana (from 5.8 to 6.4) and South Africa (from 5.4 to 5.6) (UNCHS, 1996).

Many observers have pointed out that formal housing provision is beyond the means of the urban poor, but in current circumstances, with housing and land costs increasing, and incomes diminishing in purchasing power, the affordability gap is widening rather than closing. Korboe states that by the end of 1990, the most basic shelter built to satisfy municipal standards in Ghana cost the equivalent of twelve times the annual minimum wage. He compares this with the formal real estate provision of "modestly fitted two bedroom houses" which were selling in late 1993 for 76 times the annual minimum wage. Further evidence of the growing disparity is provided in a rare comparative study of housing costs and standards in Nigeria. Oruwari's study, conducted in Port Harcourt, compares rent levels for different forms of accommodation between 1980 and 1992. Her study demonstrates that whilst rent levels for flats and houses in the formal sector have increased dramatically, the rents for rooming houses increased at much lower rates. Over the same period by comparing current construction costs and reasonable rates of return, Oruwari then shows that whilst it remains economical to build 2 and 3 bedroom flats this is no longer the case for rooming houses (Oruwari, 1994). She claims that only 3 per cent of housing built in Port Harcourt between 1980 and 1992 was intended for low-income consumption.

Whilst the prospect of affordable housing becomes less likely for most African households, let alone the urban poor, there is also evidence of a deterioration in their housing conditions as far as occupancy rates and overcrowding are concerned. Oruwari's study shows that considerably more households in Port Harcourt were occupying one room in 1992 (82 per cent) than in 1970 (52 per cent) and the occupancy rate was higher (3.8 persons in 1992 compared with 2.4 in 1970). These figures confirm a national study undertaken in 1991/1992 which revealed that 87 per cent of urban households in Nigeria lived in single rooms (Awatona, 1994). Similar findings are available from a study in Accra (Songsore, 1992). According to the study, 46.3 per cent of all households were occupying a single room and the average occupancy rate per room was 2.9 persons. For the low-income population this figure rose to 4.4 persons per room. Songsore suggests that the groups most affected by poverty in Ghana are, "redeployed workers, the unemployed, and those self-employed or casually employed in the informal sector."

Sometimes the increasing pressure on shelter may be reflected in less obvious ways. In comparing occupancy per room in the informal settlements of Nairobi, for example, Amis noted the absence of children during the late 1980s and argues that "the fostering of children of the urban poor with their rural kin is a relatively common strategy to combat the high cost of urban living. It is therefore possible to

Page 165 explain the average declining number of persons per room observed in Nairobi in the 1980s as an increase in single persons sharing and a decline in the number of children" (Amis, 1990).

In Uganda the quality of the housing stock in urban areas is very poor: "... 44 per cent of houses in Kampala and 31 per cent of houses in other urban areas require replacement, whilst 36 per cent for Kampala and 61 per cent of the stock in other urban areas can be upgraded. Good housing stock in Kampala is a mere 20 per cent and the percentage is much lower for other urban areas, dropping to 8 per cent. Seventy five per cent of residential building structures in Kampala are low-cost, semi-permanent, ... in other urban areas the percentage of poor building structures is much higher amounting to 90 per cent" (Kitunka, 1993). Whilst there remains a dearth of comparative information on shelter conditions in many of the countries of sub-Saharan Africa, the picture which emerges is one in which the majority of urban houses are built in informal or squatter settlements which are rapidly increasing in density. Upgrading programmes have enabled a fortunate minority to benefit from potable water supplies, electricity and communal sanitation, but for the most part these settlements have very limited access to basic services.

The case of the SAP in Uganda illustrates the effects of the economic recession on the housing sector (see box 4 ).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor B. Sub-Saharan Africa 4. Other infrastructural provision Mbogua argues that urban services are deteriorating in many sub-Saharan African cities: "The majority of the urban dwellers especially those living in squatter settlements have no access to basic services like: sanitation, potable water, waste disposal, health and educational services" (Mbogua, 1994). The reasons for this, he cites, are, "limited financial resources, poor management at local and central government level ... rural urban migration and high unemployment ...." As a result city management has become inefficient, which further contributes to inadequate infrastructural provision and environmental problems, and he fears this will result in what he describes as a 'squatter culture' amongst the urban poor.

Overall comparative statistical information is not available but evidence to support Mbogua's contention of declining urban services and a deteriorating urban environment may be obtained by reference to conditions in two major sub-Saharan African cities, Nairobi and Accra. Gatabaki-Kamau (1994) analyses the politically sensitive issue of solid waste disposal in Nairobi. She estimates that while the population of the city grew by approximately half a million people between 1979 and 1989, its capacity for solid waste disposal (in terms of the operational capacity of heavy duty vehicles), declined by about a third. This implies that by mid-1993 the Nairobi City Council was able to collect only about 40 per cent of the total amount of domestic refuse being generated in the city. The City's policy has been to resort to privatization and the encouragement of community participation to supplement its own endeavours, but this has resulted in a service which is inadequately supervised, liable to corruption and where "neither ... [the Nairobi City Council] ... nor the private operators are showing a keen interest in garbage collection in poor housing areas" (Gatabaki-Kamau, 1994).

In a systematic study of Accra, Songsore (1992) draws on a variety of sources to illustrate the nature of infrastructural provision and other basic services in the city. Table 20 shows the distribution of various types of water supplies in the city. It may be seen that less than half the population enjoy a piped water supply to their houses. In slum areas and other low-income neighbourhoods Songsore reports that facilities such as public or private standpipes, wells (with or without a pump), and water vendors are the main sources of supply. He estimates that daily per capita consumption in such areas is about 60 litres per day, about a quarter of the recommended level, and the reasons for this are, low system efficiency and the lack of capacity of the Ghana Sewage and Water Company to expand provision to meet the growing requirements of the city.

As far as sanitation is concerned, provision is even worse. Table 20 also shows the types of toilet facilities available to households in Accra. These figures demonstrate a rudimentary level of sanitation in most parts of the city. According to Songsore, the most common form of 'other' facility is 'open defecation'. After a deteriorating service throughout the early 1980s, the reorganization of the service was undertaken with the assistance of overseas aid in 1986. These changes have resulted in a 'stabilization' of the sanitation arrangements in the city.

Solid waste disposal, however, remains as "one of the most intractable problems within the Accra

Page 167 Metropolitan Area" (Songsore, 1992). Only about 10 per cent of the population of the city have their refuse collected whilst unauthorized dumping is widespread in low-income areas.

Songsore concludes that the inadequate provision of these basic services coupled with poverty, illiteracy and a lack of health care contributes to high rates "of environment-related, water-borne and water washed diseases" in the Greater Accra Region. Whilst area-based data for the prevalence of disease does not exist, he argues that the incidence is expected to be much higher in low-income neighbourhoods.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor B. Sub-Saharan Africa 5. Land availability The informal provision of much urban housing in sub-Saharan Africa highlights the issue of the availability of urban land to a greater extent than other factors of production. Moreover, the availability of land for urban development in many African countries is complicated by the fact that customary land law survives alongside more recent statutory law and is often communal or familial in terms of rights to use and ownership and non-transferable under any circumstances. It often precludes the ownership of land by women and is a major obstacle in enabling women-headed households to secure satisfactory accommodation (Molapo, 1994). For some time statutory land law in many sub-Saharan African countries reflected the influence of former colonial powers, but on gaining independence many countries have introduced major land reforms. The nature of these land reforms has varied, and in some countries it has been to nationalize the development rights to land effectively (e.g. United Republic of Tanzania, Zambia and recently also in Nigeria). More generally, however, the trend has been "to assign to the State a wider authority as an agency for improving social standards and the life of the community" (Boakye, 1994).

There is little evidence that any of the sub-Saharan countries experiencing rapid urbanization is able to deal effectively with the demands placed upon land supply, but those countries which have centralized decision-making over the ownership and use of land have been no more successful in delivering land for development by the urban poor than other countries. In a study of land allotment in Dar-es-Salaam between 1978 and 1992, for example, Kombe discovered that only 6.8 per cent of all applicants were successful (Kombe, 1994). He found that many of those who were successful, however, had been supported in their applications by influential politicians or party officials and concluded that most of the available plots were allotted to those with social, political or economic power. Mbogua (1994) claims that land allocation in Kenya "has acquired an extra quality. It is a consideration in an elaborate patronage system which empowers those in authority to buy loyalty from supporters". His fears are confirmed in a study by Olima (1994) who found in a study of landowners in two Kenyan towns, that only 15.7 per cent of those interviewed had secured their land through government or local authority leases, the rest had obtained their land-holding through 'informal' channels.

It would be misleading to suggest that such political influence in land allocation is confined to those countries having exercised central control over land. On the contrary, political patronage and corrupt practices in dealing with land are widespread in many countries of sub-Saharan Africa (1 7 ) . In addition to malpractice of one sort or another there appears to be a host of other factors which result in inefficiencies in the land delivery process, especially for the urban poor. These include a lack of a clear planning framework for urban land use; weak municipal capacity and procedures for dealing with land acquisition, surveying, servicing, registration and allocation; fragmented tenurial systems resulting in conflicts between customary tenure and proprietorial rights under the 'new' statutory systems; and lack of financial resources for positive interventionist policies and compensation payments, etc. These kinds of inefficiencies in the face of rapid urbanization have inevitably led to a shortage of land for development and in turn, shortages have resulted in increasing land prices and also to the emergence of a black market

Page 169 or informal system of land supply. Examples of rapidly increasing land prices abound. In Dar-es-Salaam, for example, Kombe (1994) shows that land prices in informal areas more than doubled between 1988 and 1992. Similar increases were recorded by Nuwagaba (1994) between 1989 and 1991 in various parts of Kampala. Macoloo (1994) also confirms that land prices have been steadily increasing in Kenyan towns since the late 1960s, but in a more detailed study of two low-income neighbourhoods in Kisumu, he notes that land prices have increased substantially during the latter part of the 1980s. These land price increases appear to reflect a trend in many major urban areas in sub-Saharan Africa and in all cases the effect is to push the possibility of land ownership further beyond the reach of the majority of urban dwellers.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor B. Sub-Saharan Africa 6. Summary The countries of sub-Saharan Africa are undergoing rapid urbanization during a period when their share of global trade is diminishing and macro-economic policies are forging structural changes in domestic economies. There is substantial evidence of falling incomes in the face of rapidly rising costs and growing urban impoverishment. The impact of these changes on the shelter sector is to diminish the capacity of government to intervene in the urban housing market, but at the same time to render market circumstances to be so adverse in terms of rising land costs, materials costs and the costs of borrowing, that there is a restricted market for the private sector which is confined to a relatively small proportion of affluent or influential people. Meanwhile, whilst the number of urban poor is increasing their housing standards appear to be deteriorating for want of investment and as a result of increasing densities. The affordability gap between the incomes of the poor and the cost of modest accommodation appears to be growing rather than diminishing.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor C. North Africa and the Middle East 1. Urbanization and the growth of human settlements Next to Latin America and the Caribbean, North Africa and the Middle East is the most urbanized among the regions of the developing world. As table 21 indicates, nearly 60 per cent of the population is currently living in urban areas. The table also shows that the Middle East subregion is more urbanized than North Africa (65 per cent and 50 per cent respectively). Turkey and the Islamic Republic of Iran had the largest urban populations in 1995 (43 million and 40 million respectively). The highest levels of urbanization (among the countries listed) can, however, be found in Saudi Arabia (80 per cent) and Iraq (75 per cent). The least urbanized of the countries in the region is Yemen, with only a third of its population in urban areas. All the countries are experiencing high urban population growth rates. Table 22 reveals that all countries listed have annual growth rates (19952000) in excess of 2.5 per cent. The rate of urbanization is generally higher among the countries of the Middle East, where all countries listed have growth rates in excess of 3 per cent. In terms of absolute numbers, the largest population increase occurs in Turkey and the Islamic Republic of Iran where urban populations are projected to increase with more than 1.5 million people each year between 1995 and 2000.

Table 22 also indicates that the growth rates are declining in all countries of the region apart from Egypt. The region's average annual urban growth rate has declined from 5.1 per cent during 19551965 to 4.0 per cent during 19851995. Future growth is expected to decrease even further. During the next ten years growth is expected to average 3.3 per cent, while the rate will decline to 2.2 per cent during the 20152025 period.

In absolute terms, however, the urban population of the region will continue its rapid growth. During the next decade (19952005) an average of 7.8 million people will be added to the urban population of the region each year. This figure is projected to grow to 9.0 million per year during the 20152025 decade. This urban growth occurs at a time when rural growth is dwindling. In fact, the rural population in Turkey is actually contracting with nearly half a million persons each year during the 1995• 2000 period. Urban growth currently accounts for nearly 90 per cent of the total population growth of the region. By 2015 the rural population of the region as a whole will start contracting. Ten years later, by 2025, three quarters of the regions population will be living in urban areas (see table 21 ). By this time the urban population of the Islamic Republic of Iran is projected to reach 92 million, while six other countries will have urban populations in excess of 25 million people (compared to only three today).

As table 23 indicates, all but one of the largest cities of the region are growing at rates of more than 2 per cent per year. Teheran and Damascus are the only major cities of the region where growth is expected to accelerate during the next two decades. Yet, all major cities of the region are expected to remain with relatively high growth rates for the next two decades. The three largest cities of the region, Cairo, Istanbul and Teheran are projected to experience population increases of between 50 and 60 per cent over the next two decades, reaching populations of 14.5 million, 12.3 million and 10.2 million respectively by the year 2015.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor C. North Africa and the Middle East 2. The nature and extent of urban poverty Clearly, circumstances in Iran and Iraq are exceptional after a prolonged period of warfare, but as far as the other countries are concerned, generally they have higher levels of per capita GDP than most countries in South Asia and sub-Saharan Africa and the incidence of urban poverty is less marked. Nonetheless, and despite a more diversified economy, the oil price increases of the 1970s precipitated a prolonged recession into the 1980s in Turkey. As a consequence of stabilization policies introduced by the military administration in 1981 and continued by subsequent governments, there was a marked fall in real wages between 1978 and 1986. During this time the wage index of state employees fell from 144.4 to 64.9 and that for workers associated with the Social Security Organization from 110.7 to 52.5 over the same period (Turel, 1991).

A recently undertaken poverty assessment in Egypt found that 2025 per cent of Egyptian households could be classified as poor (World Bank, 1993c). It further revealed that, despite progressive educational policies, illiteracy remained widespread, especially in the case of women (62 per cent compared with 38 per cent amongst men). Whilst most of the poorest were found in rural areas, the urban poor included those in industrial employment and services, and especially those in the lowest ranks of government. They comprised between 25 per cent and 33 per cent of young people, a large proportion of women, especially widows and female-headed households, and the elderly. The report concluded that, "the plight of the poor has been worsening in the face of a rapid population expansion, a deteriorating economy and mounting pressures on public resources".

Similar problems of rapid urbanization and faltering economic activity also characterize the other North African countries of Algeria, Morocco and Tunisia, and per capita GDP in these countries has grown marginally over the decade to 1992, with the exception of Algeria which has actually fallen by 0.5 per cent (World Bank, 1994a).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor C. North Africa and the Middle East 3. Housing and environmental conditions Housing and environmental conditions are closely related to economic performance. Worsened economic circumstances in these countries have thus led to a similar worsening of housing and environmental standards, especially for the low-income groups. In Turkey the economic crisis of 1979/1980 saw a sharp reduction in housing investment as a proportion of GNP and a fall in the proportion of housing investment of total fixed capital investment (see table 24 ). After a relatively consistent increase in housing production from the first planning period in 1963 to over 100,000 units in the late 1970s, housing starts plummeted and output figures slumped during the Fourth Five Year Plan period (19791983). The number of housing starts during this period was only 940,000, i.e. only 55 per cent of the target of 1.7 million (Ergun, 1991).

The economic crisis was a watershed in postwar housing policy in Turkey. Thereafter the government has channelled unprecedented levels of investment into housing through centrally controlled credit arrangements to encourage the development of mass housing projects through non-profit-making cooperatives. Whilst this has been successful in increasing housing output, to well over 250,000 units in 1992 (Gür, 1994 and see table 25 ), it has been less successful in improving the circumstances of the poor. Özüekren argues that there are four reasons for this, "First, the loans provided by the [Mass Housing] Fund cover only 30 per cent of the construction cost, and the low-income groups are not able to complement the loan available to make up the total cost of construction. Second, it encourages larger rather than smaller, cheaper dwelling units, which in itself addresses the housing needs of the richer rather than the poorer families. Third, it provides loans to those who may already have satisfied their basic needs. Fourth, it permits profits to be made with scarce national resources" (Özüekren, 1991).

Throughout the post-war period, therefore, formal housing provision in Turkey has not only fallen consistently short of housing needs, it has also not generally been directed towards the needs of the poorest groups. This has contributed to an inexorable growth in squatter settlements, especially in urban areas. Table 26 shows that by 1990 approximately one-third of the urban population in Turkey was living in squatter settlements and that the squatter population had almost tripled in the two decades since 1970.

The problem is most marked in the major cities, such as Ankara, Istanbul and Ismir, and table 26 demonstrates the extent of squatter settlements in Ankara. According to Aksoylu (1994), "such uncontrolled settlements are generally erected in inconvenient and inaccessible localities on the urban fringe. The task of providing public services to the unorganized and sprawling settlements is highly expensive for city governments. As a general rule, the quality of the dwellings is inadequate and electricity, running water, drainage and sewerage and gas are unavailable or are in very limited supply". In the Sixth Five Year Plan (19901994), there was some evidence that the Government of Turkey was seeking to respond to criticisms that its housing programmes were neglecting the needs of the urban poor. The Plan introduced subsidies for low-cost housing construction targeted towards low-income groups; municipalities were given powers to encourage the production of housing for rent for low-income groups; and sites-and-services programmes were introduced in order to prevent the further growth of squatter

Page 174 areas in the major cities (Aksoylu, 1994; Gurel and others, 1994).

A lack of affordability of government provided conventional mass-housing schemes alongside rapid growth of informal settlements characterizes the countries of North Africa as well. In Egypt, urban development is concentrated along the banks of the Nile and its delta. Approximately 45 per cent of the population live on 4 per cent of the land area. In a situation where public and private sector housing investment has declined over the last two decades (Rizk and Rabie, 1991a), the urban population has increased by some 60 per cent. The result is that the acute pressure for accommodation has not been matched by a corresponding increase in appropriate urban housing and services. The effects of rent control have also had an adverse impact on the quality of the older housing stock and at least 30 per cent of the urban housing stock is rapidly deteriorating. An estimated 12,000 units are lost each year through structural failure (Rizk and Rabie, 1991a). The lack of provision of low-cost accommodation has resulted in the growth of informal settlements on the urban fringe and a recent estimate by the Ministry of Local Administration assumed the total population of these irregular urban settlements to be about 7 million people (25 per cent of the estimated urban population in 1995), in just under 1,000 areas with an average density of about 50,000 inhabitants per km² (El Batran and others, 1995). In Ismailia these informal settlements are growing at an annual rate of 12.5 per cent as compared with a rate of 3.7 per cent per annum for the city as a whole (El Batran, 1994).

Most of the inhabitants of these irregular settlements are immigrants from rural areas and they are characterized by "great poverty, unemployment [a] low level of human skills [a] rising rate of disease, besides a low educational level and spreading illiteracy, especially in girls and women" (El Batran and others, 1995).

Since 1977, the Government of Egypt has embarked on a number of integrated upgrading and 'sites-and-services' projects in the major cities in order to formulate a model strategy for dealing with these irregular settlements. For strategic reasons, however, it has also initiated a number of 'new towns' and these have not only been intended to relieve pressures on the major cities, but also to alleviate the national housing shortage. Rizk and Rabie (1991b) argue, however, that the new towns have not managed to sustain a housing supply consistent with the original targets. They further argue that the provision of accommodation in the form of conventional multi-storey flats has been inappropriate for the low-income groups, and that a substantial proportion of these new-town residents belong to the low-income groups, and cannot afford to purchase the newly-built flats. As a consequence many newly built flats remain unoccupied. El Batran and others (1995) suggest that in 1986 as many as 1.8 million newly constructed housing units remained unoccupied in Egyptian cities, despite the acute shortage of low-cost accommodation. This major contradiction, of an excessive demand for low-income housing and a superfluity of more expensive accommodation is still apparent in urban areas throughout Egypt.

In Algeria, Ikhlef (1994) argues that, "The housing shortage .. is one of the most sensitive problems facing the country today". Following independence in 1962, the government embarked upon a national programme primarily to develop the economy. The provision of housing was only given increased attention during the 1970s, when a Ministry of Housing and Town Planning was created (1977). Confronted with a huge backlog of housing need and increasing shelter deficits, the government adopted an approach intended to produce mass housing through the industrialization and standardization of building products using Western European system-built technology. This approach has not been successful; "in reality, the [system-built techniques], proved expensive, difficult to manage and failed to achieve numbers on the one hand, and produced a type of housing alien to most Algerians on the other" (Hadjri, 1991). Neither have these newly built units been affordable by the urban poor and — as in Turkey and other developing countries in the region — illegal settlements have continued to grow. Despite a reassessment of this strategy during the mid 1980s and a reorientation in favour of self-help

Page 175 housing and the promotion of cooperatives using more indigenous materials, a deterioration in the economy has meant a substantial reduction in the output of social housing. In 1990, the official housing deficit was estimated at about 1.5 million dwellings with housing need increasing at about 130,000 per year (Hadjri, 1991). The current output of social housing does not exceed "a few thousands per year", is not allocated to the very poor and their only solution is to continue to reside in unsafe and insanitary, illegal urban settlements (Hadjri, 1991).

Morocco has also experienced rapid growth in its major urban settlements with the consequential growth of shanty towns and illegal settlements. The provision of new social housing has primarily benefitted urban middle-income groups. The government has, however, also pursued the upgrading and resettlement of those in shanty towns and in the more recent illegal settlements. Problems with cost recovery, land acquisition costs as well as the complex nature of the institutional framework for upgrading, has rendered slow progress in these areas (Ameur, 1995).

As projections indicate that the average household size in the region will decline from 5.6 persons in 1995 to 4.7 in 2025 the rate of increase in the number of households is considerably higher than the growth of population. During the 19952000 period the number of households is expected to increase with some nine million (UNCHS, 1996). The number of households in Egypt will increase by some 100,000 each year for the rest of this century. The figures for Turkey, the Islamic Republic of Iran and Algeria are 76,000; 52,000 and 25,000 respectively (UNCHS, 1996). Given the relative size of the urban population growth, the bulk of this growth in the number of households is likely to occur in urban areas. The challenge ahead in terms of housing supply in the urban areas of North Africa and the Middle East is thus truly staggering.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor C. North Africa and the Middle East 4. Land availability As in other developing countries, rapid urbanization places great demands on the supply of land and increasing demand generates an increase in the price of land. The liberalization of economic policies, coupled with the encouragement of privatization has tended to encourage the commodification of land and the development of urban land markets. In Egypt, for example, the introduction of its Open Door Economic Policy in the 1970s saw an influx of foreign investment, particularly from the Arab States. This influx precipitated a sudden increase in the price of inner-city real estate and subsequently resulted in increased prices throughout urban areas. The increasing value of land attracted speculators, who, in the absence of strong public sector institutional capacity for the planning and management of urban land, have become increasingly influential in urban development decision-making. At the same time the impact of rising prices throughout the urban land market has created considerable difficulties for the urban poor. El Batran describes how urban upgrading programmes in parts of Ismailia have contributed to increasing rents 1215 times. In addition to this increase comes the requirement for 'key money' (El Batran, 1994). The continuing high demand for urban land is resulting in escalating land prices in Egyptian cities, thus forcing the poor into even more peripheral locations (El Batran and others, 1995).

A similar situation has occurred in Turkey, where 'intermediaries' have established themselves in promoting illegal subdivisions of public owned land in squatter areas. Attempts by the government to preempt such developments through the establishment of a Land Office to provide a supply of low-cost land for housing development have been unsuccessful. The main reason for this is "weak organization and scarce resources" (Özüekren, 1991). More recently, however, the Government of Turkey has sought to compete with thedallal(speculative land agents), through an experimental approach by providing "Temporary Habitation Centres" to act as reception areas for low-income groups who will then benefit from relocation into sites-and-service projects. This current stratagem for urban squatter settlements has emerged as a result of the successful absorption of successive waves of immigrants expelled from central European countries since the 1950s (Gurel and others, 1994).

Escalating land costs and a shortage of land for low-cost shelter provision are also major problems confronting the urban poor in the countries of North Africa.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor C. North Africa and the Middle East 5. Summary Influenced very much by their neighbours in Western Europe, the countries of North Africa and the Middle East have embarked upon post-war housing strategies which have seen governments involved directly in the provision of formal 'social housing'. In each of these countries, however, this accommodation has failed to meet expectations in terms of numbers, and sometimes also in terms of quality. The allocation of such accommodation has also favoured middle-, rather than low-income groups, with the result that migrants to the cities have had to resort to informal or squatter settlements. In the light of economic recession, the difficulties encountered in undertaking these new house-construction programmes, and rapidly growing informal settlements, in recent years these governments have increasingly resorted to 'enabling' roles and self-help strategies for the urban poor in line with the policies advocated by UNCHS (Habitat) and other international agencies.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor D. South Asia 1. Urbanization and the growth of human settlements South Asia is one of the most densely populated regions of the world. The three countries of India, Pakistan and Bangladesh have a total population of almost 1.2 billion people in 1995. Because of the sheer size of its population — some 935 million in 1995, which amounts to one sixth of the world's population — India will be discussed in a separate section.

South Asia is, together with sub-Saharan Africa, the least urbanized region of the world. As can be seen from table 27 , only a quarter of the region's population is currently living in urban areas. Nearly 60 per cent of the current urban population of the region is living in Pakistan. Pakistan is also the most urbanized of the countries, with more than a third of its population in urban areas. By contrast, less than a fifth of the population of Bangladesh, and less than one seventh of the population of Nepal, is living in urban areas.

Urban population growth in the region is, however, relatively high. The urban populations of Pakistan and Sri Lanka have increased by 150 per cent between 1975 and 1995, while the urban population of Bangladesh has more than tripled. The rate of urban growth for the region as a whole is currently (19952005 period) 4.9 per cent per year (see table 28 ), and it has actually increased over the last three decades. The highest growth rates for the next decade is projected to occur in Nepal and Afghanistan, where urban populations will grow at about 6.6 per cent per year. Sri Lanka is projected to have the lowest growth rate. The growth rates are projected to remain high over the next three decades, and the urban population of the region is thus expected to increase with some 240 per cent to reach 284 million in 2025.

The absolute growth of the rural population in the region is still higher than that of the urban areas. This is, however, changing fast. During the first quarter of the next century urban populations are expected to increase three and a half times as fast as the rural populations (United Nations, 1994). By the year 2025, 48 per cent of the population is projected to live in urban areas. By that time, 57 per cent of the population of Pakistan is expected to live in urban areas. In all the other countries, however, urban populations are expected to form a minority (see table 27 ).

Each year during the 19952005 period, the urban population of Pakistan is projected to increase with 2.8 million. For Bangladesh the figure is projected to be 1.4 million, compared to 360,000 in Afghanistan, 257,000 in Nepal and 145,000 in Sri Lanka. The urban population of the region is expected to reach 105 million by 2000. Some 61 million of these will be living in the urban areas of Pakistan, while another 29 million will be living in Bangladesh. Among the countries listed, Sri Lanka is the odd case, with annual growth rates of less than 2 per cent during the last two decades. Yet, urban growth in Sri Lanka is projected to accelerate, reaching an average of 3.6 per cent per year during the 20052015 period.

All the major cities of the region are currently increasing their populations at average annual rates in

Page 179 excess of 4 per cent (see table 29 ). This growth is only paralleled by the growth rates in sub-Saharan Africa. A city like Dacca, for example, has had an average annual growth rate of 5.9 per cent during the 19851995 period. Although this growth rate is declining, it is still expected to remain at 5.2 per cent during the next ten years. As can be seen from the table rates are projected to remain high. The six cities listed will have growth rates in excess of 3.5 per cent also during the 20052015 period. The result is that the three largest cities of the region: Karachi, Dacca and Lahore will reach populations of 20.7 million, 19.0 million and 10.8 million respectively by the year 2015.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor D. South Asia 2. The nature and extent of urban poverty According to Qureshi and Bhatti (1991), "35 to 40 per cent of Pakistan's population may be considered as poor", i.e., those below the 40th percentile of the per capita income distribution. Those below the 90th percentile may be regarded as 'very poor'. Quoting a recent survey of patterns of consumption, they suggest that 22 per cent of households are unable to obtain a minimum diet of 2,000• 2,500 calories per day and that 60 per cent of all children under the age of 5 years have "some kind of nutritional deficiency". About 30 per cent of babies are born underweight (less than 2.5 kilograms) and 28 per cent of mothers consume less than 70 per cent of the recommended calorie intake during pregnancy. Infant and maternal mortality is higher in thekatchi abadis(slum settlements), where safe water and sanitation facilities are 'grossly inadequate', compared to other areas (Qureshi and Bhatti, 1991).

In Bangladesh, with a per capita GDP of $220 in 1992, an estimated 56 per cent of the urban population was living below the poverty line in 1986 (Ahmed and Rouf, 1991). Life expectancy is amongst the lowest in South Asia. Men have a life expectancy of 53 years and women of 50. Infant mortality is also extremely high at 110 per 1000 live births, and malnutrition is the principal cause of death amongst children under five, but adults, and particularly women, also suffer from it. The child mortality rate is 188 per 1000 and the maternal mortality rate is between 6 and 8 per 1000 (Government of the Netherlands, 1992). Moreover, projections by the Centre for Urban Studies in Dhaka indicate an alarming growth in the numbers in urban poverty by the year 2000 (see table 30 ). (1 8 ) The table indicates a similar picture to that in South East Asia, which shows that whilst the proportion of the population in poverty is decreasing, the rate of urbanization is so fast that the actual numbers of the urban poor are increasing as the urban economy is unable to absorb such large numbers.

Official statistics from Sri Lanka suggest that the numbers in poverty have remained relatively stable over two decades, falling from 3.5 million persons in the early 1970s to 3.3 million persons in the late 1980s. Within this group those considered to be 'ultra poor' have declined from 5.5 per cent in 1980/1981 to 3.0 per cent in 1985/1986 (Dickson, 1991). Assuming a poverty line threshold of Rps. 700, 34.6 per cent of the urban population (or 1.5 million people) were living in poverty in 1991.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor D. South Asia 3. Housing and environmental conditions According to the National Housing Policy (Government of Pakistan, 1992), there is a substantial shortage of housing units in the country, especially for the urban poor. Each successive Five Year Plan has failed to meet its housing targets and in 1992 it was estimated the overall shortfall was 6.25 million units. The National Housing Policy acknowledged that if current rates of urbanization continue there will be an increase in the growth of slums,katchi abadisand encroachments on private as well as public land. Table 31 shows the number ofkatchi abadis, as recorded in the Seventh Five Year Plan (19881993), and estimates the residential population of those settlements to have been about 6 million in 1988.

Malik argues that, by the early 1990s, approximately 3540 per cent of the population of the major cities of Karachi and Lahore were living in these slum settlements, and that, if present trends continue, 50 per cent of the urban population might be living in such conditions by the year 2000 (Malik, 1992; 1994).

A survey of housing conditions in a sample ofkatchi abadisin Lahore in 1988 undertaken by Zaidi (1990) gives an indication of the quality of life in such areas. As many as 82 per cent of the households living in these slum settlements had been living there for more than 10 years. The average length stay was 18 years. Average household size, at 8.3 persons, was higher than that for the city as a whole (7.0 persons), and an increasing proportion of households were nuclear, rather than joint families. There was a high dependency ratio (4.6) with only 1.8 persons per household earning any income, and those earnings were at the bottom end of the income spectrum.

Over a period of five years there had been an increase in the proportion ofpucca(permanent) structures from 24 per cent to 41 per cent and a reduction ofkutchadwellings (from 19 per cent to 13 per cent), but most residential structures remained semi-permanent. Improvements to the structures had been undertaken as the sites were regularized by the Lahore Development Authority. A total of 89 per cent of the superstructures were owned by the occupiers, but renting had increased as the slum settlements had had tenure rights conferred. Densities were high, 78 per cent of structures having plot sizes of less than 100 square yards. Sub-divisions were increasing and so too was overcrowding, as the average number of rooms per unit was only two.

Whilst housing conditions for the urban poor are deteriorating in Pakistan, the problem appears to be even worse in Bangladesh. Overall statistics on housing and environmental conditions are elusive but Islam (1992), confirms that "more than 50 per cent of the urban population are found in the category of the poor" and in Dhaka, the largest metropolitan city, the proportion "can be as high as 70 per cent". In a study of access to residential land by the urban poor in Dhaka he identifies six classifications of the low-income group according to residential status (see table 32 ).

The first group are 'squatters', which also include pavement dwellers and the homeless. These are the poorest of the poor, their residential structures are the most rudimentary and are devoid of basic services. They are invariably illegal, and on marginal sites. Densities are extremely high of 1,5002,500

Page 182 persons per acre and the numbers are growing. Most shacks are owned by the occupants, but some are sub-let to tenants.

The second group are those who have been relocated into rehabilitation or resettlement camps. These sites are often peripheral, and despite occupancy for periods of up to 30 years, tenure remains insecure, as they were intended as temporary relocations, sometimes for immigrant communities. Shelter and environmental conditions in such camps are 'extremely poor'. Islam estimates that such camps accommodate about 6 per cent of the Dhaka's population.

The largest groups of poor people live in thebustees(slum settlements). Residential structures are kutchaor semi-puccaand whilst conditions are superior to the squatter settlements, they remain quite deplorable. Approximately two-thirds of thebusteesare on privately owned land and are run as commercial enterprises bybusteeowners or 'slum-lords'. Islam estimates that whilst 40 per cent of the city's overall population may live in thesebustees, approximately seven-eighths of these will be renters.

The fourth group are those living in old, conventional tenemental structures in inner city areas. Private owner occupancy co-exists with rented units, but owing to low rents and a high intensity of use the structures become run down and dilapidated. Islam estimates that approximately 13 per cent of the city's population resides in these areas.

Employee housing for low-income groups provides a further classification. This may be provided by the government or private-sector organizations and accounts for a further 7 per cent of the population.

Finally, other accommodation for low-income groups may include lodgings or shared housing with middle-class families, or in shops, factories or other institutions. This form of accommodation has proved particularly popular amongst single young women on a shared basis and Islam estimates that no less than 50,000 women have found accommodation in the city in this way.

The outcome of these market processes is that some 70 per cent of the population in the city are living in conditions where "all basic physical and utility services necessary for health are either absent or in extremely short supply" (Islam, 1992). Moreover, the pressure for accommodation, however marginal, is increasing both as a result of natural growth and in-migration and leads Islam to conclude that by the end of the century, when the population of Dhaka is expected to reach 10 million, 80 per cent of those may be living in the circumstances described above.

In contrast to Bangladesh, housing has been given a very high priority in economic as well as political terms in recent years in Sri Lanka. Since 1978, the government has initiated three major housing programmes: The Hundred Thousand Housing Programme, 19781983; the One Million Housing Programme, 19841989; and the 1.5 Million Housing Programme, 19901994. In spite of the achievements of these programmes in raising housing standards as a whole, it is the urban poor who face "the most serious housing problem in Sri Lanka" (Fernando, 1994). According to Fernando "more than half of the population of Colombo Municipality area today live in slums and shanties", and "a similar situation of bad housing is found throughout the urban sector". The major problem is that the shanties are constructed on publicly owned land and on marginal sites liable to flooding and do not enjoy a 'legalized' status from the perspective of the provision of basic public services such as water, electricity and sanitation. Whilst the housing programmes have been relatively successful in rural areas, the urbaninitiatives have been based on a community action programme which has been slower to develop and more bureaucratic (UNCHS, 1993a). Moreover, changes in organizational responsibilities for implementation and funding under the Government's most recent programme have meant that the Urban Housing Sub-Programme has lost momentum and is likely to be the least effective of all (see table 33 ). As can be seen from the table, only 15,000 urban poor households had been assisted during the first half

Page 183 of the programme. That amounts to only 10 per cent of the programmed target of 150,000. The estimated output of the second half of the programme would still leave a shortfall of some 93,000 units. It thus seems that only one-third of the planned number of units will be completed.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor D. South Asia 4. Other infrastructural provision Water supplies in most urban areas in Pakistan are based on ground water sources. Naturally the expansion of the urban population has increased demand and resulted in a lowering of the water table. In cities without ground water supplies, or where those supplies are inadequate, water is transported, often over long distances, thereby increasing costs, Qureshi and Bhatti suggest that 80 per cent of town dwellers in major urban centres have access to safe water, but only 40 per cent have water connections inside their houses. Provision for the poor is via standpipes or through water tankers.

Around 59 per cent of the urban population in 1989 had access to sanitation facilities, whilst about 40 per cent enjoyed a solid waste disposal service (Qureshi and Bhatti, 1991). The majority of sewage and solid waste are disposed of untreated and cause serious problems of contamination. Even where sewerage and refuse facilities are provided in urban areas they are rarely available in slum and squatter settlements.

Table 34 demonstrates this in respect ofkatchi abadisin Lahore. This shows that whilst most households had access to water and electricity, human and solid waste disposal remained major problems (Zaidi, 1990). Moreover, with the rapid growth of cities, it is proving increasingly difficult to find suitable sites for solid-waste disposal, and to extend sewerage and sanitation facilities to slum populations.

In Bangladesh in 1990, it was estimated that 63 per cent of urban dwellers were outside the public water supply programme (Ahmed and Rouf, 1991). Moreover, only 4 per cent of the urban poor benefitted from the availability of free water through standposts and street hydrants at that time. Programmes are in hand to improve these services over the next decade, including a major Action Plan of Flood Control which was launched in 1990. As far as urban sanitation is concerned only about 24 per cent of all urban households rely on sewerage provision or septic tanks, the rest use pit or bucket latrines, or in many cases, use other means of human-waste disposal. The absence of safe drinking water and poor environmental sanitation contributes to high rates of disease and infant and maternal mortality, as described above (see also box 5 ).

The successive housing programmes in Sri Lanka have had an impact on water supplies and sanitation in urban residential areas. But the provision of piped water supplies and improved sanitary facilities remains a problem in many of the slum areas, particularly in the capital city of Colombo. Some slum settlements in the city are also located in low-lying areas where drainage is also a problem. The increasing amounts of solid waste for disposal are also posing problems for the major urban authorities.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor D. South Asia 5. Land availability Urban land scarcity, its cost, and speculation by developers constitute major problems confronting the urban poor in their struggle for shelter in South Asia. The problem of land scarcity is perhaps most marked in Bangladesh where topographical features limit the supply of available land for urban development, especially in Dhaka. The ownership of urban land is highly skewed so that 30 per cent of the population owns and controls 80 per cent of the land. By restricting the availability of land, costs are inflated making it extremely difficult for the majority of the population, not merely the poor, to afford to purchase land for housing or for entrepreneurial use. Meanwhile, in the limited sub-markets available to the urban poor, newly arriving immigrants continue to seek accommodation, often on a rental basis, which increases densities and, together with the natural increase of the host population, reduces per capita living space to minimal levels and reduces environmental conditions to a state prejudicial to health and devoid of essential infrastructural provision. In Dhaka especially, this situation is further exacerbated by the lack of security and threat of eviction which overhangs some slum settlements, and by the loss of accommodation which takes place whenbusteeland is sold for more lucrative purposes, such as commercial development (Haque, 1992).

In Pakistan there are similar problems. Since the late 1970s however, successive governments have favoured regularization rather than eviction fromkatchi abadis(Zaidi, 1990), but similar elements are in place. Continued immigration into urban areas creates land shortages in the major cities which increases prices and encourages land speculation (Malik, 1994). Where public authorities may be disposed to the acquisition of land for resettlement purposes, or, on behalf of the urban poor, they are handicapped by cumbersome procedures, and by land prices they cannot afford. A similar picture of spiralling land prices, accompanying rapid urban growth is also apparent in Sri Lanka (Dickson, 1991).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor D. South Asia 6. Summary South Asia is, together with sub-Saharan Africa, the least urbanized of the regions of the developing world. The urban growth rate, however, is high. Current trends indicate that the number of people in urban areas living in poverty in this region is likely to increase substantially in the foreseeable future. The likely consequence is an alarming deterioration in their housing and environmental circumstances.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor E. India 1. Urbanization and the growth of human settlements India is the second most populous country in the world having an estimated total population of 935 million in 1995 (United Nations, 1994). The total population is expected to exceed one billion before the year 2000. Table 27 illustrates the rapid growth of the urban population, which doubled between 1975 and 1995 (reaching 251 million), and increased from 21 to 27 per cent of the total. With urban population growth rates of 3 per cent or more during the next three decades (see table 28 ), the urban population is projected to reach 292 million by 2000 and 630 million (45 per cent of total population) by 2025.

Two salient features of India's growing urbanization are, firstly, the high proportion of natural growth of the urban population, as opposed to rural-urban migration; and secondly, the relatively pronounced growth rate of its large cities. According to the National Institute of Urban Affairs (NIUA, 1988a), 41 per cent of urban growth in India is due to natural increase, 38 per cent due to rural-urban migration and 21 per cent due to the reclassification of settlements. A disproportionate amount of this growth is due to the high birth rates characteristic of the low-income settlements in urban areas (Dasgupta, 1994).

In 1981 the proportion of the urban population living in cities with a population in excess of one million was 26.4 per cent. This figure increased to 32.5 per cent in 1991 and is estimated at 35.2 per cent in 1995 as the number of cities with a population of over one million reached 29. As table 35 indicates, the growth of all of India's largest cities is projected to remain at rates in excess of 2 per cent per year. The population of the largest cities is expected to increase by 50-100 per cent during the next two decades. The largest cities, Bombay, Calcutta and Delhi, are projected to reach populations of 27 million, 18 million and 18 million respectively by 2015.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor E. India 2. The nature and extent of urban poverty Official estimates of those experiencing poverty in India have varied widely over time. In recent years, however, two assiduous studies have sought to refine the process of estimating the extent of urban poverty in India (Kundu, 1993; Mathur, 1994). Kundu explains the increasing divergence in the estimates between the Central Statistical Organisation (CSO) and the National Sample Survey Organisation ( NSSO) in terms of technicalities in the way the price of commodities is estimated and argues for an upward review of NSSO consumption data. By doing this he estimates the extent of urban poverty "somewhere between 35 and 40 per cent" (Kundu, 1993). In table 36 he compares estimates of poverty from the Planning Commission, from the use of the all-India poverty line, and by aggregating the estimates of State Governments. There is a high correlation between the latter two estimates and the reason for the discrepancy between these two and the Planning Commission's figures is because of the dependency placed by the Planning Commission on NSSO data. The table shows that whilst the percentages of those in poverty are declining, the actual numbers are increasing from 50 million in 1970/1971 to some 75 million in 1987/1988. If Kundu's assumptions are applied to the 1991 Census figures, somewhere between 76 and 87 million urban dwellers were living in poverty at that time. If present trends continue — even on the most optimistic assumptions — it is possible that more than 100 million people will live in poverty in Indian cities and towns by the year 2000.

Whilst those in poverty may average 3540 per cent in urban areas, other studies have illustrated that those living in slum areas may experience higher levels of urban poverty. A study of 20 towns and cities revealed that 50 per cent of the slum population lived below the poverty line (NIUA, 1988b) and the National Centre for Human Settlements and Environment (NCHSE) recorded figures of 73 per cent, 89 per cent and 68 per cent for the slum population in the cities of Bangalore, Calcutta and Indore respectively (NCHSE, 1987). Broadly speaking, the percentage of households living in urban slum settlements correlates with the level of urbanization and economic development of the State (Kundu, 1993).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor E. India 3. Housing and environmental conditions Whilst estimates vary (widely) there is a significant shortage of urban housing in India. Moreover, table 37 shows that official figures indicate that the shortage worsened from a requirement of 3.6 million dwellings in 1961 to 7.0 million in 1981. Over the decade between 1981 and 1991, however, the shortage appears to have eased to some 4.8 million dwellings. Other organizations have in the past put the figure much higher than official estimates. The Birla Institute of Scientific Research in Delhi, for example, computed a shortfall of between 9.6 million and 22.1 million in urban areas in 1981; and at the same time, the Indian Institute of Management at Ahmedabad arrived at a shortage of between 6.6 million and 15.3 million dwellings depending on different assumptions (both estimates quoted by Kundu, 1993; UNCHS, 1993c).

Table 37 also provides some indication regarding trends in the quality of the existing housing stock. The comparison over 1961 to 1991 shows an overall and continuing improvement in the housing stock with the numbers ofpuccastructures steadily increasing and the numbers ofkutchapremises declining as a percentage of the total, although increasing in actual numbers.

Table 38 provides further information about trends in the urban housing situation in India. For the most part it may be seen that these trends are variable (as in the case of the number of persons per room, for example), perhaps increasing in number between 1961 and 1971, before reducing between 1971 to 1981. There are three clear trends discernible from the table:

 a reduction in the proportion of households occupying a single room from 53.1 per cent in 1961 to 39.6 per cent in 1991;

 a marginal improvement in the ratio of population per usable housing stock from 7.04 in 1961 to 6.74 in 1981; and

 a marked increase between 1981 and 1991 in the number of households per housing unit.

The latter change implies that while each household had their own housing unit in 1981, four households shared three units by 1991. It also indicates that the housing deficit in India may be much larger than what is indicated in table 37 . If housing need is assessed on the concept of one the household per housing unit, the urban housing deficit in India in 1991 could have been about 15 million units.

Although there was a decreasing trend in the percentage of vacant houses in the urban housing stock between 1961 to 1981 (from 7.2 per cent to 6.4 per cent), the figures had increased again by 1991 to 8.5 per cent.

The average floor area per person in 1983 was 7.81 m², i.e. slightly higher than in China where the living floor space area in 1985 was 7.46 m² per capita. Around 60 per cent of urban households lived in self-occupied houses, whilst most of the remainder rented their accommodation (Kundu, 1993).

Page 190 According to the National Building Organisation (NBO), 36.8 per cent of urban households had no access to latrines in 1987. A further 18 per cent had access only to service (communal) latrines, whilst less than 41 per cent had the use of water borne latrines and 58 per cent of these were shared (Kundu, 1993).

Whilst the 1991 Census showed very small numbers without access to accommodation, a large percentage of almost 40 per cent of households still had access to only one room. Rent levels were modest; the share of rent as a proportion of monthly expenditure was about 10 per cent on average.

These overall figures, modest as they are in terms of indicators of housing quality, do not fully convey the housing conditions confronting the urban poor. Kundu takes his analysis further by examining directly the living conditions of the bottom 40 per cent in terms of monthly per capita consumption. Table 39 shows the type of housing structure by income profile for the lowest 40 per cent of the consumption spectrum and compares this with average figures. It may be seen from the table that (with the exception of the lowest class Rs.030), those with the lowest consumption capacity were much more likely to live in kutchaor semi-puccastructures than the average. Even when averaged as a group, more than a quarter of those in the lowest 40 per cent expenditure category lived inkutchadwellings (as compared with 16.4 per cent of households as a whole), and about a third lived in semi-puccastructures (as compared with 25.7 per cent of all households).

Table 39 also shows the distribution of per capita floor area according to the lowest 40 per cent of expenditure classes. This table shows that those in the lowest expenditure classes are living in houses with significantly less per capita floor area than average households. Indeed those in the higher expenditure classes (not illustrated in the table), enjoy 4 times more per capita floor space than those in the bottom class. Kundu argues that "the bottom 39 per cent of households occupy only 28 per cent of the floor area (whilst), the top 22 per cent claim a share as high as 56 per cent". Given that a large proportion of households live in one-roomed units and that average household size may comprise 5 or 6 persons this implies that many dwellings in slum areas have highly restricted floor areas.

Table 40 provides information about housing tenure and housing costs amongst the urban poor. This table provides some interesting insights into the housing behaviour of low-income groups in India. It shows, firstly, that the phenomenon of renting increases with the level of expenditure. Thus only 11 per cent of households in the lowest expenditure class are renters, whereas in the higher groups the proportion rises, and in the very highest groups (not shown in the table), the proportion is 50 per cent and higher. It may be seen that amongst the poor as a whole only 26 per cent of households live in rental premises. The explanation provided by Kundu is that renting a dwelling is not only expensive but it also implies a legal status. It may be that new arrivals may have to rent premises when they first come to the city, but as rents are high, they very soon move out to a cheaper option, often squatting illegally on publicly owned land. This too is not entirely free of charge:

"The field surveys ... revealed that in the squatter settlements some illegal occupants had to regularly pay either the police or slum lords for their protection against fire, eviction and other harassment. Also at the time of their initial construction/occupation they were required to pay certain sums either to the police, the local lord or the previous settler. Around one-third of households had paid Rs. 1,500 to 2,000, another one-third between Rs. 1,000 and 1,500 and the rest less than Rs. 1,000 for constructing their huts" (Kundu, 1993).

These data provide firm evidence that, despite the overall improvements which may be discernible from national trends in the housing stock, the urban poor remain systematically disadvantaged in terms of access to shelter of reasonable quality, of appropriate size and legal status, and at affordable cost.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor E. India 4. Other infrastructural provision As far as water supplies are concerned NSSO data indicates that 34 per cent of the urban poor are not provided with a piped water supply, relying on alternatives such as handpipes and tubewells (19 per cent), orpuccawells (15 per cent). Since the piped water supply is available at very low cost this implies that the benefit of this subsidy is enjoyed much more by the richer sections of the community than the poor. At the same time the distribution of water is also inequitable, not only between states, but also in urban areas. Kundu estimates that in the relatively less developed states, the percentage of the poor not serviced by the public water system may be 60 per cent and a number of studies have indicated the per capita consumption of water on a daily basis to be much lower in slum areas than other parts of cities. An NIUA study (1988b), for example, showed that water provision through public stand posts in Madhya Pradesh varied between 22 and 36 litres per capita per day, whilst the supply through the domestic piped water distributional system was between 36 and 120 litres per capita per day. Similarly, in Ahmedabad, 25 per cent of the population consumes 90 per cent of the water supply (Kundu, 1993). Not only is the number of persons serviced by public stand posts likely to be higher than recommended levels, (1 9 ) but per capita water consumption by the urban poor may be well below recommended minimum levels.

Access to sanitary facilities is also limited for the urban poor. Amongst the very poor only about one-third have access to a latrine facility, whilst the proportion increases to about half amongst those at, or immediately below, the poverty line. Only very few have access to flush latrines which are connected to the sewerage system and managed and maintained by local authorities and thereby subsidized in the same way as water supplies. The majority of those with access to a latrine facility are also likely to share. Amongst the very poor, 70 per cent with access to a latrine share it with others. This proportion falls to around 40 per cent of those immediately below the poverty line. For the very poor with access to a latrine the most frequently used facility is a septic tank and for those with slightly higher consumption levels, a service latrine (community facility). The latter are often badly maintained, however, and unhygienic.

These statistics demonstrate the abysmally low levels of provision for the urban poor in respect of water supplies and sanitation. They illustrate, however, that the more affluent sections of the community benefit to a much larger extent from the public services provided. The consequence of these grossly inadequate levels of provision, poor maintenance, lack of public awareness and low levels of health care, is that "birth and death rates in slum areas are higher by 40 to 50 per cent and infant mortality rates higher by 1.8 times as compared to non-slum areas" (Sivaramakrishnan, 1991). The consequences for public health, however, as demonstrated recently by the outbreak of pneumonic and bubonic plague in Surat, extend far beyond the slum settlements themselves.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor E. India 5. Land availability The National Commission on Urbanization (NCU) observed that, "possibly the most disastrous feature of the past four decades of urbanization in India has been our tragic failure to anticipate the rising demand for urban land, and thus be able to ensure an adequate supply at affordable prices" (NCU, 1988a). India has been one country, however, where the government has made a major intervention in the urban land market through the Urban Land (Ceiling and Regulation) Act of 1976. The intention of the Act was to impose a ceiling on the ownership of vacant land holdings; to limit the size of dwelling units constructed, and to regulate the transfer of urban property. Unfortunately, the Act has not had the desired effect and has yielded only a fraction of the land identified as surplus under the legislation. The reasons may be summarized as follows: "firstly, administrative laxity combined with the absence of a strong will ... secondly, the exemption clauses have prevented the transfer of surplus land to the government, and have provided legal loopholes that the owners were quick to exploit .... Thirdly, instead of mopping up surplus vacant land, it has frozen land transactions ... and has pushed up the prices of land, especially of those parcels of land which the landowners were allowed to retain" (Sundaram, 1989). The Act is widely believed to have exacerbated the problems of the urban poor, by freezing some areas of urban land which might otherwise have been available for development and by forcing up prices. It has not resulted in any significant increase in the supply of urban land specifically for the urban poor, nor in any significant supply of accommodation for their use.

One consequence of rising land costs has been the increasing densities of those areas available to the urban poor — hence residential densities in thechawlsof Bombay, thebusteesof Calcutta, or the tenemental structures of the inner cores of older Indian cities, such an Shahjahanabad in Delhi, are intolerably high.

Alongside the distortions to the market caused by the Urban Land Ceiling Act, Sundaram is also critical of building and planning standards. Citing the example of such standards in Bombay, he asserts that, "the prescribed standards have kept land utilization at a low level of intensity and discouraged the building of dwelling units which poor people could afford" (Sundaram, 1989). The result has been effectively to disenfranchise the vast majority of the urban poor from the opportunity of legal land ownership and participation in the formal housing market and instead to drive them into illegal squatter settlements or onto marginal or peripheral sites.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor E. India 6. Summary It has been estimated that between 35 per cent and 40 per cent of those living in urban areas in India are experiencing conditions of poverty, that the numbers are increasing and by the year 2000, the number of people living in poverty in Indian cities may reach 100 million people. This is an alarming statistic. Whilst overall housing statistics demonstrate a broad improvement in the quality of the housing stock over time, a more detailed elaboration of the shelter circumstances of the poorest groups reveals very little evidence of improvement. Indeed increasing numbers of the urban poor continue to live in inadequate housing, without security, and with an abysmally low level of provision of public services.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor F. East Asia and the Pacific 1. Urbanization and the growth of human settlements Table 41 illustrates the growth of urban populations between 1975 and 1995 amongst selected countries in East Asia and the Pacific. It also shows projected growth to the year 2025. Because of its sheer population size — some 1.2 billion in 1995 — China is discussed in a separate section.

As can be seen from the table, the level of urbanization of the region varies between the Republic of Korea where 81 per cent of the population is living in urban areas, and Thailand, Viet Nam and Cambodia where only about 20 per cent is living in cities and towns. The largest urban population of the region can be found in Indonesia, where 70 million of the region's 223 million urban dwellers are located. Other large urban populations can be found in the Philippines and the Republic of Korea, each with urban populations of about 37 million. For the region as a whole, some 39 per scent are living in urban areas. The percentage is, highest in the subregion of East Asia where 76 per cent are living in urban areas. In South-East Asia the percentage is 34.

As can be seen from table 42 , the urban population of the region has grown with some 125 per cent during the last two decades. The most rapid growth over the last two decades has occurred in Cambodia where the urban population has nearly tripled between 1975 and 1995. The growth in Indonesia (167 per cent), the Philippines (139 per cent) and Malaysia (134 per cent) has also been rather high. United Nations projections indicate that this rapid growth will continue for the next three decades. The average annual regional growth rate for the region as a whole for the 19952005 period is projected to be 3.2 per cent. The rate is likely to decline but will remain above 2 per cent also during the 20152025 period. Quite naturally the growth rate is projected to be lowest in the countries with the highest level of urbanization, like the Republic of Korea (1.8 per cent during 19952005) and the Democratic People's Republic of Korea (2.1 per cent).

Growth rates will decline even further in the Republic of Korea (to 0.6 per cent during the 2015• 2025 period), the Democratic People's Republic of Korea (to 1.6 per cent), the Philippines (to 1.7 per cent) and Malaysia (to 2.0 per cent). In all these countries the urban population is projected to account for more than 70 per cent of the total by 2025. In countries like Cambodia, Viet Nam and Myanmar, the average annual growth rate for urban areas is projected to remain above 3 per cent per year for the next three decades. These three countries will, together with Thailand, have a predominantly rural population even three decades from now.

In terms of numbers, the largest urban population growth will occur in Indonesia, where some 3.3 million urban dwellers (39 per cent of the increase for the region as a whole) will be added each year for the rest of this century. The growth in the Philippines amounts to some 1.5 million each year. For the region as a whole the absolute volume of urban growth is currently five times higher than that of rural areas. Three of the countries in the region (the Republic of Korea, Indonesia and the Philippines) are currently experiencing a decline in their rural populations (United Nations, 1994). This trend is, however, spreading. According to the projections, only Viet Nam, Myanmar and Cambodia (among the countries

Page 195 listed in tables 41 and 42 ) will experience an increase of their rural populations during the 20152025 period. For the region as a whole urban growth will remain between eight and nine million each year for the next three decades, while a rural growth of 1.6 million per year during the 19952005 decade will be replaced by an annual reduction of rural populations of some 620,000 during the 20152025 period.

The majority of cities of the region are also experiencing rapid growth. Yet, as table 43 indicates there are two categories of cities in the region, i.e. those whose populations seem to have stabilized (cities in highly urbanized countries like the Republic of Korea and Hong Kong), and those that grow at rates averaging between 2.5 and 4.0 per cent per year. The most rapidly growing city is Jakarta, with a projected average annual growth rate of 3.8 per cent during the next decade. The population of Jakarta is expected to reach 21 million by 2015.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor F. East Asia and the Pacific 2. The nature and extent of urban poverty Official estimates of urban poverty in Indonesia are illustrated in table 44 . The table shows that the numbers in urban poverty have remained more or less constant between 1976 and 1990. During that time the urban population grew from 26 million in 1975 to 70 million in 1990 (United Nations, 1994). UNCHS (1993d) estimates that more than two thirds of the urban growth is due to rural-urban migration. The fact that the numbers experiencing poverty have remained constant suggests that the urban economy has been relatively successful in absorbing 44 million new people over 15 years without a significant increase in subsistence poverty. Whilst it appears that most migrants to the urban areas are able to improve their income and living conditions over time, those who remain vulnerable to continued poverty are, "the handicapped, physically disabled, illiterate, widows or single parents" (Suhandjaja, 1991).

In the Philippines the urban population is concentrated in Metro Manila (which had an estimated population of 9.3 million in 1995 and accounted for about a quarter of the urban population). Rapid urbanization has resulted in a proliferation of urban slums and squatter settlements and Nuqui (1991), estimates there are over 10 million slum-dwellers and squatters in urban areas throughout the Philippines accounting for about 40 per cent of the urban population. He profiles a typical slum household as follows: "nuclear rather than extended. It usually has six members, the majority being young. ... The household head ... is typically in the forties with some elementary education. The husband and wife are usually migrants from themore depressed regions .... The worst off are street children working in hazardous or exploitative conditions" (Suhandjaja, 1991). In 1990 it was estimated that there were 60,000 street children in Metro Manila and 25,000 in other cities in the Philippines.

Official estimates of poverty in Bangkok show a rapid reduction during the late 1970s from 6.9 per cent of the core urban population in 1975/1976 to 3.7 per cent in 1980/1981, but thereafter, a stabilization of those in poverty throughout the 1980s. In 1988/1989 the figure was 3.3 per cent (Hutuserani and Tapwang, 1990). Two studies of urban poverty conducted in the mid-1980s, (2 0 ) have identified a strong correlation between urban poverty, poor education and status in the labour market.

Chang (1991) argues that the official figures for poverty in South Korea under-estimate total numbers in urban areas particularly, because the government's poverty line does not differentiate between urban and rural areas. In 1990 the official estimate of the urban poor was 1.3 million or 3.0 per cent of the total population (4.1 per cent of the urban population). Research carried out by the Korean Research Institute for Social Sciences (KRISS) found that the minimum living costs for a family of five were 60 per cent above the official figure. Whilst absolute poverty is decreasing rapidly in Korea, the problem of relative poverty has become more serious.

The problem of urban poverty in Malaysia has become more significant with the accelerated trend

Page 197 of industrialization (Karthigasu, 1991). Government figures show that, over a period between 1970 and 1984, whilst the overall proportion of those in poverty living in urban areas fell from 21.3 to 8.2 per cent, the actual numbers increased from 86,000 to 97,000 households.

To summarize the trends in urban poverty in these East Asia and the Pacific countries, official figures and other studies tend to show that whilst the proportion of the urban population in poverty is decreasing, the actual numbers are increasing or, at best, stabilizing. The major reason for this is rapid urbanization as a result of relatively successful economic growth through industrialization. There is some evidence that whilst those in absolute poverty may be decreasing, there is an increasing problem of relative poverty. Those affected are newly arriving households from rural localities, the handicapped and physically disabled, single women and women headed households, those with rudimentary education and, in some countries, there is a disturbing problem of street children. It is evident that the relative success of these economies is itself a problem in that it attracts large numbers of migrants from rural localities who are unable to be absorbed into the urban labour market with the result that low pay and casualization of a significant part of the labour force is continued.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor F. East Asia and the Pacific 3. Housing and environmental conditions The process of rapid urbanization in the region has produced a legacy of degraded housing and environmental conditions for the urban poor. The demand for land and shelter far exceeds the supply available. Formal housing provision is beyond the affordability of the poor and often infrastructural provision is overwhelmed by the demands of the urbanizing population. Circumstances in Indonesia, for example, are as follows: firstly, there is an overall shortage of urban housing. Comparing total households in urban areas with the number of housing units, there is a shortfall of 864,000 dwellings (see table 45 ).

Table 46 shows that much of this stock is of a temporary nature (although insofar as this is a measure of housing conditions, it may be seen that there has been an improvement over time). Nonetheless, almost a third of all structures in urban areas were temporary by the early 1980s. A similar proportion of the housing stock (30.6 per cent) is also below 40 m² in size (CBS, 1990), and a large proportion of low-income households lack access to electricity and piped water supplies (The Urban Institute, 1988 — quoted in Suhandjaja, 1991). These problems are compounded by the illegal status of many slum settlements in urban areas, the use of marginal sites, such as areas liable to flooding, and the absence of infrastructural provision, like proper sanitation and refuse collection services. In the major cities, such as Jakarta and Bandung, population densities may exceed 1,000 persons per hectare and in these circumstances environmental conditions are seriously prejudicial to the health and safety of residents. In such circumstances it is estimated that up to 40 per cent of the urban poor are dependent on renting a room or a dwelling, rather than owning it, further emphasizing the frailty of their asset base (Suhandjaja, 1991).

Whilst current housing conditions are serious, projections of future need are awesome: "It is estimated that just below 2 million dwelling units of all types are required annually in the next 20 years to meet the national housing need. A total of 750,000 units is required annually to meet the demand created by the population growth while a further 100,000 units are required each year in the next 20 years to alleviate the current housing shortage, estimated at 2 million units. The remainder is required to replace (350,000 units) or upgrade (700,000 units) the deteriorating housing stock" (UNCHS, 1993d).

The housing situation in the Philippines is characterized by a huge backlog of need, estimated at 3.9 million units over the period 19931998, with 2.9 million units required in urban areas (Alonzo, 1994). This is far greater than the government has the capacity to produce, although the current administration has committed itself to provide assistance towards 1.2 million units (just over 40 per cent), during that time. Housing need is most acute in Metro Manila and it is estimated that 430,000, or 26 per cent of the 1.6 million households living in the capital, are residing in informal settlements. More than half of these households (224,000 or 52 per cent), are living in dangerous circumstances, in swamps, on waterways, or on areas liable to flooding. These households are faced with constant insecurity and an almost total lack of basic urban services, such as potable water and electricity (Alonzo, 1994).

The growth rate in the number of households in East Asia and the Pacific is nearly twice that of

Page 199 population growth. The reason for this is a rapid decline in the average size of households. While the average household size (urban and rural) in 1995 is 4.5 persons, it is projected to decline to 3.5 by 2025 (see table 5 ). Thus, if the increase in the number of households is taken as an indicator of additional housing demand, future housing demand is going to be even higher than the population growth figures indicate. This situation is most striking in the Republic of Korea where — according to United Nations projections (United Nations, 1994; UNCHS, 1996) — 459,000 households additional households will be created each year (in rural and urban areas) compared to a population growth of 'only' 431,000 persons. In Thailand, one new household will be formed for every 2.6 persons new persons added to the population. In Indonesia and the Philippines one new household will be formed for every 3.1 person added.

Whilst the scale of poor housing conditions may be greater in Indonesia and the Philippines than in other countries in the region, and there may also be some variation in characteristics from one country to another, a similar profile of wretched conditions may be drawn in each of the major cities in these South-East Asian countries. Yet, in each of these countries an array of interventionist policies has been introduced to combat poverty including those concentrating on the shelter sector, e.g. slum upgrading, relocation and 'sites-and-services' or 'core' housing schemes. It is evident, therefore, that the task of maintaining housing standards in the face of increasing demand from the urban poor is a formidable one and for a variety of reasons (which will be discussed in chapter V), these programmes have done little more than scratch the surface in terms of improving the housing and environmental conditions of the urban poor.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor F. East Asia and the Pacific 4. Other infrastructural provision The picture is perhaps marginally more optimistic in respect of infrastructure provision. It is in this area that governments have made more effective interventions than in respect of housing itself. In Indonesia, the Kampung Improvement Programme and, more recently, the Integrated Urban Infrastructure Development Program, have been major initiatives aimed at improving urban infrastructural facilities. The Kampung Improvement Programme in particular, has been directed towards poor settlements and has been effective in ameliorating some of the worst environmental conditions (Taylor, 1987). Nonetheless, there remain problems with water supply where only 30 per cent of the urban population has been served owing to "high water losses and decreasing source production combined with poor management" (Suhandjaja, 1991). Connection costs have also been a problem and, since social connections are not seen as cost effective by the private water companies, public standposts serve only a small proportion of the urban population. Figures provided by the World Bank (1994a), show no improvement in the percentage of the urban population with access to safe drinking water between 1980 and 1990. In 1990 the figure remained at 35 per cent.

Whilst water supplies to the urban poor lag behind provision as a whole, communal supplies have extended piped water coverage to the majority of the urban poor in Malaysia, the Republic of Korea, and Thailand. There remains a problem in the Philippines, however, where the illegal status of many slum and squatter settlements has precluded provision, not only of communal water supplies, but also of human waste disposal facilities, electricity and other forms of infrastructure. Whilst the problem of illegal status and its detrimental impact on infrastructural provision is not confined to the Philippines it appears to be more widespread there than in other countries in the region.

Despite the provision of communal facilities, human-waste disposal remains more of a problem than water supplies. In Indonesia 30 per cent of the urban poor have no access to public toilet and/or bathing facilities (Suhandjaja, 1991). In Malaysia, according to a rather dated study carried out between 1978 and 1980, only about half the urban poor in Kuala Lumpur had private sanitation (Karthigasu, 1991). In the Republic of Korea, the equivalent figure was 71 per cent having either personal or shared (rather than communal) use of latrines (KRIHS, 1989). This is also a problem in the Philippines and Thailand. In terms of sanitation, cost considerations are also a factor accounting for the lack of provision for the urban poor.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor F. East Asia and the Pacific 5. Land availability As indicated above the issue of land scarcity and illegal status is a major problem for the urban poor. It is also widespread throughout the South-East Asian countries. In the Philippines, Nuqui (1991) estimates that 90 per cent of the urban poor lack security of tenure. In Thailand, Krongkaew and others (1986) found that 53 per cent of poor households in Bangkok were squatters with virtually no security and in Chiang Mai to the north, the figure was 70 per cent. Even in the Republic of Korea where large-scale relocation has taken place, two studies in 1989 revealed that only 31 per cent of the urban poor in Seoul owned their own land and residence (KRIHS, 1989), and only 21 per cent of residences in poor areas were licensed (KIIE, 1989). It is now widely acknowledged that security of tenure is a key requirement in shelter strategies for the urban poor, but the problems of land scarcity and rising prices have so far meant only modest progress with individual relocation projects.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor F. East Asia and the Pacific 6. Summary The human settlements conditions of the urban poor in East Asia and the Pacific can be summarized as: the problem of land scarcity and illegal status confronting many poor communities; difficulties of access to the urban housing market for the urban poor and rural-urban migrants largely on the grounds of lack of affordability; the continuing inadequacy of housing and environmental conditions in which the urban poor have to live; and the lack of infrastructural provision and services, such as water supplies, electricity, sanitation and waste disposal. Despite the fact that East Asia and the Pacific (including China) is the only region where it is possible to discern improvements in the housing and environmental circumstances of the urban poor, the above constitutes a formidable agenda for the cities of the region during the next few decades.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor G. China 1. Urbanization and the growth of human settlements China is the most populous country in the world, having approximately 20 per cent of the entire global population. Table 41 shows the growth of the urban population since 1975 and projects urban population growth to the year 2025. Whilst the total population of China has grown by almost 50 per cent during the last two decades, to l.2 billion in 1995, the table demonstrates that the urban population has increased by 130 per cent over the same period. A word of caution must be introduced about the definition of the 'urban' population, however (in addition to the reservations raised in chapter I). Since 1964 each city has included subordinate counties and towns including an agricultural population whose socio-economic benefits and activities are determined by rural policies. The non-agricultural population of towns and cities therefore, is less than the figures shown for urban areas.

This urban growth occurs at a time when China's rural population declines with an average of two million each year between 1995 and 2000. In fact between now and 2025 the rural population of China will contract with a projected total of more than 150 million people.

Despite strict family planning policies and controls on population movement between rural and urban areas, the urban population is growing rapidly — currently at an average rate of 3.4 per cent per year (see table 42 ) — and is expected to reach 443 million by the year 2000 and 830 million by 2025. As can be seen from the table the rate of urban growth is expected to decline, yet the growth in terms of people is still increasing. Each year during the next ten years an estimated 14.9 million people is added to China's urban population. This figure will increase to 15.8 million during 20052015.

The growth rates in China's largest cities is slightly less than that of the urban population. Yet, with average annual growth rates of between 2.5 and 3.0 per cent for the next ten years and then rates of about 2.0 for another ten year period, China will have 16 cities with a population of more than 4 million by 2025, compared to "only" six in 1995 (see table 47 ). The three largest cities, Shanghai, Beijing and Tianjin, are projected to have populations of 23 million, 19 million and 17 million by 2025.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor G. China 2. The nature and extent of urban poverty In the urban areas of China, permanent residence registration has afforded guaranteed employment, access to rationed essential consumer items, and an elaborate enterprise-based labour-insurance system which involves not only health care, but also retirement and disability provision (Ahmad and Wang, 1991). In addition, other major items of consumer expenditure, on housing and transportation, for example, have also been heavily subsidized by the state. Until recently, this has ensured that basic nutritional standards and minimum levels of shelter, health care and education have been attained. Since the introduction of new economic policies after 1978, however, the liberalization of industrial and commercial activities has resulted in a dramatic growth of average incomes (see tables 48 and 49 ), and the emergence of relatively modest income disparities. At the same time the relaxation of registration procedures has also seen the reappearance of rural-urban migration and the emergence of a large 'floating' population associated with the major cities. This floating population does not enjoy the benefits of registration and would therefore need a higher income level to achieve a comparable standard with registered urban dwellers. The growth of inflation during the late 1980s has also had an adverse effect on those on fixed incomes with the State Statistical Bureau reporting a decline in real incomes for 35 per cent of the population in 1988 (Ahmad and Wang, 1991).

Recognizing the difficulties associated with an absolute urban poverty line, Ahmad and Wang adopted three different measures for income poverty, firstly, they utilized a poverty line set at 50 per cent of average urban income; secondly, a per capita figure of Yuan 375 per annum; thirdly, a minimum figure of Yuan 300 per annum. The results are set out in table 50 . The table shows that 28.2 millions (11.7 per cent of the urban population), were living in poverty in 1985 and 22.5 millions were experiencing 'acute' poverty (9.3 per cent of the urban population). These overall numbers fell in 1987 to 14.1 million and 9.4 million respectively, before rising sharply in 1988 to 19.8 million and 15.8 million.

In identifying those who might be affected by urban poverty in China, Ahmad and Wang (1991) concluded that pensioners on fixed incomes would be very vulnerable; the 'floating population' or 'those looking for work' were also likely to form a group affected by poverty; thirdly, disabled people were also at risk; and the final group were 'those afflicted by natural disasters'. On average 100 million people in China are affected by natural disasters each year.

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor G. China 3. Housing and environmental conditions During the 1980s a series of experimental reforms were carried out in different cities aimed at transforming urban housing from a welfare oriented system to one in which private ownership was encouraged under socialist conditions. The experimental phase culminated in the National Housing Reform Plan issued by the State Council in 1988. The Plan incorporated four main elements in an ambitious programme designed to be implemented in all towns and cities throughout China within three years. These elements were:

 The raising of rent levels. Rents had been set at historic levels (in the 1950s) and the effects of inflation by the late 1980s meant they no longer covered management and maintenance costs. The aim is to increase rents incrementally over time in order to cover these costs, as well as loan depreciation, interest, fees and taxes, insurance charges, and ultimately, reasonable profits.

 To establish a providential housing fund. With the objective of enabling people to invest more of their own resources in the housing sector it was seen as important to establish an institutionalized housing savings facility. Many cities have now established Housing Funds along the lines of the Providential Pension Fund in Singapore with both individuals and employers contributing a fixed amount of their income into the Fund. Employees may subsequently draw on their savings for house purchase, or repairs and maintenance of their housing.

 The aim of raising rents and establishing institutionalized savings for the housing sector is to encourage the privatization of the housing stock through individual purchase arrangements. Despite creative discounting initiatives, only a relatively small proportion of the population can currently afford to purchase their accommodation, but it is hoped that the arrangements made will increase the numbers eligible over time.

 To protect the interests of those households experiencing housing difficulties through upgrading programmes and subsidized rental schemes.

The reforms are in their infancy and problems with inflation have already revised the timescales over which the reform process is envisaged. But the State Council approved further measures designed to "deepen the process of urban housing reform" in 1994. These measures included a recognition of the need for an enhanced capacity for housing management; more sophisticated insurance, finance and borrowing systems; and arrangements to establish a healthy property exchange and repairs and maintenance market (Wang and Murie, 1994).

In the meantime, housing investment in China has also received a major boost. Between 1979 and 1987 housing investment amounted to an annual average of 6.7 per cent of GNP and urban housing development received the equivalent of 3.1 per cent (Lin Zhiqun, 1991b). As a result there has been a steady improvement in housing conditions in larger urban areas. Table 51 demonstrates, for example, that the available floor area per household is steadily increasing, and so too is the number of rooms per

Page 206 household. At the same time, the percentage of households with housing difficulties of one sort or another is decreasing (see table 52 ), i.e. unallotted households (households without a unit); overcrowded households and those having insufficient space (i.e. with children over 13 years of different sexes, or two couples, sharing a room). Since 1983 the Chinese government has targeted these households with a series of special initiatives designed rapidly to upgrade the quality of the stock. Between 1986 and 1992, 6 million households benefitted from this programme (Song Chunhua, 1994), but by 1992, four million urban households still had less than 4 m² per capita living space.

These figures show that improvements are being made on addressing the housing deficit in China. Yet, the challenge ahead is truly staggering. If each of China's households are to get their own dwelling unit, it implies that some 8.6 million units are required each year to the year 2000, increasing to 10.5 million units per year between 2000 and 2005 (UNCHS, 1996). The number of households is currently increasing at a rate nearly three times that of population growth (see table 5 ), a situation unparalleled in any other region of the world. Despite a planned increase of investments in urban housing during the 1990s of approximately 2.5 times that spent during the 1980s, it is expected that by 2000 some 4.44 million urban households will still experience "housing difficulties", i.e. some 6 per cent of all households. Some 270.000 households (0.4 per cent) are expected to experience "extreme housing difficulties" (Gu Yunchang and Gao Xiaohui, 1992).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor G. China 4. Other infrastructural provision For many years during the 1960s and 1970s there was very little investment in urban infrastructure of Chinese cities. Since 1978, however, there has been a major shift in investment, alongside urban housing provision, to improve the quality of the urban environment. Hence the per capita domestic water supply increased by 250 per cent between 1965 and 1992, and the percentage of the population with access to tap water increased from 74 per cent to 92 per cent over the same period. As may be seen from these and other statistics in table 53 there has been a rapid improvement in most aspects of urban infrastructure in China in recent years. At the same time, services such as water and transportation receive substantial public subsidies and costs to consumers are, therefore, very low. In 1989, for example, the average annual expense per urban dweller for transportation in the city was about 0.22 per cent of his/her living costs, and only one-third of all flats in urban areas have "independent kitchen and toilet facilities with their own water system" (Lin Zhiqun, 1991a).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor G. China 5. Land availability Whilst the centralized control of land use and stringent controls on population movement have prevented the kind of land speculation frequently found in urban areas in the capitalist economies, it has not entirely solved distributional problems for the urban poor, since those outside work units (i.e. the 'floating population'), or in work units of low status or earning capacity, may fail to have their requirements for land acknowledged in the planning process. In order to avoid this problem, the Government of China has encouraged the formation of cooperatives for the latter under the reform process.

At the same time, market valuations are gradually being introduced into land development transactions and a process of residential differentiation is emerging as large-scale construction companies undertake major projects for sale rather than rent. The major urban development programmes are also stimulating a debate in China over issues of land supply for urban usage as opposed to agricultural production and in some cities, most notably Shanghai, there is an acute shortage of land for development (Dong Liming, 1994).

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Chapter IV. Recent trends in the human settlements conditions of the world's urban poor G. China 6. Summary Whilst the Government of China has made major strides to improve the quality of housing and the urban environment since 1978 it is also evident that housing conditions for the poorest groups are very basic. Only about a third of all flats in urban areas have independent kitchen and toilet facilities with their own piped water system. Moreover, housing conditions are likely to remain very modest for a long period to come. Despite a planned increase of investment in urban housing during the 1990s of approximately 2.5 times that spent during the 1980s, 6 per cent of all urban households is still expected to experience housing difficulties by the year 2000.

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Chapter V. Reaching the urban poor

Following the overview of the incidence of urban poverty and trends in the human settlements conditions of the urban poor in developing countries, this chapter outlines the changing international policy context for urban development and shelter provision. It also presents a series of detailed case studies of recent shelter initiatives from Zimbabwe, Brazil, the Republic of Korea and India. (2 1 ) These four case studies encompass a variety of approaches to the problem of providing housing for the poor and low-income groups. The Zimbabwean case study focuses on the recent sites-and-services programmes in Harare. The second example is the FUNACOM programme ("the municipal programme to support housing for low-income persons through self-management"), set up by the São Paulo local government in Brazil in 1989. The case study from the Republic of Korea involves an evaluation of an employees' housing programme which was designed to provide 10,000 housing units during the 19901991 period. It was the forerunner for the current programme of 500,000 houses to be provided between 1992 and 1996 as outlined in the Republic of Korea's Seventh Socio-Economic Development Plan. Finally, the case study from India is an evaluation of a series of Slum Improvement Programmes funded and administered by the Overseas Development Administration (ODA) of the United Kingdom of Great Britain and Northern Ireland, in partnership with the Government of India and various state governments. In the concluding section these programmes are assessed against the policy framework for human settlements development and the formulation of shelter strategies for low-income groups advocated by UNCHS (Habitat) and the World Bank.

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Chapter V. Reaching the urban poor A. The changing international policy context for urban development and shelter There is a wealth of empirical evidence to show that shelter programmes conceived along the lines of Western democracies, with strong state involvement in the design, construction and allocation of housing targeted towards the urban poor, have not worked well in developing countries. In analyzing the effectiveness of such programmes, UNCHS (1991c) concluded that there were at least five major weaknesses of past shelter strategies in addressing the needs of low-income groups. These were, firstly, that governments had been much too concerned with producing formal housing programmes rather than facilitating inputs such as land and credit into the housing process. Secondly, there has been a mis-allocation of resources in the form of subsidies to land, infrastructural provision and towards housing itself, which has gone to those better able to pay for such services than the poor. Thirdly, "there has been a consistent failure among official land, housing and financial agencies to reach those who need assistance most of all" and the review of shelter circumstances in chapter IV illustrates that this is not only a continuing problem in many parts of the developing world, it is also a growing problem. Whilst there have been some successes in shelter programmes, however, these have generally been on a very small scale in comparison with the overall magnitude of the problem; and finally, coherent and coordinated local shelter strategies have been the exception rather than the rule which has made it very difficult to adopt consistent and effective policies towards the needs of low-income groups (UNCHS, 1991c).

But the policy context for shelter programmes is changing. Since the adoption of the GSS in 1988 both the World Bank and the UNDP have published important policy documents which have refined and developed their approaches towards housing and urban development in a global context. Both agencies published very similar 'urban agendas' for the 1990s (UNDP, 1991; World Bank, 1991), and their respective policies have subsequently been influenced by UNCED in 1992.

The GSS embodies a number of basic principles:

 the need to adopt an "enabling approach whereby the full potential and resources of all the actors in the shelter production and improvement process are mobilized";

 the requirement to develop sustainable shelter strategies which are realistic in terms of implementation and the consumption of natural resources;

 the need to formulate explicit policies for housing the poor as a central component of the shelter strategy;

 the importance of acknowledging and enhancing the role of women over decision-making on shelter issues; and

 the importance of instituting a monitoring and evaluation programme to ensure that the effectiveness of the strategy is regularly reviewed.

Translating such a strategy into action was seen to demand new perceptions; the importance of

Page 212 cities in contributing towards the overall growth of the economy; an acknowledgement of the shelter sector as an important part of the economy; the need for a scaling-up of production programmes drawing on all sources, including the informal sector; a balance between shelter upgrading and new provision; a need to acknowledge the significant role which may be played by the private rented sector; as well as a realization that programmes for the poorest groups will continue to require a direct role for the state.

The subsequent urban agendas of the international agencies were responses to prolonged economic recession, continued infrastructural deficiencies and environmental degradation, and the growing problem of urban poverty. The World Bank emphasized its analysis of these problems in terms of the low productivity of urban areas and set out a four-fold programme accordingly:

 The need to improve urban productivity by strengthening the management of urban infrastructure; streamlining regulations, encouraging privatization and market competition; improving the financial and technical capacity of municipal institutions, and enhancing the capability of institutional finance to facilitate urban development.

 The alleviation of urban poverty (outlined in World Bank, 1990). This strategy included the concept of a 'safety net' for the poorest sections of the community including the physically and mentally handicapped, the elderly, uncared for children and destitutes. At the same time it advocated the generation of employment opportunities in order to improve the productivity of the urban poor (especially women), improvements in shelter and the provision of basic services.

 Developing effective responses to the growing urban environmental crisis by improving the information base and enhancing awareness and understanding of the processes involved; developing city-wide strategic responses to combat environmental deterioration by adopting realistic standards of regulation and enforcement and working in partnership with others.

 The need to increase understanding of urban issues through a reactivated programme of research.

The UNDP strategy paper outlined a similar series of issues as the main concerns of its agenda for the 1990s. These included:

 a series of measures aimed at alleviating urban poverty and promoting income-generating activities for the urban poor (e.g. supporting informal enterprises to improve productivity; vocational training and community activities; encouraging the participation of women in shelter finance initiatives);

 strengthening urban local government and administration by encouraging the decentralization of powers and functions, and enhancing the capacity to plan, manage and finance urban development capabilities;

 promoting the involvement of NGOs and CBOs;

 providing urban infrastructure, shelter and services, especially to women and the urban poor;

 improving the urban environment through upgrading of solid-waste disposal, pollution control and slum upgrading programmes; and

 promoting the involvement of the private sector in the provision and maintenance of shelter and urban services.

UNCED was also influential on current thinking. Agenda 21 (United Nations, 1993a) identified a

Page 213 number of important concerns which were relevant to human settlements development and shelter provision. It calls on member states of the United Nations to:

 improve the quality of human settlements management in order to ameliorate living conditions, improve natural resources, support rural development and accelerate national growth;

 adopt national shelter strategies which support the efforts of poor and vulnerable groups; facilitate access to land, finance and building materials; reform codes and regulations; and promote the regularization and upgrading of informal settlements;

 pursue integrated urban development programmes which encourage employment generation measures for the poor through the provision, improvement and maintenance of infrastructure and services and support informal sector activities;

 promote sustainable land use planning and management policies and in particular urban land resource management plans;

 promote integrated provision of environmental infrastructure and give particular attention to water-resources management, solid-waste disposal, and the reduction of health risks from environmental pollution;

 develop sustainable construction industries which utilize local materials and labour-intensive construction methods; seek to render materials affordable and develop credit schemes to assist small builders;

 increase public awareness of the need for sustainable development, promote training and human resource development; and

 seek to develop guidelines and strategies to increase equality in society, to advance the role of women and to develop partnerships in achieving sustainable development.

The conference was particularly effective in promoting the issue of sustainability in human settlements development and increasing awareness of environmental issues and the necessity for global action along these lines. A network of 'sustainable cities' has since been established with the aim of sharing experience and good practice on urban and environmental management.

The most recent contribution to this evolutionary process of strategic policy development has been the World Bank's paper on shelter and the operation of the housing market (World Bank, 1993c). The paper identifies a seven-point programme aimed at operationalizing shelter strategies. This comprises:

 the development of property rights through the regularization of tenure in squatter settlements and the privatization of state-owned housing;

 the development of institutional housing finance;

 the limiting and targeting of subsides;

 continued improvements in the residential infrastructure for slum and squatter settlements and in servicing new land for urban development;

 improving the organization and efficiency of the construction industry;

 establishing regulatory audits to remove obstructive regulations which inhibit shelter development; and

Page 214  developing appropriate institutional arrangements for managing the housing sector.

The paper signals a shift in the World Bank's lending policies in the housing sector, recognizing the wider role of housing in the overall economy. These changes are reflected in five guiding principles. The World Bank —

 wishes to encourage governments to pursue an enabling role and to move away from the direct production, financing and maintenance of housing towards "improving housing market efficiency and the housing conditions of the poor";

 intends to shift its lending from single project assistance towards investments which have greater sectoral impact, such as regulatory reform or institutional development; when projects continue to be funded they will have to demonstrate an impact on the sector as a whole;

 will assist the development of private sector housing finance institutions;

 will support the development of innovative lending models and housing project design; and

 will seek greater commitment to improved housing data collection and analysis to aid policy formulation and implementation.

It is a great deal of consistency between the above discussed documents. Future emphasis is to be placed on improving the operation of essentially privatized housing markets. This is to be achieved by deregulation and support for institutional development in the private sector, including housing finance institutions. Regularization and empowerment of the informal sector are to be important elements in this process. Government agencies, both central and local, are to withdraw from a direct role in production, allocation and management in favour of an enabling role. Nonetheless, the urban management capacity of public agencies is to be enhanced, henceforth concentrating their attention on factors such as, reforming legal and institutional frameworks; improving the delivery of urban land and the provision of infrastructure; encouraging the development of partnerships; and promoting the shelter role of NGOs.

The World Bank states explicitly that a more efficient housing market will improve the circumstances of the poor. The other policy documents discussed above, however, advocate poverty alleviation programmes as part of integrated urban development programmes that will create income-generating opportunities targeted towards the poor, and especially women. For the poorest, both the United Nations agencies and the World Bank recognise the need for direct forms of provision both in terms of shelter and basic services and they have also tacitly come to accept the use of targeted subsidies as part of these arrangements.

Shelter strategies themselves are to be integrated with other economic and social programmes; more effectively targeted to the needs of the poor; sustainable and mindful of environmental considerations; and capable of scaling-up to levels of provision more commensurate with actual housing needs.

These policies now represent the new 'received wisdom' in the shelter sector for the 1990s; moreover, they constitute a framework against which to assess recently developed shelter programmes and projects for the urban poor.

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Chapter V. Reaching the urban poor B. The sites-and-services programme in Zimbabwe On gaining independence in 1980 the Zimbabwean Government saw the provision of an ultra low-cost core-housing programme on serviced plots as constituting the cornerstone of its large-scale low-income housing programme. For political reasons, however, the government adopted higher standards than those prevailing before independence and three key principles were identified:

 plots would be provided on an 'aided self-help' basis, i.e. self-build with technical and financial assistance;

 the establishment of 'building brigades' for construction and the production of building materials aimed at reducing costs; and

 standards set at 300 m² plots with a core house of 50 m² comprising four rooms with separate kitchen and bathroom/toilet. Road access, piped water and waterborne sewerage facilities were to be provided to every plot.

The post-independence programme may be seen to have developed through three phases, an initial development phase to 1984; the consolidation of this programme with three large scale World Bank funded schemes to the early 1990s; and a transitional phase with the introduction of partnerships, the relaxation of controls and standards, culminating in the adoption of more modest minimum standards in 1992.

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Chapter V. Reaching the urban poor B. The sites-and-services programme in Zimbabwe 1. The mobilization of financial resources and the question of affordability The initial phase was targeted towards those with incomes below the median income of those living in low-income, high-density areas (i.e. incomes of around Z$150 compared with a median income of Z$175). Cash loans were made available by the local authority with assistance from the United States Agency for International Development (USAID). By 1984 more than half the plots had been completed, considerable private finance had been mobilized and the programme was broadly considered successful.

Phase two involved an expansion of the programme to include World Bank funding for over 11,000 serviced plots in four cities. Off-site infrastructure costs were to be recovered via tariffs (water, electricity, sewerage and waste management), and through rates and supplementary charges for roads and street lighting. On-site costs were to be raised through plot sales. Building society assistance with loans was incorporated into this phase and variable rate loans were made available at 12.5 per cent (at that time) over 25 years from a special fund generated from short-term finance specifically for lending on low-cost housing. Plots were targeted to those on waiting lists with income ceilings and other eligibility criteria. Because of rising costs throughout the projects the income ceiling was increased, in Harare from Z$400 in 1984 to Z$550 in 1989 thereby excluding nearly three-quarters of the households on the waiting list. By 1991 official estimates indicated that in order to qualify for a mortgage a minimum income of Z$900 was necessary. World Bank estimates of affordability, however, included both prospective rental income from sub-letting rooms as well as reduced construction costs through self-help labour. As a consequence, the plots in these schemes were allocated largely to those in the target groups, some of whom were relatively low income and waiting-list priorities. At the same time, there was some evidence of malpractice in allocations, "the use of influence, perhaps bribery, to secure allocations for employees of local authorities and their friends and relatives, allocation to households outside the low-income groups, and falsification of information, especially related to the length of employment in the City" (Rakodi and Withers, 1994).

Despite World Bank support, the supply of serviced plots in Harare started to decline after 1984/1985 and fell to little over one thousand per annum in 1989/1990 (Mbiba, 1994). A shortage of government funds and the increasing costs of sites-and-services schemes persuaded the government to seek other ways of increasing the supply. One of the most successful initiatives was a partnership arrangement with major employers in the city. Employer assistance was sought with paying the purchase price of the plot up front and recovering it either from the employee's wages or directly from the building society. This arrangement enabled the local authority to recover its outlay relatively quickly. At the same time, however, it was also hoped that employers would assume other responsibilities such as, the selection of suitable employees, providing top-up loans, the deduction of wages at source etc., all of which would reduce the administrative burden on the local authority.

These changes, introduced in 1989, ushered in the third phase of the programme. The partnership approach became a major element of the programme between 1989 and 1991 and increased the demand for serviced plots. Beneficiaries received various levels of support, such as bridging loans,

Page 217 assistance in hiring and supervising builders, assistance with the provision and costs of materials, mortgage guarantees and concessionary rates of finance. The government introduced other changes too; it waived income ceilings for waiting list registration, and it sought cash buyers for the disposal of plots. The effect of these changes was to alter completely the client group for the serviced plot programme and by 1991 disadvantaged groups had effectively been excluded, as purchasers, from the projects. Despite this, the continued adherence to high standards also meant high costs and by 1991 the average cost of housing and related expenditure in one scheme was 32 per cent of income. Sixty per cent of the households were paying more than the guideline figure of 27.5 per cent of income and 29 per cent paid more than 40 per cent of their income.

The remainder of the third phase of the programme coincided with a major drought and the signing of a formal Structural Adjustment Agreement in 1991. Inflation increased from an average of 13.2 per cent per annum between 1980 and 1990 to 42.1 per cent in 1992 and 21.6 per cent in the first six months of 1993. The cost of living more than doubled between 1990 and June 1993, much of which was housing and related costs. By mid-1993 "there was evidence of a rapid and visible process of impoverishment" (Rakodi, forthcoming). The effect of these increased costs was to decimate the low-cost housing programme and in 1992 the government was persuaded to reduce housing standards dramatically. Minimum plot sizes were halved to 150 m² and plinth sizes reduced from 50 m² to 36 m². This reduction, it was argued, reduced overall costs by 29 per cent (Mbiba, 1994).

In retrospect, the cost of participation in these schemes in Zimbabwe has always been high because of the government's (and building society's), insistence on high standards. The affordability of the poorer groups for these projects, however, was steadily eroded over the 1980s and quickly eclipsed in the 1990s. In the early 1980s it was estimated (Schlyter, 1989), that a third of the population were unable to afford to participate in the 'Assisted Self-Help' schemes; by the mid 1980s only 16 per cent of households could afford a four room core house (Mutizwa-Mangiza, 1988); and by 1991 at least 60 per cent of non-owner households could not afford a one room house.

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Chapter V. Reaching the urban poor B. The sites-and-services programme in Zimbabwe 2. The social impact of the programme The original hopes of the government — that the 'assisted self-help' low-cost shelter programme would provide the cornerstone of its housing policy — have not been fulfilled. The programme has assisted only a fraction of those in housing need in the capital city, Harare. The programme provided 24,000 serviced plots between 1980 and 1991. Since the mid-1980s, the gap between need and provision has widened. In 1985 the Council's waiting list included 23,000 households and the City was servicing about 3,200 plots; by 1991 the annual supply of serviced plots had fallen to a rate of just over 1,500, whilst the waiting list had climbed to 80,000 households (about 400,000 people).

Has the programme been targeted on the poorest groups? To some extent it has, but not in the way that was originally intended by the government. As was shown in the previous section the targeting of the programme was directed at low-income groups on the waiting list, before relaxations in the early 1990s led to changes in the client group. The World Bank had always intended that the owners of the serviced plots programme should generate income in order to meet their costs by sub-letting rooms in their dwellings and although this was not approved of by government officials nor the building society, it has actually taken place on a substantial scale. In several schemes surveyed in the mid-1980s the majority of householders were sub-letting rooms and in one mature scheme the majority (53 per cent) of households were lodgers. A comparison of owners and lodgers in the scheme showed that — "Owner household heads (were) ten years older than non-owners (42 compared to 31), had households nearly twice as large (5.5 compared to 2.5), occupied larger dwellings (3.7 compared to 1.4 rooms), and lived in less overcrowded conditions (7 per cent with three or more persons per room and 21 per cent with two or more persons per room compared to 18 per cent and 40 per cent of lodgers). Lodgers included disproportionate numbers of young, recent migrant and elderly household heads, female-headed households, single people and low-income households (30 per cent had incomes of less than Z$400 compared to 13 per cent of owners). In a wider sample of non-owner households, 19 per cent were below a roughly calculated poverty datum line adjusted for household size" (Rakodi and Withers, 1994). Overall shortages of accommodation have meant that where turnover of accommodation has taken place this has generally been to households with higher income levels. Turnover has taken place where the local authority has cancelled the agreement of sale because of serious arrears, or failure to complete the initial development of the plot in a certain time, an increasing problem throughout the 1980s (Mbiba, 1994). It may also take place as a result of private sale; (no longer requiring the approval of the local authority). As yet a relatively small proportion of plots has been ceded or sold, but survey evidence shows an increasing incidence since the relaxation of local authority controls and that a majority of those moving in are in professional, managerial or supervisory occupations and have incomes twice the average of original allottees.

Despite the growing problems of affordability associated with the serviced plots programme, the decision to reduce standards in 1992 has been controversial. Mbiba has complained that the "obsession

Page 219 with cost-minimization strategies on the supply side" has ignored the costs of the utilization of the dwellings. He argues that, given the strategy to encourage sub-letting, "a unit meant for one household is in practice inhabited by four households" with detrimental effects on the health and welfare of residents. He is critical too of other aspects of declining standards, that the use of substitute materials will compromise the superstructure and infrastructure of the development; and that, at a time when the cost of living has recently doubled, that plot size reductions reduce the possibility for households to supplement their income by growing fruit and vegetables (Mbiba, 1994).

Some measure of support for his views is forthcoming from a survey of female householders renting their accommodation and conducted by Schlyter in 1989. About half of the households surveyed in Harare and nearly two-thirds of the households in Gweru were dissatisfied, mainly because of a lack of space and overcrowding, but also because of insecurity and the incidence of conflict with landlords.

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Chapter V. Reaching the urban poor B. The sites-and-services programme in Zimbabwe 3. Conclusions Through the opportunities it has afforded for sub-letting, the serviced plots programme in Zimbabwe has extended some provision to low-income groups, although the overall programme falls far short of the extent of need. In view of the general shortage of accommodation, the relaxation of government controls has reduced the capacity for targeting such programmes to low-income groups. The relatively high standards have also meant that the developments are attractive to middle-income groups. Given current financial constraints in both public and private sectors it is questionable whether the programme is either replicable or sustainable. The reduction in standards may make the programme more attractive to private investors and institutions and ensure its sustainability. If, however, it is to continue to have any relevance for the low-income groups, the arrangements for letting need to be acknowledged, and more systematically planned in terms of dwelling design; provision for arbitration made in landlord tenant disputes; and safeguards introduced against the arbitrary eviction of tenants.

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Chapter V. Reaching the urban poor C. Brazil: the FUNACOM programme in São Paulo The FUNACOM programme was one aspect of a radical political programme introduced by the newly electedPartido de Trabalhadores(Workers' Party) in the Municipality of São Paulo between 1989 and 1992. The context for the introduction of this programme was threefold:

 new central government legislation in 1988 devolving greater legislative and financial autonomy to five major Brazilian cities, including São Paulo;

 the election locally in São Paulo in 1989 of the Workers Party, which introduced a new political direction to the management of São Paulo Municipality; and

 the pre-existence of an influential local "Housing Movement" in Greater São Paulo (the UMM), consisting of many different CBOs, which effectively lobbied for a decentralized programme of self-managed housing investment.

The Workers' Party adopted a comprehensive and participatory approach to the problems of the city, including those of the informal (and illegal) settlements. It encouraged a process of community negotiation in order to develop an Action Plan for the city, not only with a view to improving the overall environment, but also to achieve a more equitable environment. The new Action Plan comprised an urban policy which was based on the mobilization and support of local communities; it introduced a new regulatory framework for land-use, zoning and building standards; and it sought to mobilize financial resources through the restructuring of an existing fund ("the municipal fund to support housing for low-income people" — FUNAPS), and the redeployment of municipal resources; as well as seeking partnerships over land development with the private sector. The generation of local resources was seen as particularly important in that it preserved the independence of the municipal government and its urban policies from the external pressures of the central government and international aid agencies.

The Action Plan included a number of shelter programmes; it sought to regularize informal settlements; it gave priority to relocation in sites-and-services programmes to those living in hazard-prone settlements, such as flood prone areas, or on land liable to slippage; it targeted squatter settlements and tenemental dwellings for upgrading and the provision of basic infrastructure; and it continued with the provision of low-income housing using federal government resources. The FUNACOM programme, encouraging mutual aid and self-management, was thus one of a series of programmes targeted towards the urban poor. It was established in 1989 with the following specific aims:

 to increase the institutional capacity of the municipality to manage housing programmes;

 to reduce the cost of the provision of infrastructure and housing;

 to promote autonomous community participation through self-managed programmes financed by the municipality; and

Page 222  to strengthen community participation in the housing sector.

In essence, the programme allocated funds directly to the families involved in order to improve housing and infrastructure facilities throughout the city. The families formed themselves into Community Associations (autonomously functioning legal associations), and were assisted both in the formulation and implementation of local projects by Technical Assistance Teams. The projects, developed in consultation between the Community Associations and the Technical Assistance Teams, were submitted to FUNACOM for approval. Through this programme the community not only decided on the nature and standards of local projects (e.g. rebuilding, local land adjustment and infrastructural provision), but was also responsible for the management and allocation of finance and participating in the construction process.

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Chapter V. Reaching the urban poor C. Brazil: the FUNACOM programme in São Paulo 1. The mobilization and allocation of resources FUNACOM was funded through FUNAPS. FUNAPS had been created earlier to finance the acquisition of land, infrastructure and building materials for low-income groups and it was restructured to enable it to assist CBOs as well. FUNAPS' resources were mobilized from the municipal budget (nearly $100 million), from the repayment of loans, and from partnership arrangements over land use arising out of the new legal framework ($67 million). Whilst FUNAPS had not been established by statute (a problem subsequently determined by the courts), it was administered by a council formed from representatives of the municipality and the community, and run from within the "Housing Superintendency" of São Paulo Municipality.

In order to seek funding from the FUNACOM programme, a local community had to organize themselves into a Community Association and link up with a Technical Assistance Team. Together they defined a draft programme and submitted it to FUNACOM. After preliminary approval, a final programme was prepared with specifications, costings, and cash flow statements. Upon approval, a loan application was sent to FUNAPS and when this was approved the Community Association signed a contract with FUNAPS. The signing implied accepting responsibility for the management of the works to completion.

A loan ceiling of $5,000 per family was instituted for projects and the loan itself was divided into different percentages for the following inputs: building materials, 82 per cent; hired labour (usually skilled), 10 per cent; site equipment, tools, etc., 4 per cent; and Technical Assistance Team fees, 4 per cent. These percentages were flexible in special cases. Both the percentages and the role of the Technical Assistance Team were set out in each project application and the Community Association was responsible for managing the financial arrangements. Loans were paid in instalments (the first in advance), and on subsequent monitored progress.

Individual loan repayments were calculated taking account of monthly income and family size. Repayment terms were negotiable (between 5 and 25 years) and loan repayments were to be not more than 25 per cent of income and not less than 10 per cent. Subsidies were available according to family income.

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Chapter V. Reaching the urban poor C. Brazil: the FUNACOM programme in São Paulo 2. The organizational arrangements and the process of self-management As indicated earlier, one of the conditions for the Community Association to obtain funds was to contract an independent Technical Assistance Team to assist with the formulation and implementation of a local project. The Technical Assistance Teams were:

 independent of the local government;

 associated with, or contracted by, a Community Association;

 multi-disciplinary, and able to provide technical assistance in the fields of engineering, finance and with the legal aspects of development; and

 identified with the social and political values of the Housing Movement (UMM).

The Technical Assistance Teams were obviously important in indicating to the Community Associations what the possibilities for development were within the cost limits available. The programme was flexible, however, to enable standards to be determined locally by the Community Association, and to develop local solutions to local problems. The Technical Assistance Teams often undertook training for members of the Community Association, supervised the actual construction works, and gave advice and guidance on the establishment of income generating activities.

In getting established the first task was the conceptualization of a local project. This involved considerable discussions between the Technical Assistance Teams and Community Associations. After approval of the initial submission, the detailed arrangements were worked out. Next came the definition of the construction process and agreement on building regulations and the principle of mutual help. This involved reaching agreement over tasks such as:

 the expected number of hours per week that each household should work;

 allocation of working hours between family members and minimum time to be spent on site;

 rules governing the use of equipment and access to materials;

 the role of the Technical Assistance Team, the foreman and the work coordinator;

 sanctions in case of negligence; and

 distribution of houses among members of the Community Association.

Many Community Associations also designed and built community facilities such as crèches and community centres, as part of the programme. These were financed by FUNACOM. The nature of the work demanded widespread community organization and a strong sense of solidarity and responsibility amongst members of the community. The participation of workers was an integral part of the programme

Page 225 both in terms of determining the nature of the project, and in working towards its implementation.

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Chapter V. Reaching the urban poor C. Brazil: the FUNACOM programme in São Paulo 3. The impact of the FUNACOM programme Designed very much in line with the key principles of the GSS, the São Paulo Municipal programme for shelter was very effective in targeting the urban poor. Over the 19891992 period it is estimated by Guedes and Devecchi that 250,000 families were involved in regular discussions about the Action Plan and that the various shelter programmes funded from local sources secured the following achievements:

 squatter settlement upgrading: 47,000 families;

 tenemental upgrading: 481 families;

 sites-and-services with core housing: 7,700 families; and

 the self management and mutual aid programmes: 10,600 families.

In addition, the low-cost shelter programme using Federal resources assisted more than 25,000 families over the same period.

At the ideological core of the shelter programmes was the FUNACOM programme, tangibly demonstrating the benefits of mutual help and community mobilization in shelter provision for the urban poor. Denaldi (1994), and Guedes and Devecchi (1994), have itemized their perception of the strengths and weaknesses of the programme. The 'strengths' included:

 a successful enabling framework: the FUNACOM programme enhanced security of tenure and provided a legal, technical and financial framework which enabled the process of self management and mutual aid effectively to target the shelter and environmental conditions of the urban poor;

 the programme was effective in raising 'collective consciousness' over shelter and environmental issues; it extended the coverage of community associations, strongly promoted the role of women and genuinely mobilized support for the programme amongst the poor;

 this high level of community participation and the decentralized nature of the programme ensured that the most pertinent issues confronting the urban poor were addressed and that the programme effectively countered problems of political patronage;

 it was effective in local capacity building; it strengthened local organizational decision-making, raised the level of skills and competencies, and increased the opportunities for local economic development;

 the localized nature of the projects and the flexibility of the programme resulted in appropriate choices of standards and technologies, according to the preference, necessity and affordability

Page 227 of each community;

 the role of the Technical Assistance Teams ensured autonomy; promoted participation and complemented the local authority role; and

 the local authority itself adopted decentralized procedures and accepted local decision-making; it also began to develop public-private partnerships over land development.

They perceived the major weaknesses of the programme to be:

 its lack of sustainability; the strong political support of the Workers' Party was both a strength and a weakness, the loss of office of the Workers' Party in November 1992 has subsequently revealed the vulnerability of the programme to political change;

 the inability of the Workers' Party to secure lasting legal and institutional reforms; whilst far-reaching legal reforms were introduced, the political opposition, systematically (and successfully), obstructed the adoption of these reforms in the Municipal Chamber;

 the weakness and lack of competence of some of the Technical Assistance Teams contributed to the difficulties of implementation of the programme; and

 the bureaucratic procedures required by the municipal authority were insensitive to the need for change and resulted in instances where they were circumvented by informal procedures.

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Chapter V. Reaching the urban poor C. Brazil: the FUNACOM programme in São Paulo 4. Conclusions The FUNACOM programme, as part of the overall shelter programmes initiated by the municipal authority of São Paulo between 1989 and 1992, achieved much greater success in targeting the needs of the urban poor than previous administrations. The programme was seen as an ideological one, however, and was unsuccessful in obtaining the political support of opposition parties and the private sector as a whole. It was able, however, to mobilise local communities to participate effectively and to generate substantial local resources to improve the living and environmental conditions of the urban poor.

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Chapter V. Reaching the urban poor D. An evaluation of the Employees' Housing Programme (EHP) in the Republic of Korea The economy of the Republic of Korea has grown from a mainly agricultural one in the 1950s to a mainly industrial one today. GNP per capita has grown from $87 in 1960 (Kim, W-J., 1994) to $7,660 in 1993. The economy has grown by an average of 8.2 per cent per year during the 19801993 period, the highest of all the countries listed by the World Bank (1995a). The emphasis of government policy has been to ensure continued high economic growth. Despite the success of the economy, however, direct government investment into housing has, until recently, been relatively modest, ranging from 3 to 4 per cent of total expenditure between 1980 and 1988. With the advent of a major house construction programme aimed at building two million units between 1988 and 1992 this proportion of expenditure increased to more than 7 per cent in 1989 (Kim, W-J., 1994).

One of the major structural changes in the Republic of Korea — occasioned by the long term success of government economic policies — has been the formation of a large urban industrial workforce. This has been made possible by large-scale rural-urban migration. In fact, the urban population of 1995 accounts for 81.3 per cent of the total population. Housing provision for these workers has largely been in the private sector (62.3 per cent of new housing construction was by the private sector between 1965 and 1990), much of this is privately rented accommodation, or in flats and dormitories provided by industrial companies for their employees. In fact, by 1990 a total of 55 per cent of all urban households tenants (Kim, W-J., 1994).

Continued serious shortages of accommodation have resulted in successive waves of intense speculative activity in both house prices and land costs. Between 1971 and 1978 house prices increased by a multiple of 19 whilst incomes quadrupled; and the price of urban residential land in Seoul rose on average by 1582 per cent between 1979 and 1985 (Kim, J-H., 1994). Continuing difficulties of access to the housing market persuaded the government to launch a major house construction programme in 1988 aimed at providing two million units of accommodation before 1992. Moreover, the fear that speculative activity in urban land was likely to undermine this programme also drew the government into strong interventions in the land market in 1989. A series of legislative measures imposed a ceiling on urban land ownership in the major cities; levied property taxes on the market value of real estate; and introduced capital gains tax on corporate land holdings to discourage hoarding and release land for development.

As part of the two million units programme, the government launched the EHP in 1990 to relieve instability in the rented market and to improve housing quality for industrial workers.

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Chapter V. Reaching the urban poor D. An evaluation of the Employees' Housing Programme (EHP) in the Republic of Korea 1. The resource base for the EHP Over 1990/1991 almost 100,000 units were constructed under the EHP. Both housing for sale and housing for rent were provided by local government, the Korean National Housing Corporation ( KNHC) and private builders (see table 54 ).

The programme was administered by local authorities and the eligibility criteria were an income ceiling for targeted households of K$1,250 per month; or more than 10 years service in the industry; and a targeting of workers in the manufacturing, transportation, coal mining and cleaning industries.

For those that wanted to purchase a house, loans of up to K$17,500 per unit were made available to householders to set against a purchase price of about K$30,000. These loans were repayable over a 20 year period at an annual interest rate of 8 per cent. Loans of K$18,750 per unit were made available to industrial companies to provide rental housing for their employees. Priority was to be given to small businesses.

In financial terms the programme has been very beneficial for those who have qualified. Housing expenditure for those in rented housing has been reduced by more than 50 per cent on average, whilst for those purchasing their housing, the increasing asset value has more than offset the imputed rental value of the hefty deposit required. Nonetheless the relatively high cost of housing for sale has limited the participation of low-income workers. A monthly payment of K$250 is needed, for example, for loans and if a housing expenditure ceiling of 30 per cent of income is assumed, this implied a monthly income of about K$830. Yet, the average income of industrial workers was only K$700, and 55 per cent of small company employees earned less than K$500. This has meant that whilst the workers from small companies have less ability to purchase housing and therefore a higher need for rental accommodation, the smaller companies have less capacity to manage rented housing programmes.

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Chapter V. Reaching the urban poor D. An evaluation of the Employees' Housing Programme (EHP) in the Republic of Korea 2. The social impact of the EHP Apart from reducing the housing costs of beneficiaries, the programme has greatly improved their housing conditions in terms of the amenities available, for example, the availability of kitchens, bathroom and heating methods. As far as size is concerned the units were relatively modest at 5056 m², and whilst on average the size of apartments has increased from 4552 m², 30 per cent of residents have experienced a decrease in the space available over their previous accommodation.

At the same time, the programme has improved the residential stability of the beneficiaries, who mostly lived in privately rented dwellings, in company housing, or in dormitories before moving into the EHP. A four year rental period is common for the rental housing which significantly improves residential security. It remains to be seen if this is also the case for those purchasing their housing. Since purchasers are able to resell on the open market after just two years, it was anticipated — because of the highly subsidized nature of the programme — that this would result in substantial potential financial gain, thus encouraging the beneficiaries to sell.

The programme has received some criticism for the modest space standards constructed. Whilst there is a maximum limit of 60 m², the size of developments has varied and many units have been built at less than 45 m². The average size of workers' households, however, is 5 persons. The programme has therefore restricted access to smaller households, and in approximately 50 per cent of cases some household members were excluded when they moved into the EHP. Other eligibility criteria have led to the exclusion of younger households both on grounds of cost and the requirement of having been employed for a 10 year period. Many workers' households are also excluded from consideration because of the targeting of specific sectors of industry.

Finally, there have been some difficulties with the location of certain sites. Because of the difficulty of acquiring low-cost land, some large scale housing complexes have been constructed on peripheral sites and there is insufficient demand to fill them because of the inconvenience of their location.

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Chapter V. Reaching the urban poor D. An evaluation of the Employees' Housing Programme (EHP) in the Republic of Korea 3. Conclusions The EHP has been very beneficial for those fortunate enough to have qualified for it. They have seen their housing costs and rents fall whilst the quality of their housing and environment has substantially improved. Yet, despite a high level of public subsidy, the EHP is not reaching the low-income groups. The costs remain too high. Other eligibility criteria have also led to the exclusion of low-income groups from the programme.

The majority (72.5 per cent) of the housing units have been constructed by central or local government agencies and the rest by private builders. The private sector has been limited in this way because of the high taxation levels on land for private sector agencies wishing to construct houses. At the same time the partnership with private industries over housing for their employees has only been partially successful. Small companies in particular are in a double-bind, their employees are invariably unable to afford the costs of home ownership whilst the companies themselves have limited capacity to manage rental housing schemes.

A further 500,000 units are planned to be developed between 1992 and 1996; it remains to be seen whether the government will relax the eligibility criteria or introduce other mechanisms to encourage the participation of small businesses and extend coverage of the programme increasingly to meet the needs of low-income groups.

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Chapter V. Reaching the urban poor E. India: An evaluation of a series of Slum Improvement Programmes In 1991 it was estimated there were about 48 million slum dwellers in urban areas in India and 40 per cent of these were concentrated in the metropolitan cities. For many years the Federal and State governments have pursued programmes aimed at upgrading and relocating slum settlements. In the late 1960s and early 1970s slum settlements were an emerging phenomenon and were regarded as 'unfit' and deplorable environments and were subjected to clearance and relocation programmes. These schemes were expensive, insensitive to the needs of slum dwellers, and the forcible clearance operations were widely despised by slum dwellers and civil servants alike.

In 1972 the government adopted a different approach by introducing the centrally sponsored EIUS programme. The underlying objective of these schemes was to provide collectivized basic services in slum settlements. Thus 100 per cent grants were available, calculated on a per capita rate, for the provision of water supplies, community sanitation, drainage, paved pathways, street lighting, etc. Whilst the scheme provided for the acquisition of private lands, the states and municipalities have concentrated on the improvement of slums on public land and only in exceptional cases have these schemes been extended to private landholdings (e.g. Calcutta and Kanpur). The state governments have not followed a uniform policy over EIUS, however. Some state governments have passed legislation to ensure a systematic approach to the problem, whilst others have pursuedad hocpolicies and procedures.

Evaluations of the EIUS scheme have offered a series of criticisms:

 the projects have tended to be rigid and inflexible, with a social welfare and paternalist orientation;

 rarely have the prescribed standards actually been met, due to locational and cost constraints;

 there has been insufficient funds to tackle the programmes on an adequate scale;

 no workable arrangements are devised for the management and maintenance of EIUS schemes;

 slum communities have not been involved in discussions about the standards of provision or the maintenance of the services;

 there has been no concern for the convergence of other basic services or assistance with actual home improvements; and

 no steps have been taken to incorporate the slum settlements into the overall planning and infrastructure framework of towns and cities (Shah, 1994).

Accordingly, when World Bank assisted Slum Upgrading Programmes (SUPs) were adopted during the 1980s, some of these criteria were addressed in a more ambitious approach:

 a more comprehensive perspective towards urban development has been adopted, in which

Page 234 SUPs are orientated towards the upgrading of slums in an entire town or city;

 the legalizing of the status of slum dwellers has been a major step forward, thus creating the opportunity for further investment and development in slum settlements;

 the provision of services has improved on the 'Spartan' standards of EIUS, including the opportunity for home improvement loans;

 the involvement of the slum dwellers is sought and encouraged at each stage of the programme; and

 unlike the 100 per cent funding provided by EIUS, however, the World Bank-assisted schemes are entirely on the basis of loan finance, and a strong emphasis is placed upon full cost recovery.

Like the EIUS programmes, however, the actual implementation of the programmes has not met with the conceptual expectations. There are difficulties over cost recovery. These difficulties range from the practical, where local authorities simply do not have efficient mechanisms for cost recovery; through the political, where politicians may 'defend' the interests of a community over non-payment in return for its support; to the ideological, where communities used to highly subsidized, state-led programmes are not convinced of the need for repayment. Issues of land tenure are proving more complicated than anticipated. The acquisition of private lands is expensive for municipal authorities starved of resources; the redesignation of use of public lands a lengthy and bureaucratic exercise; and at the level of the slum communities themselves there may be some negative reaction to the enhanced liabilities (such as property taxation), which the 'advantages' of ownership may bring (Shah, 1994). Experience from various SUPs also shows that, on the whole, the process of decision-making is still not vested with local communities and such tokenism can lead to indifferent levels of community participation during the implementation of projects.

Within this context, another series of continuing Slum Improvement Programmes has been undertaken in a partnership between the ODA, the Government of India and a number of state governments.

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Chapter V. Reaching the urban poor E. India: An evaluation of a series of Slum Improvement Programmes 1. The scope of the Slum Improvement Projects (SIPs) The SIP programme was initiated in Andra Pradesh with ODA support for the well-known Hyderabad Urban Community Development Project. The municipal authority effectively adopted a community development approach to a city-wide slum-improvement programme. To this was added, firstly, the support of the United Nations Children's Fund (UNICEF) for its Basic Services Programme, and subsequently the support of ODA, in providing a substantial grant for physical provision, and additional inputs for health, education and other socio-economic programmes. This integrated approach was extended to two other cities in the state (Visakhapatnam and Vijaysawada), before subsequently being extended to Calcutta (West Bengal) and Indore (Madhya Pradesh). The scope of the projects may be seen from the objectives of the Indore SIP (1989) which seeks to:

 integrate the slums into the economic and social networks of the city;

 improve physical living conditions for some of the poorest urban families;

 increase standards of health, literacy and basic education;

 increase income-earning potential;

 develop community organization and institutions;

 provide security of tenure;

 encourage self-help improvement of housing;

 strengthen local government, NGOs and the slum communities to ensure that the assets created are properly maintained and the project benefits are sustained; and

 improve housing conditions in areas adjacent to the slums, and lead to a general improvement in health standards in relation to water-borne diseases in the city as a whole.

Whilst these are indicative of the aims of all five projects, each one is part of an evolutionary approach, adapting to experience of good practice and to differing local circumstances. The projects thus have wide-ranging briefs, not merely to improve the physical infrastructure and environment, but to increase the earning capacity of slum-dwellers and their quality of life through other health and educational programmes; to develop local organizational capacity to assist with the delivery of programmes through community development and leadership programmes (especially with regard to women); and to establish systems and procedures for the maintenance of the projects and their future sustainability.

Page 236 The Human Settlements Conditions of the World's Urban Poor

Chapter V. Reaching the urban poor E. India: An evaluation of a series of Slum Improvement Programmes 2. The social impact of the SIP projects Whilst, for the most part, the SIP projects have been effectively targeted on the urban poor, there has been some criticism that the projects have used slum settlements as a proxy for the settlements of the poor. The selection of slum settlements was largely left to the local authorities and, as a result, has concentrated on 'unobjectionable slums' rather than those in the worst condition. The projects did not make any particular provision for pavement dwellers, moreover, despite the fact that the National Housing Policy (Government of India, 1992b) sees them as a more urgent priority for attention than slum dwellers. A further related criticism is that whilst one of the aims of the projects is to integrate the slums into the economic and social networks of the city this cannot be achieved whilst they remain as recognizable 'projects'; rather they need to form part of a city-wide poverty alleviation strategy. This means integrating the projects into the economic and employment strategy of the cities just as much as it does ensuring they are part of the physical planning framework, or an integral part of the city-wide network of infrastructure.

Owing to the differing regulatory frameworks concerning the notification and regulation of slum settlements in the different states, the SIPs have not been able to exercise a consistent policy over the conferment of occupancy rights. This is so even despite the fact that security of tenure is widely acknowledged as crucial to the sustained enjoyment of the benefits of the projects and to the prevention of the involuntary displacement of existing occupants. At the same time, the state governments differ over the assistance given to householders in the form of loans for house improvement. These variations in the application of policy have resulted in different outcomes as far as housing upgrading is concerned. In Indore — where there is very progressive legislation for the regularization of the occupancy of slum dwellers on public land, and assistance with loans towards housing improvement — there has been a much higher level of induced private investment than in Calcutta where there is confusion over occupancy rights arising from a three tier tenancy structure and no organized assistance for housing loans. This stresses the need for a systematic policy framework towards housing for the poor.

A further problem has arisen over infrastructure costs. The costs have varied across the five projects. In all cases, however, they are above the per capita norm (of Rs.525) for the EIUS schemes, sometimes by as much as five times. In circumstances where the projects do not afford comprehensive coverage of slum settlements this raises the question of the opportunity costs of more intensive expenditure in some areas than others and the political difficulties which this may generate. The extent of the difficulties is underlined by the fact that the financial allocation towards just one city in the SIP programme is roughly equivalent to the planned expenditure commitment of the Madhya Pradesh Urban Welfare Department, which is responsible for slum improvement, rehabilitation of the landless, urban employment and municipal strengthening across the entire state, over a similar time period.

To the problem of costs is added a complication over implementation. There are now three 'models' for slum improvement in operation in India (EIUS, the National Plan Programme; the World Bank schemes; and the SIPs). EIUS and the SIPs are both grant based schemes whilst the World Bank's

Page 237 programme promotes full recovery of costs on land and infrastructural investment. Where two or more of these programmes are operating simultaneously in the same state this can lead to unnecessary confusion between bureaucrats and beneficiaries alike.

An overall evaluation of the components of the SIP projects reveals varied outcomes from genuinely successful innovation through to some disappointments. Founded very much on the principle of community participation, this has been a very prominent and successful feature of the projects. In each case a very extensive range of community initiatives and activities has been developed and where project completion is nearing, arrangements are underway for local neighbourhood councils to assume substantial responsibilities for the continuing management of these initiatives. In the earlier projects, now nearing completion, the major challenge is to sustain this wide range of activities once the formal funding for support staff has ended. This issue of sustainability is also receiving greater attention in the later projects.

As far as infrastructural provision is concerned, apart from the general problem over costs already mentioned, these programmes appear to have been successfully implemented. The Indore SIP, however, has been particularly successful in both the design and implementation of an innovative infrastructural system. This has been designed to lower costs, reduce the maintenance responsibilities of the municipality, whilst increasing those on the community, and to permit the phased linkage of slum settlements to the overall infrastructure network of the city.

Where relocation programmes have been undertaken, however, these have met with mixed success. A recent review of the relocation component of schemes yet to be undertaken has concluded a need to bring thinking more into line with requirements to consolidate, wherever possible, in-situ solutions to the problems of slum settlements.

The health and education components have also been successful, and some extremely so. Again, the major concern is over sustaining the levels of provision and service delivery which has been achievable under an externally funded project oriented framework when this organizational structure is replaced by the mainstream service delivery programmes of the statutory and voluntary services.

The weakest component of the projects has been the Economic Support Programmes and it has been clear that this is an area where there is least experience. Whilst a range of training and enterprise initiatives have been established; revolving loan funds set up and small loans disbursed; and expertise and advice from a range of institutions mobilized, the success rate in micro-enterprise development has not been good and experience with loan recovery poor. More recently, the projects have tended to move away from revolving loan funds towards the encouragement of thrift and credit cooperatives and towards more active links with local businesses. The major difficulties appear to be a lack of experienced staff; and absence of a strategic framework for training and employment initiatives, given that these initiatives often begin in a policy vacuum without an informed knowledge of the nature of the local economy or the operation of the local labour market.

Two further issues are raised by the projects, the first is the question of sustainability and the second, the replicability of the projects. As the earlier projects are now nearing their formal completion it is evident that there are likely to be some serious problems in continuing the sustainabilty of some elements of the projects as delivered so far. Some components, such as infrastructure provision, require a major investment and thereafter there is the question of maintenance; other components, like some health and educational projects, are continuing and the absence of continued funding calls in question their future continuity. This is a major problem with externally funded projects. The second issue is the related one of replicability. It is evident that the projects have developed a strong and independent organization and framework which, in some instances, has neither been properly integrated with the local state and municipal administrative structure, nor with the norms and procedures of indigenous programmes such as

Page 238 EIUS and the Urban Basic Services Programme. Discussions are currently underway between the Government of India and ODA as to how continuing support for slum upgrading programmes can be more effectively integrated within administrative and legal frameworks, whilst at the same time adding support to the Government of India's strategic approach to urban poverty alleviation.

Page 239 The Human Settlements Conditions of the World's Urban Poor

Chapter V. Reaching the urban poor E. India: An evaluation of a series of Slum Improvement Programmes 3. Conclusions The SIP schemes illustrate both the strengths and weaknesses of the project-oriented approach to slum improvement and poverty alleviation. On the one hand the projects are well organized, adequately funded and are able to deploy staffing levels and adopt norms and expenditure levels which are able to impact positively on the quality of life of the beneficiaries. On the other hand, the projects are selective rather than comprehensive, they tend to develop an independent managerial orientation and the different norms and standards tend to be difficult to sustain and replicate when the projects come to an end.

To overcome some of these problems, more comprehensive city-wide programmes could be developed, rather than localized projects. This would ensure that programme staff are accountable within the existing administrative and legal frameworks; that the main thrusts of policy are consistent with strategic approaches of the government and municipal authorities; and that norms and expenditure levels are agreed in such a way that they do not create problems of opportunity cost for the future.

The SIPs however, have been important and innovative projects which have encouraged effective partnerships between statutory agencies (at state and municipal levels), NGOs and local communities to tackle physical, social and economic problems in a series of slum communities. The projects have demonstrated the importance of sound leadership and local political support. Whilst not all components of the projects have been successful, the systematic monitoring of the projects has enabled adaptation and modification from one project to another and has enabled an evolutionary development over time. The SIPs offer invaluable experience for others undertaking programmes of slum improvement and urban poverty alleviation.

Page 240 The Human Settlements Conditions of the World's Urban Poor

Chapter V. Reaching the urban poor F. Conclusions: Assessing the experience of projects/programmes aimed at improving the human settlements conditions of the world's urban poor In a review of international experience of the extent to which governments were introducing enabling strategies, UNCHS (1991c) observed that, "many countries have responded positively to the GSS and have already started to implement its recommendations in a wide range of areas". It also goes on to conclude that, "most governments find themselves in a transitional stage in housing policy, somewhere between the old emphasis on production and direction and the new enabling approach of the GSS" (UNCHS, 1991c). This certainly remains true for this report. The evidence available, both in the review of human settlements conditions in chapter IV and the more detailed case studies above, suggests that governments continue to acknowledge the importance of GSS. Yet, in the light of widespread economic austerity throughout much of the developing world economic circumstances are hardly propitious for an expansion of the role of the private sector. At the same time, the impact of SAPs and other macro-economic reforms on the public sector has also meant that governments have, in most cases, yet to get to grips with the task of developing coherent enabling frameworks for shelter and urban development.

The four case studies above reflect different levels of government commitment to the concept of the enabling shelter strategies. The FUNACOM programme in São Paulo was clearly part of a significant and concerted attempt by one of the largest municipal authorities in the world to adopt many of the principles of the GSS. The SIP programme in India has been constructed around a community development approach which strongly embraces the idea of enablement. State agencies in Zimbabwe also demonstrated a willingness to liberalize many aspects of their approach to the delivery of sites-and-services projects before the programme succumbed to the twin problem of economic austerity and a severe drought. Even in the Republic of Korea, where evidence from the case study might demonstrate that the commitment to enablement is least, there is evidence of a conscious attempt to involve the private sector both in the construction and management of low-cost housing. Both the SIP programme in India and FUNACOM in São Paulo demonstrate progressive attempts to develop coherent local shelter strategies within an enabling framework and whilst the São Paulo strategy foundered because the Workers' Party failed to secure continuing political support, the SIP programme (although project-based rather than a wholly strategic programme), is still able to evolve and develop because of its universal political support. This underlines a previous observation by UNCHS (Habitat) that, "sustained political will is an essential ingredient in the success of any major policy change. To be effective, the GSS has to be supported at the highest levels of government over successive administrations" (UNCHS, 1991c). Three of the four case studies also demonstrate that government bodies, both central and local, are taking cognizance of the advice given by the international agencies to withdraw from direct state provision in the housing market. Consistent with the findings of the UNCHS (Habitat) study (1991c), however, it remains the case that although these municipal bodies have played, and will continue to play, an important role in the development of local shelter strategies, there is a long way to go before these roles may be

Page 241 regarded as fully fledged and coherent enabling roles.

A second fundamental characteristic of the new orthodoxy is the development of partnerships between municipal bodies, NGOs and local communities in order to secure and enhance low-cost provision for low-income groups. Such a partnership was the central feature of the FUNACOM programme, although it was evident that there were some difficulties in changing attitudes and procedures within the municipal bureaucracy in a short period of time. There were also problems in mobilizing the technical resources through NGOs on a scale commensurate with needs across a highly decentralized programme throughout the city. The SIPs in India were founded on a community development approach and the replicability and continued success of this approach has been the major feature of these programmes. It has generated community-based initiatives on a broad scale and across a wide range of activities in each of the projects. There has clearly been less of a role for community participation in the formulation and implementation of the sites-and-services programmes in Zimbabwe and in the EHP in the Republic of Korea. Partly as a consequence, neither programme has succeeded in effectively reaching the low-income groups, save indirectly, in the case of Zimbabwe, through the sub-letting of properties.

A third important criterion is the enhancement of the role of the private (commercial) sector. This is currently one of the least developed areas within the conceptual framework for local strategies. "For the poor, there remains little alternative but to rely on one's own resources or to use informal sources of finance" (UNCHS, 1991c). Evidence from the case studies above demonstrates that in each example efforts have been made to involve the private (commercial) sector in these shelter initiatives for low-income groups, but with limited success. In São Paulo, the municipality entered into partnerships with the private sector over land development; in Zimbabwe, the municipal bodies sought partnership arrangements with the building society for private sector loan finance and with private employers for assistance with a range of administrative tasks; cooperation from employers was sought in the EHP programme in the Republic of Korea; and in India, the SIPs have (latterly) sought assistance from private companies with regard to training and enterprise development. Thus, private sector cooperation has been sought across a range of activities relevant to these shelter initiatives. None may be described as highly successful, however, and attempts by the government in the Republic of Korea to encourage small companies to assist with the EHP for the low-income groups have failed. The reason was affordability problems and the lacking capacity of small firms to provide housing management. Meanwhile, in Zimbabwe the involvement of the private sector and the liberalization of local authority controls further exacerbated the difficulties encountered by the municipalities in trying to target low-income groups in an increasingly expensive scheme and led eventually to changes in the socio-economic composition of beneficiaries. From the case studies, however, there is little indication of progressive developments in the enhancement of the institutional capacity of the private sector to assist low-income groups.

The promotion of self-help in low-cost construction and materials production is a further important component of effective low-cost shelter strategies. This was a strong feature of the FUNACOM programme with local Community Associations not only determining appropriate standards and materials, but also undertaking the majority of the construction work themselves. This helped to raise confidence, encouraged the development of skills, and created opportunities for local economic development involving construction and the provision of materials. A similar process is also being undertaken in the SIP programmes and, although local circumstances differ from project to project, the physical upgrading of shelter and the environment using self-help initiatives is at the core of these programmes. Where these initiatives are supported by regularization of tenure, loan finance for upgrading, and training programmes for construction skills, they have been particularly successful. There was also scope for self-build activities in the sites-and-services programme of Zimbabwe, and the establishment of 'building brigades' was intended to assist with the production of building materials and reduce costs. Although the self-build approach worked well in the initial phase, the building brigades were not a success and the rising cost of

Page 242 materials was a major factor in undermining the affordability of the scheme for low-income groups; and as the higher-income groups replaced those on low incomes, the principle of self-building became less relevant. There is little, if any, scope for self-help activity in the EHP programme in the Republic of Korea. The review of human settlements conditions in chapter IV confirms that formal housing provision is rarely accessible or affordable for the urban poor and a similar conclusion may be drawn from two of the case studies. Hence, the GSS urges governments to formulate explicit shelter policies for the poor. There has been increasing recognition in recent years, moreover, that women, and women-headed households in particular, are disproportionately represented amongst those living in poverty (see chapters II and IV). Hence shelter policies need to demonstrate that they are responsive to the particular needs of women and children as well as to those on low incomes. Certainly the FUNACOM programme and related shelter policies in São Paulo and the SIP programme in India, demonstrate approaches which are more effectively targeted and responsive to the needs of the poor and to women's needs, than conventional government provision. Both programmes involved the conferment of legal title in squatter settlements (although this has not been universally applied throughout the SIP programme), and the FUNACOM programme was one of several simultaneous policies which were responsive in different ways to the shelter needs of the poor in São Paulo. Other related programmes included tenemental upgrading in central areas, squatter settlement upgrading in peripheral areas linked to relocation programmes involving sites-and-services schemes where in-situ upgrading was considered unwise in view of the dangerous nature of the existing site, and a low-cost new build housing programme. The SIP programme is also more effectively targeting the poor than conventional housing programmes, but the project approach has been seen to be a drawback in the effective targeting of the very poorest groups. Despite focusing on slum settlements, the SIPs have been criticized for failing to include all slum communities within their purview and, at the same time, for excluding consideration of pavement dwellers, street children and other destitutes.

Both programmes have also been responsive to the practical needs of women, involving them fully in the formulation and implementation of local activities. But as UNCHS (1991c) points out, it is much more difficult to make progress with regard to the institutional and market inequalities which exist and which inhibit or preclude the ability of women to hold land titles, to take loans, secure training or to obtain jobs.

The sites-and-services programmes in Zimbabwe, whilst originally successful in targeting the poor, have over time become a contradiction. The building standards required have become increasingly unaffordable for the low-income groups. There also appears to have been a policy vacuum over the issue of sub-letting. The result has been that many of the practicalities of renting have not been considered in a purposeful way and large numbers of those renting were dissatisfied. Furthermore, the throughput of serviced plots has been very small in comparison with housing needs.

Despite high levels of subsidy, the EHP programme has not been successful in targeting low-income groups because the costs remain outside their affordability. The eligibility criteria applied to the programme have also limited the access of the poor. Governments should ensure that shelter provision and upgrading is combined with infrastructural investment, with local economic development initiatives, and with health, educational and welfare provision to enable a concerted, and integrated approach, to urban poverty alleviation. Of the case studies, the SIPs most clearly demonstrate the advantages of this approach, but there is little doubt also that the project orientation and framework of the SIPs has been a constraint in seeking the broader objective of attempting to integrate slum settlements more effectively into the physical, social, economic and political networks of the city as a whole. Such an approach needs to be developed over time and involves the development of partnerships across areas of traditional expertise. In São Paulo, whilst the conceptualization of local development activity was broadly based, involving improvements in infrastructure and to community facilities, it is not clear whether a fully

Page 243 integrated strategic approach was adopted. In the remaining two case studies the targeting of the housing programmes on the low-income groups (at least in the latter stages of the Zimbabwe programme), was not effective, thereby precluding any attempt at an integrated approach towards urban poverty alleviation.

Agenda 21 (United Nations, 1993a) has increased the emphasis on two further requirements for the formulation of shelter strategies. It encourages a greater concern for environmental issues and a recognition of the need to develop strategies which were sustainable. Certainly the aim of each of the case study programmes has been to improve the quality of housing and environmental conditions of beneficiaries. By concentrating on existing slum settlements often devoid of infrastructural provision, the upgrading programmes in São Paulo and the SIPs in India have tackled the problems of environmental degradation directly, and by adopting self-help mechanisms have been particularly cost-effective as well as successful in mobilizing local communities around issues of shelter and the environment. These programmes have also encouraged the use of locally available low-cost materials thereby increasing the potential for employment creation and generating a beneficial impact from local income multipliers.

The issue of sustainability, however, is a complex one. The FUNACOM programme, along with other shelter programmes in São Paulo, although evincing many of the characteristics of an environmentally sensitive and sustainable programme consistent with the GSS, was unsustainable because of local political change. There are also difficulties with the sustainability of the SIP programmes but for very different reasons. The external resourcing of the SIPs and the subsequent development of an independent managerial orientation has meant the projects have adopted staffing levels and norms and standards which will be difficult to sustain once the major capital funding stage has concluded and local statutory bodies begin to assume responsibility for the projects. There are problems too for the sites-and-services programme in Zimbabwe. The high standards of shelter and infrastructural provision have already been modified to reduce costs, but unless the number of serviced plots is greatly enhanced and more consideration given to arrangements for letting, the programme is likely to remain inaccessible and beyond the means of low-income groups. These criticisms of the Zimbabwean programme correlate strongly with general criticisms of the project approach to emerge from an assessment by UNCHS (Habitat) which concludes that projects:

 invariably addressed only the needs of a proportion of overall demand, and often a very modest proportion;

 tended to focus on technical efficiency rather than a community-orientated approach;

 were often beyond the affordability of the poor, or if not, created problems because of a lack of availability; and

 were generally not conceived in terms of the impact they might have on broader urban development issues (UNCHS, 1991b).

Ironically, insofar as the EHP was something of a pilot programme in the Republic of Korea, it seems that of the case studies, whilst it least adheres to the principles associated with the GSS, it may nonetheless prove to be the most sustainable programme. There are nonetheless some important lessons to be learned from the EHP if it is to be more effectively targeted on the urban poor in the future.

A related issue to that of sustainability is the extent to which shelter programmes may be replicable and capable of scaling up to make a more effective contribution to overall housing needs. Whilst the São Paulo programme was a city-wide strategy, its output (albeit at the commencement of the programme), resulted in new and improved shelter conditions for approximately 100,000 households and yet over a similar duration (19891992), the population increase in São Paulo during these four years would have

Page 244 amounted to about 1.2 million people or almost a quarter of a million households. This not only demonstrates the scale of the shelter problem, it also underlines the urgency of the need to develop strategic approaches which dramatically scale-up the level of provision.

Perhaps with the exception of the Republic of Korea there are major problems in scaling-up current levels of provision in urban areas in India, Brazil and Zimbabwe. One of the key problems is the scarcity of resources (and the relative incapacity of state government resources in the Indian context is amply demonstrated in the case study), but similar problems are apparent in Brazil and Zimbabwe (and throughout much of the developing world). As a consequence UNCHS (Habitat) argues that the most important elements in seeking to scale-up shelter programmes are, "popular participation (so that people 'own' the process and are committed to making it work themselves), financial self-sufficiency (through cost recovery, user-charges, and micro-economic development), and administrative capacity (at all levels so that programmes and policies can be implemented efficiently over time)" (UNCHS, 1991c). The latter is particularly important: "Unless the local authorities are strong, well-resourced, efficient, flexible, and accountable, they will be unable to promote the right framework within which the household and private sectors can play their roles" (UNCHS, 1991c).

Finally, in order to be fully aware of the progress being made both in general and specific terms, the international agencies recommend a capacity for the monitoring and evaluation of shelter programmes. To an extent each of the case studies has been the subject of research and evaluation exercises but the one programme in which monitoring and evaluation processes have been used in an integrated way to learn from experience and modify subsequent development has been the SIP programme in India.

From this brief review of four case studies of low-income shelter programmes in Zimbabwe, Brazil, the Republic of Korea and India it may be concluded that the programmes in São Paulo and in India demonstrate the closest association with the key principles recommended by the international agencies and the EHP programme in the Republic of Korea, the least. Each of the programmes, however, does exhibit some characteristics of the new GSS agenda.

Page 245 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor This chapter is concerned with a series of issues which are seen as critical to enabling strategies in attempting to reduce the human settlements problem of the world's urban poor.

Page 246 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor A. The scope for public/private partnerships The concept of 'partnership' is a pre-requisite for the implementation of the enabling strategy outlined in the GSS. In a study of public/private partnerships UNCHS (Habitat) spells out the comparative advantages of the three sectors, public, private and the third sector comprising NGOs and CBOs (UNCHS, 1993b). The comparative advantages of the public sector may be summarized as:

 ensuring an adequate land supply for low-income housing;

 co-ordinating the provision of infrastructure and services;

 establishing a sound financial environment to encourage private investment in shelter; and

 liberalizing standards to permit a wider range of building materials.

Those of the 'commercial' private sector are as follows:

 production and marketing of land and housing;

 provision of infrastructure in middle and higher-income settlements on a commercial basis;

 creation of a housing finance market;

 production of building materials; and

 development of a competitive construction industry.

The third sector — i.e. NGOs, CBOs and the urban poor themselves — have the following comparative advantages:

 producing shelter at the lowest possible cost;

 developing some infrastructural facilities (sanitation and refuse disposal) on a self-help basis;

 mobilizing local communities; and

 mediating between the interests of financiers, the government and beneficiaries.

It follows from such an analysis, as well as from practical experience, that harnessing the efforts of two or more of these partners is likely to ensure greater success or effectiveness in the implementation of projects, especially for the urban poor. There is a number of different types of partnerships. The five most prominent of these are summarized below.

The first type is partnerships over land supply. A number of successful strategies involving partnerships, such as land sharing, land readjustment, land banking and so on, have been identified. Yet,

Page 247 the land supply achieved via such mechanisms is very modest in comparison with needs. Thus "difficulties in ensuring access to land in sufficient quantities remains the most severe constraint on low-income housing development in the Third World" (UNCHS, 1993b). A "strong government intervention in the land market on a much greater scale" is therefore required. The ownership and control of land remains a very politically sensitive issue, however. In many parts of the world such an approach is not only untenable but impractical. Here, the opportunity for collaboration between the public and private sectors, with landowners in particular, over the issue of access and rights of use in respect of land would seem to be the most fruitful way forward.

The second type of partnerships are those over the provision of housing finance. Not only are there fewer examples of partnerships to draw on in this area, there are very few that have actively benefitted the interests of the urban poor. Most such partnerships have involved the support, consolidation or enhancement of the formal financial sector. It is only recently that efforts have been made to link the vast array of informal financial arrangements with the formal sector, or to consider the possibility of scaling-up these informal mechanisms. There is considerable scope for further dialogue over issues of housing finance for the urban poor, however, ideally between all three sectors in a mutually supportive relationship.

There are many examples of the third type of partnership arrangements, those designed to assist in reducing the cost of building materials or in providing training for construction. These kinds of partnerships may take the form of government assistance to small-scale suppliers, as in India or Colombia; or, at the local level, 'materials banks' may be developed through bulk purchase arrangements. Examples of such schemes exist in the Philippines and in Chile. Collective access to materials through the development of cooperatives, as in Turkey and Uruguay, is a further form of partnership arrangement. The sharing of information and experience through research and training is another way in which cheaper forms of materials and construction may be promoted. NGOs such as FEDEVIVIENDA in Colombia, CONAMUP in Mexico, and SPARC in India, have provided skills training for low-income groups for many years.

There are also many examples of partnerships in construction and the development process. So many in fact that it is useful to subdivide the range into a number of subsections: e.g. the role of cooperatives; partnerships in providing rental accommodation; or in inner-city renewal. Invariably, however, the involvement of the private commercial sector tends to result in products too expensive for the urban poor. The "key to partnership in the production of low-income housing remains, therefore, the development of an enabling environment by government which can liberate the third sector — people and their organizations — to do what they can do best, but to do it more effectively" (UNCHS, 1993b).

The fifth, and last, type of partnerships are those in the provision of basic urban services, such as sanitation and drainage, water supply, waste disposal and transportation. It seems from experience that three conditions are necessary to balance equity in provision and the cost recovery necessary to sustain services. These are, a strong link between cost and quality; a high level of participation by consumers; and effective administration and supervision of the services. This suggests that partnership arrangements in the provision and extension of basic urban services and infrastructure to the urban poor are essential.

A number of factors contribute to the success (or failure) of public/private partnerships. In summary form these are (UNCHS, 1993b):

 the requirement of strong government (at both national and local levels);

 the involvement of NGOs and CBOs representing the views and interests of the urban poor as equal partners;

Page 248  the need for greater coordination and the integration of functions within a strategic policy framework;

 ensuring, as far as possible that benefits accrue to all the partners involved;

 recognizing the importance of political, economic and cultural factors in creating an environment in which partnerships are, at least, likely to succeed;

 ensuring that the benefits of partnership programmes are both replicable and sustainable; and

 recognizing that there are limits to the role of the commercial private sector in ensuring the provision of shelter for the urban poor.

To summarize, "the key relationships in most of the partnerships affecting low-income shelter are those which develop between people, third sector organizations and the public sector" (UNCHS, 1993b).

In a number of these partnership arrangements it is also vitally important to promote income generation and employment opportunities for low-income groups. Whilst the United Nations has encouraged such approaches for some time, a recent joint publication by UNCHS (Habitat) and ILO ( UNCHS/ILO, 1995) sets out in some detail how the provision of shelter and other urban services may be seen to offer enormous potential for employment opportunities for women and for low-income groups, whilst at the same time improving efficiency and reducing costs. The main arguments in support of this approach and the opportunities it affords are set out in the following two sections.

Page 249 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor B. The potential for employment generation in human settlements development through construction activity The failure of public housing programmes to make a meaningful contribution in meeting housing needs, especially for the poor, and the effects of global recession on macro-economic policy-making, have meant that many governments in developing countries have reduced their investments in the housing sector. The Government of India is a good example. Total public investment in the first Five Year Plan (19501955) was very high, at about 8 per cent of planned public sector outlay. Since that time, however, it has fallen to about 2.5 per cent in the late 1960s and early 1970s and to its lowest level of 1.3 per cent during the Seventh Plan (19851990). It has been marginally increased in the latest Plan to 1.47 per cent. In terms of capital formation, public and private investment in housing has fallen from 34 per cent in the First Plan to around 10 per cent in the Seventh Plan (UNCHS, 1993c).

Research over the last ten years or so, however, has challenged the assumption that investment in housing and associated development is unsound. Firstly, it has tended to emphasize the important economic role of the shelter sector. Tipple has pointed out, for example, that, "Housing represents more investment than any other single use in urban areas" (Tipple, 1994). Recent work by the World Bank and others suggests that housing investment in developing countries ranges from 28 per cent of GDP and from 1520 per cent of gross fixed capital formation (Buckley and Mayo, 1989). Moreover, there is a close relationship between construction activity and economic growth such that when an economy begins to grow the construction sector becomes an important element of that growth. At the same time, further research has demonstrated that the financial returns generated on a number of World Bank schemes involving sites-and-services programmes and upgrading schemes has been relatively favourable in comparison with other investments (Burns and Ferguson, 1987). Much research has also been undertaken into the multiplier effects of housing investment. Grimes has estimated that the multiplier effect of low-cost housing is about 2. In other words, for each unit of currency invested in housing a further unit is generated by the economic 'spin-offs' of that activity (Grimes, 1976). Moreover, in terms of employment generation the benefits appear to be in inverse proportion to the costs of housing. Work undertaken by Ganesan in Sri Lanka, for example, demonstrated that construction work on conventional low-cost housing and traditional dwellings generated about twice the labour inputs as luxury housing (Ganesan, 1975). Other studies in Africa and Latin America give similar results, (2 2 ) that although informal sector housing consumes less labour, the lower unit cost means more jobs per unit of expenditure, as well as many more dwelling units.

Hence the GSS not only acknowledges the need to encourage the provision of low-cost housing through the informal sector. It also recognizes, and seeks to demonstrate, the potential economic opportunities that shelter provision and human settlements development afford for employment generation especially for low-income groups and women. UNCHS/ILO (1995) makes a systematic appraisal of the potential for employment generation through housing production, infrastructural provision and the delivery of urban services, and the potential afforded by backward and forward linkages to these programmes. In seeking to generate employment from low-income housing programmes the study highlights a number of advantages:

Page 250  the nature of the activity, in calling for unskilled and semi-skilled labour, can have an immediate impact in creating employment for the urban poor;

 scaling-up low-cost shelter provision can generate more employment opportunities for women, who are the sole bread winners in 25 per cent to 30 per cent of all households in developing countries and whose numbers are increasing (Urban Edge, 1988);

 a shift in favour of labour-intensive construction methods and materials will assist the informal sector to ensure that a greater proportion of the investment on shelter generates economic benefits for the urban poor; and

 there also appear to be major advantages in substituting local, or indigenous materials, for high-cost imported products which require high levels of foreign exchange. Not only are local materials cheaper, but their intensified use will also create further local employment opportunities.

Efforts to scale-up low-cost housing programmes, especially in the light of tight monetary environments and contracting public sector budgets, will not be easy. Governments will need to be convinced of the above advantages. The most efficient way would seem to be through the informal sector, by seeking to encourage greater efficiency through training programmes, by facilitating finance, by a careful reconsideration of regulatory frameworks so that whilst they are flexible enough to deal with diverse local conditions, they also provide the essential safeguards which continue to be necessary. At the same time the range of low-cost housing programmes in the formal sector offer considerable potential for economic development and the generation of employment. Slum upgrading, urban renewal and residential maintenance programmes involve incremental, small scale building works which are wholly suited to SSE s and to the creation of unskilled or semi-skilled employment opportunities. Systematically pursued with training inputs, financial incentives and an employment-creation framework — such as exists in India — these programmes could generate considerable economic activity as well as undertake much needed renovation work to slum settlements and other parts of the urban housing stock in developing countries. As far as new construction through sites-and-services, core housing programmes, etc., are concerned there is a need to eschew high-technology and capital-intensive approaches in favour of labour-intensive building programmes using locally-based, low-technology materials and to encourage the diversification of contractors, including SSEs.

By adopting these kinds of approaches advocated by UNCHS/ILO (1995), Spence and others have calculated that, "where the urban population is growing at 6 per cent per year ... the construction of residential accommodation of 6 m² for each additional person, using a technology for which the employment generation is of the order of 0.05 to 0.1 job per m² ... would create employment for between 1.8 per cent and 3.6 per cent of the total population. This will be in addition to whatever employment is generated by the construction of roads and infrastructure" (Spence and others, 1993).

Urban infrastructure provision is another area which UNCHS/ILO (1995) have examined in seeking to encourage opportunities for employment generation for low-income groups. Infrastructural provision often involves major capital-intensive programmes of work. The challenge involved is to see whether those capital-intensive programmes can be substituted, or even partially replaced, by labour-intensive schemes which adhere to acceptable standards of efficiency and cost. The organization and management of such an approach is formidable, but experience gained through the work of ILO in developing labour-intensive methods in implementing infrastructural projects, including road building, provides important lessons (ILO, 1993). The development of community contracts of employment is also important and although these appear to have worked well in rural projects, there is less experience of using this approach effectively in urban situations (UNCHS, 1993a). Nonetheless there appear to be

Page 251 many opportunities for exploring the potential of labour-intensive projects in relation to urban infrastructure provision. "The provision and maintenance of infrastructure offers considerable potential for increasing employment opportunities particularly for unskilled labour through labour-based and local resource-based approaches" (UNCHS/ILO, 1995).

The successful application of an employment-generating approach towards shelter and human settlements development will also have important economic benefits in 'backward linkages'. Backward linkages involve the effects on other sectors of the economy as a result of increases (or decreases) in the demand for goods linked to construction. The most obvious impact is on the need for building materials. Woodfield (1989) has argued that if the shelter sector can be stimulated during a period of economic stagnation then the impact on economic multipliers may be enhanced. This may be achieved, firstly, because an increased programme will generate additional demands for building materials; and secondly, because the employment effects will encourage semiskilled and unskilled workers with a greater propensity to consume local products. The same principle also applies to the use of materials; the multiplier effects on the local economy will obviously be greater if the majority of building materials are made locally using a local labour force, rather than imported requiring the use of foreign exchange.

Developing countries should seek to use their indigenous resources better through the development of their domestic building materials industry. In so doing they will also be able to maximise the benefits of 'backward' linkages (UNCHS/ILO, 1995).

Whilst the difficulties confronting governments in seeking to ensure shifts in policy consistent with the above principles are not inconsiderable, there are a number of international projects aimed at urban poverty reduction and maximizing local employment generation currently taking place. Among these are the Urban Poverty Partnership Programme. This programme was launched in 1992/1993 and involves four United Nations agencies (UNCHS (Habitat), ILO, UNV and UNDP). An important future task is to identify good practice from this and similar programmes, to ensure the dissemination of results; and to establish appropriate training programmes throughout the developing world.

Page 252 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor C. The potential for employment generation from HBEs Home-based employment activities are very common in developing countries, especially amongst poor communities. (2 3 ) Given their location in the home they are especially important in respect of the role of women. Not only do they offer employment opportunities for many women (Strassmann, 1986), but they are also an added responsibility in running the home. For the poorest households, which are often women-headed, "the act of living where they work or working where they live seems more a necessity than a choice, as it is a matter of being the only space available where they can be or where they can feel relatively safe due to a network of friends or parents" (Blanc, 1994). At the same time, in poorer households, the whole family may be engaged in assisting in some way with the enterprise, including very young children and the elderly. Several studies have identified a gender differentiation in intra-household activities which often consigns the most arduous tasks to female members with the least reward in terms of space, food, personal time or money. (2 4 )

Although HBEs are found mostly in low-income neighbourhoods, they are not exclusive to such communities (Strassmann, 1987), and the range of activities undertaken is enormous; "People bake, cook, sew, print, repair, photograph, give injections, cut hair, sell drink, rent lodgings, keep chickens, and sell other goods and services in their homes" (UNCHS/ILO, 1995). Thus, although slum areas may accommodate mostly low-income groups, they may also be vibrant economic communities, but usually engaged in work of low productivity. The large slum of Dharavi in Bombay is an example; by reputation 'the largest slum in Asia,' Dharavi, is also characterized by a huge variety of economic activities, the extent of which has only recently been revealed as a result of official proposals to redevelop the area. The different economic activities also have an intrinsic impact on the built environment so that the area housing the pottery-makers, with its open air kilns and rows of drying pots, is very different from the apparent chaos of the livelihoods of those involved in recycling activities, or the intense densities associated with the garment-makers. Strassmann (1986), found similar geographical variations in different neighbourhoods in Lima. A further important factor to the survival of HBEs is access to markets. Often the informal products of HBEs are dependent on formal markets and margins are so fragile that geographical proximity is critical. It is precisely these kinds of considerations, i.e. the organic nature of the built form and proximity to markets, which are so difficult to replicate in redevelopment and relocation projects and which raise important doubts about the justification and viability of such approaches. Given that HBEs are common amongst poorer communities already living in conditions of space constraints and accommodating families of perhaps five or six persons on average, the major function of HBEs is to sustain household incomes. Gilbert (1988), found that most HBEs were small and assisted only in marginally enhancing incomes, whilst Strassmann (1987), reported from Lima and Sri Lanka that the earnings of HBE workers were only about half of what they would have earned had they been undertaking similar work elsewhere and on the same full-time basis. Despite these apparent low financial rewards, HBEs do have a number of financial compensations. They are relatively easy to establish, since they require only a small capital input; overheads are very low; they obviate the problems (often considerable), associated with journey to work and, at the same time, save on transport costs; and their place in the informal sector also means they are free of taxation (although perhaps not free of all costs in

Page 253 that some households may have to make payments to continue their businesses). Thus, it seems that the 'savings' render the meagre earnings to be worthwhile. One finding which confirms this conclusion is that Strassmann's work suggested that in poor neighbourhoods especially, dwellings with HBEs were of better quality than the others, having more floor space and were more likely to be serviced with sewers. In poor neighbourhoods HBE households were the elite, whilst in more conventional neighbourhoods they were struggling to keep up.

There are, however, also negative aspects to HBEs. They are often not subject to official scrutiny which means that the workforce can be subjected to exploitation. This is perhaps less likely where the household has discretion over its activities. In places where home-based working is organized on an 'outreach' basis with large numbers of workers engaged for long hours on 'piecework' in very poor conditions and for low pay (Schneider de Villegas, 1990), exploitative conditions do exist. These conditions invariably involve women, and in large numbers. Local attempts at organization or unionization are often difficult and sometimes even dangerous for those involved. A second disadvantage is the effect of HBEs on the environment. Unregulated HBEs often generate noise, dirt, fumes and waste that are a nuisance or a danger either to others or to the environment as a whole. These are 'negative externalities' which require state intervention in order to prevent or minimize their adverse effects.

So far this discussion has centred around HBEs involving employment for household members, however, the most frequent form of income generation through the use of the home is in sub-letting space or rooms in the form of rented accommodation. With the increasing cost of home ownership in many countries identified in chapter IV, it is apparent that many poorer households are only likely to acquire accommodation through renting rather than ownership, although the costs of renting may also be too high for some, leaving illegal squats the only alternative for the poorest. Fuller consideration will be given to the opportunities afforded by a rental strategy later (section J). For the moment it would appear that, in principle, similar safeguards need to be in place to deter and minimize the exploitation of tenants by landlords, to those needed to prevent the exploitation of home-based workers by unscrupulous employers or 'middlemen'. This suggests that the opportunities afforded by HBEs (including sub-letting), for generating employment for the urban poor need to be approached with some caution. The body of research evidence suggests that the effects of SAPs, macro-economic stringency and policies oriented towards deregulation have not only increased the numbers in urban poverty, but have also increased the exploitation of vulnerable sections of the workforce and most particularly female labour. In those countries where the tradition or capacity for enforcement was already weak, the active promotion of HBEs as part of a strategy to counter the effects of unemployment or underemployment carries greater risks of the increased exploitation of vulnerable groups.

This is a difficult and controversial area. "The challenge to policy-makers is to attempt to maximise both the employment creating potential of the informal sector, in this case HBEs, and the degree of social protection and regulation extended to it" (UNCHS/ILO, 1995). Whilst the progressive legalization of the informal sector is essential, this is more likely to take place where obstacles to legal entry are reduced to a minimum, where costs are not prohibitive and where there are clear benefits in legality. Hence, HBEs can be encouraged by reversing the trend towards smaller plot sizes in new housing development; revising regulations governing the use of plots, essentially to ensure health and safety standards; and creating a facility to encourage small loans to HBEs. At the same time, minimum standards need to be enforced in three areas:

 basic human rights such as freedom from forced labour and freedom of association;

 safeguards against exploitative types of employment relationships, e.g. hazardous employment or the employment of young children; and

Page 254  the upholding of basic standards of occupational health and safety (UNCHS/ILO, 1995).

Page 255 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor D. Public participation and capacity-building The rapid growth of the urban population has overwhelmed human settlements provision in many developing countries and has led to a widespread recognition that it is the poor themselves who make the greatest contribution to shelter provision in those countries. In recommending an enabling strategy for shelter provision, the GSS articulated the need to harness these efforts of the poor to house themselves and envisaged a role for public bodies wherein the latter would support, and indeed encourage, these efforts as one of the basic principles of shelter strategy (UNCHS, 1988). At the same time, most, if not all, the leading international agencies support the process of public participation in the formulation and implementation of national strategies for human settlements development. The process is more difficult than the rhetoric, however, because unlike the success of the 'green' or the 'white' revolutions in the rural sector in India, for example, it is essentially a political rather than a technical transformation which is required. Indeed, there may be a need for transformation to take place at more than one level. The Community Development Programme — funded by DANIDA and implemented by UNCHS (Habitat) — which has examined the scope for community participation in human settlements development since 1984, has concluded that there is a need for "a new kind of development politics" which involves "genuine devolution of power and decentralization of activities" and it has to be recognized that this entails "some reduction of the power and decision-making authority now vested at the top" (UNCHS, 1991a). Clearly where such political support is forthcoming the scope for effective action is much greater. There is no better illustration of this than in Sri Lanka during the Million Houses Programme (UNCHS, 1993a). An important recent development in this regard, however, is the passing of the 74th Constitutional Amendment by the Government of India in 1994, devolving some key responsibilities for human settlements development to local municipal corporations. Not only is there a need for a change of political will at national government level. There is also a need to mobilize communities themselves. If successful community participation is to be elevated from the level of individual projects or neighbourhood initiatives, then it must be part of an inherently political strategy at the local level which empowers local communities to take responsibility for their living conditions and the environment and to take decisions which challenge the status quo. An example of a radical programme which sought to empower local communities was that of the São Paulo government mentioned above (chapter V.C).

In addition to the political obstacles to greater community participation in shelter strategies, other difficulties include the inflexibility of bureaucratic regulations and procedures and the resistance of bureaucrats themselves; the lack of energy, time and personal resources of the poorest groups who may simply be unable to respond to participatory approaches; and a variety of other local factors such as the heterogeneity of the local population, or groups harbouring deep-seated religious or cultural differences.

Where such difficulties can be overcomed, however, the benefits of adopting a participatory approach appear to be gaining wider recognition. Some of the benefits may be summarized as follows:

 from the community's viewpoint a participatory approach enables people to direct their efforts towards achieving improvements in their quality of life as a whole and not simply in their shelter conditions and physical environment;

Page 256  the process of participation contributes towards engendering trust between local authorities, NGOs and CBOs which helps to build confidence, raise the self-esteem of poorer communities and enables them to participate with dignity more actively in the political, economic and social activities of their towns and cities;

 from the viewpoint of governments (both central and local), community participation offers one of the very few options for developing a strategy which deploys resources commensurate with the need to provide improvements for shelter and human settlement conditions; and

 a community participation approach can increase the cost effectiveness of a shelter delivery programme, especially where the community contributes voluntary labour inputs, and in this way it may supplement the scarce human and financial resources available from NGOs and local bodies.

Whilst many governments have, in recent years, produced national shelter strategies in line with GSS recommendations, only relatively few have given serious consideration to ways of addressing the shelter needs of the poorest groups. Encouraging community participation is at the heart of such an approach and it is important that governments do not abrogate their responsibility for providing more effective support to low-income groups. There is thus considerable scope for governments to adopt community-based, participative shelter programmes for the urban poor. It seems, too, that there is a major role for training and the dissemination of good practice in respect of such programmes. The UNCHS/DANIDA Community Development Programme — concerned with examining the role of community participation in human settlements development in Bolivia, Sri Lanka and Zambia — has taken a lead in this process both in exploring good practice in terms of methods and approaches to community participation, as well as in developing manuals and guides for training programmes and dissemination to practitioners (UNCHS, 1991a; 1992c; 1993a). Some important findings of the programme for institutional development include:

 local governments have a key role in developing such programmes in partnership with NGOs and CBOs;

 preliminary research is essential to acquire information on the physical, economic, social and cultural situation of the target community;

 carefully tailored strategies will be necessary with appropriate institutional access of sufficient status to enable changes to be effected to government regulations and procedures; and

 self-evaluation mechanisms and regular feedback are important.

Key findings on the training side include:

 effective training is itself a participatory process combining classwork with 'hands-on' training in the field;

 there is a need to recognize the pre-eminent role of women and women's organizations in the community and to ensure that training programmes are gender sensitive and responsive to women's needs; and

 that although there are 'core' issues which are common to different countries, training materials and approaches need to be adapted to different local circumstances (UNCHS, 1991a).

The UNCHS (Habitat)/DANIDA programme has laid particular emphasis on understanding community participation and how it functions. It has created a research/action approach incorporating

Page 257 practical 'hands-on' training and the dissemination of key findings which may be replicated in other countries in order to promote good practice. At the same time such an approach may be consolidated by extending into related areas of activity, such as poverty reduction or income-generating activities. It is vitally important that good practice in relation to community participation as a means of assisting poor communities to improve their living conditions is disseminated as widely as possible.

Page 258 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor E. Increasing the access to residential land Ensuring an adequate supply of residential land at affordable prices is an absolute pre-requisite for the development of a shelter strategy for the urban poor. This is a universal problem (see chapter IV). The inability of urban authorities to generate a reasonable supply of serviced land leads to an excess of demand over supply and subsequently to increasing prices, the development of a 'black market', or as we have seen in some African countries, the use of land for political patronage. In those urban sub-markets accessible to the urban poor, low purchasing power is compensated for by increased densities, often to intolerably high levels (up to 5,0006,000 persons per hectare in South Asia). In many instances the poor resort to squatting illegally on any available site or, in circumstances of absolute desperation, to dwelling on pavements or in public places.

There are a variety of problems in ensuring a supply of residential land for the urban poor. First, the ownership and control of land is politically highly charged. Throughout the developing world governments have adopted a variety of approaches which vary from state control of all land through to an essentially privatized market. It is apparent that none of these political strategiesper secarries with it an intrinsic solution to the problem of land supply for the urban poor. Second, there are shortcomings in policy and the institutions responsible for land registration and supply. Many developing countries do not have a clearly developed urban land policy, an effective institutional structure, or a legal framework which encourages the identification, proper legal registration and processing, and supply of land for development. Third, even in countries where these structures are in place, the encouragement of a market oriented approach may act against the interests of the urban poor. In a highly competitive land market the poor are ill equipped to afford adequate access, and in circumstances of scarcity, speculation in land invariably accelerates prices.

In the face of these difficulties various approaches have been developed aimed at releasing land for the urban poor. These include:

 Land sharing and readjustment initiatives. Perhaps the most widely known initiatives, these involve a form of barter. In principle, land sharing or readjustment involves the surrender of a parcel of occupied land by a private owner (usually) in exchange for the opportunity to realize some of the commercial value of the site. The remainder of the site is then systematically planned, allocated to the slum dwellers and services installed. With some variation in the details of transactions, this form of land release has been used widely in the Republic of Korea, and in Colombia, India, Kenya and Thailand. It has not always been used to benefit poor people, however. (2 5 )

 Land banking. Another widely used approach, whereby governments expropriate or purchase land and subsequently release the land at affordable prices specifically for poorer groups. Increasingly less used, as government resources are reduced and land prices rise.

 The innovative use of land tenure. Several governments have sought innovative ways of using

Page 259 land tenure systems to facilitate access for the urban poor. Botswana, for example, has introduced an intermediary tenure form entitled the Certificate of Rights, a leasehold system, which has "enabled the government to produce, fast and cheaply, many low-income plots" and has "played a leading role in containing the growth of illegal settlements in most urban centres" (Kalabamu, 1994).

 Joint ventures. Public/private partnerships in the form of joint ventures have been used in some countries to facilitate access to land for the urban poor. Such ventures were part of the strategy used by the São Paulo administration (see section V.C), but joint ventures have also been used effectively in the Philippines and Turkey. (2 6 )

 The use of planning controls. Attempts have also been made through planning powers to ensure that land is set aside for low-cost housing, e.g. Malaysia, often as a condition of planning permission.

 Other initiatives. Other initiatives have been developed which, whilst they have not directly contributed to the supply of land for the urban poor, have been designed to facilitate the supply of residential land in general, or reduce the extent of speculation in the land market. Examples of such approaches include the establishment of the Urban Land Ceiling Act in India (see section IV.E); and the introduction of fiscal measures such as 'betterment' charges accruing from capital gains, or the introduction of hefty taxes on unused land to prevent hoarding, as in the Republic of Korea (see section IV.F).

This catalogue of initiatives is not intended to be exhaustive nor is there scope here for a detailed appraisal. It serves to illustrate, however, that a range of approaches have been attempted by various countries throughout the developing world. It is true to say, however, that such initiatives have, so far, met with limited success and, notwithstanding the UNCHS (Habitat)/World Bank/UNDP assisted Urban Management Programme, there is a tangible need for a sustained international effort to improve professional competency and service delivery in urban land-use planning and management. As Musandu-Mayamayaro (1994) observes, however, "accounts offering critical reviews of municipal land delivery systems and processes ... are, unfortunately, not matched by those that offer concrete solutions." Neither can the current policy environment be considered very supportive. With the international agencies advocating a market-led approach, and SAPs resulting in reductions in public sector spending, many municipal authorities have a diminished capacity and reduced resources to embark on policy initiatives designed to improve efficiency and enhance output (DAG, 1994). Nonetheless reforms are needed and at both central and local government levels. They begin with a recognition by central government of the requirement for a clear strategic framework for urban land policy and management. The Government of Bangladesh has recently reviewed its policies for urban land management in an important national seminar and has concluded with a number of recommendations which have relevance for many other countries (Islam and Chowdhury, 1992). Amongst the recommendations at strategic level relating specifically to urban land management were:

 the need to strengthen urban land management within the context of a national human settlements policy for the country as a whole;

 the need to update the legislative framework by enacting an Urban and Regional Planning Act and by revising zoning regulations and building codes;

 the strengthening and modernization of institutions responsible for the maintenance of land records, mapping and surveys;

 enhancing the scope for professional training;

Page 260  establishing a National Commission on Urbanization to formulate appropriate urban policies; and

 a research and monitoring capacity.

At the local or operational level the review identified a need to:

 strengthen the capacities of municipalities in planning and urban management;

 operationalize and develop techniques such as land sharing and adjustment to maximize land resources;

 designate land for the urban poor and make available financial resources for the purchase of this land and for shelter construction for the urban poor;

 upgrade the operational responsibilities for field staff and enhance capacity through training; and

 upgrade technical capacity through computer use and introduce local research and monitoring capacity.

In the case of Bangladesh, major reforms were evidently considered necessary. In those countries with a well developed and strong municipal tradition, however, there may be a case for a streamlining of existing administrative procedures to reduce bureaucratic delays and speed decision-making. Given the difficult current financial environment for municipal bodies, however, it is likely that such reforms will remain as good intentions unless the revenue generating possibilities are also operationalized. This will mean exploring the fiscal opportunities afforded by land market transactions, such as betterment charges on land development. The negative aspect of such charges is that they will invariably increase the price of land.

Page 261 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor F. Improving access to housing finance Whilst informal mechanisms for housing finance, such as rotatory credit associations, are widespread in countries throughout the developing world (Osondu and Middleton, 1994), the absence of formal financial arrangements is acknowledged to be a major constraint to the development of efficient housing markets (World Bank, 1993b). Even where formal housing finance institutions do exist, they are of little direct benefit to the urban poor: "the fact of the matter is that formal sector housing finance institutions fail to reach the low-income households either as borrowers or savers" (Kim, K-H, 1993).

There are several reasons for this; first, as Munjee (1993) points out, "The heart of any efficient housing finance system, whatever manner it may be structured, is an operational land market (even though it is not entirely efficient), with fairly unambiguous titling arrangements". As we saw in the previous section, few developing countries can claim to have effective land markets which are efficiently serviced in respect of property rights and titling arrangements, and even where they were this would only serve to highlight the lack of access for the urban poor. Secondly, the poor are perceived by the financial institutions, for a variety of reasons, as being a 'high risk' group and perhaps the first law of banking is "to minimize risk". Where the institutions may be persuaded to lend, however, they will counter the effects of increased risk by higher charges, thereby rendering the process once again beyond the means of the poor. Thirdly, transactions with the poor are administratively costly compared to higher-income savers and borrowers, because although the administrative costs of accepting savings or servicing a loan may be no different from other clients, the sums saved or borrowed are likely to be smaller. These relatively high administrative costs tend towards a reluctance by formal financial institutions to encourage the involvement of poor groups in any substantial way (Patel and Burra, 1994). So, there remains a policy dilemma as to how to extend the facility of formal housing finance to the urban poor.

In many parts of the developing world and particularly Africa and Latin America, where formal housing finance institutions are experiencing a very difficult financial environment, the proposition of extending their lending to the urban poor appears currently ambitious and is not a priority. It is in the countries of South and South-East Asia (and in China) — perhaps where the economies are more robust, or where the impact of SAPs has not been so adverse — that innovatory developments in housing finance are rapidly taking place: "Countries in the region which did not have conventional mortgage lending institutions are now striving to establish them mainly in the private sector (India, Nepal, Vietnam). Those that have state owned housing banks are firstly attempting to create a more diversified market with private sector participants (Bangladesh, Pakistan, Sri Lanka and Indonesia) and secondly to transform their existing institutions into more market oriented institutions, if not privatizing them fully. Finally, those that have developed a fairly extensive housing finance system for middle-income borrowers, are seeking methods to extend the system to assist lower-income households (Malaysia, Thailand, Korea and Philippines)" (Munjee, 1993). This assistance to low-income groups by the formal financial institutions in an attempt to link the formal and informal sectors, is being matched by nascent attempts by community-based savings

Page 262 organizations to scale-up their activities to become peoples housing banks.

Much of the former activity by the housing financial institutions in South and South-East Asia is taking place under the auspices of the Asian Housing Finance Coalition, which consists of housing finance institutions from India, Thailand and the Philippines, and the KRIHS of the Republic of Korea. Through its members the coalition is experimenting with at least two initiatives designed to extend housing finance to the urban poor. The first is the Community Mortgage Programme which has been developed by the Home Development Mutual Fund, a shelter finance agency established by the Government of the Philippines, "to enable squatters or slum dwellers to acquire tenure to the land they have been illegally occupying or to another site where they are relocated" (Alonzo, 1994). Finance under this programme is arranged in three portions. First, for the acquisition of the land at a price agreed in negotiation between the landowner and the community association or cooperative; second, for infrastructural provision; and thirdly, for home improvement or reconstruction. Substantial inputs to infrastructural works and housing are made on a self-help basis, but under professional supervision. The Fund currently has 66 community associations registered as members involving over 8,500 families and an estimated requirement for finance for land acquisition of $3 million (Alonzo, 1994).

The second initiative involves action research projects in each of the countries in which the Coalition has a presence in order to extend savings and borrowing facilities to low-income groups by using NGOs as intermediaries. The basic principle underlying this activity is the establishment of partnerships between formal financial institutions, NGOs and CBOs with a view to influencing savings and lending programmes in order to make them more sensitive to the needs of poorer groups.

Other NGOs in the region are critical of this approach, arguing that it is both "dangerous and dysfunctional" (Patel and Burra, 1994). Their concern is that NGOs will become "a conduit for loans" which will overwhelm all their other activities and turn "what should have been a joint venture between communities, NGOs and housing finance institutions" into "a moral and organizational liability of the NGO ". Instead a number of NGOs in India, primarily spearheaded by women's organizations (e.g. SPARC, Mahila Milan and the Self-Employed Women's Association (SEWA)), are taking their inspiration from the principles of the Grameen Bank in Bangladesh and are seeking to scale-up relatively modest savings and credit schemes for housing and other purposes, into financial institutions, directly accountable to, and specifically for, the urban poor. Hence, JANASAMPATTI ('People's Wealth') is aiming to build upon the success of existing savings schemes for slum dwellers in Bombay and other Indian cities (initiated by SPARC and administered by the women's pavement dwellers' association, Mahila Milan), and to consolidate these savings into a central fund which is both large enough to attract high rates of interest in the formal financial sector, whilst at the same time, being used as collateral against which to raise loans from a variety of other sources. By mixing together these funds from other sources, it is hoped that different financial packages may be devised which will be much more suited to the needs of the poor than conventional institutional lending (Patel and Burra, 1994). Whilst the assessment of individual projects would be made by a core team of professional staff, the policy framework would be decided by representatives of CBOs and democratic control ensured by the appointment of Board members (Patel and Burra, 1994).

The innovatory thinking of these NGOs has also influenced government policies, in that the Housing and Urban Development Corporation — the main source of housing funds for state governments — has recently formulated a loan arrangement for the urban poor. Under this new arrangement it is prepared to disburse loans through NGOs and CBOs with a track record of local savings and credit schemes, in return for a deposit of 1025 per cent of the loan. This deposit serves as collateral for the loan, rather than requiring the parties to enter into mortgage arrangements.

This brief résumé of initiatives in respect of housing for the urban poor has concentrated on

Page 263 innovations in South and South-East Asia. Whilst the financial environment in many parts of the world remains relatively bleak, these initiatives suggest that there is, nonetheless, substantial scope for the development of these ideas and for their wider application in many other developing countries.

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Chapter VI. Reducing the human settlements problem of the urban poor G. Improving access to appropriate building materials There has been increasing concern over recent years with problems over the supply of building materials for traditional house construction in developing countries. The problems were highlighted in a report to the fourteenth session of the United Nations Commission on Human Settlements (UNCHS, 1992a). It identified "a mounting crisis" in materials supplies which can be characterized as follows:

 Although building materials production and consumption in developing countries increased during the 1980s, it was uneven in output. An overall decline was registered in Africa and a decline in some key materials production in Latin America.

 There is an increasing tendency for developing countries to resort to imported materials in order to bridge the gap between supply and demand. Between 1975 and 1985, for example, developing countries increased their imports of building materials in real terms by 85 per cent.

 Partly as a result of imported products, the price of building materials has risen very rapidly in many developing countries. In the United Republic of Tanzania, the price of sand, cement and steel increased more than fivefold between 1982 and 1989. A similar picture of rapidly increasing prices is apparent in Latin America and Asia. The obvious effect of such price increases is to raise the costs of housebuilding. The prospect of home ownership is thus placed even further beyond the reach of the urban poor.

These price increases may be attributed to seven particular causes (UNCHS, 1992a):

 The rapidly depleting supply of raw materials on which building materials production depends. Each of the main types of building materials, wood, bamboo, grass, earth, building stone and limestone, is experiencing difficulties of supply at current levels of demand.

 The steeply rising costs of energy. Cement, steel, bricks and lime are all energy-intensive materials and many developing countries' energy costs have risen by more than 25 per cent over the decade.

 The use of inappropriate technology. Ironically many governments in developing countries established large factories for the production of local building materials as part of their import substitution policies during the 1950s, 1960s and 1970s. Unfortunately these plants have depended heavily on imported spare parts and machinery, which has resulted in low capacity utilization.

 A lack of improvement in productivity owing to the fragmented nature of the industry.

 Local materials lacks status among end users or statutory authorities. The result is that well established technologies remain hardly used.

 Distribution and marketing problems often significantly affect the retail price of building materials.

Page 265  There is often little recognition amongst policy-makers of the significance of the building materials sector and, hence, a lack of official recognition and support for its needs.

There is thus a need for governments to develop a strategic approach for the development of the building materials sector. There is a wide range of opportunities available for governments wishing to address these problems seriously, such as, the application of new materials and technologies, the need to ensure improvements in energy efficiency, and the adoption of appropriate levels of technology in local materials production. All of these factors are designed to improve the efficiency and effectiveness of the supply of indigenous building materials. By increasing supplies whilst at the same time reducing costs, they would ultimately (hopefully) be of benefit to the urban poor. UNCHS (1992a) also make a number of recommendations which would be of more direct benefit to the urban poor. These include, firstly, the need to diversify the production of indigenous materials to include small-scale producers and those in the informal sector. As indicated earlier, small-scale producers tend to be less capital-intensive and to employ more local labour. They also have the advantage of reducing the transportation costs of materials, and are likely to be more responsive to the needs of local builders whether these are SSEs or those engaged in self building or renovation. It is also important that support is available to encourage entrepreneurship through training, and/or advice and guidance so that credit for such enterprises is available. The aim should be to upgrade the activity of small and informal sector enterprises to improve their productivity and financial viability, whilst at the same time minimizing the detrimental environmental impact of their operations.

Secondly, positive attempts should be made to encourage the involvement of local communities in both off-site and on-site production activities. Successful examples of aided self-help and partnership arrangements involving local communities in residential construction activities have been undertaken in a number of countries, but there is also the opportunity of employing local labour in the production of building materials on a greatly enhanced scale. This prospect offers the added advantage of offering employment opportunities for women. Experience has shown, however, that women tend to be marginalized when it comes to formal employment opportunities in construction and related work ( UNCHS, 1990b). Although there may be other difficulties, such as cultural norms prohibiting women's involvement, the main obstacle to enhanced female employment in this sector is access to training, which may in turn require financial support to enable their participation. Critically, however, "the essential principle ... facilitating women's entry into non-traditional occupations is a detailed and in-depth understanding and knowledge of the dynamics and requirements of the existing and potential markets in which skills ... will be sold" (UNCHS, 1990b). This suggests a rigorous market appraisal as a prelude to a carefully tailored programme of training opportunities which is also sensitive to gender issues if this opportunity for enhancing job opportunities for women is to be genuinely seized.

Thirdly, activities should be targeted towards the poor, as they are the most vulnerable. Examples of good practice might include partnership arrangements with NGOs to secure economies of scale through bulk purchasing arrangements. Examples of this occur in Thailand (Boonyabancha, 1990) and in Chile (UNCHS, 1993b). Alternatively, and with the assistance of NGOs, 'building materials banks' may ensure priority access for low income communities, as in Chile, Colombia and the Philippines (UNCHS, 1993b). Low-income communities (and particularly women) may also benefit from targeted programmes of learning in construction skills and from technical advice and guidance over the use of materials, as undertaken for some time by NGOs like FEDEVIVIENDA in Colombia and CONAMUP in Mexico ( UNCHS, 1993b), or through the Building Centres in India (UNCHS, 1992a).

UNCHS (1992a) recommends the exploration of new materials and techniques in the continuing search to reduce costs and whilst it is assumed that much of this work will involve technical expertise of one sort or another, there is one area which could offer further employment opportunities for some of the poorest groups. This is in the recycling of waste materials, such as scrap metal, or the re-use of

Page 266 non-hazardous industrial waste materials. Since the recycling of waste materials is very much the responsibility of some of the poorest groups in developing countries, the systematic use of such materials for use in construction could well increase the employment opportunities for the very poor.

Page 267 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor H. Improving infrastructure and sanitation The review of housing conditions for the urban poor in chapter IV illustrates that, the absence or poor quality of infrastructural facilities for the urban poor is a pervasive problem in many cities in developing countries. The statistics available vary from city to city and from country to country and are often official estimates (which tend to be cautious), or aggregate figures for cities, or even countries as a whole, which conceal the true extent of deprivation. The picture which emerges, however, is one in which the urban poor constitute a significant proportion (rarely less than one-third of the urban population and sometimes twice that proportion), and they suffer disproportionately in terms of the lack of a wholesome water supply, from proper sanitation, and from the absence of an effective refuse disposal system. These findings are consistent with other global estimates. Hardoy and others (1990), quoting estimates by the WHO in 1985, state that "a quarter of the Third Worlds urban population had no access to adequate, safe water supplies and half had no adequate sanitation system." Figures by UNDP (1995), however, indicate that 12 per cent of the urban population in developing countries lack access to safe water supplies, while 31 per cent lack access to sanitation facilities (see table 10 ). Thus, the figures for the urban poor themselves will be much higher, as the detailed work of Kundu (1993) in India testifies.

Comparative information about the standards of infrastructure provision over time is even more elusive. There is, however, some evidence to suggest that despite the infrastructural investment made during the 1980s, the problems of lack of provision may be increasing, at least in some parts of the developing world. The main reason for this deterioration is the rapid growth of urban areas and the increasing incidence of urban poverty. The consequences for the health and safety of those in slum and squatter settlements, and for the public health of millions of other urban dwellers, are alarming: "a lack of readily available drinking water, of sewerage connections (or other systems to dispose of human wastes), of garbage collection and basic measures to prevent disease and provide health care ensure that many diseases are endemic; diarrhoea, dysenteries, typhoid, intestinal parasites and food poisoning among them. These combined with malnutrition so weaken the body's defences that measles, pneumonia and other common childhood diseases become major killers" (Hardoy and others, 1990). When one takes into account the fact that health spending per person actually declined in many developing countries over the 1980s (UNICEF, 1990), the case for decisive action over infrastructural provision becomes even more pressing. Following the need to enhance the release of larger supplies of urban land, the provision and upgrading of infrastructural facilities in slum and squatter settlements should become a second priority of national shelter strategies for urban areas.

Local government has traditionally been responsible for the planning, implementation and maintenance of infrastructural provision and it is invariably a lack of funds and technical competence which lies behind its inability to extend services commensurate with the needs of rapidly growing urban communities. If authorities have been unable to cope in the past it is simply unrealistic to assume that circumstances will change greatly in the future. The first task confronting local authorities seeking to extend their infrastructural provision, therefore, is to generate the resources required. In the past central

Page 268 government has been the major source of finance for infrastructural works either from funds generated externally through international agencies, or internally through tax revenues. In the current economic climate, however, government expenditure is likely to be severely constrained owing to SAPs and the tight fiscal environment. In fact, spending on infrastructure has been most adversely affected by expenditure cuts. It is thus "imprudent to look to central government to finance infrastructure investment growth on the scale that will be needed to meet the goals of the [GSS]" (UNCHS, 1990a). The implication is that, henceforth, such funding is likely to have to be generated locally with a greater emphasis on user charges and other sources of local finance. The danger is that this will impose a greater burden on the poor, and, indeed, in many cases has already done so (Moser and others, 1993), or that it will influence local authorities choice of major works in favour of those which are more amenable to cost recovery.

Under such circumstances local authorities face an uncomfortable dilemma. One can only argue, however, that in determining their priority for infrastructure expenditure which is targeted towards poorer communities in preference to other pressing claims for finance, they should give cognisance to two issues; firstly, the economic arguments outlined earlier in this chapter in respect of the multiplier effects on the local economy of investment in construction activity (see section B, above). Secondly, local authorities also need to consider the impact of such investment in raising the quality of life of relatively large numbers of the urban poor and the subsequent improvements on the health and welfare of those communities.

In moving forward from the mobilization of resources to modes of implementation, the decision to invest in the upgrading of the infrastructural environment of slum and squatter settlements will have a much greater beneficial impact on the urban poor if the local authority seeks to adopt a community participation approach and involve those local communities actively in the upgrading process as recommended by UNCHS/ILO (1995). Indeed, as "government projects based on direct labour or large contractors rarely fulfill expectations or needs, the community-based approach may be the only realistic alternative for neighbourhood level public works". Furthermore, works of this kind, like the self-help housing sector, provide "an ideal entry point into learning skills and gaining experience in the logistics of development" ( UNCHS/ILO, 1995). Adopting an approach of this kind will involve at least three elements:

 consultation with those local communities over their priorities for local infrastructural investment;

 adoption of labour-intensive approaches to implementation where it is possible to do so; and

 a programme of local recruitment and training to carry out the works and ensure the facility for continuing maintenance.

If these approaches are adopted, and emphasis is also given to the training and recruitment of female labour as mentioned above (see section G above), local authorities can maximize the beneficial impact of their major capital works programmes on poor communities.

Page 269 The Human Settlements Conditions of the World's Urban Poor

Chapter VI. Reducing the human settlements problem of the urban poor I. The effect of building and planning codes and regulations on the human settlements conditions of the urban poor Housing provision in urban areas is invariably governed by a number of codes and standards regulating densities, plot sizes, the use of building materials, and so on. Unfortunately in many developing countries such codes and standards are a hindrance rather than a help in trying to secure an improvement in housing standards for the urban poor. Schilderman outlines ten reasons as to why standards in developing countries may be inappropriate:

"Housing standards are often imposed or imported and therefore not in line with local conditions, culture or building conditions.

 Such standards fail to recognise that housing in the Third World is more often an incremental process, than a one-off exercise of building complete houses.

 These standards are not based on consensus, but set by middle or higher-income policy makers, and fail to take account of the masses.

 Most standards are therefore socially divisive: they only recognise the 'well to do', and categorise the less affluent as substandard or illegal.

 Current standards are not affordable, both at the level of the masses and of countries as a whole: the resources simply do not exist to house entire populations according to the level set by them.

 Housing standards do not necessarily reflect people's priorities: for example they might favour the quality of construction above quantity of space, whereas space is what most people want in the first place.

 Imported standards require the use of scarce and often imported building materials and skills, and thereby retard the development and dissemination of local technologies; this is economically unsound.

 Constructing houses according to the regulations means going through a maze of bureaucracy; even if householders understand this process, it still makes access to standard housing lengthy and costly; it also encourages corruption.

 Imposing high standards by force, including the destruction of substandard housing, has an adverse effect on people's willingness to carry out home improvements, and destroys much of housing resources. It also goes against the traditional processes of incremental housing.

 Finally, imposing high standards will increase rental housing, and result in overcrowding and an overuse of infrastructure installed in standard housing areas. That, in turn, may make these areas substandard, and defeat the purpose of the standards" (Schilderman, 1994).

Page 270 These criticisms imply that a new and different approach to the question of standards is required in many developing countries. Standards need to be reformulated in a way which recognizes the need for safeguards in terms of the safety, security and health of households and local communities, but also in a way which supports rather then penalizes the efforts of the community. Above all, the reformulation of codes and regulations needs to be realistic in terms of achievement and sensible in terms of affordability. At the same time, local housing conditions vary and the formulation of attainable and affordable standards is best done with local knowledge and experience rather than in a centralized and detached manner. If an enabling approach is to be adopted, therefore, there needs to be flexibility in terms of the standards required.

A number of other principles should also be considered by governments seeking to reformulate housing, planning and building regulations. Firstly, much construction activity in the informal sector takes place over time and on an incremental basis, as and when households secure the resources to undertake improvements. The reformulating of building codes and standards needs to acknowledge this by defining minimal standards and by giving guidance over progressive developments over time. Several governments have adopted such an approach to their sites-and-services programmes; the government of Malawi, for example, has developed Minimum Building Standards which allow for the use of modest construction techniques in the expectation that standards will improve over time. Such an approach might also be developed for settlement upgrading programmes.

Secondly, the reformulation of standards also needs to take account of questions of technology. Municipal authorities have the opportunity not only to encourage, but actively to promote the enhanced use of indigenous building materials and low-cost products rather than the use of expensive and imported substitutes, through the application of their building codes. If this is to be achieved, however, the reformulation of building codes and standards and the strategy for the development of the building materials sector (see section G above), need to be mutually reinforcing in order to achieve the greatest impact.

A third consideration in the reformulation of standards is the substitution for (sometimes) highly prescriptive specifications of materials by measures of performance to be achieved. Schilderman (1994) describes changes to the building by-laws achieved through a Ministerial Task Force in Kenya; "The 1968 version of by-law No. 219 requires facilities for washing clothes; these should be of a minimum size of 90x60 cm for a slab and 90x90 cm for a splash area; the slab should be made out of 7.5 cm concrete on a suitable foundation, and provided with a 0.5 inch standpipe and tap, connected to the mains". The 1992 version merely states that "all dwellings shall be provided with facilities for washing clothes and utensils; this allows for any size and type of floor, e.g. thin concrete or clay tiles". This is not only a simplified system, which is easier to understand, it also allows for greater flexibility in terms of implementation.

The adoption of a more flexible building code is an important reform, but it may not be seen in isolation from the way in which the code is interpreted by municipal officers. Ideally government officials would be engaged in a pro-active role working with the community, and possibly with NGOs, in a political environment where they were expected to, and were capable of, exercising their professional judgement within the context of a flexible policy framework. Unfortunately, many municipal authorities in developing countries have neither the qualified staff nor the organizational capacity to operate in this way. Despite the capacity-building associated with the Urban Management Programme and the commitment of other international agencies to the strengthening of municipal finance, it is difficult to envisage any rapid improvements in the effectiveness of municipal administration in developing countries, especially under current political and economic priorities. A much greater emphasis on improved training and management capability in local authorities is essential.

Page 271 Nonetheless, UNCHS (Habitat) has been working for some time in seeking to promote the adoption of more appropriate building codes and standards for developing countries. An international information exchange has been established by a number of international organizations working in this field and professional advice and guidance is available to governments wishing to enhance their capabilities in respect of the reformulation of building by-laws and standards.

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Chapter VI. Reducing the human settlements problem of the urban poor J. Renting as opposed to ownership: Options for the urban poor Commentators are highly cautious over making estimates of the numbers of households living as tenants in developing countries. What is known, however, is that the numbers are substantial and that they vary markedly from one country to another. Whilst ownership remains exceptional in Chinese cities (despite the current initiatives towards privatization), in other countries, such as Venezuela and Colombia, the majority are owners. Gilbert summarizes the situation as follows, "most people in West African, Chinese, Indian and Korean cities rent accommodation; a majority in the cities of the larger Latin American and Middle Eastern cities tend to be owner occupiers" (Gilbert, 1990).

The nature of renting also varies between one country and the next. The most obvious distinction is between renting in the public or private sectors. On gaining independence many African, South Asian and South-East Asian countries emulated the experience of the developed countries and embarked upon state funded programmes for rent, usually to targeted population groups, such as civil servants or specialist workers. Not only have these programmes been comparatively modest, but they have also invariably experienced difficulties of administration which has, sooner or later, resulted in their conversion to programmes for sale. Wadhva (1994) charts the experience of such schemes in India. Apart from problems in securing rent recovery, she identified three reasons for the failure of these early programmes; firstly, the high cost of operation and low revenues rendered the schemes non-financially viable; secondly, the procedures specified by central government to make subsidy available were very cumbersome; and finally there were serious problems in administering the accommodation (Wadhva, 1994). Very similar problems over administration and management, and rental recoupment have been experienced in other African and Asian countries. As a consequence, and with the possible exception of China, few developing countries have significant amounts of publicly rented accommodation.

In strong contrast, the private rented sector often plays a highly significant role in the housing market of developing countries. It too, varies significantly between countries in many ways e.g. in the type of landlords; the relationship between landlord and tenants; the impact of legislation; the nature of tenancies, and the forms of accommodation. Thus, the formalized nature of private tenancy arrangements in the Republic of Korea, where there are three forms of tenancy, (2 7 ) is in marked contrast to the informal tenancy arrangements, or the availability of free accommodation in some West African cities (UNCHS, 1993f); or the enormous complexity surrounding tenancy arrangements in thebusteesof Calcutta.

The variation in size in the privately rented sector in various countries has stimulated much discussion over which factors influence and determine the growth or contraction of the sector. Edwards (1990), distinguishes between housing built specifically for letting and other housing which may, at some stage, be made available to let. In the case of the former, whilst it is comparatively rare to find housing constructed for letting in the informal sector, it is relatively frequent in the formal sector. Such housing may be historic in that in the older, core areas of cities there are often tenemental structures specifically built to house workers (as in many South Asian cities), or former colonial areas now subdivided to provide rented accommodation. It may also be contemporaneous, providing housing for rent, remains widespread in many African countries, for example. The main factors affecting the supply of such

Page 273 accommodation are summarized by Edwards (1990): "The most important factor ... is the rate of return on investment. Although rents are usually low in this sector, the multi-occupancy character of tenements and the fact that little or nothing is re-invested by the landlord in maintenance can make them an attractive proposition. Also significant are legal control (on rent levels or the subdivision of dwellings), the historic pattern of urban development ... the location of employment opportunities which require a proximate supply of cheap labour, and the availability of capital .... Finally, commercial redevelopment of the inner city ... inevitably reduces the stock of cheap rental housing in the same area". The bulk of rental housing in developing countries, however, is provided by low-income home owners in both legal and illegal settlements. Edwards (1990), argues that there are two critical sets of factors determining the supply of such property, first, the ease with which the poor gain access to home ownership, and second, the propensity for low-income owners to let their property. The main determinants of the first are well known, the price of marketable land and of materials, the accessibility of that land to the urban poor, and the relative income levels of the low-income groups. As far as the propensity for homeowners to let is concerned much less is known, but Edwards suggests the key factor again is the profitability of letting; other factors also include, the influence of government policies, such as rent control or slum clearance programmes; income levels, the size and design of dwellings; lifecycle changes affecting the household (and influencing the availability of space available for letting in the dwelling); and cultural factors, such as obligations to kin, or the need for separate space for female members.

Work by Kumar in Madras (1994), has tried to shed light on the motivation of landlords to let their properties. He argues that low-income landlordism may be divided into three; these are, first, "subsistence landlords" who generate rental income in order to meet "essential consumption expenditure"; second are the "consolidator landlords" where rents are used "to improve the material base of the household and the dwelling"; and third, "petty-capitalist landlords" where rents contribute to "the expanded reproduction of capital in the form of landed property" (Kumar, 1994).

The shifts in policy focus advocated by the GSS have led to a growing recognition in recent years of the part played by private renting in providing shelter for the urban poor. At present, however, policies to encourage the privately rented sector are tentative and guidelines are broad-based; they are handicapped as Gilbert (1990) acknowledges by a lack of information about the sector and an absence of policy initiatives which might act as examples of good practice. The World Bank has sought to encourage sub-letting in sites-and-services programmes; the Government of the Republic of Korea has provided subsidies to encourage companies to construct employees housing (see above, section V.D); and the Kampung Improvement Programme in Indonesia has encouraged the provision of accommodation to rent. Yet, such initiatives remain rare and do not constitute a strategy.

Clearly much work remains to be done to encourage a healthy privately rented sector. In stressing the critical link between the growth of low-income homeownership and the availability of accommodation for rent, Edwards makes an important contribution to policy. He confirms that a strategy aimed at encouraging low-income home-ownership may result in an additional dividend for the urban poor through opportunities for renting. Kumar's work is important too in that it highlights distinctions in the financial motivation of landlords. He suggests that a strategy for encouraging landlordism needs to understand better the financial factors likely to encourage home-owners to become landlords and to devise appropriate fiscal and financial incentives, rather than relying on a general exhortation, "to review rent control legislation". Much may also be done to modify building and planning standards to create a more positive environment to encourage expansion, where appropriate, rather than inhibit it.

The development of appropriate rental strategies is essential as the urban expansion in the coming

Page 274 decades will mean that rental housing must assume an increasing share of housing supply and will need to become "a vital part of a government's arsenal of enabling policies" (UNCHS/ILO, 1995). A number of recommendations should thus be adopted to encourage opportunities for renting:

 progressive withdrawal of rent controls;

 tax benefits on rental income where this is appropriate and practical;

 encouragement of house extensions in well-built and well-located housing in order to increase accommodation for rent.

At the same time any strategy for encouraging the expansion of the privately rented sector needs to introduce safeguards for tenants and for the poorest. As Sundaram (1990b) points out, the security of tenants in unauthorized settlements is rarely a matter of legal argument, but more "a function of community pressure, perception ofde factolegality of the settlements, and the clout of the landlord". In such circumstances there should be the capacity for arbitration in landlord/tenant disputes, perhaps vested with local NGOs or neighbourhood associations, and safeguards against arbitrary eviction. For the poorest, their security should rest with governments and Sundaram (1990b) suggests hostels to provide accommodation for single, working women and night shelters for the homeless, such as those being constructed in all metropolitan cities in India.

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Chapter VII. Agenda for future work This chapter is concerned with two primary issues; firstly, from the foregoing account of the human settlements conditions of the urban poor and a discussion of some of the key issues, it sets out an agenda for future research and direct support considered necessary to establish a sustainable approach in addressing the problems of urban poverty and degraded shelter and environmental conditions. Secondly, it considers the changing roles of the public sector, of NGOs and CBOs, and the private commercial sector in seeking to counter the deterioration of human settlements conditions.

Page 276 The Human Settlements Conditions of the World's Urban Poor

Chapter VII. Agenda for future work A. Countering urban poverty In view of the increasing numbers enduring urban poverty in various regions of the world, the most pressing task for action is to explore systematically ways of countering this growing trend effectively. In some countries undergoing SAPs the World Bank has been persuaded of the need for compensatory programmes of intervention to mitigate the most adverse consequences of macro-economic reform. These programmes have included a reallocation of public expenditure to protect areas of social provision such as primary health care and education, and other measures have included public employment schemes and a targeted programme of nutrition and food assistance (Moser and others, 1993). But as UNICEF has subsequently pointed out, "these programmes do not ... attack the root causes of structural poverty" (van der Hoeven and Anka, 1994).

There is, therefore, an urgent need to complement the 'safety net' strategy of the World Bank with a pro-active programme which systematically and exhaustively explores the opportunities afforded by shelter and human settlements development and upgrading as a means of creating economic opportunities for the urban poor. This theme has underpinned work undertaken by UNCHS (Habitat) and ILO for some time and this report strongly endorses the establishment of the Urban Poverty Partnership Programme. This inter-agency initiative seeks to address:

 "practical measures to generate or increase productive employment of people living in low-income communities — including labour-intensive urban infrastructure projects, micro-enterprise initiatives, and supporting credit schemes;

 measures to improve the physical living conditions of residents in low-income communities — their housing, sanitation, water supply, waste disposal, drainage, access roads; and

 opportunities to share in the planning, prioritizing and implementation of local development, and to gain greater access to and influence over resources for local development which could improve employment, incomes and physical living conditions" (Ministry of Foreign Affairs, the Netherlands, 1993).

The programme will operate at the community level, seeking the genuine participation of poor communities in local programmes drawing in NGOs, CBOs, local and central governments and the private sector in a partnership approach to maximize opportunities for the urban poor. By combining their expertise and resources, and indeed by inviting the participation of other donors, the United Nations agencies hope to 'maximize synergy' between their individual programmes. UNCHS (Habitat) and ILO have recently made a number of more detailed recommendations in respect of employment generation from shelter provision and human settlements development. These include:

 the call for an urgent shift in attitudes and approaches which links shelter provision and major public works programmes to anti-poverty strategies through the use of labour-intensive initiatives to create unemployment opportunities for the urban poor;

Page 277  the encouragement of a positive environment for small-scale contracting in shelter provision and upgrading through training and advice and guidance; the availability of raw materials and local sources of finance; and the empowerment of households to be able to deal with small contractors;

 the acknowledgement of shelter as a workplace and the encouragement of HBEs; and

 the development of a series of pilot projects to examine the potential of small-scale contracting in scaling-up the level of low-cost shelter provision and in exploring ways of integrating work-place and residential space in a variety of different circumstances.

An important element of this new approach will be a need to share experiences and ideas between organizations and communities, which in turn also emphasises the need for an effective monitoring role and the wide dissemination of findings. These programmes also afford an important opportunity for a more detailed research role which should be carefully considered. Amongst the wide range of potential topics for comparative research, for example, could be the economic impacts on poor communities of labour-intensive approaches; or social issues, such as the effect of local programmes on the role of women; the impact of such programmes on social cohesion, integration and self-reliance; or issues of urban governance, such as the organizational dynamics between CBOs, NGOs and municipal authorities. In order to be effective, the research programme needs to be planned as an integral part of the local programme and designed in such a way which contributes directly to the implementation of the programme itself.

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Chapter VII. Agenda for future work B. Shelter, good governance and the enabling role A second issue of major concern is the capacity and competence of urban administrations to deliver effective public services within an enabling framework in the area of shelter and urban infrastructural provision. The new role perceived by the international agencies implies three major areas of responsibility for local authorities:

 they will continue to deliver certain core services to the community, e.g. basic services such as nutritional programmes, primary health care and education;

 they are to assume responsibility for providing a strategic policy framework for the delivery of urban services; and

 by working with or through other bodies (i.e. NGOs, CBOs and the private sector), they are to ensure the enablement and regulation of service delivery within the context of the strategic policy framework.

Batley (DAG, 1994), argues that these enabling and regulatory roles "assume that government has the capacity of oversight, analysing the operation of markets, identifying the need for intervention and setting the policy framework for other sectors". Yet, "there is scarce evidence" that such administrative capacities exist in many developing countries. The development of shelter strategies is one area where enablement is highly advantageous and there is an urgent need for local authorities to acknowledge the contribution of poorer communities and work closely with them. But in the context of the chronic and increasing need for shelter, scarce and declining public sector resources, poor market conditions, a weak political and administrative framework and a demoralized public sector in the wake of the depletion of resources through SAPs, the formulation of enabling shelter strategies will be very challenging indeed. Such strategies will demand innovative thinking, the forging of new relationships and administrative procedures, the need for an overhaul of old regulatory structures, and the capacity for analysis and a more entrepreneurial approach. This is a highly challenging agenda with intrinsic technical and political difficulties for which there is no prescription and very little guidance.

The international agencies and indeed some governments are already committed to strengthening urban local government through the decentralization of powers and functions, but if these new responsibilities are to be effectively undertaken there needs to be much greater support for the public sector and a major international initiative in training, guidance and support for local authorities. In the shelter sector in particular there is an urgent need for training and institutional development to increase the competence of technical officers, administrators and politicians in seeking to identify shelter solutions for the urban poor in the context of more market oriented strategies. Such an initiative needs to incorporate a research oriented approach similar to that embodied in the UNCHS (Habitat)/DANIDA Community Development Programme, in order to draw on emerging international practice and to build an analytical capacity into enabling strategies which increases their relevance for the urban poor. An integrated research and training programme would identify good practice, highlight successful partnerships, record

Page 279 procedural arrangements and seek to explore other effective mechanisms for extending shelter to the urban poor. Through training, good practice guidance and publications it would disseminate such information as widely as possible.

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Chapter VII. Agenda for future work C. Specific policy areas in need of development Whilst the capacity of local authorities to adjust to new roles needs greater support, it remains the case that the preconditions necessary for the development of market mechanisms in the shelter sector are also poorly developed in many developing countries. One may highlight by way of example three particular areas of activity:

 the legal and institutional environment for the ownership, transference, and management of land;

 personal savings and private sector institutional housing finance; and

 the underdevelopment of local materials production, marketing and distribution.

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Chapter VII. Agenda for future work C. Specific policy areas in need of development 1. Improving the effectiveness of the land market The ownership and control of land remains a fundamental issue perpetuating poor housing conditions in developing countries, and as observed earlier (see sections VI.E. and VI.F.), the effective operation of the land market is also essential to the development of institutional housing finance. A shift towards market mechanisms will require a more effective legal and institutional framework for the planning, registration and disposal of land. A greater emphasis on market mechanismsper se, however, is unlikely to operate to the advantage of the urban poor unless local authorities have the competence, procedures, financial resources, and political will to intervene more effectively in the land market, and via a range of measures such as those outlined in section VI.E., to ensure a regular supply of developable land, directly available for their use. Whilst both these areas, i.e. the legal and institutional framework and the competence of, and resources available to, local authorities, need strengthening, there is a danger that the drive towards privatization will eclipse the imperatives for intervention, and most particularly, will not yield the financial resources necessary for local authorities to purchase land directly on behalf of the urban poor.

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Chapter VII. Agenda for future work C. Specific policy areas in need of development 2. Encouraging the development of institutional housing finance for the urban poor The urban poor are also disadvantaged by their lack of access to institutionalized credit and whilst market circumstances have been far from ideal in recent years for the extension of credit facilities to low-income groups, informal credit mechanisms remain widespread, and a number of initiatives have occurred. These initiatives to extend "down-market" lending appear to reflect two different basic approaches. Firstly, existing housing finance institutions are seeking to circumvent the perceived problems of high risk and high transaction costs by modifying conventional lending criteria. Typically this means on-lending earmarked funds at subsidized interest rates and over longer terms in order to extend lending to low-income groups. To overcome problems of access for clients, housing finance institutions are seeking to work in partnership with NGOs. In this 'facilitated lending' situation, the loan is made directly by the housing finance institutions to the borrower, but the NGO may assist with the loan origination and servicing.

In the second case, financial intermediation is done by a community-based financial institution using funds loaned by an housing finance institution or other financial institution. In these circumstances the community based-finance institution seeks to tailor loans more appropriately to the needs and affordability of the poor (most particularly in respect of the absence of security), and also uses its peer group association to reduce risk. Several changes to conventional lending practice are envisaged, however, and these include a wider use of insurance cover, the establishment of a 'delinquency risk' fund linked to recovery performance, and loan spreads which ensure coverage of the higher transaction costs associated with a larger establishment (Mehta, 1994).

Both of these innovatory credit arrangements are in their infancy. Much technical and advisory support has already been forthcoming from national and international sources and much remains to be done before the projects may be deemed to be effectively operational. It will be necessary to initiate pilot schemes and to monitor and evaluate the outcomes, but these are important initiatives which appear to offer great scope for application amongst poorer groups in many other developing countries.

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Chapter VII. Agenda for future work C. Specific policy areas in need of development 3. The enhancement of local materials production Section VI.G. illustrates how the production of indigenous building materials has not been able to keep pace with demand and that the cost of materials in many developing countries has risen steeply in recent years. At the same time, local materials production is often characterized by low productivity, fragmentation, problems of distribution and poor marketing. Increasing the efficiency and organizational capacity of local materials production in particular countries would seem to offer a number of advantages, such as, increasing economic output and reducing the need for costly imports; increasing supplies to reduce shortages and therefore costs; providing increased job opportunities, especially for women and low-income groups; and encouraging low-cost shelter options for the urban poor.

For these reasons this report endorses the recommendations made by UNCHS (Habitat) on building materials for housing in 1992 (see section VI.G.) (UNCHS, 1992a). The latter report advocates that operational strategies at national level should concentrate on developing, transferring and diffusing new technologies; creating a supportive policy environment and strengthening institutional support. It also strongly recommends greater cooperation amongst developing countries, especially on a regional basis, in sharing ideas, experience and expertise, as well as greater North-South cooperation to provide appropriately targeted development finance, improved technology, and technical expertise. In supporting these recommendations this report highlights the need for national strategies to maximize the benefits for low-income groups, and especially women, in terms of job opportunities and training in the production, distribution and sale of materials; in promoting easier access to local materials for self-building purposes or renovation; and in encouraging innovative says of reducing the costs of materials, e.g. through bulk purchase arrangements or building-materials 'banks'.

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Chapter VII. Agenda for future work D. Strengthening shelter strategies for the poorest groups In seeking to strengthen shelter strategies for the very poorest groups there is a need for action at two levels, firstly, at central government level in persuading governments not to abrogate their responsibilities to the urban poor; and secondly, at the operational level, to use such resources as are available in the most effective way to promote the interests of the poorest.

For many years housing investment came to be perceived by governments as a drain on scarce public sector resources. Recent shifts in international policies through SAPs and the GSS have imposed tight restrictions on public expenditure and encouraged a more market oriented approach towards shelter provision. Given the severe economic problems confronting governments in many developing countries and the lack of political influence exercisable by the poorest groups, there is a danger, as articulated by Coulomb (1994) in Mexico, that shelter issues will slip even further down the list of priorities as governments' feel that such problems are now to be dealt with more appropriately by market forces. There remains a need to counter such perceptions by strongly promoting the arguments outlined by UNCHS (1994) and UNCHS/ILO (1995) and elaborated in chapters III and VI above, favouring enhanced investment in the shelter sector, not only from an economic perspective but also from the health and environmental viewpoints advocated by Agenda 21. Habitat II will provide an important international opportunity for promoting the case for greater investment in shelter and human settlements development.

Invariably, however, public sector resources will remain modest in relation to the shelter needs of the urban poor, hence the need to consider carefully the use of these resources in local shelter strategies. Local authority staff as well as those in NGOs are likely to need training and institutional support in order to formulate and implement strategies which determine priorities and use appraisal techniques to make best use of scarce resources between various policy options. These options are likely to include, the acquisition of development land for the urban poor; low-cost new build programmes (e.g. sites-and-service schemes); incentives to encourage slum improvement programmes; infrastructual investment and relocation projects; the use of public funds to lever private resources through partnerships; the formulation of incentives to encourage 'responsible renting' in the privately rented sector; and the direct use of resources for shelter provision for the most disadvantaged groups, such as, street children, the homeless, the physically and mentally handicapped, some women-headed households, etc., a sadly neglected area of local policy. Currently only the authorities of the largest cities are capable of conceptualizing strategies of this kind and working towards their implementation. For enabling strategies to work, however, this implies that local authorities will have to analyse and respond to the local housing market in a way they have not done hitherto. It also implies accepting more directly responsibility for formulating local policies which make provision for the neediest groups.

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Chapter VII. Agenda for future work E. Harnessing the benefits of research The World Bank (1991) has decried the apparent reduction in urban research activity during the 1980s and called for the "reactivation" of urban research in the 1990s. Others have pointed out that there is a growing "gulf" between the research community and the agenda for action by practitioners in the field of shelter and human settlements development. Both of these statements implicitly underline the importance of research to urban policy development and the need for a stimulating policy dialogue between research and practice. Whilst there is no shortage of ideas for research, in recent years there has been a shortage of resources to support critical and substantive research programmes.

There are a variety of roles which research can fulfill and it is relatively easy to identify recognizable gaps in research coverage. Firstly, in reviewing areas of fundamental or substantive research it is possible to identify several areas which need to be addressed. There has been, for example, remarkably little research which has analyzed the impact of SAPs and macro-economic reform on the shelter policies of developing countries. Secondly, whilst policy-makers advocate increased recognition of the role of the privately rented sector there is little understanding of what this means in terms of living conditions, landlord-tenant relations, or the level of rents payable. Initiatives designed to promote private renting are few and far between and there is little knowledge of what incentives or safeguards may be necessary to encourage 'responsible renting' as a component of shelter strategies. Thirdly, whilst the World Bank has established its Housing Indicators Programme and UNCHS (Habitat) has more recently begun an Urban Indicators Programme, there has been very little research which seeks to understand the dynamics of local housing markets, or indeed whether a 'market', as such, exists at all! Each of these areas (and there are others), raises some fundamental questions for policy-makers which are not currently being addressed effectively.

A second role for research is monitoring and evaluation. Such research is usually linked to an innovative project or area of policy. There is considerable scope for additional monitoring and evaluation work especially in association with the shelter initiatives of international agencies. There are also other important shelter and urban development programmes where monitoring ought to be included and is currently absent or ineffective in feeding back into decision-making.

Thirdly, research may be used to identify and promote innovation and good practice. A good example of such a research programme already mentioned is the UNCHS (Habitat)/DANIDA Community Development Programme (see section VI.D.) from which a worldwide capacity for advice, guidance and training has been developed. If additional resources were forthcoming from international donors, this kind of research/action could be extended to include other policy areas, e.g. local economic development and shelter partnerships.

By definition the two former types of research are prescriptive, i.e. the areas of work may be defined and research bids invited, whilst the latter is more responsive, i.e. the research depends on the initiatives and their location. There is a need to harness all three types of research and, in the context of the increasing internationalization of global shelter strategies, to ensure an increasingly comparative

Page 286 dimension to shelter and urban research programmes. The international research community is responding organizationally to this need through the formation of shelter research networks. The European Network of Housing Researchers has grown rapidly since its inception in 1989; an Asian Housing Research Coalition has recently been established and an African network is proposed. With encouragement and support these networks should facilitate more effective communication between researchers, practitioners and donor agencies, more effective dissemination of research findings, and provide greater scope for inter-regional research collaboration.

Habitat II provides an invaluable opportunity for restoring the policy dialogue between researchers and practitioners, but this dialogue also needs to include donor agencies. It is important that one of the aims of Habitat II should be to identify and acknowledge a research agenda for the future, arising out of the debates and policy decisions of the Conference. This needs to be complemented, thereafter, by a regular series of events, workshops, seminars and conferences, organized around major policy issues associated with urban development and the GSS.

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Chapter VII. Agenda for future work F. The future role of local authorities The three major roles envisaged for local authorities have already been outlined and discussed (see section B above), this section will seek to explore some of the implications of these roles for human settlements development. Local authorities will be expected to assume a more strategic function. This implies that they will be expected to increase their effectiveness in at least three areas of urban development, firstly, in urban planning and land management. They will be expected to anticipate population growth and urban expansion and to exert greater control over that expansion in accordance with a planned strategy which seeks to maximize the use of resources whilst minimizing the growth of illegal and squatter settlements. Secondly, they will need to plan carefully the provision of infrastructure not only for it to be effectively coordinated with planned urban growth, but also to extend its coverage of the existing urban environment. Thirdly, local authorities will be expected to begin to formulate local shelter strategies which seek shelter solutions much more within the context of the operation of the local housing market. The adoption of a strategic approach implies a much more pro-active and entrepreneurial approach than most local authorities are accustomed to, a substantial improvement in their information base and a greater analytical capacity than hitherto.

For the implementation of these strategies local authorities are expected to continue with some of their core administrative activities, e.g. land-use planning, but to rely increasingly on an enabling approach to secure policy objectives. Hence, it is anticipated that local authorities will increasingly withdraw from the role as a direct provider of shelter (except perhaps with respect to the poorest groups), in favour of a greater reliance on other bodies (CBOs, NGOs and the private sector). Principally, as far as programmes for the urban poor are concerned, this will mean working more closely with NGOs or with the communities themselves. This will again involve local authorities in a more pro-active, creative and catalytic role than hitherto, seeking to explore innovative solutions to the backlog of shelter, providing technical advice, guidance and incentives to encourage upgrading, working with NGOs to secure new building arrangements, exploring potential partnerships with landowners and developers, and so on.

Local authorities must also retain their role as regulators, however; a role which is performed with enormous variation in developing countries from the exercise of Draconian powers to a practically non-existent influence. In this role local authorities are having to adjust to a presumption in favour of more market-oriented strategies which will require major changes in attitudes and approaches. Calls have been made, particularly in the areas of building and planning regulations, for example, for greater flexibility in the exercise of codes and standards. Whilst the liberalization of codes and standards is justified, it does highlight the need for enhanced professional competence in making judgements which safeguard the health and safety interests of the community at the expense of the individual.

In conclusion, these new roles for local authorities, in seeking to develop enabling strategies in shelter and human settlements development, will be highly challenging.

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Chapter VII. Agenda for future work G. The role of CBOs and NGOs The GSS places great emphasis on the role of CBOs and NGOs. This is a recognition of the reality that low-income communities themselves are the main providers of low-cost housing in developing countries and that these communities can provide housing at lower cost and on a much larger scale than government organized programmes (UNCHS/ILO, 1995). To improve the quality of informal settlements and extend infrastructure, however, and to ensure minimum standards in newly built settlements, these communities require a clear policy framework and support from government as well as readily available advice, guidance and organizational support from intermediary organizations, such as NGOs.

As outlined earlier (section VI.A.), UNCHS (Habitat) acknowledges that NGOs exercise comparative advantage not only in working with local communities to produce low-cost shelter and infrastructural provision, but also in mobilizing those communities and mediating between them and government officials or the private sector (UNCHS, 1993b). Turner (1988), also identifies three roles for NGOs in human settlements development, first as enablers of CBOs; secondly, as mediators between communities and the authorities controlling access to resources, goods and services; and thirdly, as advisors and consultants to those authorities on ways of amending rules and regulations in order to permit greater freedom for communities to develop and to access resources. They may also act as technical advisers to the communities themselves and provide training as part of their repertoire of activities.

NGOs and CBOs are by definition, however, very diverse organizations. They are unelected, or voluntary, organizations and whilst they may employ staff, they are invariably non-profit making bodies. They are inspired by a social commitment and their accountability is vested in the local communities they serve. They also vary very much in size, organizational structure, capacity and technical competence. Hence, the precise nature of their activity and the role they perform is often locally determined. In seeking to harness the involvement of NGOs in local shelter strategies, therefore, the task confronting governments is how to provide a clear policy framework within which very divergent NGOs can make a positive local contribution.

Experience suggests that this is not an easy proposition. Whilst there are many examples of effective partnership arrangements between governments and individual NGOs, involving NGOs in a strategic way appears to be more problematic. In Chile, for example, following the restoration of democracy in 1990, the government embarked on a national shelter strategy which sought the collaboration of NGOs in a community-based, participatory programme targeted on the poorest households. The involvement of NGOs, however, has not worked as well as was expected: "On the one hand these organizations are few, they do not exist all over the country, and they normally work on a small scale. On the other hand, the coordination and collaboration between the Ministry of Housing and the NGOs has led to significant problems that in some cases have ended in many NGOs losing interest in [participating in] the [Progressive Housing Programme]" (Fernandez Prajoux, 1994). The principal problems alluded to were, firstly, over the legal status of NGOs and the exclusion of

Page 289 any political activity from their remit; secondly, the financial strength of NGOs and most particularly those in receipt of government finance for development; and thirdly, difficulties in arriving at mutual procedures between government and NGOs. Alongside these problems, difficulties have also arisen over the levels of funding made available to NGOs, and over what the NGOs regard as exclusion from decision-making over policy.

The work undertaken by the NGOs confirms the advantage of their involvement, however; "the programmes which involve NGOs strengthen the solidarity of the groups living in extreme poverty and improve their quality of life as an expression of a new type of relationship within a more democratic and equitable society" (Fernandez Prajoux, 1994). What the Chilean experience demonstrates, is that despite a strong and mutual commitment to a collaborative working relationship it takes time and considerable effort to develop workmanlike procedures in a workable partnership.

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Chapter VII. Agenda for future work H. The role of the private commercial sector The enabling approach to urban administration envisaged by international agencies sees a broader role for the private sector and indeed the privatization of some functions previously the responsibility of government bodies. Since the main concern of the commercial sector is profitability, it is not immediately apparent that this will improve circumstances for the poorest groups. It must be remembered, however, that these groups are often already dependent on the private sector for a number of urban services. Renting from a private landlord, for example, is very common amongst low-income groups; water may be purchased from vendors if a public supply is not available; and urban forms of transport are often also privately owned.

The increasing emphasis on the private sector, however, implies that in seeking to improve or enhance provision for the urban poor, whether it be in terms of the availability of land for development, the provision of shelter, or improvements in infrastructure and urban services, local authorities will increasingly have to seek solutions which draw on the resources of the private commercial sector. The implication of this is increasing dialogue between the sectors over issues of urban management and service delivery. Already in many developing countries, often as a consequence of SAPs, there are discussions of this kind over the delivery of basic services such as water-resource management and solid-waste disposal. One would expect this kind of dialogue, or joint working, to extend to issues such as the availability of land for development in order to seek to resolve current difficulties over land scarcity and the absence of land for the urban poor. The development of local shelter strategies is likely to involve similar types of discussions between local authorities and housing developers, land holders, landlords, financiers, and others, in an attempt to examine potential partnership solutions to improvements in shelter provision.

One area in which the private commercial sector has been active for some time is in seeking to extend credit facilities to low-income groups for shelter development and upgrading. Although these developments are tentative at present (see section VI.F), they are likely to become more important in future.

A further area of activity in which the involvement of the private commercial sector is likely to be much more actively sought in the future is in the field of local economic development as part of poverty alleviation strategies. Advice and guidance from the private sector is likely to be increasingly needed in the area of SSE and HBE development (and encouragement). Private sector expertise is also likely to be necessary in developing training programmes in relation to local labour needs and developing local enterprise strategies (UNCHS/ILO, 1995).

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Chapter VIII. Conclusions and recommendations A. The incidence of urban poverty One of the most important conclusions of this study is that both the incidence and volume of urban poverty are increasing in parts of the developing world. World Bank estimates of (income) poverty ( table 7 ), demonstrate that whilst the overall incidence of poverty in developing countries is decreasing and is expected to continue to fall to the year 2000 this is largely predicated on an improvement in circumstances in the Asian region, and particularly East Asia, where both the incidence and volume of poverty have fallen, and are expected to continue to fall, to the year 2000. In contrast, the incidence of poverty in sub-Saharan Africa, North Africa and the Middle East and in Latin America and the Caribbean has grown over the latter part of the 1980s; and whilst it is likely to fall again in North Africa and the Middle East, improvement is expected to be marginal in Latin America, and circumstances are anticipated to continue to worsen in sub-Saharan Africa before the year 2000.

As far as the volume of poverty is concerned, the actual numbers suffering from poverty increased in all regions of the developing world, between 1985 and 1990 with the exception of East Asia, and it is only in the Asian region (and particularly East Asia), where they are expected to fall again before 2000. The numbers in poverty in sub-Saharan Africa, for example, are expected to increase over the decade by 40 per cent.

These figures describe the situation as it relates to poverty as a whole. Chapter I demonstrates the rate of urbanization in developing countries, however, and shows that urban poverty is increasing much faster than its rural counterpart. Moreover, the estimates provided in chapter IV relate specifically to urban poverty, and whilst they are uneven in coverage and not always comparable, they tend to confirm the pessimistic picture of the late 1980s, as well as indicating that in some of the largest countries of the world, the numbers experiencing urban poverty are continuing to grow into the 1990s. Indeed, projections for individual countries in Asia (e.g. Bangladesh, India and Indonesia), a region in which the World Bank anticipates a fall in overall figures before 2000, suggest that those experiencing the problems of urban poverty may continue to rise throughout the decade unless there is a significant upturn in the economic environment affecting these countries in the meantime.

Much poverty in developing countries is the result of structural economic and demographic factors which are likely to require long term policy responses relating to economic growth and development. But, at the same time, increasing exposure to the international economic environment is resulting in short-term economic effects and fluctuations at city-regional level which influence agglomeration economies in different ways and contribute to the growth (or decline) of the numbers in poverty in a cyclical way. The report also confirms that it is women who have borne the brunt of the problems of poverty, and that deteriorating economic circumstances over the last decade or so have invariably impacted most adversely on the role of women. The survival strategies devised by poor households, for example, to cope with economic adversity and 'shocks' invariably impose enhanced burdens onto female members of the household. Women-headed households are particularly vulnerable and they constitute a high and growing percentage of all households. Other groups disproportionately represented amongst the urban poor include large families with high dependency ratios; those vulnerable to fluctuating employment

Page 292 opportunities at the lower end of the market, e.g. the handicapped or newcomers to the city; those lacking basic education or who are illiterate; and those with no social support, such as street children or destitutes.

The policy implications of these factors in respect of poverty alleviation strategies highlight the need to safeguard programmes of human resources development during longer term, macro-economic adjustment; to develop long-term policies which begin to tackle some of the structural causes of poverty, such as gender inequality and low productivity in the informal sector; and at the same time to develop the capacity for short-term employment programmes which counter vulnerabilities arising in increasingly volatile local labour markets.

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Chapter VIII. Conclusions and recommendations B. The human settlements conditions of the world's urban poor Although they are closely linked, a distinction is drawn between income, or subsistence poverty, and housing and urban poverty. Housing poverty is not simply a question of affordability issues, it may include those living in shelter and environmental conditions which are insecure, life-threatening, or which pose an immediate danger to their health and well-being. Between 30 and 60 per cent of the population in developing countries reside in illegal settlements or in overcrowded and deteriorating tenemental structures (UNCHS, 1994). There is clearly a strong correlation between those who are poor, when measured on a subsistence basis, with those living in slums or informal settlements, but it remains the case that sometimes a significant proportion of slum dwellers are not necessarily poor in terms of income. The implications of this are twofold; first, it suggests that estimates of income poverty are likely to underestimate the total number of those living in insecure or unsatisfactory shelter environments; and second, that the shelter sector itself is under-developed in that the supply of satisfactory accommodation is deficient even for those who could afford to pay for higher standards of housing.

Chapter IV reviews the human settlements conditions of the urban poor throughout the developing world. Whilst variations in circumstances do exist, a picture emerges in most developing countries where the shelter sector is conspicuously under-developed. This is reflected by a situation where there is often a huge shortage of housing; where the demand for land and housing far exceeds the supply available; and the subsequent price of formal housing provision is only affordable by the middle- and high-income groups. In such circumstances there is little option for the lower-income group and the urban poor but to reside in illegal and/or informal slum settlements, or to squat.

The illegal status of these unauthorized settlements leads to problems for local authorities and slum dwellers alike. For local authorities the existence of such settlements precludes the effective planning and allocation of land uses and the provision and coordination of infrastructure and other essential services. In some instances the lack of control over development results in slum settlements occurring in dangerous or unhealthy locations. For the slum dweller, in addition to the physical hardships, privations and health risks associated with such developments, there is the problem of insecurity of tenure and threat of eviction. In recent years, government officials and policy-makers have become more sensitive to the issue of security and most governments are now willing to consider the regularization of slum settlements. Major problems remain nonetheless and without legal title slum dwellers have little incentive to invest either in their property or in their settlement.

Chapter IV also seeks to identity trends in human settlements conditions over recent years and despite the plethora of data on slum settlements, projects, infrastructural provision, etc, the absence of comparable data series is a serious handicap. Much of the data available is also averaged, which often conceals the true circumstances of those living in the worst conditions (see for example, section IV.E.). As far as the specific circumstances of the urban poor are concerned there is more evidence of a deterioration in conditions than of any marked improvement. Circumstances also vary within and between regions as the policies of some governments in targeting the poor are more effective than others. In very broad terms, there is evidence of an improvement, both in shelter conditions and in the provision of

Page 294 infrastructure and services for the urban poor, in a number of countries of East Asia and the Pacific.

In the larger countries of South Asia (including India), whilst overall housing and infrastuctural indicators demonstrate a steady improvement in human settlements conditions, despite the efforts of governments, there is not much evidence to show that these improvements are being shared on any scale by the growing numbers living in urban poverty.

In Latin America the recession of the 1980s has had a dramatic effect on the shelter sector and on human settlements conditions. Again, whilst circumstances differ from country to country, a generalized picture emerges of deteriorating financial conditions leading to a collapse of institutional structures supporting market operations; the consequential growth of informal settlements; a growing backlog of housing need and a widespread deterioration in housing and environmental conditions. As in other regions, there are those amongst the urban poor who will have benefitted from shelter projects and upgrading schemes, but in the context of the overall deterioration in conditions there is very little prospect of any systematic improvement in the quality of life of the urban poor.

Circumstances appear to be at their worst in sub-Saharan Africa, however. Here, rapid urbanization is overwhelming the resources of municipal bodies on a grand scale. Many countries have large and growing shelter deficits; there is a very substantial gap between supply and demand in housing for the poor; there is a growing disparity of affordability of the poor for even the most modest formal housing provision; an increasing proportion of the urban population live in slum settlements where densities and occupancy levels are increasing but incomes falling; and many slum settlements are without infrastructure or basic services. Not only are the numbers in housing poverty increasing but the conditions under which they live are rudimentary and the provision of essential services sometimes non-existent.

This generally bleak picture of the deterioration of human settlements conditions in many parts of the developing world calls in question the effectiveness of the role of governments in providing shelter and basic urban services for the poor.

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Chapter VIII. Conclusions and recommendations C. The shortcomings of past policies and initiatives for improving the conditions of the urban poor Attempts by governments to address the human settlements conditions of the urban poor have varied enormously in the developing world. Some governments have made great efforts, whilst others have scarcely addressed the problem at all. The review of human settlements conditions in chapter IV and the case studies outlined in chapter V demonstrate both the diversity of approaches from difficult governments and the difficulties and shortcomings of these initiatives in attempting to target the urban poor. Almost without exception however, and whatever the array of policy initiatives and projects developed, these measures by governments have failed to keep pace with the scale of the problem. A variety of reasons may be advanced for this and at various levels, e.g. the lack of a strategic overview and an appropriate policy framework for action; the absence of an effective legal and institutional framework; and a shortage of resources commensurate with the scale of the problem. Each of these factors is pertinent to the role of many governments in developing countries. Whilst at the operational level, one might argue factors such as, a lack of necessary professional skills and competencies, or hidebound bureaucratic processes and a rigid regulatory framework and, once again, the insufficiency of financial resources. The evidence is overwhelming, however, that the resources available to governments alone can scarcely do more than scratch the surface of the problem and that there is a need for a much more concerted effort to seek to improve the housing and environmental conditions of the poorest groups.

Moreover, the failure of government policies and programmes to make an effective contribution towards shelter provision for the urban poor has two further implications; first, it emphasises the much greater productivity of the efforts of the poor themselves, albeit in adversity. Second, it underscores the need for a major shift away from past approaches and to the adoption of a new set of policies which not only legitimates the efforts of the poor but also provides the necessary framework and support which will enable increasing levels of output in a more effectively planned way.

If government policies and initiatives have been found wanting in the past, however, projections of future growth rates of the urban population in developing countries provide yet another imperative for a major shift in the emphasis and approach of shelter programmes. Projected growth rates show that by the year 2005 more than half of the population in developing countries will be living in urban areas. Moreover, if projected growth rates are reasonably accurate over the next three decades, urban areas in developing countries will by 2025 contain nearly 50 per cent of the global population, compared to less than 25 per cent today. In fact, three-quarters of the total net population increase is currently occurring in the urban areas of developing countries. The urban areas of developing countries are currently growing by some 65 million each year.

Given the enormity of the problems currently confronting municipal authorities in providing low-cost shelter, land for development, and in seeking to ensure the provision of basic services, this suggests problems of even greater magnitude in the future. If these problems are to receive the priority and resources necessary to be tackled effectively then there is a need in many countries for a radical transformation of current policies of housing and urban development.

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Chapter VIII. Conclusions and recommendations D. The key principles of the GSS and the new agenda for development This report concludes with the view that, if the problems of shelter provision for the urban poor and the deteriorating conditions of human settlements in developing countries are to be genuinely addressed, then many governments urgently need to introduce radical changes in their housing and urban development policies along the lines of the GSS. In its key principles the GSS seeks to:

 Introduce and refine the concept of an enabling framework for housing and urban development for government bodies. At central government level this implies the introduction of legal and institutional reforms to encourage the development of a healthy housing sector. This involves, for example, creating the necessary framework to secure the efficient planning and administration of urban land; seeking to create a financial environment conducive to the development of institutional housing finance; strategically reviewing the organization and structure of the building materials industry, and so on. At local government level it represents a highly significant change in administrative culture which shifts emphasis from a bureaucratic and regulatory regime to one which is more strategic, pro-active and entrepreneurial in outlook. It requires the adoption of a more strategic approach towards urban development and the shelter sector; the review of the local regulatory framework of building bye-laws and planning standards and their replacement with more realistic and flexible requirements; the need to withdraw from the direct production of housing in favour of a more facilitative role working in partnership with other housing providers and actors in the local housing market.

 Adopt locally-based, city-wide programmes which target the deterioration in living standards and shelter conditions of the urban poor. Such programmes would involve community development, capacity building and self-help approaches to galvanize the support and labour power of low-income communities in a concerted attempt to draw up local programmes of action to combat poor living conditions, environmental degradation and the absence of infrastructural provision in slum settlements. Although local authorities would retain responsibility for mobilizing finance and for the strategic planning and management of these programmes, it is envisaged that the principle of partnership would underpin arrangements involving CBOs and residents' organizations at the local level, and NGOs in a technical capacity providing technical advice, supervision and administrative support.

 Link local shelter and urban development strategies in a systematic way with opportunities for employment generation for low-income groups. Such opportunities need to be exhaustively pursued, as in the case of locally-based slum upgrading programmes above, but other opportunities are afforded by infrastructural improvement programmes or major public works utilizing labour-intensive technologies and, where possible, local materials in order to maximize the local employment advantages. A further opportunity is presented by exploiting the under-development of the shelter sector to create employment opportunities for SSEs through low-cost shelter construction programmes. Inevitably such initiatives, at least in the early stages, would need strong local authority support in ensuring land and materials and in providing

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 Encourage a responsible role in housing and urban development for the private sector. The development of a healthy housing sector also implies the active and responsible role of the private sector not only from the perspective of construction where the private sector could increase the supply of housing to meet realisable demand for home ownership, but also in increasing housing opportunities for low-income groups through the provision of low-cost accommodation for rent. At the same time local authorities, in seeking to exercise their more strategic enabling role are likely to need to explore the scope for local partnerships with the private commercial sector in order to facilitate the release of land for development, secure access to finance, or encourage the supply of rented accommodation through 'commercial' landlords.

In their local application throughout the developing world, the above principles will require substantial elaboration and further refinement in relation to local circumstances in order to constitute an effective enabling strategy. Nonetheless, in encouraging the development of a healthy housing sector and in concentrating the scarce resources available in the housing and urban development sector much more effectively than hitherto on the needs and circumstances of the urban poor, the GSS affords a genuine opportunity in contributing to a counter-attack on the growth of urban poverty in the developing world and in reversing the deterioration in human settlements conditions of many of the world's urban poor. The GSS is thus the foundation on which the "Habitat Agenda" — the Global Plan of Action of Habitat II — will be based.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations As indicated earlier in the report the shelter sector in many developing countries is under-developed institutionally, in terms of productive capacity, and housing supply. On the basis of the discussion on the preceding pages, this final section contains seven specific recommendations on how to improve the human settlements conditions of the world's urban poor. The first four focuses on the factors of production. The fourth and fifth concentrates on issues of consumption, and in particular on how changes in the use of the existing housing stock may contribute to an improvement in the shelter conditions of the urban poor. The final recommendation focuses on the interaction between the actors in the shelter delivery process.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations 1. The supply of residential land Ensuring an adequate supply of land at affordable prices is an absolute prerequisite for the development of an effective shelter strategy and for meeting the needs of the urban poor. Difficulties exist at a variety of levels: many countries do not have an effective institutional structure or legal framework; there are shortcomings in the formulation of urban land policy and in the capacity for implementation; and there is a lack of expertise in operational techniques in assembling land resources for the urban poor.

There is thus a tangible need for UNCHS (Habitat) to mount a substantial international effort in this area to ensure:

 that legal, technical and professional advice and consultancy is available to governments wishing to reform legal and institutional structures;

 that there is a sustained international effort through technical aid and training programmes to improve professional competence and service delivery in urban land-use planning and management; and

 that pilot projects are established to evaluate operational techniques and best practice in identifying and ensuring the availability of land for the urban poor.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations 2. Sources of institutional housing finance The absence of formal financial arrangements is a major constraint on the development of a healthy housing market, and it is a particularly intractable problem for the urban poor. The viability of institutional housing finance is, however, closely linked to the effectiveness of land markets and in particular with efficient registration and titling arrangements for land. Despite the austerity of the 1980s, there have been important initiatives in the development of housing finance and in particular in arrangements for the urban poor. Much technical and advisory support has already been forthcoming in respect of the initiatives to promote institutional housing finance for the urban poor, but much remains to be done before the projects are deemed to be operationally effective. Nonetheless, they appear to offer substantial scope for development and for wider application in developing countries.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations 3. Improving access to, and affordability of, building materials for the urban poor There have been increasing problems with the supply of building materials in developing countries over recent years. There is thus a need for governments to consider ways in which their indigenous materials industry can become more efficient and effective in order to reduce costs and increase supplies. Particular recommendations which will assist the urban poor:

 There is a need to diversify the production of indigenous materials to include small scale producers and those in the informal sector. This is likely to involve a discrete programme of training and support through small-enterprise development agencies and the availability of credit facilities for the disbursement of small loans. The small enterprise development agencies should draw heavily on proven private sector expertise.

 Further measures should be taken to ensure the access of low-income groups to low-cost building materials. This may be achieved via cooperative initiatives organized by NGOs in bulk-purchase arrangements, for example, or the establishment of building materials 'banks' specifically for use by low-income groups. The recycling of non-toxic waste materials for use in construction should continue to be explored with regard to the potential for employment generation for low-income groups as well as benefits to be gained from potentially reduced costs.

 UNCHS (Habitat) should continue to ensure that professional and technical advice is available to governments seeking assistance in restructuring the indigenous building materials industry.

 UNCHS (Habitat) should also continue to monitor good practice in ensuring the availability of low-cost materials to low-income groups and should widely disseminate findings.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations 4. The opportunities for employment generation Employment generation amongst low-income groups and the scaling-up of construction programmes in shelter and human settlements development are at the core of the GSS. The unskilled and semi-skilled nature of the work is well suited to low-income groups and to women and there is a variety of different types of work in which the opportunities for employment may be sought. Governments, both central and local, are strongly encouraged, therefore, to scale-up their housing and urban development activities in a strategic programme to increase employment opportunities amongst the urban poor. Accordingly, they are advised to:

 review local building standards and planning codes which, while safeguarding the safety, security and health of households, should seek to encourage self-build and participative approaches by low-income communities;

 explore opportunities for enhancing the employment of low-income groups through the development of low-cost shelter construction programmes by SSEs; through the provision and upgrading of infrastructural facilities in slum and squatter settlements; through urban renewal and residential estate maintenance programmes; and in enhancing the capacity for the use of indigenous building materials; and

 examine the opportunities for the use of labour-intensive technologies and communal contracts of employment in major infrastructural provision and public-works programmes; ensure the provision of appropriate training and supervisory inputs (in collaboration with NGOs), and that equal access is available to women.

For its part, UNCHS (Habitat) needs to identify good practice from new and existing employment-generation projects in respect of shelter and human settlements development and to disseminate this information widely.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations 5. Encouraging the availability of accommodation for rent In view of the likely increasing demand for urban shelter in the coming decades and the need to expand access to low-cost accommodation for low-income groups, governments are advised of the need to:

 review their current policies with regard to rented accommodation to create a favourable legal, financial and administrative framework for the development of responsible renting strategies (such strategies might include incentives for those wishing to sub-let part of their property, or to build extensions (where appropriate) for sub-letting);

 ensure that effective steps (such as local landlord/tenants forums), are in place to safeguard tenants from exploitative practices; and

 ensure directly provided hostel accommodation for the poorest groups, e.g. street children.

At present, policies to encourage private renting are tentative and guidelines broadly-based; there is a need for UNCHS (Habitat) to continue to monitor policy development in this area, encourage information exchange and the dissemination of information on good practice.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations 6. Acknowledgement of the role of shelter also as a workplace HBEs are very common in developing countries and their pre-eminent function is to sustain the income of poorer households. Whilst a vast array of functions are carried out from HBEs these functions are invariably pursued in contravention of local planning and building regulations. Thus although they may be treated with 'benign neglect' by the authorities they are rarely perceived in a positive way. Local authorities, therefore, need to:

 review their development control regulations in respect of HBEs to grant a presumption in favour unless the operation of the enterprise contravenes health and safety requirements, involves hazardous or exploitative employment practices or infringes basic human rights; and

 seek to develop a strategy of small enterprise development in respect of HBEs providing advice and guidance, small loans for development and relocation opportunities where appropriate.

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Chapter VIII. Conclusions and recommendations E. Summary of recommendations 7. Encouraging partnerships between governments, local authorities and communities The final recommendation of the report embodies the key change of emphasis in policy which lies at the heart of the GSS and is seen as fundamental to the development of an effective international effort not only in improving the human settlements conditions of the urban poor, but also in contributing to the alleviation of global urban poverty. This is the need for the development of a genuine partnership between governments, local authorities and local communities and a determination to succeed. As indicated earlier, the efforts of governments in the past to provide shelter for the urban poor have met with limited success. It is vital to the development of an effective strategy that governments harness the energies and commitment of the poor themselves in a systematic and targeted programme of action. Governments will only achieve this, however, if those communities recognize a genuine commitment to community-based, participative programmes with real resources and shared decision-making, in which local authorities provide the necessary support, encouragement and guidance to ensure the programme is put into practice and meets its objectives.

The challenge for Habitat II is to secure those genuine partnerships.

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