TREATING PEOPLE AND COMMUNITIES AS ASSETS
ACTIONS TO REDUCE POVERTY AND ACHIEVE THE MILLENNIUM DEVELOPMENT GOALS
Elda Solloso, and Luis Valenzuela
Range of Locally Driven Initiatives that Improve the Lives of Slum
In his landmark book
Development as Freedom, Professor Amartya Sen identifies five
interrelated “instrumental freedoms” providing persons with types of
rights and opportunities to improve their lives and shape their future.
These freedoms are viewed as the principal means of development. The
argument he presents is powerful and attests to the multidimensional
characteristics of social exclusion. The rationale underlying the links
between different categories of rights and opportunities is clear and
convincing. Access to one facilitates access to others, whereas denial
of any one category impedes one’s ability to reach others. This
conceptual framework is well suited to the analysis of public policies
affecting poor and marginalized populations. Public policies that
promote these rights enhance the capabilities of citizens and empower
them to become agents of their own development. Such policies enrich
the lives of citizens and enable them to achieve development goals.
Instrumental to Development: Amartya Sen
opportunities that people have to determine who should govern
them and on what principles.
opportunities to utilize economic resources for the purpose of
consumption, or production, or exchange.
arrangements that a society makes for education, health care and
other basic social services, which influence the individual's
substantive freedom to live better.
required for people to deal with one another under guarantees of
disclosure and trust.
safety net needed for preventing the affected population from
being reduced to abject misery, and in some cases even
starvation and death.
Development as Freedom, Amartya Sen
authority-driven initiatives that contribute to extending these freedoms
to poorer communities, marginalized groups, and other slum dwellers
(whose access to these freedoms and rights is generally constrained by
depriving them of the opportunities they need to pursue their own self
improvement) will empower them to achieve economic security and social
inclusion. Such initiatives contribute significantly to improving their
lives. They include:
participatory urban processes that give a voice in decision-making
to poor and marginalized populations.
communities, community-based organizations (CBOs), and
non-governmental organizations (NGOs), including advocacy groups, on
to land (including regularization), infrastructure, and urban
integrated programs for the improvement of the urban environment.
development of small businesses and micro-enterprises.
citizenship and social inclusion.
with foundations and philanthropic organizations on social projects.
hardships endured by poor and marginalized populations.
special programs to reach vulnerable groups.
allowed municipalities to act directly on a wide range of issues.
Democratic local governance has enabled them to institutionalize
participatory processes, negotiate partnership agreements to counter
deprivation or exclusion, develop instruments to target and reach the
areas of greatest need, and launch a range of initiatives to foster
Scope of Local Government Action
The cases reviewed
in this article document the range and diversity of local
authority-driven initiatives that improve the lives of slum dwellers.
Acting on a range of challenges requires a multifaceted approach.
Infrastructure is a
dominant component. This reflects the priority placed on access to
services. Water supply is a particularly important issue for women and
girls who in many cultures have traditionally been assigned the task of
fetching water for the family. Concern with sanitation among slum
dwellers increases in parallel with the deterioration of conditions in
the settlements, as densities rise and overcrowding becomes the norm
with multiple families on the same lot, sharing highly inadequate
facilities. While local government authorities are much more concerned
with the mitigation of health hazards, their awareness of broader
environmental issues has increased as a result of the activities of NGOs
promoting environmental protection and conservation, and the focus of
international donors on environmental issues since 1992.
roads, drainage, and transport are essential to integrate peripheral and
marginalized settlements in the urban fabric and economy. In the face
of growing disparities and economic downturns, promoting local
development has to include the necessity of opening up employment and
income generation opportunities for impoverished populations.
Interlinked multisectoral programs are needed to address these
challenges. Local authorities are the level of government most directly
involved, even where national and international funding is available to
support sectoral programs. The case studies reflect the growing
importance of local initiatives to support small businesses and
micro-enterprises, with and without outside support.
Housing is addressed
through a variety of mechanisms ranging from subsidized credit to
providing accommodations, to resettling populations living in
environmentally hazardous zones, to developing serviced sites and
housing for lower income groups. The importance placed on living
conditions by slum dwellers can be gauged from the speed at which home
improvements are initiated after security of occupancy is granted and
settlements regularized. All wage earners in the household contribute
cash, building materials and supplies, labor, and furnishings.
of local authorities in health care, education, vocational training, and
other social services depends on the degree of decentralized delivery of
these services in each country, and the devolution of functions to the
local level. It also reflects the critical role of local governments in
reaching and extending services to vulnerable groups.
to land regularization reflects the emphasis placed on property titling,
and the role of national authorities in the issuance of titles and the
recording of property transactions. The recent trends focusing on
security of occupancy rather than ownership rights have expanded the
capacity of local governments to address regularization on their own.
Access to land is critical to slum dwellers. It is the starting point
of any improvement process; it conditions the poor’s willingness to
secure and invest in building up assets, and empowers them to increase
their incomes and improve their lives through self-reliance.
Supportive Frameworks for Local Government Action
can be structured to channel funds to communities through local
governments or through NGOs and CBOs. Both approaches have led to
successful results when the focus was the institutionalization of
organizational and financial frameworks to support action at the local
Organizations Development Institute (CODI) is an outstanding example of
central initiatives working with CBOs. In 1992 the national government
set up the Urban Community Development Office (UCDO) to address
pervasive problems of urban poverty. UDCO channels funds to community
organizations, savings and loan groups, and NGOs for income-generation
activities, housing construction, and community improvement. Loans also
are provided to networks of CBOs for lending to member organizations.
In 2000, UDCO was incorporated into CODI, which reaches 950 savings
groups in 53 provinces, and plays a key role in the government’s slum
and international and regional financial institutions have advocated
decentralization as a general principle, albeit with some reservations
regarding the degree of fiscal decentralization feasible in particular
countries and circumstances. The integration of poverty alleviation as
a central component of lending strategies in the mid-1990s has led to a
renewed focus on fostering economic opportunities for the poor. Funds
were made available to governments to improve living conditions in slums
and squatter settlements.
The introduction of
more flexible lending instruments, adapted to the nature of programs
rather than projects, facilitated the development of a new generation of
interventions combining macroeconomic stabilization, national sectoral
policies, and integrated programs to alleviate poverty and improve the
urban environment. These programs advocated strengthening the capacity
of local governments and CBOs, encouraging participatory processes,
transparency and accountability in governance, and promoting increased
involvement of the private sector and civil society in all spheres of
local activity. Within the challenging contexts of transition and
financial crisis, programs in Albania and Indonesia illustrate
approaches to poverty alleviation emphasizing the role of local actors
and focusing on the improvement of squatter and informal settlements.
to Peri-urban Informal Settlements during the Transition
In Albania, the
transition to market-based democracy during the 1990s introduced new
patterns of mobility and land occupancy, rapid privatization of property
ownership, a legal environment characterized by constant change and new
relationships between central and local governments. The private sector
contribution to the GDP increased from 10 percent in 1992 to 75 percent
by 1996. In the four-year period between 1990 and 1994, the built-up
area in Tirana grew four times more than the previous 40 years, mostly
as a result of massive rural-to-urban migration, reaching the half
million mark in a country with a total population of 3 million.
This explosive urban
growth led to the proliferation of informal settlements on the edge of
Tirana’s boundaries. The settlements were growing at an alarming rate,
as exemplified by Kamza, where the population increased from 6,000 in
1994 to 60,000 by 2000. Residents lacked clear land tenure, basic
infrastructure services, access roads, and community facilities
including schools and health centers. Most households combined multiple
wage earners and multiple income-generating activities to meet basic
A task force of
national and local government authorities developed the Urban Land
Management Project (ULMP) funded by the Albanian government and the
World Bank to provide essential urban infrastructure to under-serviced
or neglected areas in greater Tirana and other urban centers, and to
strengthen the institutions responsible for the delivery of urban
services at the national and local levels.
The program was
designed to build upon popular practices and structured around five key
demand-driven delivery of services with reasonable conditionality
for residents and communities.
lower-income neighborhoods in both under-serviced or deteriorated
areas, and informal settlements without secure land tenure and
partnership models that engage residents in setting development
priorities and structuring agreements with municipalities.
cost-sharing for infrastructure among national government, municipal
authorities, and residents.
Scaling up and
building on the experience of pilot projects.
resources provide substantial support for the municipal project
implementation teams. Community-based organizations have a defining
role in mobilizing and organizing efforts at the community level. NGOs
give technical assistance to both the CBOs and the municipal government
funds provide the bulk of the project financing. Households contribute
10 percent of the infrastructure improvement costs in formal
neighborhoods, and 20 percent in informal neighborhoods. They also pay
the cost of the tertiary infrastructure. The municipal government share
was adjusted to reflect the cost to the municipalities in managing the
upgrading activities, and took into consideration their minimal share of
public revenue. They can contribute 5 percent of the costs of secondary
infrastructure as temporary financing, until they collect the funds from
In the two pilot
sites, housing a total of 4,500 inhabitants, tangible impacts can be
observed today. The active partnership among resident organizations,
local government, and the NGOs was critical in coordinating different
interventions funded by various programs and in the opening of public
rights of ways for roads. Land values and densities increased. After
years of disregarding urban planning concerns, the municipalities
formulated urban development plans and strategies.
The program made
adjustments to its operational strategies to begin scaling up. The
project coordination unit made a concerted effort to advertise the
program. This resulted in 40 applications for projects from different
municipalities and planning is underway for a total of 25 projects in
seven cities at an estimated cost of US$14.1 million. Given the
complexities of resolving land tenure and property ownership restitution
issues in Albania, a new approach was developed that allowed the program
to initiate improvements while simultaneously working on resolving
tenure problems. Studies have been initiated to develop provisional
property registration, and a land regularization office has been
established within the Municipality of Tirana.
Poverty Alleviation and Partnerships
between Municipalities and CBOs
The most recent
programs recognize the equally important role of local authorities and
civil society in improving the lives of the urban poor. They
simultaneously address issues of decentralization and poverty
alleviation and promote partnership between municipalities and
communities. Indonesia’s Urban Project illustrates this new strategic
decades of improvement in living standards were reversed by the recent
financial crisis and political instability. Tens of millions of
Indonesians who had managed to rise above the poverty level found
themselves once again struggling in poverty. Today about 30 million
urban dwellers live at or below the poverty line mostly in unserviced
laws in 1999 devolved wide responsibilities to local governments in
districts, cities, and villages. They are responsible for providing
health, education, public works, communications, and the management of
land and other environmental resources, as well as support of
agricultural, manufacturing, and commercial activities. The laws do not
specify which functions are mandatory for each category of local
authority and which are optional or shared with other authorities. This
lack of clarity notwithstanding, local governments have continued to
take the lead role in addressing the needs of lower income communities.
The devolution of responsibilities was matched by the devolution of
control over expenditures, but the decentralization of revenues did not
follow. Instead the national government has instituted new flexible
transfers which replaced the basic services grants for education,
health, and roads instituted in the 1970s. The new transfers introduced
in 2001 as the Fiscal Equalization Program consist of three separate
A lump sum
accounting for 10 percent of the total, distributed equally among
accounting for 40 percent of the total, reflecting the fiscal gap
between projected expenditure needs (based on an index of four
weighted indicators: population, area, poverty level, and cost
index) and estimated local fiscal capacity measured by collections
of own revenue sources and shared taxes revenues.
factor accounting for 50 percent of the total, ensuring that local
authorities receive at least the same amount as in the previous
years based on personnel expenditures. It is viewed as a transition
measure to be phased out in the future.
Own revenue sources
are still very limited and do not exceed 15 percent for cities and
towns. Despite the Fiscal Equalization transfers, local authorities
lack the resources needed to discharge their new statutory
responsibilities. To alleviate the hardships endured by impoverished
populations, the Indonesian government decided to reinstate targeted
transfers for basic education, health, and infrastructure services.
A separate poverty
alleviation grant funded through the World Bank will assist local
authorities working in partnership with CBOs to improve the lives of
urban dwellers living below the poverty line. Access to the grant is
made conditional on partnerships, joint preparation of proposals, joint
project selection processes, and joint implementation of activities.
Local governments also must commit to cover operational costs and
provide for the required matching funds. In addition they must support
community subprojects for which separate block grants (Kehurahan Grants)
are provided. The program is structured to ensure that communities
participate as full partners in decisions regarding the allocation of
funds, to strengthen local authorities’ ability to work with CBOs, to
foster community ownership of the program, and to promote longer term
sustainability of the improvements.
initiatives include pilot sites to test the performance of proposed
strategies and mechanisms before attempting to scale them up or transfer
the model to other locations. In this respect, it should be noted that
the most successful initiatives launched by local authorities on their
own with or without outside support have either provided the model for
the formulation of a national program, or were actually transferred to
the central level and mandated to work nationally.
A prominent example
of the former is Jakarta’s Kampung Improvement Program initiated by the
municipality in 1969 with the objective of providing a potable water
supply and improving basic sanitation and solid waste management in all
of Jakarta’s slums over a 15-year period. This outstanding program gave
rise to a national program with the same title under the Department of
Human Settlements. The program received wide international recognition
for its unparalleled achievements, having improved 11,000 hectares of
slums and reaching 15 million people over the past three decades.
The Challenges Faced by Megacities and Larger Urban Centers
larger urban centers are the engines of economic growth. They produce a
disproportionately large share of the Gross Domestic Product (GDP),
concentrate the nation’s purchasing power, and represent its largest
markets for goods and services. They cumulate key economic, commercial,
administrative, and cultural functions and encompass the country’s
leading financial, educational, research, and technology capabilities.
Their functional efficiency is key to national prosperity, and they
receive a large share of public investments to support and enhance their
production capacity and their competitiveness in a globalized economy.
larger urban centers exhibit sharp contrasts in the quality of their
urban environment, reflecting the disparities in income and wealth that
characterize different regions and provinces, as well as the nation as a
whole. Because they concentrate wealth and opportunity, they are
magnets attracting migratory flows from economically depressed areas,
and across national borders from the surrounding countries. The influx
of migrants swells the ranks of poor and marginalized populations living
in slums and informal settlements. Unplanned urban expansion often
spills over jurisdictional boundaries into adjacent smaller
municipalities, overwhelming their managerial and financial capacities.
Addressing the needs
of slum dwellers, including migrants and floating populations, is part
of the national social and political agenda. It is also a critical
component of local economic and social development strategies.
Operationalizing these strategies in larger urban centers requires
structures adapted to the scale of the city and the magnitude of the
challenge. The program implemented by Sao Paulo illustrates the
difficulties entailed by this effort.
Sao Paulo Slum Action Plan
In the challenging
context of Latin America, Sao Paulo, Brazil’s largest city and its
dominant economic center, anchors a metropolitan area grouping 55
municipalities with a total of 20 million inhabitants. It has to cope
with inequities in access to land and services which have led to the
proliferation of squatter settlements and the marginalization of
In Sao Paulo, the
Secretariat for Housing and Urban Development (SEHAB) directly runs five
major programmatic areas:
new housing units by “mutiroes” or private developers.
and upgrading of “favelas” (informal slum settlements)
housing and infrastructure works for population living in hazardous
construction and improvement in areas close to employment nodes.
of the historic center.
The secretariat is
working on slum upgrading in 30 slums, and has approximately 31,000
dwelling units under construction or renovation. SEHAB’s Slum Action
Plan requires coordination among programs undertaken by different
municipal secretariats as well as the state and federal governments.
The plan relies on community participation and empowerment and is based
on five fundamental principles:
The social right
to a decent home.
access to city space.
civil society in municipal decision-making and management.
The right to
secure occupancy of land in settled areas.
The priority of
lower income households in the allocation of public resources and
underlying the Slum Action Plan recognize the link between slums and
social exclusion, and call for the reorientation of municipal housing
policy to reinforce the city’s efforts at alleviating poverty. The
social housing program has been redirected to focus on resettling
households living in environmentally hazardous zones, providing
relocation dwellings to families displaced through slum upgrading
activities, and the extension of infrastructure to unserviced zones.
Over 5,000 families have received new housing under programs funded
through the Municipal Housing Fund, state and federal programs, and
To target the most
vulnerable groups in an objective and transparent manner, SEHAB
partnered with the Center for Metropolitan Studies to develop a spatial
and statistical database covering more than two thousand slums where
289,000 households accounting for 1.16 million inhabitants live in
substandard conditions. Mapping multi-dimensional indicators of social
exclusion allows the city to target the communities with the highest
unemployment and poverty rates, the lowest educational levels, the most
inadequate access to public services, and the highest rate of crime and
children at risk.
A special feature of
Sao Paulo’s program is “Bairro legal”. The program aims to improve
slums and deteriorated areas and integrate them as neighborhoods in the
city with secure land occupancy, adequate access to services and
community facilities, improved urban environment, and landscaped open
space and recreation areas. Priority is given to the designated special
zones of social interest (ZEIS) of which 600 have been delineated to
date. The action program includes three key components:
Development of housing and urban action plans at the district level:
The plans combine the technical and financial resources of the different
municipal departments, leverages local resources by obtaining funding
from the state and federal governments as well as external sources
including the Inter-American Development Bank, and includes NGOs as
partners. Priority is given to districts where CBOs are well organized
and actively involved in social issues, including control of urban
Slum upgrading and inclusion in the city’s physical and social fabric:
The program acts through land regularization, improved access to
infrastructure and public services, provision of new housing and
community facilities, and social projects. Fostering resident
participation in planning and decision-making, and ensuring community
approval at every stage of the program and its different activities, is
viewed as a fundamental component of the strategy and the cornerstone of
its success. Transparency and trust are preconditions to community
support for the program, and for participation by CBOs in the
maintenance of infrastructure and public space and the physical and
social management of the upgraded neighborhood.
Regularization of occupancy in informal settlements on publicly owned
land and in unauthorized subdivisions:
This program involves the release of municipally owned land to house
lower income families, regularization of occupancy in these informally
settled areas, and granting occupants land concessions authorizing
“special use for housing purposes”. In 2003, 160 settlements had been
regularized benefiting 40,000 families.
In April 2003, the
President of Brazil announced the creation of a housing fund of 5.3
billion Brazilian reals (US$1.6 billion) to finance the construction of
new housing and upgrading the favelas and other under-serviced areas.
The fund also will provide credit for housing improvement. Several
financial instruments ranging from micro-loans to assisted loans will be
available to lower and middle-income families. Families with a monthly
income below US$80 will receive direct subsidies. This fund will
make an important contribution to social equity and the improvement of
living conditions for the poorer segments of the population.
The Expanding Scope of Partnerships in Local Government Initiatives
In slums and
squatter settlements, sustained demand for infrastructure, particularly
water, has led the drive for security of tenure and access to services.
Local government response has been conditioned by statutory powers,
local politics, and especially the forcefulness and political potency of
the various public, private, NGO, and community actors operating through
formal and informal channels on the local scene. Their ability to
collaborate with these different actors is a key factor in their
effectiveness at structuring programs that can significantly improve the
lives of slum dwellers. The range of partners involved in local
authority-driven initiatives has grown in parallel with decentralization
and the expanding scope of local responsibilities.
has sometimes been marred by mismanagement and excessive politicization,
the best-governed local governments are taking bold decisions,
negotiating with communities and social movements and advocacy groups,
entering into agreements with strategic partners, and instituting
innovative practices. As they move away from promises and projects
motivated by electoral tactics to strategies and action plans formulated
through participatory processes, local authorities become far more
effective in addressing the needs of slum dwellers. Partnerships,
multisectoral strategies, and integrated mutually reinforcing
initiatives are the key features of successful programs.
program in Fortaleza, Brazil, was a leader in structuring partnerships
integrating state and municipal government, NGOs, CBOs, and local
stakeholders as full partners to simultaneously improve the lives of
favela residents, guide the expansion of the urbanized area, and offer
socially, economically, and environmentally adapted models for the
settlement of poor households.
capital of Ceara State, has a population of 2.5 million inhabitants,
over half of whom live in more than 350 favelas. The inability of
housing and slum upgrading programs to keep up with migration from rural
areas fueled their proliferation at the rate of one new favela emerging
every month. In 1987, the state and the municipality initiated a
housing program for lower income families relying on the traditional
self-help system known as “mutiroes”. To date, more than 11,000 units
have been built by their future occupants. In addition, a social
assistance program called PROAFA has been a factor in engaging favela
communities in the development effort.
In 1988 the
Municipality of Fortaleza and the popular council of Rondon district
with support from international donors, signed a partnership agreement
to develop a strategic approach to address the challenge of uncontrolled
urbanization and poverty. The concept focused on the development of
strategically located micro-settlements to draw urbanization in desired
directions. Their planned location near very poor favelas brings badly
needed services to the peri-urban fringe. They create nodes offering an
alternative pattern of urbanization affordable to lower income
populations through community-based methods of development. The success
of the pilot project housing 50 lower income families led the state
government to support expanding this initiative.
Comunidades program structures an interface for coordinated action among
the key stakeholders involved in urban development. The process
capitalizes on the complementary roles of NGOs with the capacity to
innovate and lead outreach and mobilization efforts, and the public
authorities that can foster institutionalization and replication of
successful actions. The program has three strategic objectives: to
create a setting for self-built housing, to generate employment
opportunities, and to set in motion a process of sustainable
managed by a special commission (the Integration Council), which
includes two representatives of each of the partners involved: the state
government, the municipalities, the university and the technical school,
the intermediary NGOs, and the community groups. The council prepares
the work plan, coordinates public, private, and community inputs and
gives the community a voice in the allocation of financial assistance to
different activities. Separate agreements are signed for each project.
The state government covers the cost of infrastructure and provides
machinery and equipment for the workshops, as well as building materials
for the core development. The municipalities secure the land and
implement public works. The educational institutions contribute
training in construction methods.
associations are organized in each project area and they manage a
community fund. This fund derives its resources from members’
contributions, and from rents paid for workshops and commercial
premises. Title to the land is initially transferred by the
municipality to the community association. Later, the community
association can grant ownership rights to members in good standing for
five or more years. Members of the Comunidades are drawn from
the adjacent favelas. They are usually poor families living in
shared accommodations. They contribute 600 to 800 hours of sweat equity
for the construction of their houses and community facilities. The cost
to the public authority was US$1,000 for infrastructure, US$800 for
other services, US$800 for building materials, and US$300 for the
workshops, on a per household basis for the 50 families in the core
The job creation
component is a cornerstone of the Comunidades concept. The
workshop producing building materials and prefabricated components for
housing construction is the first component built on the site. It
anchors an activity zone where micro-enterprises can be started by
residents in the Comunidades and adjacent favelas. A credit line
established by the state government provides entrepreneurs with seed
capital and working capital. The fund is replenished through borrowers’
savings and loan repayments, allocations from the community association
fund, and contributions from the municipality.
In parallel, a
credit program “Casa Melhor” has been established providing home
improvement loans at zero interest, reimbursable over a one-year period
to Comunidades and favela residents with legal occupancy rights.
Community associations review and guarantee the applicants, and an
intermediary NGO manages the program. Households may apply for a
maximum of three loans for the same property. The municipal subsidy,
initially equivalent to 30 percent, is progressively phased out and
offset by increasing contributions from the borrowers.
introduced concepts that have become the hallmark of successful
initiatives today, including partnerships among local stakeholders,
interlinked programs, integrated strategic initiatives, and community
management of activities. In 1996 it won
UN-Habitat’s Dubai Award for Best Practices to Improve the Living
International and Bilateral Development Organizations: From actors to
partners, an evolution in parallel with decentralization
In support of their
advocacy of decentralization, international and bilateral development
organizations have emphasized the need to strengthen the role and
capabilities of local governments and channel funding to the local
level. In the process they have tempered their marked preference for
creating special entities and institutional arrangements to implement
the programs they fund. They may and often do request recipient local
governments to establish within the municipal organizational framework
appropriate structures to guide and monitor program implementation.
evolution, central governments have been enjoined to progressively
withdraw from direct interventions and involvement in the daily
operations of programs. Instead, they are acting in a supportive role,
channeling to localities and communities the inputs they need in terms
of funds, technical and material resources to assist them in the
execution of public works and the operation of programs. Similarly,
local authorities are encouraged to draw on the efficiencies and
financial capacity of the private sector for specific program
components, and to delegate CBOs with responsibilities for community
organizing and management of activities.
to improve the lives of slum dwellers and alleviate poverty among
vulnerable groups most often receive earmarked transfers from national
and international donors, who exercise some oversight. These
initiatives require intergovernmental coordination, clear definition of
responsibilities, and smooth interface with communities and households.
Proper structure tends to evolve over time as the actors involved gain
experience and redefine their roles. The evolution from actor to
partner requires a change in institutional culture as well as in
procedures. In countries with high levels of decentralization, central
agencies have accomplished this shift. The examples summarized below
illustrate this evolution in countries undergoing rapid and profound
political, economic, and social change. Drawn from different contexts
and cultures, they highlight the common features of recent trends.
for Basic Infrastructure Services
instituted the Municipal Infrastructure Grant Program (MIP) in 1995 to
ensure “that all communities have access to at least a basic level of
service”. The program was part of the government’s multifaceted effort
at overcoming the apartheid legacy and addressing the sharp inequities
prevailing in the country. The concept of services is broadly defined
and allows the program to fund all categories of infrastructure, many
community facilities, as well as building the capacity of municipalities
to manage the services they deliver. The program is structured to
contribute to six strategic objectives:
living environment and promoting social equity.
divided urban areas.
employing local entrepreneurs, contractors, and workers, with
special emphasis on women and youth.
infrastructure to support the development of housing (housing
construction is funded by a separate program).
The program offers
grants of 7000 South African rand (US$830) per household, covering the
cost of basic services. It is primarily oriented to reach poorer urban
and rural communities, as reflected in the criteria for the allocation
of funds: number of families earning less than 800 South African rand
(US$95) per month, lack of water supply, and level of unemployment in
the community. This program is designed as a partnership between the
national government, the provincial government, the municipalities, and
the communities. All funding requests must be initiated by the
communities. Municipalities prioritize the requests, and provincial
governments review their eligibility and submit the proposals to the
national government. The grants are disbursed to the community through
the municipality. Municipalities and provincial governments can and do
supplement the grants with funds from their own budgets. Structured for
geographic outreach and speed of delivery, the program completed 2,323
projects with 910 more under construction and 878 in the design stage as
of June 2003. The management team has developed indicators to assess
the program’s impacts and contribution to the government’s strategic
Given the magnitude
of the challenges faced, the government in 1998 redefined the program’s
scope to include upgrading of infrastructure and service-delivery
systems, reinforcing links with local economic development, enhancing
the retention of funds in the community, and expanding mechanisms to
empower marginalized populations. To meet this more ambitious mandate,
the program budget was increased from 91.43 million South African rand
(US$20 million) in 1997/98 to 702.31 million South African rand (US$142
million) in 1998/99. In view of the impressive performance achieved
since then, the budget has steadily grown: doubling in 2002/03 to
1,790.90 million South African rand (US$157 million). It was expected
to double again in 2003/04, reaching 2,357.00 million South African rand
(US$278 million), making it one of the largest and most ambitious
programs of its kind in the world.
leaders are now able to mobilize their communities and tap the resources
provided by national funds to promote local development and improve the
lives of families living in slums and squatter settlements. This
increased capacity is demonstrated by the community of Klapmuts in
Western Cape, South Africa.
In 1994, Klapmuts
was the most disadvantaged community in the municipality of Stellenbosch.
It had 200 formal houses and approximately 770 households living in
squatter settlements. It had no piped water supply or sewerage, and
only one paved road leading to the school. The well from which
residents derived water had become badly polluted. The community came
together, energized by responsible and entrepreneurial older and younger
leaders, able to work together across racial, ethnic, and generational
boundaries in order to create a better future for their community. They
established a development forum to improve the town’s deficient
infrastructure and housing.
The MIP grant was
used to extend infrastructure systems to the town, to connect existing
houses to the new systems, and to service land for an urban extension
zone designed for resettling the squatter population. The National
Housing Subsidy funded the housing project and Stellenbosch Municipality
provided supplementary funding.
viewed community participation in planning and implementation of
projects and fostering civic responsibility and self-reliance among
disadvantaged families as the cornerstone of sustainable improvement in
the town. Households were offered a finished house of 25 square meters
or an unfinished platform of 48 square meters including the foundation
slab, the toilet, and the roof. Except for the elderly and recently
arrived rural migrants who prefer to get a finished unit irrespective of
size, urban families opted for the larger unfinished space, despite a
requirement that they must initiate improvements within one month and
complete the outside shell within three months. Eligibility was made
conditional on payment for services and demolition of shacks, to prevent
the perpetuation of squatter housing through the renting out of vacated
Land ownership plots
were drawn directly from the total pool of relocatees through a lottery
system, resulting in a mix of races and ethnic groups throughout the
housing zone. The families decided to allocate a portion of their
housing subsidies to develop playgrounds and public open spaces, and
contributed their own labor to supplement the funds. Today, proximity
to Cape Town is fueling an influx of rural migrants to Klapmuts, and the
town is now facing the challenge of integrating them physically,
socially, and economically.
Redefining the Role of
Frameworks for Regional / Local Relations
In Europe the role
of regional authorities has been redefined to adapt to globalization and
reflect a supranational geographic space where economic growth is driven
by networks of cities with dominant nodes and where development is
shaped by major transport corridors. Regional authorities have become
key links in the planning and management of economic and social
development. The European Union and national governments channel funds
to local authorities through the regions, and local governments have to
align their own development plans to regional strategies. An example
from Spain illustrates how this integrated supportive framework can help
cities cope with the problems of environmental degradation and social
exclusion in inner city slums and economically distressed areas.
In Cordoba, Spain,
the historic center (Old Town) suffers from depopulation, with a
concomitant concentration of social problems: unemployment, widespread
poverty, marginalization, prostitution, and drug addiction.
Deterioration of the urban environment is also leading to loss of a
unique architectural heritage which attracts world tourism to the area.
The Municipality of Cordoba decided to formulate and implement an
integrated action plan to revitalize the District of La Ribera in the
Old Town. The rehabilitation of a strategically located public area
which had reached an unacceptable level of degradation was identified as
an effective intervention to launch the program. The project is funded
through a European Union (EU) regional policy program called URBAN,
targeting urban neighborhoods in extreme state of deprivation and
monitored through the regions. The EU grant covers 70 percent of the
financing and the remainder is covered by the municipality.
signed with various NGOs, advocacy groups, and community associations,
including the "Hiedra" Association of Female Prostitutes, the Cordoba
Pro-immigrant Association, Andalucia Acoge, the Cordoba Gypsy
Secretariat, the Axerquia Residents' Association), Caritas, and the
Association for the Social Defense of Teenagers and Children.
The URBAN Ribera
project managed to revitalize this depressed district by responding to
the needs of the population. Forty one businesses benefited from grants
totaling about 1 million Euros (US$900,000). The grants leveraged
private investment of 3.35 million Euros (US$2.9 million) and created
jobs. Extensive technical training was provided to students seeking
entry in the labor market and companies were given incentives to employ
area residents and new entrants in the labor force. Participation of
neighborhood groups and associations has helped develop consensus and
mobilize the disadvantaged populations. Targeted social actions reached
the most marginalized groups and contributed significantly to improving
their quality of life, particularly the women's groups. These targeted
actions required a higher commitment of resources from the standpoint of
the city, but did reach relatively inaccessible groups that conventional
programs do not reach.
In Eastern and
Central Europe where the bulk of the Tsigan or Roma population lives,
these communities have traditionally been a marginalized group. In
Greece, the Tsigan population is estimated at 120,000 to 150,000, most
of whom live in the rural areas but an increasing number are settling in
or near urban centers.
During the 1990s,
joint efforts have been made by the national government and the Tsigan
community to address issues of social and economic exclusion. In 1996,
a framework for the social development and the protection of the Tsigan
population was formulated. Measures were adopted to improve health,
social welfare, vocational guidance, and psychosocial counseling
services, and to provide housing accommodations. An inter-ministerial
committee oversees implementation and the European Union is providing
the bulk of the funding.
The Municipality of
Sofades, located in the Thessaly region, has a population of 12,000 of
which 3,000 are Tsigans. The Tsigan community settled on a peripheral
area near the river where 400 families live in very substandard
conditions. Fifty percent of the houses are shacks and the site is not
connected to the water supply and sewerage networks. Families of six to
eight members share housing areas of 30 to 40 square meters. Most of
the Tsigan adult population is illiterate, and there is a high rate of
school dropout before elementary school completion, particularly
affecting female children.
undertaken a housing project to resettle the Tsigan population, as the
existing settlement could not be upgraded because the plots were too
small to allow for the provision of housing units which would minimally
match the housing standards of the average family in Greece. The new
site adjacent to the urbanized area can accommodate a total of 700
families in plots of 400 square meters and houses of 120 square meters.
A 20 meter-wide access road and a municipal bus service will connect
the settlement to the town center. Community and recreational
facilities as well as a nursery school will be also provided, and
possibly also a health clinic.
loan of 45,000 Euros (US$38,800) repayable over a 20-year period is
provided to Tsigan families to build new houses either in the
de-densified old settlement, in the new settlement, or anywhere else in
the municipality. The government also will extend the housing loan to
other Tsigan families throughout the country, conditional on the local
government authorities providing the land.
exclusion had created prejudices and distrust which had to be overcome.
Municipal officials and the Tsigan community held a series of meetings
to discuss community needs, housing, financing terms, and eligibility
criteria. A Social Services Department was established in the
municipality with three assistants from the Tsigan community to
facilitate communication with local and national authorities. From 2000
to 2003, there was a drastic shift from an initial refusal to leave the
old settlement to an overwhelming demand to move to a new housing unit.
While the higher housing standards promote social inclusion, the Tsigans
are worried about maintenance costs. Expanded access to education,
health care, vocational training, and better employment opportunities
are needed to significantly improve the lives of the Tsigan population.
The Growing Role of
NGOs and CBOs as Strategic Partners in Locally-Driven Initiatives
Quite apart from
their advocacy role, NGOs and CBOs have emerged as key partners of
municipalities in efforts to alleviate poverty, regularize land
occupancy, deliver services, and otherwise act on the multifaceted
aspects of social exclusion. Pervasive difficulties in securing
financing for capital investments and in building a capacity for
outreach and community organization within the organizational structure
of local government has been the catalyst and the driving force
sustaining the shift towards action through partnerships between local
authorities, NGOs, and CBOs. Even in the case of infrastructure,
community-based service providers are increasingly involved in the
delivery of services to poor communities.
Linking Formal and
Informal Service Providers
In many developing
countries, unplanned urban growth and mounting densities have
overwhelmed the capacity of local governments to deliver services and
eroded the efficiency of traditional systems. As is usually the case,
the poorer neighborhoods are the most affected by curtailment or
collapse of service delivery systems. Initiatives aiming to deliver
services to poorer communities hinge on the ability to link formal and
informal actors operating at different geographical levels, and relying
on different technologies.
In West African
cities water supply, sanitation, and garbage collection are priority
concerns and have reached crisis levels in many locations. Typically,
few services are provided in informal subdivisions and none in squatter
In 1988, the Commune
of Adjame in Abidjan, Cote d’Ivoire, facing severe budget cuts under
national structural adjustment programs, somehow managed to nurture and
support community-based structures, including the “Comite de Development
de Quartiers” (CDQs), to deliver services in the city’s 19
neighborhoods. The CDQs were provided start-up capital to launch the
services they offered. Beyond the start-up period, the services had to
be operated on a self-supporting basis, an imperative for continuity in
situations where central transfers have been curtailed and subsidies for
operating costs cannot be sustained over the long term. In the early
1990s, the commune experimented with encouraging the CDQs, which employ
and train youths, to expand their responsibility for street sweeping, to
cover regular collection of garbage and trash, and to deposit wastes at
designated stations along the major paved roads. The private companies
contracted to provide solid waste collection and disposal services for
the 12 communes of Abidjan, removed the wastes from these dumping
stations. Adjame sought an abatement of its assessment for the citywide
service. The savings would be applied to procure the equipment needed
for the CDQ collection service. Ten years later, the city of Cotonou,
Benin, struggling with these very same issues has devised similar
solutions based on partnerships between municipalities, NGOs, and CBOs.
for the Protection of the Environment (Pr.A.P.E.) focuses on providing a
healthy environment for Cotonou’s communities. Instituting a functional
garbage collection system and reducing uncontrolled dumping of waste in
a city of 1 million inhabitants lacking a solid waste management program
was conceived as an environmental protection initiative. Pr.A.P.E. is
run by an NGO which employs local youths to collect waste. Subscribers
to the service pay monthly fees. Two committees composed of community
residents were established. The development committee formulates plans
and defines the responsibilities of each partner, and the technical
advisory committee monitors the sanitation activities. Pr.A.P.E.
provides technical support and addresses technical issues. The
municipality assumes the responsibility of transporting waste from
dumping stations to the disposal sites and ensuring that disposal meets
accepted environmental standards.
considered a cornerstone of the program. It uses ecologically sound
technologies including biological treatment of polluted run-off water,
control of harmful gas emissions, composting of organic wastes, and
reducing 30 dumpsites to five. Pr.A.P.E. organizes and trains women to
collect and resell recyclable materials. Bilateral aid (from Germany)
provided start-up funds for the project in 1995.
In the first five
years of operation, 80 percent of the population subscribed to the
service. Payment rates were on the order of 95 percent, allowing the
collection system to become self-financing and 200 permanent jobs to be
created. Another grant contributed seed capital to set up a community
bank, enabling women recyclers to access micro-credit to start up and
expand their activities. In 2002, this program won an international
Award for Best Practices to Improve the Living Environment from United
Nations-Habitat and the Dubai Municipality.
In 1998, a similar
deplorable situation prevailed regarding water distribution in Cotonou.
The piped water supply system operated by a public corporation, “Benin
Water and Electricity Company” (SBEE), covered less than 50 percent of
the city. Only 16 percent of the households were directly connected and
32 percent purchased potable water from neighbors. Half the population,
including the poorest households living in hazardous conditions in the
wetlands, had to buy water of dubious quality at high cost from informal
Development Partnership (PDM), a regional organization, encouraged the
municipality to intervene to alleviate the hardships endured by the
poor, and deliver services to the households in the peripheral urban
wetlands at a cost they can afford. This entailed reaching and
organizing the vendors and building up their capacities. A formal
Association of Water Vendors (AREB) was created grouping 300 vendors
operating in Cotonou, Porto Novo, and Parakou. This entrepreneurial
core group accounted for 20 percent of potential members.
The Municipality and
the SBEE officially recognized AREB as a partner in the delivery of
water supply. An agreement was negotiated between SBEE and AREB,
granting members preferential pricing for water purchases. This
practically eliminated the perennial disruption of supply in the poorer
settlements when operators of water fountains ran arrears in the
settlement of bills and were cut off. A survey of fountains in
operation demonstrated that hygiene around these water points has
improved. For the first time since 1960 when public water fountains
were closed down, the municipality is constructing 24 fountains in
settlements that are not regularized. AREB members will operate the
The PDM acts as a
mediator and a facilitator to overcome the conflicts and distrust
prevailing between small vendors, SBEE, and the municipality. It is
planning to transfer this partnership concept to other West African
cities to improve the delivery of services to the poor.
The Expanding Role
of Microfinance Institutions
become a dominant feature of poverty alleviation programs implemented
since the late 1990s. Invariably, these programs include components to
finance microcredit initiatives. Yet, microcredit institutions have
expanded their products beyond making loans for income-generating
activities. Leading institutions offer credit for housing improvement,
and more recently, access to urban land and infrastructure services.
They have now become key strategic partners for local authorities in
their efforts to improve the living conditions of the poor. The
Parivartan initiative in Ahmedabad, India, is an outstanding example of
the effectiveness of this partnership.
Slum Networking Program, Ahmedabad, India
Ahmedabad is the
major commercial, industrial, and financial center in the state of
Gujarat. It has a population of 3.5 million of which 41 percent live in
slums and under-serviced areas. The bulk of the residents living in the
slums share water supply and more than 25 percent have no toilet
facilities. Ninety percent of the families live in shacks. Despite
combining home-based economic activities with occupations outside the
slum, poverty and extreme poverty is widespread, with a monthly
household income of about 500 Indian rupees (US$11) in 2000. Desire to
improve living conditions was tempered by distrust in the local
government and hampered by poor community organization.
In the mid-1990s,
the Ahmedabad Municipal Corporation (AMC) decided to face the twin
challenge of providing basic services for its growing population and
improving living conditions in the slum neighborhoods. AMC was running
budget deficits, with accumulated losses of 350 million Indian rupees
(US$9.2 million). Sound fiscal and managerial reforms were a
precondition to enable the AMC to improve and expand infrastructure
services. These included improving tax collections, upgrading the
workforce, and partnering with the local business community, NGOs, and
other organizations to develop new initiatives to reach the poor.
The Slum Networking
Project referred to as Parivartan was initiated to provide slums
dwellers with infrastructure, including individual water supply,
underground sewerage, individual toilets, solid waste collection, storm
water drains, internal roads and paving, street lighting, and
landscaping. The cost of the secondary and tertiary infrastructure
required could be covered by municipal budget allocations and national
transfers and grants. Resources had to be found to pay the balance,
namely the cost of house connections amounting to 6,300 Indian rupees
(US$138) per household. This cost was divided in three equal parts, and
it was decided that the household and the municipality would each cover
one-third and the remaining one-third would be raised from private
The AMC sought
assistance from the Self-Employed Women’s Association (SEWA), an NGO
established in Ahmedabad in 1992 as a trade union to empower low-income
women working in the informal sector (which account for 96 percent of
employed women). SEWA, at the request of its members, established two
micro-credit institutions, first, SEWA Bank, a cooperative bank fully
owned by SEWA shareholding members, and then the Mahila SEWA Trust (MHT)
which provides members with legal and technical assistance as well as
micro-loans to improve their housing. In 2000, SEWA had a membership of
220,000 and SEWA Bank had nearly 113,000 depositors and 36,000 borrowers
with a working capital of just over US$6 million.
SEWA agreed to
partner with the AMC in the Parivartan initiative. SEWA assumed
responsibility for community outreach and organization. A female-led
CBO is established in each slum community. Acting as financial and
technical intermediary, SEWA assists households in meeting the program’s
technical requirements and negotiates with AMC on the community’s
behalf, as for example, in defining minimum setbacks for street width
and alignments. SEWA extends micro-loans of up to US$37 per household
to be repaid in monthly installments of US$2.30 or as a lump sum. The
loans carry an interest rate of 14.5 percent. SEWA also helps AMC
obtain matching grants from local businesses and philanthropies.
designates the slums for upgrading and regularizes land tenure. All
participating households are provided with written documents ensuring
security of land tenure for a minimum period of 10 years that can be
renewed. Participation is optional but conditional on commitment to pay
their share of the program’s costs: US$48 towards the infrastructure
improvement package and US$2.30 towards the cost of maintenance. The
AMC continues to support communities by holding monthly monitoring
meetings with the partners to review work progress and share discussions
of future plans. In addition, they maintain office hours to attend to
public concerns and provide training to orient the communities on
technical aspects of the projects.
Within five years,
Parivartan reached 9,435 families with 56,610 people in over 40 slums.
It is being expanded to include 59 more slums reaching an additional
15,431 households. The impact on the lives of slum dwellers is already
evident in the pilot areas. Death rates have declined from 6.9 per 1000
to 3.7 per 1000. Communities have seen an increase in children
immunized against disease, from 31.25 percent to 51.35 percent of all
children and 100 percent of newborns. General illness incidence has
also been lowered from 24.4 percent to 16.5 percent, allowing families
to decrease their monthly expenditures on health related problems from
131 Indian rupees (US$3) to 74 Indian rupees (US$1.70).
Enhanced ability to
generate income and access to employment opportunities has enabled
families to increase their monthly expenditures from 2806 Indian rupees
(US$64) to 3740 Indian rupees (US$86). They can rely on the assistance
provided by community-based organizations which have now been
established in every slum. The program also has improved the level of
basic education. Pre-primary and supplementary classes are now being
held and literacy rates have increased from 30 percent to 45 percent.
Partnerships and Institutional Arrangements
involving a multiplicity of local actors and stakeholders, the
management of integrated programs can become overly complex. Attempts
to combine multi-sectoral initiatives and multiple partners within a
single institutional framework for joint action can result in cumbersome
processes, unwieldy decision-making and long delays in implementation of
activities. Interlinked partnerships can offer more effective
approaches when local authorities have the technical and managerial
capacity needed to structure and drive such complex initiatives.
In 1988, the dynamic
Mayor of Cebu, Philippines, initiated a reform in governance and
transformed the way the municipality relates to and serves poor urban
communities. He developed a set of interlinked partnerships with NGOs,
CBOs, and the private sector. City departments and offices have been
grouped into four clusters:
A simple interface
with the public was developed. New offices were established including a
special Women's Desk and a Child and Youth Section at every police
The Urban Basic
Services Program, addressed urban poverty by: increasing geographic
coverage; providing secure land occupancy; improving access to basic
health, education, and social services; expanding social welfare and
vocational training programs; extending credit to the informal
micro-entrepreneurs and organized urban poor groups; promoting home
improvements through cooperation with private businesses,
community-based housing associations, and mortgage credit; and
coordinating and improving the delivery of special services for street
children, single mothers, disabled persons, and destitute individuals
The Cebu Commission
on the Urban Poor coordinates this complex program. The partnerships
involve 13 public agencies, 26 NGOs, and 26 area task forces. A trust
fund replenished by proceeds from the sale of city-owned land was
created to provide shelter and cover related expenditures. The
participation of street vendors' associations in the management of the
markets is recognized in the Revised Market Code.
The city has
developed programs to build the capacity of barangays (communities) and
grassroots organizations to enable them to take an active role in the
development of projects. Outreach, community organization, consultative
meetings, assemblies, and training sessions allowed barangay officials
and police, farmers, women, youth, vendors' associations, area task
forces, and community-based street educators to participate fully in
planning, implementing and monitoring the different activities and
schemes have been adopted to support partnerships, including the
Emergency Rescue Unit Foundation which receives a subsidy from the city
government to provide emergency medical services, and the Cebu People's
Multi-Purpose Cooperative that provides credit and support services to
the Urban Basic Services Program in 26 low-income barangays has achieved
remarkable results. The proportion of fully immunized children
increased from 52.1 percent in 1989 to 92.1 percent in 1994. Infant
mortality rates declined from 34.2 percent per 1,000 live births in 1989
to 20.3 in 1994. Maternal deaths decreased from 0.8 deaths per 1,000
live births in 1990 to 0.6 in 1994. The percentage of severely and
moderately malnourished pre-schoolers decreased significantly from 16.5
in 1989 to 9.9 in 1994. The number of agencies involved in the Cebu
City Task Force on Street Children grew from four in 1990 to 21 in
1994. Most importantly, the initiative strengthened civic organizations
in participating communities, leading to the formation of 13 barangay
development councils, 13 water users groups, nine multi-purpose
cooperatives, three credit cooperatives, and five
initiatives are needed to address the needs of vulnerable populations.
Worldwide, the number of children at risk and street children has been
increasing at an alarming rate. Where this distressing problem was a
minor issue it has now become a major concern. Impoverishment and
marginalization of large segments of the population, urban and domestic
violence, mobility, displacement, and civil strife are factors
contributing to the erosion of traditional community structures which
helped protect vulnerable groups including children at risk. The
devastating impacts of neglect, abuse, and abandonment of street
children have prompted renewed international and national action.
Involving the Private
The participation of
private enterprise in local authority-driven initiatives to improve the
lives of slum dwellers has been largely limited to grants and donations
for particular social initiatives, as in the case of Parivartan.
rests on the ability of the local leadership, particularly mayors, to
structure civic forums and networks that can engage the businesses
sector, get entrepreneurs interested and convince them that the
resources they provide will be well-managed and used for the purposes
for which they were donated. The reluctance of private entrepreneurs to
get more directly involved comes from their concern that local
governments may shift to them responsibilities for social assistance
that they are unwilling to assume.
In Central and South
America, private enterprise is starting to take a more active role in
local economic development initiatives. Creative approaches are being
developed to integrate poverty reduction and social inclusion in
strategies and programs for local development. The experience of
Nejapa’s Local Development Fund in San Salvador is instructive. It
demonstrates the resource mobilization potential of these promising
Nejapa is a
municipality of 30,000 inhabitants located in the San Salvador
metropolitan area, experiencing a very rapid urbanization. Despite its
attractiveness as an industrial location due to its water resources and
to its proximity to planned major infrastructure projects, development
indicators in Nejapa are the lowest in the region. The majority of the
population lives in slums and squatter settlements. Poverty is rampant
with 79 percent of the residents considered poor, and 48 percent
classified as living in “extreme poverty”. Educational levels are low,
with 30 percent of the population over 10 years old being illiterate.
Thirty eight percent of the dwellings are overcrowded, 84 percent lack
water supply, and 49 percent lack electricity. Deforestation,
pollution, and uncontrolled sewage discharge threaten the water
resources of the area.
A Local Development
Fund in Nejapa was established in 1997 to provide a sustainable
instrument of mobilization, coordination, and integration of the
resources and capabilities for development in the municipality. The
objectives of the fund are: to generate a sustained flow of resources
for programs and projects selected by local communities, to promote and
coordinate the role of key stakeholders and their potential contribution
to local development, and to foster a culture of consensus and
collaboration as a mechanism for sustainability of local development in
Nejapa. A Compensation Fund was set up to provide seed capital to
enable the municipality to initiate economically viable projects. This
fund was needed to overcome the rigidity of budget procedures in San
Salvador, which constrains local government’s ability to pre-finance
Development Fund is managed by a representative of the central
government; two officials of the municipality; four representatives of
the two local enterprises, EMBOLSAVA (representing Coca Cola products)
and the Nejapa Power Company; two representatives of the Association for
development of Nejapa (ACDN) which includes many different CBOs; two
members of NGOs, FUSAI and FUNDE; and two representatives of
international investors, the FIA (Inter-American Foundation) and SIDA
(Swedish International Development Cooperation Agency).
Development Fund mobilized US$814,297 for the development of the
municipality, of which 64 percent are grants from international donors,
17 percent from the private sector, 12 percent from other local actors,
4 percent from the municipal government, and 3 percent from the
community. The Municipality of Nejapa is expecting to be able to
contribute about 20 percent in the future as a result of the increase in
central transfers to local governments.
To date, the fund
has developed 12 projects representing an approximate investment of
US$368,682. The projects directly benefit 53,753 persons and at least
11 organizations in the public, private, and social sectors. Over the
past two years, the fund financed projects for environmental recovery
(reforestation and water-related projects), infrastructure (bridge
construction, electricity, and lighting), housing, and social services.
New Trends in Local
Government Initiatives: Networks of Stakeholders, Complementarities in
Action, and Leveraging of Resources
Effectiveness of Local Governments
The ability of
municipalities to capitalize on decentralization is directly related to
their capacity to layer action plans programmatically into components
for which institutional arrangements and financial support can be sought
separately. This implies a capacity to identify strategic partners, tap
multiple sources of funding, leverage resources, and coordinate the flow
of investment funds to ensure overall coherence in program
implementation and operation.
The Municipality of
Santo Andre in the greater Sao Paolo region is a leader among Latin
American local authorities in establishing such a capacity. With a
population of 650,000, Santo Andre has been severely affected by the
retrenchment of the automotive and heavy industry sector in the region.
The city is collaborating with seven adjacent municipalities to
restructure the economy of the sub-region (referred to as the ABC
Region) by promoting local small and medium-sized enterprises in an
effort to counter the loss of employment and the erosion of the tax
base. Simultaneously, the city is restructuring the petrochemicals
sector and seeking to attract high value-added industries.
Planning and Budget Secretariat was been reorganized into four
departments. The Participatory Planning department is responsible for
the participatory planning and budgeting processes; the department of
Strategic Planning and Budgeting controls and monitors the municipal
budget; the office of Coordination of Socio-Economic Indicators develops
and maps statistical data to identify areas of greatest need; and the
office of Coordination of Resources is responsible for accessing
resources from outside the municipality and directing funds to implement
multidimensional character of social inclusion, Santo Andre’s Integrated
Social Inclusion Program is managed by three teams. The
interdepartmental team develops guidelines and monitors activities. The
technical team, consisting of municipal officials, technical experts,
and civic leaders, is responsible for implementation and coordination of
activities and projects. The local team, led by community leaders and
stakeholders, is directly involved in the operationalization of the
activities. Community participation in decision-making, execution, and
operation of activities is the cornerstone of the program. Residents
help develop many of the activities particularly within the social and
program includes about 11 subprograms. The actual number varies
according to the availability of programs and funds at the federal and
state government levels at any point in time. The subprograms cover a
wide range of activities:
Minimum income linked to school attendance.
Vocational training for entry in the workforce.
Cooperatives and incubators to support work groups and build
entrepreneurial skills (Popular Entrepreneur).
Microcredit and capacity-building for informal sector workers (People’s
Vocational training for illiterate and semi-literate youths and adults (MOVA/SEJA).
Community Health (Family Health).
children and child citizenship (Child Citizen).
Gender-oriented approaches to poverty reduction (Gender and
Overcoming Hunger (Zero Hunger).
To leverage local
resources, the Santo Andre Municipality set up a strategic team in the
mayor’s office. The team’s mandate is to obtain funding through
national programs and seek supplementary funds from international
agencies. The team has been able to draw on several federal programs
and secure loans and grants, particularly from the European Union, the
Inter-American Development Bank, and the UNDP/UN-Habitat Urban
Management Program (UMP) for Latin America and the Caribbean, as well as
bilateral technical assistance.
The social inclusion
program was first implemented in four pilot favelas reaching 3,540
families, comprising 16,042 people. Throughout the process regular
meetings are held between residents, local teams, and technical teams to
discuss physical improvements as well as the operation of social,
economic, and environmental programs. Periodic meetings are also held
between residents and elected officials, and a resident’s commission is
organized to sustain the improved conditions.
A new secretariat
for “Social Inclusion and Housing” has been established in the
Municipality to fully institutionalize the social inclusion strategy.
The secretariat is developing a set of indicators of social exclusion
drawing on the cutting edge work undertaken by Sao Paulo. As is the
case in Sao Paulo, mapping the indicators allows Santo Andre to target
the areas of greatest need and execute targeted sectoral projects for
which funding can be secured. Complementing this quantitative
assessment by a participatory qualitative assessment at the community
level generates the detailed information needed to design high impact
interventions informed by community knowledge and proposals. This
partnership accounts for the impressive results achieved. In 2002,
Santo Andre’s social inclusion strategy won UN-Habitat’s Dubai Award.
Participatory Processes in Local Governance
participatory urban planning and management must address the twin
challenges of political will to get local authorities to support the
reforms, and sustained pressure and participation by citizens to drive
the process. Assistance and funding by international and bilateral
organizations are helping localities in Latin America develop a culture
of decentralization and participation, which can have a significant
impact on the lives of slum dwellers.
participatory processes for the allocation of public resources entails
the delegation of executive authority to participatory structures and
requires the integration of these structures into the institutional
organization of the municipality. Similarly, the processes by which
people participate must be integrated in the municipality’s rules of
governance. This requires conviction and commitment on the part of
mayors and other senior officials.
Participatory Housing Budget
In Belo Horizonte,
Brazil, a city of 2.2 million inhabitants, the housing secretariat (SMHAB)
is committed to participatory housing delivery processes.
The municipality has
instituted a two-year participatory capital investment budget (OP)
interlinked with a parallel process for the housing component of the
budget. Fifty percent of the city’s capital investment budget is
divided equally among its nine districts (referred to as regions). The
other half, also allocated through the OP, is targeted to improve
conditions in communities where the quality of life is low. SMHAB has
developed a quality of life index (IQVU) combining six quantitative
indicators (two each for economic, social, and environmental quality).
The IQVU allows SMHAB to determine the budget envelope for each region
and delineate within each region priority areas for social inclusion.
The population in the identified areas is
accounting for 9 percent of the city’s total.
Municipal Housing Bank leverages locally generated funds to finance
housing programs. However, the
gap between needs and means is still very wide. The housing
shortage is estimated at 50,000 units, and there are 15,000 households
living in hazardous zones and another 100,000 in slums and peri-urban
under-serviced settlements. The Municipal Housing Council, composed of
representatives from the city council and administration, social
movements, labor unions, private developers, professional experts, and
higher education institutions allocates the total funds available in the
budget cycle among SMHAB’s three housing programs: production of new
housing, regularization and upgrading of existing settlements, and
resettlement of people living in hazardous zones.
By engaging citizens
in policy formulation, the city aims to foster an understanding of
opportunities and constraints, enhance awareness of the needs of each
neighborhood, and enable citizens to make informed decisions regarding
the allocation of municipal resources. Outreach through meetings at the
neighborhood level is necessary to expand opportunities for
participation by lower income people. Belo Horizonte and Santo Andre
both rely on civil society for outreach, and mobilize community
associations for the task. Community meetings are held where
participants fill a survey of demands to be presented at plenary
sessions held in the 37 neighborhoods in the second year of the budget
The result of the housing budget is
district level commissions (COMFORCA),
grouping elected popular representatives, civic organizations, and
housing associations, for review and inclusion
in the draft capital investment for the district. These
commissions also oversee the implementation of projects.
Secretariat has institutionalized the role of the MSC social movement
“Movimento dos sem casa” as a partner in the organization of the housing
budget and in the management of housing delivery. Families who do not
own property and have lived in the city for at least of two years, and
whose income is below minimum wages are organized by the MSC into
Associations (“conjuntos”) and register with SMHAB.
As of the 2001/2002 housing budget cycle, there were 179 associations
registered with SMHAB with a membership of 32,260 families.
budgeting process starts with Preparatory Assemblies held at the
district level to review budgets and elect delegates to the Municipal
Housing Forum. Associations are represented in the Municipal Housing
Forum in proportion to the size of their membership.
delegates vote priorities and allocate the estimated production to the
different regions and associations based on participation, quality of
mobilization, and level of organization. They elect representatives to
the COMFORCA District Commissions. A separate commission composed of
two to three members per district and SMHAB representatives decides on
the final allocation of housing units to the different associations.
The associations choose the beneficiaries from among their members. The
second year of the housing budget cycle is devoted to program
available funds for new housing provide for the accommodation of 1,000
to 1,500 households organized into resident associations and
cooperatives. Families pay for their share of the land, a part of the
infrastructure, and the superstructure. Assisted credit is made
available though the Housing Bank.
The housing budget
covers over 70 percent of the city’s housing production, and the
resettlement of families living in hazardous areas accounts for 22
percent. Over half of the investments went for projects in the
“priority areas for urban and social inclusion” (56 percent in the
2003/04 budget). From 1996 to 2000, 3,059 housing units were built and
2,464 serviced parcels developed. Hence the importance of the favela
upgrading program funded through Inter-American Development Bank, which
accounts for 25 percent of the total capital investment in the
municipality. The housing budget reached 14 million Brazilian reals
(US$12 million) in 1998, was reduced to 6 million Brazilian reals
(US$3.4 million) in 1999 due to a national financial crisis. Since then
it has recovered and reached 16 million Brazilian reals (US$6.9 million)
housing budget has built trust and fostered cooperation with social
movements and CBOs by creating a space for the disenfranchised to
participate in the allocation of local resources. The process is open
and transparent. Its effectiveness as a mechanism to control the
proliferation of favelas and structure urban expansion will
depend on the resources that can be mobilized for the various programs
implemented by SMHAB. These resources must increase so that people have
hopes that their living conditions will improve in the not too distant
described in this article illustrate how local authorities have managed
to extend to slum dwellers the empowering rights and opportunities
identified by Professor Amartya Sen, listed in the opening section.
participatory processes, and collaboration among local stakeholders are
the key features of recent initiatives reviewed. They are already
established trends in the structure of new programs to improve the lives
of slum dwellers. However, partnerships are vulnerable. When the
interest of one or another of the partners change, the whole partnership
can unravel and excellent initiatives deprived of political support and
resources can collapse. The most common cause of conflict among
partners is politics. Excessive politicization of issues and
discontinuities in leadership can lead to disruptions. Electoral
strategies, political maneuvering, and personal conflicts within local
authorities and partner organizations can cause partial or total
In the fragile
institutional context of many developing countries, reforms can be
reversed with every change in local leadership. Such reversals should
not be construed to imply failure or rejection of a concept. Wide
popular support has pressured new administrations to resume suspended
initiatives as in the case of Adjame’s CDQs, and
also has been instrumental in overcoming reversals and reinstating
suspended initiatives that contribute to improving the lives of poor and
marginalized populations. Discontinued programs are often simply
reinstated under a different name. Sound strategies and well-structured
initiatives have managed to survive political conflicts, difficult
transitions, and recover from these setbacks, as happened in
is an Adjunct Professor in the Graduate School of Design at Harvard
University in Cambridge, Massachusetts, Vice President of the Institute
for International Urban Development, and a member of the Advisory Board
of Global Urban Development. She is co-author of
Municipal Finance of
Urban Development. Elda Solloso is a Junior Professional
Associate in the South Asia Energy and Infrastructure Department at the
World Bank in Washington, DC. Luis Valenzuela is an
Architect at the Gund Partnership in Cambridge, Massachusetts. Their
article is adapted from a background paper originally prepared for the
UN Millennium Project Task Force on Improving the Lives of Slum
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