Al-Ahram Weekly Online   11 - 17 June 2009
Issue No. 951
Economy
 
Published in Cairo by AL-AHRAM established in 1875

Development in 3D

Urban density is a good thing, the 2009 World Development Report implies, Niveen Wahish reports

For decades we have been hearing about how Cairo has sprawled beyond control, attracting migrants from rural areas looking for employment opportunities and a better life. World Bank figures show that Cairo produces more than half of Egypt's GDP while using 0.5 per cent of its total area. Such concentration causes problems. Some suggest the need for horizontal expansion into the desert and encouraging businesses to set up in various parts of the country, to take jobs to the people rather than the other way around. But that no longer seems the best thing to do. In fact, the World Bank's 2009 World Development Report (WDR) says that proximity to cities is a key to prosperity. According to the overview of the report, "to fight this concentration [in cities] is to fight growth itself, and policy-makers must show patience in dealing with these imbalances [between rural and urban areas]." In addition, the report shows that "policies to reduce interstate or provincial disparities in production and living standards are commonplace, but largely ineffective."

By the name of Reshaping Economic Geography, the report looks at how three "d's" -- density, distance and division -- have each made a difference in the economic development of countries. The report shows that density is important on the local level, encouraging people and firms to move closer together. On the national scale, distance is important. In terms of business and industry, the report says it is important to help "firms and workers reduce their distance from density" through the reduction of transportation costs and infrastructural investment. On the international level, the report says that border barriers, differences in regulations and currencies among countries block international integration at a time when integration is needed to promote growth. While making these policy proposals, the report points out that they will lead to an unequal distribution of growth. Nonetheless, "to try to spread out economic activity is to discourage it." Integration is key, whether of rural and urban areas, slums and other parts of cities, "lagging and leading provinces within a nation" as well as "isolated and well-connected countries".

To achieve integration and deal with disparities within or among countries, the report recommends the application of "policies that are spatially blind in their design and universal in their coverage". These, it says, include "regulations affecting land, labour and international trade", and social services such as education, health and sanitation. It also recommends paying attention to infrastructure and all that entails facilitating "the movement of goods, services, people and ideas locally, nationally and internationally". That includes roads, railways, airports, harbours and communication systems. The report is careful not to overlook the need to help particular areas, via slum clearance programmes or preferential trade access for poorer countries.

The solution may be easier said than done. Lubna Abdel-Latif, professor of economics at Cairo University, speaking at the launch of the 2009 WDR at the Egyptian Centre for Economic Studies this week, pointed out that there are downsides to the policies promoted by the report. She noted that the huge growth of Cairo has led to a distortion in the social fabric of families as well as in the city as a whole, resulting, for example, in higher crime rates. She also stressed that there must be clear policies to prevent the encroachment of the city on agricultural land -- a problem that has already manifested itself, and where encroachment often occurs faster than the government can do something about it. Meanwhile, for Egypt to make the most of urbanisation, according to Abdel-Latif, it must work on improving its road network, to enable citizens to access the services they need.

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