The elephant and the mouse

There was once an elephant and a mouse living next door to each other. Now although the elephant was the largest and strongest of creatures, it did not know much about the world and was actually scared of things that were different, even mice. Naturally, the mouse had to spend most of its time and energy avoiding being trampled by the elephant. As a result, it became quick-witted and adaptable, but had no energy left to grow strong and healthy.

One night, the elephant had a dream that it need not be scared of other things and woke up determined that change was possible. The mouse, whose name was Cuba, was very happy at the idea that they might actually be able to live peacefully together as neighbours.

Cubans are nothing if not realistic. Whilst they have hopes that Obama may relax the embargo which has crippled the Cuban economy for several decades, they realise that the older Cuban-Americans, who are vehemently opposed to any change, still exert influence in US politics, even though younger ones are so integrated into US society that they have no interest in returning to Cuba or opposing change.

The US imposed embargo has had a serious impact on the Cuban economy by reducing opportunities for international trade and forcing the country to live by its wits with minimal natural resources. Despite these constraints, Cuba has much of which to be proud. The civil defence system is arguably the best in the world in that although two of the worst hurricanes in recent memory, (Gustavo and Ike), destroyed over half a million houses and large areas of tobacco and other agricultural products, only about two people died as a direct result and these were reportedly due to people leaving shelters. Whilst the mayor of New Orleans was boasting on CNN that the city had successfully evacuated a few thousand people to areas of safety, no mention was made of the fact that Cuba successfully protected over 300,000 people. The country has a vibrant culture and its health and educational systems have enabled the country to equal the US in terms of Human Development Indicators (a more useful guide to social wellbeing than GDP, since they measure infant mortality, levels of literacy and life expectancy, etc).

However, it should also be acknowledged that domestic economic management in Cuba has been a failure. Vast tracts of fertile land remain uncultivated, since farmers understandably see no point in working hard if they are forced to sell most of their produce to the state for a pittance. Similarly, joint ventures with foreign investors often fail if the Cuban government suspects that they are making what are considered excessive profits, or if an investor falls out of favour.

During a recent visit to Cuba, nobody spoke about Fidel in other than positive terms. It was acknowledged that whilst he was authoritarian, he was also inspirational and idealistic. No such affection appeared to exist towards his brother Raül, who assumed the presidency in February this year and who, as head of the military, seems intent on maintaining tight political control. Whilst Cubans may now legally stay in hotels, the costs prevent this for all but a small minority. Similarly, it is now legal to own a cellphone, but getting a line costs far too expensive for the average worker.

Cubans, especially the young, are desperate for change and feel that whilst they are proud of their country and the achievements of the revolution, this very achievement makes it unnecessary for them to fight the same battle as their parents and grandparents fifty years ago.

This pressure for progress poses a genuine problem for the government. If it relaxes political control too far, or too quickly, the country may fall into the sort of chaos faced by Russia after the collapse of the Soviet Union. At the same time, Cuba is constrained from adopting the Chinese approach of liberalising the economy whilst maintaining strong state controls politically because they have a minute domestic market and no internal capital base.

Intriguingly, the presidents of both Russia and China have visited Cuba in the last month and as both these new political and economic giants are immune to US economic pressure, this may open options for domestic change. Certainly, one observer indicated that the party is planning a major review of economic policy in 2009 in order to provide incentives for farmers and workers in other sectors to increase production and to reduce dependency on tourism as a source of hard currency. Official concern that this may increase social and economic inequality has to be offset by the fact that there is already a massive disparity in incomes between a senior professional earning at most US$40 a month, a primary school teacher receiving US$8 a month and those working in tourism who can earn up to US$250 a month. Such disparities also force many trained professionals to abandon their vocations to take any work where they can earn foreign currency. This is not only a waste of their education, but a source of great personal frustration. One taxi driver told me he was a qualified engineer who could earn far more in a week as a driver than he could as an engineer. He consoled himself that he “was still an engineer in his heart”.

Anyone planning a book on economics in Cuba would do well to use the title “It all depends”, since this is the answer given if you ask the price of anything. It alls depends on whether you work in, or know somebody working in the sector, you have something to swap, or are paying in local, or foreign currency. The failure of the formal economy has forced large sections of the population into an illegal black or informal economy which in turn enables the authorities to selectively punish those it deems a threat.

A pessimistic assessment of the future would be for the military, which already enjoys considerable influence and economic benefits, to increase its hold over both political and economic spheres to the detriment of both economic and social progress. An optimistic assessment for the country’s talented and creative population would involve a relaxation of the US embargo once Obama is in power, followed by a steady increase in external investment managed by an increasingly pragmatic and self-confident government. This would facilitate a range of joint ventures with foreign investors and donors in ways which can build the economy and maintain high standards of public services and welfare, whist accepting a degree of difference in the allocation of benefits (as exists already).

The global economic crisis has destroyed faith in unregulated markets even in the bastions of neo-liberalism. In doing so, it has opened the door to approaches which seek to achieve a balance between social justice and environmentally sustainable economic development. Obama’s election provides hope that the US may place a higher priority on meeting social policy objectives which can reduce inequality. Similarly, there are signs in Cuba that Raül Castro will relax central government controls and promote economic growth and investment, possibly with Russian or Chinese help.

As Cuba prepares to celebrate the fiftieth anniversary of the revolution in the beginning of 2009, a gesture from the US to progressively relax the embargo could help build confidence that change is possible for both countries.

All friends together!

With the giveaway name of Bernard Madoff relieving investors of US$50 billion (not a typing error) of their money, the US regulators responsible for overseeing such the financial sector (the Securities and Exchange Commission) have been coming in for some well justified criticism. The SEC Chairman Christopher Cox has even grovelled in public, though only to pass the buck down the ladder to paid employees so that the commissioners, who are politically appointed and therefore ultimately responsible, can try to wash their hands of blame.

Of course, we do things differently in the UK. Don't we? Well, actually, no. It's not only quagmires like Iraq that New Labour has followed the US into. We have also followed their approach of 'light-touch' regulation of the financial sector. A key reason why UK banks got so heavily into trouble following the US sub-prime housing scandal was because the UK regulatory authority, the Financial Services Authority, was funded by - guess who? - the very banks it was mandated to regulate! Its like authorising prisoners to run the prison to ensure nobody escapes. With such a cosy relationship, no wonder things went wrong.

Another fine mess you've landed us in Gordon!

The world comes to town

Early November was probably not a good time to expect decisions to be made on an urban planning application, housing project proposal or academic thesis. About 7,000 of the world’s leading urban planners, policy makers, academics, NGO staff and researchers took time out to converge on Nanjing, in South-East China, for the fourth World Urban Forum (WUF4),

This bi-annual UN-Habitat event was held in the first year when humanity officially became more urban than rural. The overwhelming majority of urban growth is in developing countries, which could triple their entire urban built-up areas by 2030, from 200,000 to 600,000 sq. km. This 400,000 sq. km. increase would match the world’s combined urban area in 2004. Few urban centres have been planned to absorb these numbers. The result is a growing urbanization of poverty (UN 2008). Such a transformation of human society over such a short period presents an unprecedented challenge to policy makers, professionals and the residents themselves, though you would never realise this from the low level of funding and interest shown by donor agencies.

Whilst international commitment and funding for urban related issues has never been high, it is ironic that even this modest level appears to be reducing when the need has never been greater. For example, the UK’s Department for International Development (DFID) and Sweden’s SIDA no longer have dedicated sections dealing with urban issues and DFID sent just one staff member to join the small UK government team in Nanjing.

Despite a laudable increase in its programme budget from little more than £3 billion in 2002 to about £8 billion in 2010, DFID continues to be subject to annual ‘efficiency’ cuts of 5% in its administrative budget which will further erode its ability to influence key aspects of the international development agenda. This is highly regrettable as DFID was widely regarded until recently as a leading influence on urban development with innovative research, capacity building programmes and practical programmes. Whilst DFID continues to fund some important urban capacity building projects, such as a large scale programme in Bihar and Andra Pradesh, India, this is the result of in-country agreements and means that the London HQ has virtually no influence in international development policy for urban issues. Iain Wright, Junior Minister for Communities and Local Government, flew the flag for the UK in Nanjing. Apparently he was extremely impressed by the experience, so perhaps he can have a private word with his ministerial colleagues in DFID to encourage them to re-engage with the urban agenda globally, especially since urban issues are central to addressing climate change and poverty reduction targets.

The British planning profession was well represented in Nanjing, reflecting an encouraging awareness of global issues. Together with the Commonwealth Association of Planners, the RTPI launched a ‘Self Diagnostic Tool earlier this year to help planning organisations across the world to assess their capacity to respond to the challenges of urban growth. Sadly, the RIBA was not present to reflect similar concerns on behalf of the architectural profession.

The event itself addressed the issue of harmonious urbanization, an appropriately Confucian concept given that China was the host. The UN report on the state of the world’s cities, launched just before WUF4 (reviewed in Planning 31 October) also stressed the need for harmony, given the high levels of inequality present in affluent countries as well as the developing world.

As usual in these major events, there was a rich diet of roundtables, networking events, seminars, training sessions, a World Youth Forum and a major exhibition presenting examples of proposals and achievements in China and the rest of the world. With such a wide range of events covering many major issues, it was easy to overdose – and to miss many that were of interest.

Although there was a tendency for presenters to be addressing the converted, it was encouraging to see a large number of mayors, national politicians and private sector representatives participating with the urban specialists. Such diversity of interaction is vital if progress is to be achieved in the real world when participants return home to the everyday challenges facing urban areas. With 1 in 3 of the world’s urban population presently living in slums and squatter settlements and forecasts that this will increase to 1.4 billion by 2020 and 2 billion by 2030 unless radical action is taken, there are certainly no grounds for complacency.

UN-Habitat now needs to stimulate awareness and support for addressing this and other key issues, such as climate change, a topic surprisingly under-represented at the forum, given that urban areas produce a high proportion of greenhouse gas emissions. This goal will not be achieved by holding large conferences or publishing lots of reports, but by informing and persuading those in positions of influence in the donor community.

The global economic crisis:

The global economic crisis: An historic opportunity for transformation
November 6th, 2008 ·


A message with the above title has been received from Ken Fernandes of stopevictions@yahoo.co.au and represents “An initial response from individuals, social movements and non-governmental organisations in support of a transitional programme for radical economic transformation Beijing, 15 October 2008”. Geoff has posted the following response:


I agree fully that this is an important opportunity to consider alternatives to the neo-liberal, market-driven basis for managing the world economy.

Whilst agreeing with the concerns of those drafting the proposals, I share the reservations of Felipe Aramburu and others regarding several specific proposals.

Essentially, it seems the group are proposing to revert to a socially based development model in which governments would effectively make key decisions on investments and the allocation of resources. In my assessment, this is not only naive but an attempt to turn the clock back to another failed arrangement.

The really exciting point about the present situation is that it is evident that the old certainties of governments knowing best and markets knowing best are dead. Even if banks want to go back to the status quo ante, the environmental constraints will sooner rather than later impose limits on unrestrained growth.

I cannot help hoping that humanity will take this opportunity to reassess the basis for a good quality of life in ways which are not dependent on growth but more on equity within a sustainable environment. There is after all, enough to go around, but its badly distributed.

Change will entail a move away from national governments deciding things and to a degree also a move from private entities controlling the economy towards one in which supra-national entities have a greater role in managing markets so they are less volatile, and more socially and environmentally responsive. This will make the World Bank and other UN agencies, plus the EU, etc, more, not less, necessary. They may be flawed but they are all we have.

I submit that what we need is more 'smart' regulation, not petty bureaucratic rules, but market guidance based on a redefinition of what constitutes the wider public interest and means of protecting and enhancing it.

In her 2008 Schumacher Lecture, Susan George provides a very comprehensive analysis and set of proposals which echo the concerns of your group and which I would recommend progressive thinkers support.

We all want the same ends; the question is one of means.

If you want to read the original message and add your name and/or organization, or leave a comment, you can check the proposals at the following website:http://casinocrash.org/?p=235

Living ground-hog day - again!

Those of us working on urban development, especially in developing countries seem to have failed so far to convince policy makers in government and in many international agencies, of the need to invest more time and effort in planning for urban growth. Why?

Why is it that any discussion on urbanisation over the last 3 decades or more invariably elicits the response that cites are too big and are growing too fast, as though there is some optimum size or rate of growth, beyond which it should be stopped? Why is the concept of 'over-urbanisation' still so widely held, despite that fact that the proportion of urban populations is actually still relatively low in many countries? Why do so many people still argue that more effort should be put into promoting rural development, by providing jobs, schools and other attractions to help keep people in rural areas?

More to the point, why is it that these responses invariably come from people who themselves live in cities? Why do they want to stop others joining them? If cities are so bad, why do these people not go back to villages themselves? Of course, in high-income countries, many people are doing this. They can afford to commute to the cities when they want or need to and can afford a good lifestyle in a village, often funded, however, by selling a high value urban propoerty and buying up lower price homes in the country. That is their choice (though it also makes life tough for villagers unable to afford a place themselves as prices rise, but that's another story!). However, for those living in developing countries, the cities are where the opportunities are, where the services are, the schools, the cinemas, the clubs and restaurants, in fact all the things middle and high income people around the world take for granted. So why do they want to close the door, or pull up the drawbridge? Why do arguments in favour of planning for urban growth get a negative response year after year and country after country, despite all the evidence that growth will continue whatever governments or international agencies, or middle/high income groups do or say? Why do I feel I have been living ground-hog day for over 30 years?

The cynical view is that people enjoying urban life don't want it spoilt by waves of poor people flooding into their neighbourhoods, lowering 'the tone' and the values of their homes. The more benign view is that people want the benefits of urban life to be more widely distributed so people are not forced to move in order to gain the basic necesities of life, let alone a few modest pleasures.

Whatever the reason, arguments in favour of rural development ignore a few basic issues.

Firstly, in a poor country, investment focuses on the few locations where the economies of scale, the educated workforce, the services and the markets are concentrated. It is only larter, when opportunities are greater, that a more diffused distribution of assets and benefits can be generated. Many developing countries have not yet reached that point.

Secondly, where can the resources for rural development come from? The answer, of course, is from cities! For example, Mumbai accommodates about 1.5% of India's population, but contributes a massive 30% of all central government revenues! So if the Indian government wants the resources for developing the rural areas, it needs successful, dynamic, healthy cities.

Thirdly, the forces generating urbanisation are so strong that it will happen irrespective of whether governments encourage or discourage it. Of course, the outcomes in many developing countries at present pose unprecedented challenges, with a billion people forced to live in slums and squatter settlements, lacking tenure security and basic services. However, life expectancy is still greater in the slums of many developing countries than it was in the mid 19th century in Manchester at a time when the UK was a leading economic power and the numbers of people involved were relatively small. Even then, it took the UK well over a century to come to terms with urbanisation and manage urban areas. Developing countries, lack the economic power the UK enjoyed, often have far larger populations and have had much less time to generate appropriate responses.

That is why we need to find ways of managing urbanisation and urban growth. Before we can even start, however, that is why those of us working on urban development in developing countries need to find ways of increasing acceptance of the realities of urbanisation and urban growth and generating the necessary support to make sure the processes are managed well - and for the benefit of all.

UN-Habitat has a major role to play in this and has so far not succeeded in winning the argument. Campaigning for better governance, for tenure security, for harmonious cities, etc., is all very well, but until it can help win the argument about the positive role of cities in social and economic development and show how this can be achieved in environmentally sustainable ways, we will not make any real headway.

UN-Habitat launches harmonious cities report

On a day when the UK press reported that a 16 year old was chased down a street, beaten and stabbed to death, simply because he was “from another part of town”, the UK launch of a report promoting harmonious cities (‘State of the world’s cities 2008/2009' UN-Habitat) could not be more timely.

Launching the report in London, Anna Tibaijuka, UN-Habitat’s Executive-Director, said that whilst there are massive problems of deprivation and inequality, these are by no means restricted to developing countries. As the housing loans crisis in the USA has demonstrated, it is now clear that issues of housing finance are global and that the poor have been left to cope on their own for too long. Sustainable urbanisation needs to provide pro-poor, inclusive approaches to urban management and development.

Summarising key findings from the report, Eduardo Moreno presented a range of data on l social, spatial, and environmental aspects. Much play was made at the launch on data relating to income inequality, though as David Satterthwaite, one of the launch panel stated, we need to consider inequality and deprivation within a broader framework to include aspects such as access to public services, health and educational facilities.

Despite their higher incomes levels, the report demonstrates that cities in the USA are as unequal socially as many in Latin America and sub-Saharan Africa, which contain the highest level of social inequality in the world. Whilst European cities are relatively equal in social terms, it is impossible to deny that we have a long way to go before we can claim to have created harmonious cities.

In campaigning on behalf of cities, UN-Habitat faces a dilemma. If it celebrates cities and urban life, it can be accused of being in denial of the manifest problems faced by 1 billion people – 1 in 3 of the world’s urban residents - living in slums, many without basic tenure security, clean water or sanitation. On the other hand, if it focuses too much on the scale and complexity of the problems, donors and national governments may just bury their heads in the sand and hope that rural development programmes will curb urban growth. Of course, this overlooks the fact that although 3 million people are being added to urban populations globally every week, rural-urban migration is not the main cause of growth in many cities and has been replaced by increases within existing urban populations. Whilst urban issues are undeniably complex, they can be addressed by bringing the residents into the decision-making process and improving governance at national and local levels.

Another challenge addressed by the report is that of climate change. Nearly 400 million people are considered to be at risk, mostly in developing countries like Bangladesh which are vulnerable to sea level rise.

Cities are also major consumers of energy, with buildings representing a higher proportion than industry or transport in high-income countries and cooking one of the major consumers of energy in low-income countries. Whilst cities are justifiably blamed for contributing to CO2 emissions, the report demonstrates that this is related more to consumption patterns than urbanization per se. For example, Sao Paulo produces one tenth of the emissions of San Diego, with a population ten times bigger. Cities in Europe are making progress in clean energy, whilst those in the USA continue to be the worst polluters, due largely to urban sprawl and private motorised transport.

Improved building design, more efficient land use and friendly, efficient public transport offer the greatest scope for improvements. Clearly, if cities are currently part of the problem, the report makes it clear that they have to be part of the solution.

My hands are clean!

Now that the sub-prime crisis has triggered the end of free market capitalism, many are understandably claiming they saw it coming. However, how many can claim they saw this in 1989, nearly 20 years ago? Let me explain.

In 1989, I was invited by the World Bank to review a large number of reports, articles, books and papers on land tenure policies in developing countries as a potential contribution to the Bank's forthcoming housing policy paper. I explained to the Bank that I was not an economist, had minimal knowledge of the subject, but was, of course happy to be paid to learn more. I was told it was because I had already reviewed the literature on housing policies in developing countries and could summarise complex issues for a non-technically sophisticated readership (they had students in mind), that I was in fact well qualified. Flattery, and the prospect of being paid to learn, was enough for me to accept.

During correspondence and the exchange of a first draft, it became increasingly clear that the Bank wanted my report to endorse a policy of promoting home ownership in developing countries. Other forms of tenure, such as customary or rental tenure, were apparently not of interest.

The more I read, the more these assumptions seemed politically driven rather than empirically based. I could see no reason why home ownership was being so widely promoted. The reason given - that people could use the collateral of their titled homes to obtain credit, set up a business and thereby lift themselves out of poverty, was seductive, but made a rather basic assumption, namely that collateral is only relevant if you can afford to service the debt in the first place. For the majority of low-income households in developing coutnries, this was clearly not possible. Home ownership, in other words, is not appropriate for everyone.

My draft report advocating caution and promoting tenure diversity was condemned internally as biased, though no substantive criticisms were made and I was told that they would permit me to publish elsewhere. My report findings were excluded from the Bank publication, which was published in 1993 under the revealing title of 'Housing: Enabling Markets to Work'. A cynic might claim that this was a clever highjacking of the enabling concept being advocated by UN-Habitat and many progressive housing professionals working in developing countries, but that's another story.

It was this experience that got me into working on land tenure issues. Several research projects later, the initial concerns have now been fully vindicated. The assumptions made by the Bank - and many other advocates of free markets - have been exposed for what they were - an ideologically driven agenda.

I trust we are all pragmatists now.

Living in interesting times!

My first blog - and what a time to start!

All the old certainties of the world, that governments had all the answers, and then that markets had all the answers, are gone. Even bankers, those 'masters of the universe' are now civil (or uncivil) servants! Can we assume they will be subject to public sector pay restraint?!

The housing bubble has finally burst - and about time. Surely it is not just bad economics, but also immoral to be able to get richer by lying in bed as one's home rises in value, than if one goes out and gets a job?

If this bubble had not burst now, the pain when it finally burst would have been even bigger. So now we have effectively got a form of socialism. However, its not the old form that strikes terror into the hearts of God-fearing Americans, under which the State decided who needed what and what they would get. This form of socialism is far more interesting and, hopefully, sustainable. The new socialism is in fact a form of social capitalism or tax-payers socialism, since the state is investing taxpayers money - yours and mine - so needs to listen (or at least pretend to) when it places its representatives on the boards of banks and other joint venture companies (which is what banks have become).

We can expect a new generation of 'smart regulation' in which private corporations will need to take into account the wider public interest when making their investments.

The time has arrived in which we need to redefine the public interest in economic development (and urban development) and formulate ways of protecting it, whilst still enabling bankers and other investors, to make a reasonable living.

Interesting times indeed - and potentially exciting! This time, we need to get it right.