"The New Urban Agenda will pay for itself"

By: Joan Clos

Date: March 14th 2016

Source: Citiscope

It’s time to emphasize implementation, the head of the Habitat III conference says.

On the sidelines of last week’s Habitat III thematic meeting on financing the New Urban Agenda, Habitat III Secretary-General Joan Clos sat down with Citiscope’s Greg Scruggs to discuss the key moment to which this process has come.

Much energy and debate has and will continue to be focused on the four days in mid-October when tens of thousands of delegates will descend on Quito to hash out the details of the New Urban Agenda. Yet increasingly, the official and unofficial processes are looking to the day after Habitat III — to the nuts and bolts of how to implement the strategy that will be decided upon in Ecuador’s capital.

This interview, which took place in Spanish, has been slightly edited for length and clarity. The Spanish-language original will be posted soon.

Citiscope: In the first place, why should we change the current system of urban development financing to implement the New Urban Agenda?

Joan Clos: In recent years we have detected a widespread situation, where municipalities generally do not have the resources to address the needs of urbanization. There is a tendency where, little by little, urbanization or municipal financing has been sidelined, and this is generating relatively serious problems in many cities.

Which financial players should come to the table and open their pocketbooks to make the New Urban Agenda a success?

Basically, the problem of municipal financing is a political issue — it’s not so much a financial question as a problem of redistribution of resources. The city and urbanization in general generate wealth, and thus it’s a question of how to distribute that wealth and reach the best decisions so that part of this redistribution will be dedicated to urbanization. I believe that not paying enough attention to urban financing is a bad political decision, because it undermines an instrument that generates wealth: the city.

And how much will it cost, more or less, to implement the New Urban Agenda?

There are no exact figures, because that will depend on how urbanization takes shape. I’m not worried about how much it will cost, because what the new urbanization will generate, as a source of wealth, is much more than that. Thus, the cost will always be lower than the wealth generated. And since it will be significantly less than the wealth generated, I insist that it is a political decision about how the financial demands of urbanization are addressed.

In your view, is the private sector a necessary presence for the success of the New Urban Agenda?

The private sector clearly has a very important role to play in the urbanization process, because they have capacity for investment. Fortunately this is no longer in debate; it’s no longer questioned. What should be made clear, however, is that the private sector has neither the vocation nor the capacity to replace the public sector when it comes to urban planning, urban design. The private sector is very good at what it does and is very efficient because it responds to the demands of the market in many aspects. But what the private sector is not prepared for, and does not have the tools for, is urban design.

Here we have one of the current problems of urbanization. In many cases, the public sector’s capacity for urban planning and urban design has waned, and this had led to poor urban planning. And this poor urban planning has an unexpected aspect: Poor urban planning destroys wealth. That means it is a bad economic decision — failure to invest in the capacity to plan a well-designed city is an economic mistake, among other things.

Do the new financing frameworks for the Sustainable Development Goals and the Paris Agreement on climate change offer good opportunities for financing sustainable urbanization?

Again, the main thing that has to be understood is that urbanization generates wealth in and of itself. And it generates value from scratch, from nothing. That is, it creates wealth. Thus, the problem of urban finance is strictly a question of the adequate assigning of resources. It’s not a problem of lack of resources but rather of how they are allotted. In fact, we all know that many people make a lot of money with business ventures related to urban development. So in the case of financing for urban development, unlike other aspects, what is important is the political decisions regarding how to redistribute the wealth generated by urbanization.

How do developing countries react to your call for them to mobilize “endogenous”, or domestic, sources of financing to generate wealth?

 

This is the new paradigm for the New Urban Agenda that we are proposing for Habitat III: It should be understood that urbanization is an instrument for development, an instrument that creates wealth. And it creates wealth in relation to the quality of the urbanization. The greater the quality of the urban development, the greater the wealth generated. And the problem of urban quality is not one of costs but one of design. And this is a new paradigm shift, a radical change.

And these countries — as one says in English, do they “get it”?

Well I think they do — the positive aspects of urbanization in terms of growth are beginning to be understood. In fact, some countries are basing their growth now on urbanization. Above all, urbanization is more and more relevant in economic terms, because with regard to the quality or the economic structure of the modern society — where things are moving from the primary sector to the secondary sector, to industrialization, and from the secondary to the tertiary sector — in this economic evolution, the city, urbanization, are increasingly strategic. Because it is in the city where this new wealth associated with added value is growing.

So what we have here is a new approach to urbanization that is radically different from what we had seen before. Up to now, the money that went into urbanization was considered a net cost, and I believe this concept must change radically so that it is understood as an investment — an investment with a view to the future, which will generate new revenue. Therefore, the modern financial system makes it possible to finance a scheme where today’s design will generate future revenue. So there’s no problem in the conceptual sense with regard to creating good urban financing.

Have you seen the draft report from the General Assembly of Partners?

Yes.

What is your opinion of the report’s vision of the implementation of the New Urban Agenda?

Given the importance of and priority placed on all aspects of urbanization, from sustainability to coexistence to equality, the best thing now is the emphasis on implementation — it’s time to do that. We’re in this phase of historic development, right? Declarations of principles are no longer enough; we have to put these principles into practice.

What about the report’s specific proposals — such as an Intergovernmental Panel on Sustainable Urbanization or a U. N. Advisory Committee on Sustainable Urbanization?

These are ideas that the partners have put on the table, and starting in the next few weeks, a debate will begin between the partners and the members of the [U. N.] General Assembly — that is, the member states. In the end, a decision will be taken, since we’re in the United Nations, by the assembly of nations. But I think the competent voice of the partners will be heard and will be very much taken into account.

Speaking of the member states, what is your evaluation of their interest in the Habitat III process to date? Where is there room for improvement?

There is a growing interest, I believe, in urbanization. Since Rio+20, later at COP 21 and then in Agenda 2030 [which includes the SDGs], it has been clearly seen that urbanization is a very important aspect in the future of development — that development and the quality of that development are closely tied to the quality of urbanization. This is new because up to now, urbanization hadn’t been associated with development. It had been linked to equality, to the right to the city and other aspects, all of them very noble.

But what is now emerging, at a time when there are problems with development — since the 2008 crisis, there has been a relatively serious stagnation of the global economy, which means unemployment is rising — is a new interest in studying solutions to this situation. At some points there has even been talk of a depression, of negative GDP growth; they’re talking about a demographic crisis, etc. All of this, of course, is in the context of rapid urbanization, and that gives a new role to the city. It introduces a new need to pay close attention to urbanization.

And specifically India and China, where are they in the Habitat process?

China has advanced a great deal, and it has already made an enormous effort to urbanize. The state-of-the-nation report recently presented by Premier Li has once again proposed an improvement in urbanization for 200 million more Chinese citizens: 100 million from rural-urban migration and 100 million more in recognition of the need for better conditions than current urban residents enjoy. So in China there is a very, very structured and I would say well-tested policy. They have observed and understood the link between urbanization and development, as well as other risks if aspects such as the environment are not taken into account.

In India, it’s different. In India the political structure is decentralized, as is decision-making, and thus India’s urbanization is completely different from China’s in terms of political and legal aspects. So we will see an urbanization process that will be different from China’s — it will be much more diverse, and we’ll see how it takes shape. Now, the Indian government and the president, the prime minister, have also set a target of creating 100 new cities, and at least 100 or 200 million more people are expected to be urbanized.

So between China and India alone, 400 million more people will be urbanized in the short term. Need we say more? It’s very clear that urbanization is in the sights of growth strategies.

What has surprised you in the Habitat process?

Well, surprised isn’t the right word, but what is curious and very interesting at an intellectual level is the paradigm shift — how people are quickly catching on to this shift toward urbanization as a development tool. This is completely new, and it is giving rise to a kind of new vision of urbanization. People’s eyes are opening to a whole new possibility of alternatives that had not been considered up to this point.

Finally, there are many ways to measure the success of the Habitat III process toward a New Urban Agenda. How do you define success in this regard?

I think that if a new vision of urbanization wins out that leads to the adoption of effective decisions to improve urbanization, for me this is the most immediate success. And more important — what affects people’s lives, that is, what turns into wealth and prosperity for citizens. I believe we’re going to see this quickly, and for me this would constitute success: that in five years, we would have new ways of doing things both in terms of renovating existing cities and in creating or expanding cities that have to grow, so that urbanization and the city once again become a utopian instrument, let’s say, that creates equality in the face of diversity. And that could be a civilizing triumph in the end, because many of the cosmopolitan values that we understand today as those that offer dignity and well-being to the lives of our citizens have been created in the city, through the process of urbanization.
Translation by Stephanie Wildes.

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