Arif Hasan

GLOBAL CAPITAL AND THE CITIES OF THE SOUTH
By Arif Hasan KARACHI: International capital is desperately looking for a home. Cities of South and South-East Asia are attractive destinations since they have a weak regulatory framework and have undergone structural adjustment. Here, this investment, is increasingly determining not only the shape of the city but also social and economic relations. New terms, such as "world class cities", "investment-friendly infrastructure", "foreign direct investment" or "FDI" as it is called, cities as "engines of growth", have entered the development vocabulary. All politicians and official planners in the Asian cities are using these terms and it is largely because of them that the whole approach to planning has undergone a change. Local governments are obsessed by making cities "beautiful" to visitors and investors. This means building flyovers and elevated expressways as opposed to traffic management and planning; high-rise apartments as opposed to upgraded settlements; malls as opposed to traditional markets (which are being removed); removing poverty from the centre of the city to the periphery to improve the image of the city so as to promote FDI; catering to tourism rather than supporting local commerce; seeking the support of the international corporate sector (developers, banks, suppliers of technologies and the IFIs) for all of the above. The above agenda is an expensive one. For this, sizeable loans have been negotiated with the International Financial Institutions (IFIs) on a scale unthinkable before. For example, between 1976 and 1993, Sindh borrowed $799.64 million for urban development. Almost all of this was for Karachi. Recently, the government has borrowed $800 million for the Karachi Mega City Project. Of this, $5.33 million is being spent on technical assistance being provided by foreign consultants. Almost all the projects designed and funded through previous loans have not met their objectives and there is evidence to show that they will again not meet their objectives as the same process for their design and implementation as before is being followed. Many of the new projects are being floated on a BOT process. It is clear that the projects have replaced planning. This is especially true of transport related projects. Cities such as Bangkok, Manila, Cairo and earlier Calcutta have made major investments in light rail and metro systems. Other Asian cities are following their example. However, these systems are far too expensive to be developed on a large enough scale to make a difference. Manila's light rail caters to only 8 per cent of trips and Bangkok's sky train and metro to only 3 per cent of trips and Calcutta's metro to even less. The light rail and metro fares are 3 to 4 times higher than bus fares. As a result, the vast majority of commuters continue to travel by rundown bus systems. In addition, there has never been more liquidity in banks and leasing companies. However, due to the freedom that these loan giving institutions have today, this liquidity is used to provide short-term high interest loans which do not bring any benefit to the city or to the majority of its residents. For example, 502 vehicles have been added to Karachi per day during the last financial year, more than half of which are cars. It is estimated that about 50 percent of these have been financed through loans from banks and leasing companies. This means that loans worth $1.125 billion were issued for this investment which could easily have been utilised for improving the public transport system or for the badly needed social housing. The nature of investments being made in many of the Asian cities and the mindset behind them, are increasing land hording; evictions of settlements, hawkers and informal businesses; informal settlements far away from the city and from social sector facilities; exclusion (due to gentrification) of poorer communities from public spaces of recreation and entertainment; and, the ad-hoc urbanization of ecologically sensitive and agriculturally productive land. Monitoring of evictions by the Asian Coalition for Housing Rights, a Bangkok base NGO, has shown that in seven Asian countries (Bangladesh, China, India, Indonesia, Japan, Malaysia, Philippines) evictions are increasing dramatically. Between January to June 2004, 334,593 people were evicted in the urban areas of these countries. In January to June 2005, 2,084,388 people were evicted. In Karachi as well evictions have quadripiled in the last four years and an increasing number of families are now sleeping and living on pavements in the absence of an alternative. The major reason for these evictions has been the "beautification" of the city, mega projects and the land hunger of the developers backed by politicians and bureaucrats. In the majority of cases, people did not receive any compensation for the losses they incurred and where resettlement did take place it was 25 to 60 kilometres from the city centre. The current master and/or strategic plans are not giving priority (unlike in the decade of the eighties) to the socio-economic issues arising out of these trends. The rich-poor divide has increased as a result of these policies. Subsidies for the social sectors and increase in inflation and price of utilities, especially in countries which have undergone structural adjustment, has multiplied this divide. The economic survey of Pakistan 2006-07 concedes that the gap between the rich and the poor is widening. It says that the share of consumption of the richest 20 per cent stands at 39.4 while it is 9.5 for the bottom 20 per cent population. The survey further states that the gap is growing in spite of a 7 per cent GDP growth. However, the most serious repercussion of this new development paradigm is that the overwhelming power of international capital and consultants and their local partners has weakened government institutions and the democratic political process. Governments have become deaf to the concerns of the environmental and dissenting academic lobbies. And all this in an age where the media is freer than before and "consultations" are the order of the day. NGOs and community activists and academics in most Asian cities in which I have worked have the same complaint. They claim that consultations are an eyewash and environmental assessments are rubber stamps. Meanwhile, successful NGO projects, the result of the populism of the '80s, have now in most cases become "respectable" and are in partnership with governments. Also, the NGO movement has undergone a change. It is increasingly an industry manned by "development professionals" and no longer by populist altruism. Most of these "development professionals" have been trained at special courses in First World universities who have turned exploratory Third World practices into development theory! IF THE TRENDS CONTINUES If the present trend continues then the rich-poor divide, evictions, informal settlements and exclusion will increase with not only the poor but also the rich living in ghettos surrounded by armed guards and security systems (this is already happening). Governance issues will increasingly become law and order related and not justice and equity related. This will increase fragmentation for the only thing that will hold the city together will be an aggressively upwardly mobile middle class which by its very nature is not interested in issues of justice and equity. In addition, development will take place where the investor is happy and so the other regions will become the backwaters (again this is also happening). The continuation of the current process is a recipe for conflict. HOW CAN THIS CHANGE? Foreign capital (and local liquidity) has its benefits and must be encouraged. However, it has to fit into a larger development plan based on development principles so that an inclusive and an environmentally friendly urban environment can be created. These principles could be: one, planning should respect the ecology of the areas in which the urban centres are located; two, landuse should be determined on the basis of social and environmental considerations and not on the basis of land value or potential land value alone; three, planning should give priority to the needs of the majority of population which in the case of Asia are low- and lower-middle income communities, hawkers, informal businesses, pedestrians and commuters; and four, planning must respect and promote the tangible and intangible cultural heritage of the communities that live in the city. Zoning byelaws should be developed on the basis of these principles so that they are pedestrian friendly and street friendly, pro-dissolved space and pro-mixed landuse. If South-Asian cities are to be taken as examples, then what is required is: one, a heavy non-utilisation fee on land so as to bring horded land into the market; two, a cut-off date for the regularisation of informal settlements and an end to evictions (where relocation is required, market rate compensation should be paid); three, planned squatting for five years during which programmes for closing the demand-supply gap for low income housing takes place; four, initiation of programmes for built units and plots which successfully solve the issues related to targeting and speculation (apart from the small scale of social housing, the failure to respond to these issues is the main reason for the failure of social housing attempts all over the Third World); five, development of rules, regulations and procedures to guarantee that the natural, entertainment and recreational assets of the city will not be in the exclusive use of the elite or the middle classes; six, a regime for privatisation backed by institutional arrangements that guarantees provision of sustainable employment and development; and seven, an understanding that all programmes and projects will be advertised at their conceptual stage, subject to public hearings before finalisation, supervised by a steering committee of interest groups, have their accounts published regularly, and overseen by one government official from the beginning to the end. The major question is how can the above agenda be achieved in an age where social and political evolution is in a flux and the economy is controlled globally by undemocratic international organisations? For example, the UN is controlled by five members who won the Second World War; the IMF and the World Bank function on the principle of one dollar one vote; the WTO was created out of the green room negotiations that produced GATT. Not much democracy in global institutions in an age of globalisation! Civil society organisations in many countries have come together to challenge the new urban development paradigm. However, most of them are funded by bilateral agencies and international NGOs who, or the governments they represent, are the promoters of this paradigm. Maybe because of this their success has been limited. There are also international movements seeking to modify the inequities in global relations of trade and aid. Over the last few years they have become weaker. The only viable option seems to be to make this important issue a part of the larger political process within countries. How this can be done effectively is the big question. (The above text was prepared as a discussion paper for a meeting of the UN University in New York in July 2007) Daily Dawn August 24, 2007 Friday http://dawn.com/2007/08/24/fea.htm#1	Arif Hasan Published in the August 24, 2007 Friday http://dawn.com/2007/08/24/fea.htm#1 If the present trend continues then the rich-poor divide, evictions, informal settlements and exclusion will increase with not only the poor but also the rich living in ghettos surrounded by armed guards and security systems (this is already happening).
IFI Loans and the Failure of Urban Development	Posted February 2006
Between 1976 and 2003, the government of Pakistan has taken loans from International Financial Institutions (IFIs) for urban development projects. These loans amount to US$ 1,472.44 million (Rs 88.346 billion) and most of them have been for water and sanitation projects. They have multiplied over the years due to the devaluation of the rupee and interest. These loans were identified through technical assistance for which an additional US$ 16.95 million (Rs 1.017 billion) was provided. Technical assistance includes development of human resources and the capacity building of relevant government institutions. In spite of these huge investments, infrastructure and environmental and socio-economic conditions in the urban areas of Pakistan have deteriorated considerably. The functioning of government institutions has also declined both in terms of efficiency and accountability. Asian Development Bank’s (ADB’s) own 1996 evaluation of the Karachi Urban Development Project and Peshawar projects, terms both of them as unsuccessful, except for the Orangi Project (termed as partially successful) which was done in association with the Orangi Pilot Project. For the development of projects through these huge loans, foreign consultants were employed and the loans paid for them. Studies by Pakistani professionals and NGOs have identified the weaknesses of these consultants and the problems with the methodologies that they have used in planning and in the processes of project implementation and monitoring. Of the US$ 1,472.44 million loans, US$ 653.89 million (Rs 3.92 billion or 44 per cent) were taken for various Karachi projects which included traffic and transport related programmes as well. As a result of these loans, the Karachi Water & Sewage Board (KWSB) owes the ADB more than Rs 42 billion. The servicing of these loans is done by making deductions at source in Sindh’s annual development budget. Thus both urban and rural Sindh service these loans. Loans taken for infrastructure projects in the rural areas of the province are much larger and have caused serious ecological damage and social and economic stress to local communities. At present a number of technical assistance programmes and studies are being carried out (or have been carried out recently) by IFIs for Karachi. These studies are paving the ground for a new cycle of loans even larger than the previous ones. These studies include the World Bank/ADB Public-Private Infrastructure Project; the JBIC’s Rehabilitation of Hub and Pipri Treatment Works; the JBIC’s study for the Revitalisation of Karachi; the ADB’s Mega-City Development Project; JICA’s Water Supply and Sewage Master Plan Preparation; JICA’s Passenger Trip Study for Karachi for the preparation of a transport plan; the World Bank’s “Turn Around Programme” in support of operation and maintenance of Water and Sewage System; and JETRO’s study for the future development of industry. The city government meanwhile is preparing a master plan for the city of Karachi and is also turning the sewage-carrying-nalas of Karachi into box culverts to overcome the sanitation problems of the city and the KWSB has initiated its own reform process. There is a direct link between most of the studies and projects that are listed above. However, there is no coordination between them and many of the consultants engaged by the different IFIs are not aware of what exactly the others are doing. Many of the issues raised in the IFI reports so far do not find place in the terms of reference for the Karachi Master Plan consultancy and as such they are not (and nor will they even be) a part of a larger planning exercise. Many of these plans are duplication of each other and of government initiatives. In addition, the methodology and terminology of these reports and their proposals is not dissimilar from previous reports which have led to projects which have not only not met their objectives, but have harmed existing systems and local communities and for which loans and technical assistance were provided. Reading through these documents one gets a sense of déjà vu. There is serious concern in academic, professional and civil society circles that these studies, for which we are paying, will lead to new loans (some of which have already been identified) and given what has been described above, a failure to meet objectives. It is feared, that as in the past, the only beneficiaries of this technical assistance and loans will be international consultants (and their junior local partners), contractors (foreign ones for large projects), and the IFIs themselves as they will be able to push their loans. Planning and its implementation cannot be done in foreign-funded-fragments determined by outsiders in their own interests. Karachi’s professionals, academics, NGOs, concerned citizens and civil society organisations have voiced concerns about many of the previously IFI funded projects and of government funded projects as well. A review of the projects they have objected to clearly demonstrates that they have always been right. Some of these projects include the Metroville Project where it was pointed out (also by a Dutch researcher, Jan Van der Linden) that the target population would not be reached through the proposed methodology; the ADB funded Greater Karachi Sewage Plan where it was pointed out that there was a conflict between the Plan and where sewage actually flowed and was disposed off; the Baldia Sewage Project where it was pointed out that the Rs 1,300 million investment was duplicating much of what already existed and as such what was being planned would not be used; the Lines Area Redevelopment Project where it was predicted that given the plan and its implementation process, the area would turn into a physical and social slum and would benefit neither the residents of Lines Area and nor the city of Karachi; the Karachi Mass Transit Project where serious objections were raised which have been justified by the research studies of other cities carried out by the Indian Institute of Technology and other international academic institutions. Similarly, the objections raised to the Lyari Expressway are already proving to be correct given the unplanned changing landuse pressures on the Corridor and its adjacent areas. If the Expressway had been subjected to serious public consultations it would probably still have been built since the “powers that be” wanted it desperately for some unknown reasons. However, as a result of these consultations, it is possible that the Expressway would not have been a huge wall dividing the city; it would not have displaced communities who have lived in the Corridor for more than a hundred years; it would not have disrupted the schooling of over 26,000 children and deprived thousands of persons of their jobs. In addition, the consultations would probably have declared the eighteenth century Jewish cemetery, the Hindu cremation grounds and the nineteenth century dhobi ghats as protected heritage, a heritage which we will lose. If the failures of the past have to be avoided then political decision making regarding development in general, and development projects in particular, has to be informed. Given the wealth of information, knowledge and practical experience available with Karachi’s academic institutions, professionals, organised community networks and NGOs, it is essential that a system of consultation between them and the decision makers is established. This is something that the new Nazim of Karachi has also mentioned in a number of the talks that he has given to the citizens of Karachi. It is proposed that every Karachi plan and proposal at the conceptual stage should be advertised along with its financial implications and displayed at an appropriate place that is easily accessible to the public. Consultations on the conceptual plan should be held with interest groups (including beneficiaries and victims) and relevant academic and civil society organisations. Concept finalisation should take place only after such consultations and a steering committee of interest groups should be appointed to oversee the detailed design and implementation of the project. One government officer should be responsible for overseeing the project from its inception to its completion and his name should be made synonymous with the project. Accounts should be published every three months and should be available to the public. Establishing this process will not be easy and will require considerable political will. However, once established this process will not only ensure accountability and transparency but will also develop a desperately needed sense of belonging and involvement of the citizens of Karachi in its development and management. In addition, it will help ensure that planning takes into consideration the requirements of Karachi’s low and lower middle income groups who are currently marginalized from the planning process. Much of the current mess in Karachi is the result of this marginalisation. __________________ Urban Resource Centre A-2/2, 2nd Floor, Westland Trade Centre, Commercial Area, Shaheed-e-Millat Road Karachi Co-operative Housing Society Union, Block 7 & 8 Karachi Pakistan Tel: +92 21 - 4559317 Fax:+92 21 4387692 E-mail; urc@cyber.net.pk web Site www.urckarachi.org	Arif Hasan Published in Daily Dawn 19 February 2006
Why do we need more slums in Asia ?	Posted November 30 2003
For the foreseeable future only informal settlements can provide housing for the poor because: Land is a commodity. The poor do not have the resources to purchase it. Funds available for slum upgrading are a fraction of the demand. Social housing in the present market economy and after structural adjustment is not a priority. Small showcase schemes due to the above reasons cannot be turned into effective policy options. Therefore what we require is not less slums but more slums. However, they should be Secure slums Slums in appropriate locations (near places of work, recreation, city centres) Slums that can evolve into non-slums in 15 to 20 years. For the above to happen you require A land-use plan that can be implemented and in which social considerations and not land value determines land-use. A land acquisition act for social housing A heavy non-utilisation fee on vacant land and property that makes speculation difficult. Collective ownership of land for slum and lower-middle income settlements. By-laws and zoning regulations that make the above possible. How do you achieve this is the major question I increasingly feel that the fundamental issues need to be addressed and I also feel that only political movements within the "developing" world can address them. This is not to say that the processes of community participation etc are not important. But at what stage does one move from these processes to address larger structural issues?	Arif Hasan Urban Heroes Award Arif Hasan POETRY and DEVELOPMENT Pakistan, buried under US $65 billion in foreign and domestic debt, plans to get $500m more from WB on June 12 2003 Alternatives to External Loans Go to the URC Karachi web-site for an informed paper on: POWER, POLITICS AND POVERTY IN PAKISTAN HERE h