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The Third World goes to town
The Third World goes to town Will US policy catch up?
Coralie Bryant The growth of cities in the Third World is one of the historic changes in our times. Occurring relatively quietly in most parts of the world, it is not considered especially newsworthy, thus increasing the odds that policy makers will be caught unprepared. Consider the numbers. In 1950 some 200 million people in the Third World lived in cities; by the year 2025, some 3 150 million will do so. Indeed, by the year 2000, we will have passed the turning point; for the first time, over half of the world's population will live in cities. By the year 2000, 18 of the world's 21 largest cities will be in the Third World. 1 At the time of writing Coralie Bryant was a The implications of this historic demographic change have begun to visiting fellow at the Overseas Development Council, Washington, DC, USA. be felt within the developing countries themselves, especially by those within the receiving cities, as the demands for services escalate and the capacities to respond are increasingly strained. Debates over competing models of development are shoved aside by issues demanding urgent attention. How can employment be generated? Tax revenues increased? Services financed? Services provided so that they do not attract further migration? Energy, health, solid waste disposal, transport and shelter 1See Sheldon Annis, 'What is not the same about the urban poor: the case of Mexico needs be provisioned? Add to these concerns the problems of managing City', in John Lewis, ed, Strengthening the a structural adjustment programme with changed rules of the game for Poor, Overseas Development Council, urban food subsidies and the policy complexity deepens. 2 Policy Perspective volume, 1988. Data on projected urban growth rates are available The impact of Third World urbanization has been complicated by the from the United Nations, Urban and Rural generally weak condition of most local governments. Understaffed, Population Projections, 1950-2025: The underfinanced, and often lacking in authority, they have marshalled few 1984 Assessment, New York, 1986. 2See, for example, A. Braverman and R. resources to meet the challenges they confront. 3 The central governKanbur, 'Urban bias and the political ecoment, its ministries and parastatal organizations continue to circumnomy of agricultural reform', World Describe the role and authority of local units. And structural adjustment, velopment, Vol 15, No 9, 1987. aFor a policy analysis of the choices conwhile essential for macroeconomic reasons, has had unfortunate uninfronting development managers in the tended microeconomic consequences. It has further polarized the Third World see C. Bryant and L. White, competing interests of farmers and city dwellers, and it has also lead to 'Managing urban growth', in Managing Development in the Third World, Westview underinvestment in urban infrastructure. As ministries of finance have Press, Boulder, CO, 1982. See also undertaken economic reform, they have asserted greater budget control Johannes Linn, Cities in the Developing over sectoral ministries. One of the results of this has been to deepen World, Oxford University Press, New York, 1983. and extend central government's power vis-a-vis local authorities. Third World cities are growing so fast that in the 21st century over half the world's population will be urban. This shift will need to be recognized by all aid donors, and particularly by the USA. Sustainable development will be possible only if Third World governments central and local - can be assisted to meet the challenge of thls massive rural to urban transition.
0264-2751/90/020125-08 © 1990 Butterworth & Co (Publishers) Ltd
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The Third World goes to town: will US policy catch up?
Throughout Africa, for example, even though local governmental capacity in the 1970s was already limited, it is even more so in 1989. Meanwhile, however, people locally continue to organize themselves to get on with the business of survival. Wiring into sources of electricity, or bartering goods and services, lending and selling to one another in township or squatter settlement, assembling building materials for homes, peddling food and water, assisting with birthing or burying, people pull together clubs, associations, groups, leagues, or movements. Bearing witness to the indomitable human spirit, people cope with their environment and proceed to construct their social transaction systems. And when cut off by an outraged government (as in South Africa) informal organizations move underground, transform themselves, and replicate. Thus does the kaleidoscopic quality of local institutional life defy easy description, or prescription. What, if anything, should constitute development policy toward urbanization? That question requires that a prior question be addressed: what interests within Northern industrial countries are impacted by Third World urbanization? Of course we could argue for an urban development policy on humanitarian grounds. Yet the currrent lack of interest in development in general means that such arguments are all too often dismissed. This article will address a narrower issue - the near-term interests of the USA impacted by Third World urbanization. The secondary point of this argument is that if a case can be made for US development policy makers paying more attention to Third World urban development needs, then that case is likely to be, at least in part, of relevance to other bilateral and multilateral donors. The urbanization currently under way in many developing countries has serious implications for US trade. Consider the following linkages: •
•
•
•
•
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US trade - and hence US economic growth - requires that trading partners resume economic growth. In the markets for US exports, developing countries will play a larger role. Third World growth, however, requires national strategies to service debts, optimize resources and develop partnerships with the private sector. Third World urban residents are not willing to tolerate no growth, relentless debt servicing, no improvement in urban services and mounting unemployment. While many Third World governments recognize that investment in agriculture and rural development are essential, they also know that urban poverty demands attention. Further, they know that agricultural growth alone, while necessary, will not be sufficient to resume national growth. (Domestically, agricultural exports require urban financial infrastructure, as well as transport. Yet Third World leaders also recognize that they will not be able to export enough primary commodities to earn the foreign exchange needed to meet debt payments. An industrial strategy - with all its spatial and urban implications - is essential.) Therefore, in so far as future growth for the USA requires that growth resume in many developing countries, it follows that the USA will have to be concerned with urban as well as rural development.
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The Third World goes to town: will US policy catch up?
Agriculture and Third World urban economic growth The most popular, prevalent, and w r o n g assumption is that policies which promote urban economic growth must be at the expense of investment in agriculture. It is important to be clear that these are not competing arenas for investment but rather interrelated activities which must be mutually strong for both to prosper. 4 Of course there are trade offs, as well as budgetary competition and competing interests. But the point to be taken is that choices concerning investments in industrialization strategy, for example, must be made with an eye towards their urban and spatial needs. Import substitution policies are in effect urbanization policies. While it is true that it is relatively easier for urban elites to abet an urban bias in national expenditures, it is also true that the underlying interrelationships between agriculture and urban choices are central to the growth impasse in many developing countries. The nature of those relationships are rooted in country and regional differences. They vary between, as well as within, regions: •
•
4The interdependence between rural productivity and urban growth usually focuses upon the spatial implications of regional planning. Long ago, writing about Chile, John Friedmann pointed to the need for regional planning in order to enhance national (not urban) development. See his book Urbanization, Planning and National Development, Sage, Beverly Hills, 1973. Next came the most detailed examination of this relationship in Deninis Rondinelli and Kenneth Ruddle, Urbanization and Rural Development, Praeger, New York, 1978. Within this tradition is the work of Bertrand Renaud, National Urbanization Policy in Developing Countries, Oxford University Press for the World Bank, New York, 1981. SFor a detailed empirical examination of this agricultural trade story see Robert Paarlberg, 'US agriculture and the developing world: opportunities for joint gains', in John Sewell and Stuart Tucker, Growth, Exports and Jobs in a Changing World Economy, Overseas Development Council, Washington, DC, 1988.
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•
In summary, in Africa the rural-urban linkages are closely integrated. People travel back and forth to small cultivated holdings with regularity, carrying goods in both directions. Further, many African countries do not have a comparative advantage in agricultural production. While yields nmst increase for domestic consumption, it is not likely that Africa will ever gain a major share in the international market for maize, rice or wheat. African countries are already importing US food, and increasing those imports annually. When, and if, African economies resume real growth, their demand for US food will increase. In Asia, urban-rural linkages, and severe land shortages, underpin complex political and social systems. As some of the most successful of the smaller countries grew, so did their food imports. While the NICs are competitors in international trade, their competition is largely within manufactured goods. Empirically it is now established that as these countries grow, they import more food, and the US share in those food imports is substantial. 5 In Latin America, industrialization has already moved ahead of agriculture to generate an increasingly large percentage of GNP. There is not as much movement between town and country as in Africa. Land shortages in Latin America, while not as severe as in some of the worst Asia instances (eg Bangladesh) are, none the less, severe.
US interests in Third World urban growth It is unavoidably the case that increased US trade in the decade ahead will require that attention is paid to Third World markets, and that in turn will require attention to the manner in which urban areas play important functions in facilitating economic growth within developing countries. Let us now look at this trade story in more detail. Trade
US trade with developing countries is already largely urban. The primary US economic interest is in increasing US exports, which requires increasing growth within Third World countries who have been trade partners but are currently unable to be so, given their debt 127
The Third World goes to town: will US policy catch up?
problems. Increases in that trade can come only when these countries regain their own growth potential. US trade in goods and services as a percentage of GNP grew from 6.4% in 1970 to 12% in 1980. Research at the Overseas Development Council indicates that the fastest growth share within that expansion was exports to developing countries. By 1981, developing countries were buying 41% of US exports - more than Japan and Western Europe combined. As the largest concentrations of Third World consumers of US exports are in urban areas, increasing their opportunities to raise their incomes means an increase in exports. US goods and services will continue to encounter stiff competition from the newly industrializing countries in the cities of the Third World, but if past US shares of this market are any indication of the future, there is a demand for US services. The greatest losses in US exports to date have been in high technology exports, particularly, for example, in microelectronics. Regaining these markets will require both increasing US investment in research and development - hence innovation - and establishing markets in those countries (predominantly Latin America and Africa) which are not likely to generate their own microelectronic or high tech capacity in the near term. US agricultural exports, on the other hand, are likely to increase even when Third World agriculture grows. The demand for food is greater than many had forecast: in many countries economic growth has led to higher imports of US food, when the dollar is competitive. (The long-run constraints here may come from problems within US agriculture - its sustainability given water shortages, environmental degradation, and soil loss.) African food imports (from all sources) have been about 10 million tons annually, two-thirds of which are purchases at regular market rates. This level of imports was in some sense a rock bottom demand, coming as it did in the context of serious debt problems. If any of the African debt or financing relief proposals currently discussed were to become realities, food imports would increase. Few African countries other than South Africa have a comparative advantage in international markets for food exports. And it is urban groups which are the fastest growing food importers. With urbanization goes a move away from maize, the traditional food in many countries, to rice and wheat which are only infrequently major crops. Food diversification in consumption is a feature of urbanization. Many other US interests are affected by Third World urban development. Resolution of the debt problem carried within it a large urban component. Security interests and compelling humanitarian concerns contribute to US interest in the Third World urban development. Debt Debt, and coping with staggering debt service problems, is holding back any progress in generating growth in many Latin American and African countries. Most debt relief strategies currently proposed have more implications for urban than rural growth. They would provide more relief for city dwellers than for rural classes. The conditions most frequently imposed with structural adjustment lending - reducing food subsidies, reducing public sector employment, reducing subsidies for urban services - fall with greatest severity upon urban groups (lower
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The Third World goes to town: will US policy catch up?
middle class and working class poor). It is widely acknowledged that African debt relief will have to be differently conceived and delivered from Latin American debt relief. Latin American debt relief is far more immediately salient to US economic interests while African debt relief is more salient to US humanitarian interests. (Although there is the additional issue of the future of the IMF. The IMF is already a changed international institution because of its exposure in the African debt situation.) The political pressures within the Third World for default are largely urban based. Reaching urban groups through increased urban growth might diminish pressures for default. It is no surprise that one of the most urbanized subSaharan countries - Zambia - has proved to be one of the most truculent in its negotations with donors. Union interests both civil service unions, and mine workers - are not readily amenable to agreeing with the adjustment reform programmes. Urban bias in national planning has a long history in Zambia. Security
8John W Sewell, 'Overview - the dual challenge: managing the economic crisis and technological change', in John Sewell and Stuart Tucker, Growth, Exports and Jobs in a Changing World Economy, Overseas Development Council, Washington, DC, 1988, details the trade data illustrating the costs of the US economy of lost exports to the developing world. ~The political behaviour of migrants and urbanites has been amply documented. The work of Janice Perlman, The Myth of Marginality, University of California, Berkeley, CA, 1976 analyses the political proclivities of migrants and finds them to be in practice relatively conservative. The work of Joan Nelson, Access to Power, Princeton University Press, Princeton, 1979, surveys and analyses a wide range of empirical studies from all regions giving the reader a view of the diversity yet the generally conforming political behaviour to be found among Third World city dwellers.
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The relationship between poverty and drugs is well known to development professionals. In so far as drugs represent a security threat in US cities, the production of those drugs, and their transport and marketing through Third World cities, is a security issue. Urban residents have historically been leaders in the process of making demands on the state. The relationships between development, security and urbanization, are intricate. Yet, basically, development processes generate stakeholding and, as an ever widening number of people acquire stakes, or interests, within their polity and economy, they will be less willing to destroy that polity or economy. Of course increasing stakeholding may mean increased turbulence in the short run; but in the long run it will be a force for potential stability. While newly arrived migrants are not likely participants in radical political movements, longer-term urbanites, when deeply frustrated, are more likely to be politicized than their rural counterparts. 7 In part this greater activism is a function of media, communications, density and local organization. This has been observed recently in the problems of managing structural adjustment lending, urban food riots, strikes etc. Ethnic violence in cities is an ever present problem, and an especially volatile one in developing countries. Urban growth strategies require special attention to the ethnic implications of resource allocations as a result. Interestingly, US experience with urban heterogenity means that the USA is better positioned than any other bilateral donor to talk about the ethnic implications of urban development. Military security is only one aspect, and perhaps a declining one, of the security debate. Urban health issues are an increasingly salient part of the security debate as AIDS and drugs travel between urban areas worldwide with ever increasing speed. Humanitarian concerns
Urban health problems, as seen recently in the AIDS and crack epidemic, travel internationally with great rapidity. The USA has an obvious interest in addressing these problems closer to their source. Urban poverty brings with it environmental as well as human degradation. Having no choice, the poor poach in order to eat, deposit solid wastes into rivers and streams and scour areas for fuel; they are
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forced to mortgage their future. Environmentalists must, therefore, be concerned about urban poverty. While the consequences of environmental damage do not travel as fast as the epidemiology of eg AIDS they do, as we have learnt through the reports on global warming, carry global consequences. US public opinion has traditionally demanded responsiveness to egregious violations of human rights or widespread famine. Much of Africa's rapid urban growth is in response to widespread hunger and civil violence. Many migrants, especially in Mozambique, Angola, Sudan and Ethiopia are refugees. In Southern Africa (Botswana, Lesotho, Swaziland, Zambia, Zimbabwe, Malawi, Tanzania, Mozambique and Angola) urbanization will increase dramatically in the next decade on top of already high rates of internal migration. If there were to be any progress on reforms to the Group Areas Act within South Africa, urbanization would dramatically increase. (The Group Areas Act has been a major urban control mechanism. The shortage of skilled labour - and a desire to move away from foreign workers - may mean that even the Nationalists will amend parts of this act.) South Africa's apartheid - and concerted international efforts to bring about its end - deserves all the attention it receives. A post-apartheid South Africa will experience extraordinary urban growth as the hated reserved homelands are abolished. The massive ensuing rural to urban movement will carry far reaching challenges and opportunities for urban development. Given the centrality of that economy for Southern Africa, urban development will have implications for approximately one-third of the subcontinent.
US policy responses to the urban challenge
8This is the major point of the Sheldon Annis paper cited above. He discusses at length the ways in which the local groups in Mexico City come together in support of a mythical figure who really connotes the existence of their loosely linked coalition Super Bario. Following the earthquake, thousands upon thousands of Mexico City's poorer residents coalesced behind Super Bario in their demands. Further, they were singularly effective in achieving their goals. It is highly likely that those charged with urban governance in many parts of the Third World have much to learn from this example. The organizing capacities of the poor are increasing, even in the closed economy instances: witness Solidarity in Poland, or UDF in South Africa.
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The starting point for an urban strategy in US development assistance must be to recognize the linkage between agriculture and urban development. Agriculture requires technology, financing, marketing, transport, and in some instances, processing. Most of those functions are transacted in towns and cities. Beyond recognizing this linkage, much more research is needed on the country and regional specificities of that relationship, for it varies depending upon people/land ratios, level of technology, financial institutions and policy environment. Skilful urban-rural programming, therefore, can only follow from a solid grasp of the way in which these particular relationships are at work in a particular country. One aspect of that analysis must be the way in which people are organized to make demands upon the government. One of the most interesting changes in the past decade in many regions, but especially in Latin America, is the increased role among urban residents of community organizations. These organizations take many different forms, and are more or less in touch with one another. 8 As both agriculture and urban areas require increased capacity in the other, attention to the urban consequences of national choices becomes centrally important. Investment decisions have spatial implications. Tax decisions imply locational incentives. Indeed, most of the decisions of national ministries have implications for urban development. Attention to those urban implications is the first step in an urban policy. Attention must be paid to avoiding increases in services likely to
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The Third World goes to town: will US policy catch up?
attract larger flows of in migration, and which are likely to incur high recurrent costs. Increasing the capacities of cities cannot mean increasing again the cost to the public sector. It does mean increasing urban capacities to marshal resources, levy and collect taxes, and generate employment by improving the climate for entrepreneurship, investment and technological innovation. The informal sector has a role to play. In some instances this means deregulating that which cannot be effectively regulated anyway - much of the work in the informal sector - peddling, hawkers, beer brewing, small-scale carpentry, street food vendors. But there is a limit to the amount of employment that the informal sector will be able to generate. And given past lack of investment, urban infrastructure is already substandard. Hence new financing methods are needed for housing, transport, water, and waste systems. User fees and cofinancing are essential for cost recovery of basic services eg water and waste disposal. Metering services is usually the first step. But the range and variety of cofinancing arrangements that might be negotiated with new incoming investors for the services they will need warrants exploration. Is there any viable role for development assistance in the future in urban infrastructure? Resoundingly yes. Yet it will be in a different role from that of the past. Urban infrastructure needs in Africa, and some countries in Asia (Bangladesh, Indonesia) - in water, electricity and transport - are overwhelming and expensive. The scale of these needs is such that they will require multidonor funding to provide whatever outside assistance there may be. Cofinancing is easily said, yet not easily done. The record to date with cofinancing approaches is not encouraging. The problems in managing cofinancing - when different funders have different budget cycles, different objectives and must satisfy different domestic constituencies mean that cofinancing is singularly difficult. One of the most useful immediate tasks that USAID should undertake is to identify a few successful cofinancing programmes and detail how they were achieved, with special attention to showing how they could be replicated. Bilateral development assistance will have to play the role of helping to induce the private sector to build that urban infrastructure, and of helping countries to develop the policies which move towards new roles for cofinanced infrastructure. Finally, there is a very large role for bilateral assistance in helping local governments to draw upon the special skills and resources available within non-governmental organizations and private voluntary groups. That these are the kinds of community based groups developing daily within cities also means that they will have a special role to play. Too few Third World urban governments have provided ways of including these new actors into their resource mobilization efforts.
Conclusion The Third World's future will be an urban future. Massive rural to urban transitions are already under way. The issue at hand, therefore, is not whether, but how, developing countries manage this transition, and how those who endeavour to work with their Third World counterparts will facilitate sustainable development in that transition. For development donors - multilateral and bilateral - the challenge is to embrace
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the opportunities inherent in that change. Few processes impact more than urbanization on many social, political and economic variables. Technological and environmental implications are equally compelling. Urbanization means people moving from one pattern of relationships to production to another. In so doing their perspectives, needs and demands are changed. That which was previously unthinkable might become unavoidable; new social realities - with all their politico-economic implications - are constructed. For decision makers, these processes will bring greater opportunities as well as challenges for development policy and planning. The first and major challenge is to focus more sharply on the need for urban development as an integral component in national growth strategies. Unfortunately too few development policy makers have grasped that fact; the lags in research and development for our common urban future have become drags upon growth.
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Coralie Bryant The growth of cities in the Third World is one of the historic changes in our times. Occurring relatively quietly in most parts of the world, it is not considered especially newsworthy, thus increasing the odds that policy makers will be caught unprepared. Consider the numbers. In 1950 some 200 million people in the Third World lived in cities; by the year 2025, some 3 150 million will do so. Indeed, by the year 2000, we will have passed the turning point; for the first time, over half of the world's population will live in cities. By the year 2000, 18 of the world's 21 largest cities will be in the Third World. 1 At the time of writing Coralie Bryant was a The implications of this historic demographic change have begun to visiting fellow at the Overseas Development Council, Washington, DC, USA. be felt within the developing countries themselves, especially by those within the receiving cities, as the demands for services escalate and the capacities to respond are increasingly strained. Debates over competing models of development are shoved aside by issues demanding urgent attention. How can employment be generated? Tax revenues increased? Services financed? Services provided so that they do not attract further migration? Energy, health, solid waste disposal, transport and shelter 1See Sheldon Annis, 'What is not the same about the urban poor: the case of Mexico needs be provisioned? Add to these concerns the problems of managing City', in John Lewis, ed, Strengthening the a structural adjustment programme with changed rules of the game for Poor, Overseas Development Council, urban food subsidies and the policy complexity deepens. 2 Policy Perspective volume, 1988. Data on projected urban growth rates are available The impact of Third World urbanization has been complicated by the from the United Nations, Urban and Rural generally weak condition of most local governments. Understaffed, Population Projections, 1950-2025: The underfinanced, and often lacking in authority, they have marshalled few 1984 Assessment, New York, 1986. 2See, for example, A. Braverman and R. resources to meet the challenges they confront. 3 The central governKanbur, 'Urban bias and the political ecoment, its ministries and parastatal organizations continue to circumnomy of agricultural reform', World Describe the role and authority of local units. And structural adjustment, velopment, Vol 15, No 9, 1987. aFor a policy analysis of the choices conwhile essential for macroeconomic reasons, has had unfortunate uninfronting development managers in the tended microeconomic consequences. It has further polarized the Third World see C. Bryant and L. White, competing interests of farmers and city dwellers, and it has also lead to 'Managing urban growth', in Managing Development in the Third World, Westview underinvestment in urban infrastructure. As ministries of finance have Press, Boulder, CO, 1982. See also undertaken economic reform, they have asserted greater budget control Johannes Linn, Cities in the Developing over sectoral ministries. One of the results of this has been to deepen World, Oxford University Press, New York, 1983. and extend central government's power vis-a-vis local authorities. Third World cities are growing so fast that in the 21st century over half the world's population will be urban. This shift will need to be recognized by all aid donors, and particularly by the USA. Sustainable development will be possible only if Third World governments central and local - can be assisted to meet the challenge of thls massive rural to urban transition.
0264-2751/90/020125-08 © 1990 Butterworth & Co (Publishers) Ltd
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The Third World goes to town: will US policy catch up?
Throughout Africa, for example, even though local governmental capacity in the 1970s was already limited, it is even more so in 1989. Meanwhile, however, people locally continue to organize themselves to get on with the business of survival. Wiring into sources of electricity, or bartering goods and services, lending and selling to one another in township or squatter settlement, assembling building materials for homes, peddling food and water, assisting with birthing or burying, people pull together clubs, associations, groups, leagues, or movements. Bearing witness to the indomitable human spirit, people cope with their environment and proceed to construct their social transaction systems. And when cut off by an outraged government (as in South Africa) informal organizations move underground, transform themselves, and replicate. Thus does the kaleidoscopic quality of local institutional life defy easy description, or prescription. What, if anything, should constitute development policy toward urbanization? That question requires that a prior question be addressed: what interests within Northern industrial countries are impacted by Third World urbanization? Of course we could argue for an urban development policy on humanitarian grounds. Yet the currrent lack of interest in development in general means that such arguments are all too often dismissed. This article will address a narrower issue - the near-term interests of the USA impacted by Third World urbanization. The secondary point of this argument is that if a case can be made for US development policy makers paying more attention to Third World urban development needs, then that case is likely to be, at least in part, of relevance to other bilateral and multilateral donors. The urbanization currently under way in many developing countries has serious implications for US trade. Consider the following linkages: •
•
•
•
•
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US trade - and hence US economic growth - requires that trading partners resume economic growth. In the markets for US exports, developing countries will play a larger role. Third World growth, however, requires national strategies to service debts, optimize resources and develop partnerships with the private sector. Third World urban residents are not willing to tolerate no growth, relentless debt servicing, no improvement in urban services and mounting unemployment. While many Third World governments recognize that investment in agriculture and rural development are essential, they also know that urban poverty demands attention. Further, they know that agricultural growth alone, while necessary, will not be sufficient to resume national growth. (Domestically, agricultural exports require urban financial infrastructure, as well as transport. Yet Third World leaders also recognize that they will not be able to export enough primary commodities to earn the foreign exchange needed to meet debt payments. An industrial strategy - with all its spatial and urban implications - is essential.) Therefore, in so far as future growth for the USA requires that growth resume in many developing countries, it follows that the USA will have to be concerned with urban as well as rural development.
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The Third World goes to town: will US policy catch up?
Agriculture and Third World urban economic growth The most popular, prevalent, and w r o n g assumption is that policies which promote urban economic growth must be at the expense of investment in agriculture. It is important to be clear that these are not competing arenas for investment but rather interrelated activities which must be mutually strong for both to prosper. 4 Of course there are trade offs, as well as budgetary competition and competing interests. But the point to be taken is that choices concerning investments in industrialization strategy, for example, must be made with an eye towards their urban and spatial needs. Import substitution policies are in effect urbanization policies. While it is true that it is relatively easier for urban elites to abet an urban bias in national expenditures, it is also true that the underlying interrelationships between agriculture and urban choices are central to the growth impasse in many developing countries. The nature of those relationships are rooted in country and regional differences. They vary between, as well as within, regions: •
•
4The interdependence between rural productivity and urban growth usually focuses upon the spatial implications of regional planning. Long ago, writing about Chile, John Friedmann pointed to the need for regional planning in order to enhance national (not urban) development. See his book Urbanization, Planning and National Development, Sage, Beverly Hills, 1973. Next came the most detailed examination of this relationship in Deninis Rondinelli and Kenneth Ruddle, Urbanization and Rural Development, Praeger, New York, 1978. Within this tradition is the work of Bertrand Renaud, National Urbanization Policy in Developing Countries, Oxford University Press for the World Bank, New York, 1981. SFor a detailed empirical examination of this agricultural trade story see Robert Paarlberg, 'US agriculture and the developing world: opportunities for joint gains', in John Sewell and Stuart Tucker, Growth, Exports and Jobs in a Changing World Economy, Overseas Development Council, Washington, DC, 1988.
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•
In summary, in Africa the rural-urban linkages are closely integrated. People travel back and forth to small cultivated holdings with regularity, carrying goods in both directions. Further, many African countries do not have a comparative advantage in agricultural production. While yields nmst increase for domestic consumption, it is not likely that Africa will ever gain a major share in the international market for maize, rice or wheat. African countries are already importing US food, and increasing those imports annually. When, and if, African economies resume real growth, their demand for US food will increase. In Asia, urban-rural linkages, and severe land shortages, underpin complex political and social systems. As some of the most successful of the smaller countries grew, so did their food imports. While the NICs are competitors in international trade, their competition is largely within manufactured goods. Empirically it is now established that as these countries grow, they import more food, and the US share in those food imports is substantial. 5 In Latin America, industrialization has already moved ahead of agriculture to generate an increasingly large percentage of GNP. There is not as much movement between town and country as in Africa. Land shortages in Latin America, while not as severe as in some of the worst Asia instances (eg Bangladesh) are, none the less, severe.
US interests in Third World urban growth It is unavoidably the case that increased US trade in the decade ahead will require that attention is paid to Third World markets, and that in turn will require attention to the manner in which urban areas play important functions in facilitating economic growth within developing countries. Let us now look at this trade story in more detail. Trade
US trade with developing countries is already largely urban. The primary US economic interest is in increasing US exports, which requires increasing growth within Third World countries who have been trade partners but are currently unable to be so, given their debt 127
The Third World goes to town: will US policy catch up?
problems. Increases in that trade can come only when these countries regain their own growth potential. US trade in goods and services as a percentage of GNP grew from 6.4% in 1970 to 12% in 1980. Research at the Overseas Development Council indicates that the fastest growth share within that expansion was exports to developing countries. By 1981, developing countries were buying 41% of US exports - more than Japan and Western Europe combined. As the largest concentrations of Third World consumers of US exports are in urban areas, increasing their opportunities to raise their incomes means an increase in exports. US goods and services will continue to encounter stiff competition from the newly industrializing countries in the cities of the Third World, but if past US shares of this market are any indication of the future, there is a demand for US services. The greatest losses in US exports to date have been in high technology exports, particularly, for example, in microelectronics. Regaining these markets will require both increasing US investment in research and development - hence innovation - and establishing markets in those countries (predominantly Latin America and Africa) which are not likely to generate their own microelectronic or high tech capacity in the near term. US agricultural exports, on the other hand, are likely to increase even when Third World agriculture grows. The demand for food is greater than many had forecast: in many countries economic growth has led to higher imports of US food, when the dollar is competitive. (The long-run constraints here may come from problems within US agriculture - its sustainability given water shortages, environmental degradation, and soil loss.) African food imports (from all sources) have been about 10 million tons annually, two-thirds of which are purchases at regular market rates. This level of imports was in some sense a rock bottom demand, coming as it did in the context of serious debt problems. If any of the African debt or financing relief proposals currently discussed were to become realities, food imports would increase. Few African countries other than South Africa have a comparative advantage in international markets for food exports. And it is urban groups which are the fastest growing food importers. With urbanization goes a move away from maize, the traditional food in many countries, to rice and wheat which are only infrequently major crops. Food diversification in consumption is a feature of urbanization. Many other US interests are affected by Third World urban development. Resolution of the debt problem carried within it a large urban component. Security interests and compelling humanitarian concerns contribute to US interest in the Third World urban development. Debt Debt, and coping with staggering debt service problems, is holding back any progress in generating growth in many Latin American and African countries. Most debt relief strategies currently proposed have more implications for urban than rural growth. They would provide more relief for city dwellers than for rural classes. The conditions most frequently imposed with structural adjustment lending - reducing food subsidies, reducing public sector employment, reducing subsidies for urban services - fall with greatest severity upon urban groups (lower
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The Third World goes to town: will US policy catch up?
middle class and working class poor). It is widely acknowledged that African debt relief will have to be differently conceived and delivered from Latin American debt relief. Latin American debt relief is far more immediately salient to US economic interests while African debt relief is more salient to US humanitarian interests. (Although there is the additional issue of the future of the IMF. The IMF is already a changed international institution because of its exposure in the African debt situation.) The political pressures within the Third World for default are largely urban based. Reaching urban groups through increased urban growth might diminish pressures for default. It is no surprise that one of the most urbanized subSaharan countries - Zambia - has proved to be one of the most truculent in its negotations with donors. Union interests both civil service unions, and mine workers - are not readily amenable to agreeing with the adjustment reform programmes. Urban bias in national planning has a long history in Zambia. Security
8John W Sewell, 'Overview - the dual challenge: managing the economic crisis and technological change', in John Sewell and Stuart Tucker, Growth, Exports and Jobs in a Changing World Economy, Overseas Development Council, Washington, DC, 1988, details the trade data illustrating the costs of the US economy of lost exports to the developing world. ~The political behaviour of migrants and urbanites has been amply documented. The work of Janice Perlman, The Myth of Marginality, University of California, Berkeley, CA, 1976 analyses the political proclivities of migrants and finds them to be in practice relatively conservative. The work of Joan Nelson, Access to Power, Princeton University Press, Princeton, 1979, surveys and analyses a wide range of empirical studies from all regions giving the reader a view of the diversity yet the generally conforming political behaviour to be found among Third World city dwellers.
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The relationship between poverty and drugs is well known to development professionals. In so far as drugs represent a security threat in US cities, the production of those drugs, and their transport and marketing through Third World cities, is a security issue. Urban residents have historically been leaders in the process of making demands on the state. The relationships between development, security and urbanization, are intricate. Yet, basically, development processes generate stakeholding and, as an ever widening number of people acquire stakes, or interests, within their polity and economy, they will be less willing to destroy that polity or economy. Of course increasing stakeholding may mean increased turbulence in the short run; but in the long run it will be a force for potential stability. While newly arrived migrants are not likely participants in radical political movements, longer-term urbanites, when deeply frustrated, are more likely to be politicized than their rural counterparts. 7 In part this greater activism is a function of media, communications, density and local organization. This has been observed recently in the problems of managing structural adjustment lending, urban food riots, strikes etc. Ethnic violence in cities is an ever present problem, and an especially volatile one in developing countries. Urban growth strategies require special attention to the ethnic implications of resource allocations as a result. Interestingly, US experience with urban heterogenity means that the USA is better positioned than any other bilateral donor to talk about the ethnic implications of urban development. Military security is only one aspect, and perhaps a declining one, of the security debate. Urban health issues are an increasingly salient part of the security debate as AIDS and drugs travel between urban areas worldwide with ever increasing speed. Humanitarian concerns
Urban health problems, as seen recently in the AIDS and crack epidemic, travel internationally with great rapidity. The USA has an obvious interest in addressing these problems closer to their source. Urban poverty brings with it environmental as well as human degradation. Having no choice, the poor poach in order to eat, deposit solid wastes into rivers and streams and scour areas for fuel; they are
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forced to mortgage their future. Environmentalists must, therefore, be concerned about urban poverty. While the consequences of environmental damage do not travel as fast as the epidemiology of eg AIDS they do, as we have learnt through the reports on global warming, carry global consequences. US public opinion has traditionally demanded responsiveness to egregious violations of human rights or widespread famine. Much of Africa's rapid urban growth is in response to widespread hunger and civil violence. Many migrants, especially in Mozambique, Angola, Sudan and Ethiopia are refugees. In Southern Africa (Botswana, Lesotho, Swaziland, Zambia, Zimbabwe, Malawi, Tanzania, Mozambique and Angola) urbanization will increase dramatically in the next decade on top of already high rates of internal migration. If there were to be any progress on reforms to the Group Areas Act within South Africa, urbanization would dramatically increase. (The Group Areas Act has been a major urban control mechanism. The shortage of skilled labour - and a desire to move away from foreign workers - may mean that even the Nationalists will amend parts of this act.) South Africa's apartheid - and concerted international efforts to bring about its end - deserves all the attention it receives. A post-apartheid South Africa will experience extraordinary urban growth as the hated reserved homelands are abolished. The massive ensuing rural to urban movement will carry far reaching challenges and opportunities for urban development. Given the centrality of that economy for Southern Africa, urban development will have implications for approximately one-third of the subcontinent.
US policy responses to the urban challenge
8This is the major point of the Sheldon Annis paper cited above. He discusses at length the ways in which the local groups in Mexico City come together in support of a mythical figure who really connotes the existence of their loosely linked coalition Super Bario. Following the earthquake, thousands upon thousands of Mexico City's poorer residents coalesced behind Super Bario in their demands. Further, they were singularly effective in achieving their goals. It is highly likely that those charged with urban governance in many parts of the Third World have much to learn from this example. The organizing capacities of the poor are increasing, even in the closed economy instances: witness Solidarity in Poland, or UDF in South Africa.
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The starting point for an urban strategy in US development assistance must be to recognize the linkage between agriculture and urban development. Agriculture requires technology, financing, marketing, transport, and in some instances, processing. Most of those functions are transacted in towns and cities. Beyond recognizing this linkage, much more research is needed on the country and regional specificities of that relationship, for it varies depending upon people/land ratios, level of technology, financial institutions and policy environment. Skilful urban-rural programming, therefore, can only follow from a solid grasp of the way in which these particular relationships are at work in a particular country. One aspect of that analysis must be the way in which people are organized to make demands upon the government. One of the most interesting changes in the past decade in many regions, but especially in Latin America, is the increased role among urban residents of community organizations. These organizations take many different forms, and are more or less in touch with one another. 8 As both agriculture and urban areas require increased capacity in the other, attention to the urban consequences of national choices becomes centrally important. Investment decisions have spatial implications. Tax decisions imply locational incentives. Indeed, most of the decisions of national ministries have implications for urban development. Attention to those urban implications is the first step in an urban policy. Attention must be paid to avoiding increases in services likely to
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attract larger flows of in migration, and which are likely to incur high recurrent costs. Increasing the capacities of cities cannot mean increasing again the cost to the public sector. It does mean increasing urban capacities to marshal resources, levy and collect taxes, and generate employment by improving the climate for entrepreneurship, investment and technological innovation. The informal sector has a role to play. In some instances this means deregulating that which cannot be effectively regulated anyway - much of the work in the informal sector - peddling, hawkers, beer brewing, small-scale carpentry, street food vendors. But there is a limit to the amount of employment that the informal sector will be able to generate. And given past lack of investment, urban infrastructure is already substandard. Hence new financing methods are needed for housing, transport, water, and waste systems. User fees and cofinancing are essential for cost recovery of basic services eg water and waste disposal. Metering services is usually the first step. But the range and variety of cofinancing arrangements that might be negotiated with new incoming investors for the services they will need warrants exploration. Is there any viable role for development assistance in the future in urban infrastructure? Resoundingly yes. Yet it will be in a different role from that of the past. Urban infrastructure needs in Africa, and some countries in Asia (Bangladesh, Indonesia) - in water, electricity and transport - are overwhelming and expensive. The scale of these needs is such that they will require multidonor funding to provide whatever outside assistance there may be. Cofinancing is easily said, yet not easily done. The record to date with cofinancing approaches is not encouraging. The problems in managing cofinancing - when different funders have different budget cycles, different objectives and must satisfy different domestic constituencies mean that cofinancing is singularly difficult. One of the most useful immediate tasks that USAID should undertake is to identify a few successful cofinancing programmes and detail how they were achieved, with special attention to showing how they could be replicated. Bilateral development assistance will have to play the role of helping to induce the private sector to build that urban infrastructure, and of helping countries to develop the policies which move towards new roles for cofinanced infrastructure. Finally, there is a very large role for bilateral assistance in helping local governments to draw upon the special skills and resources available within non-governmental organizations and private voluntary groups. That these are the kinds of community based groups developing daily within cities also means that they will have a special role to play. Too few Third World urban governments have provided ways of including these new actors into their resource mobilization efforts.
Conclusion The Third World's future will be an urban future. Massive rural to urban transitions are already under way. The issue at hand, therefore, is not whether, but how, developing countries manage this transition, and how those who endeavour to work with their Third World counterparts will facilitate sustainable development in that transition. For development donors - multilateral and bilateral - the challenge is to embrace
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the opportunities inherent in that change. Few processes impact more than urbanization on many social, political and economic variables. Technological and environmental implications are equally compelling. Urbanization means people moving from one pattern of relationships to production to another. In so doing their perspectives, needs and demands are changed. That which was previously unthinkable might become unavoidable; new social realities - with all their politico-economic implications - are constructed. For decision makers, these processes will bring greater opportunities as well as challenges for development policy and planning. The first and major challenge is to focus more sharply on the need for urban development as an integral component in national growth strategies. Unfortunately too few development policy makers have grasped that fact; the lags in research and development for our common urban future have become drags upon growth.
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