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:: 03 the future of Urban Development
Urban Development - The New Development Frontier
03 the future of Urban Development 2/5/2003 10:45:13 AM

The world is rapidly urbanising. It is estimated that, within a generation, the majority of the developing world's population will live in urban areas. This means that the existing urban population of the world - which is currently approximately 2.5 billion - will double within a generation. At the same time, political and fiscal decentralisation is underway in all regions, with the result that, as cities are growing in size, they are also gaining more and more political and economic influence.

Globalisation will increasingly transform some cities from engines of national growth to engines of global growth. In several developing countries, such as the Philippines, Brazil and India, large urban metropolitan regions have emerged that account for a significant share of national GDP. These metropolitan centres increasingly have more in common with other global metropolises than with other cities in the nations where they exist. Increasingly, these metropolitan centres are playing a more autonomous role in the global trading system. By creating an environment of openness framed by international rules, globalisation has made regional autonomy more feasible.

The new inter-governmental relationships being established as a result of this new paradigm of urbanisation, decentralisation and globalisation are not always perfect. In most cases, municipal authorities are being burdened with more responsibilities without the necessary authority or capacity to finance and manage municipal operations. The income gaps between cities are also widening. Cities that have the administrative and financial strength to tap into the global economy are benefiting, while the less-prepared cities are being left behind.

The interaction of urbanisation, decentralisation and globalisation is creating many opportunities for cities, but it is also laying some potentially dangerous traps. This new paradigm is, without a doubt, bringing about positive change in cities around the world, but that change must be carefully managed if opportunities are to be created for all citizens. Urban poverty - visible in every city in the world - continues to be a clear danger. Local government capacity is one of the most important factors in determining whether a city is able to use the new paradigm to its advantage. Not surprisingly, it is an area that is receiving considerable attention from the international development community.

Development organisations, such as the World Bank, also view the current opportunities as a double-edged sword. They can capitalise on the emerging opportunities and help their client countries bypass multiple stages of development. At the same time, however, missed opportunities can result in a significant set-back to a country's development goals. The challenge for development organisations is to find more effective ways to work with local governments, helping them realise the benefits of the new paradigm. For donor organisations - those that have been used to dealing with central governments - this will represent a significant change in direction.

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