A Brief on A. Laquian’s “Flagship Study on City Cluster Development (CCD) in Asia: Toward an Urban-Led Development Strategy” Background Since ADB was launched in 1966, Asia has urbanized rapidly and is projected to become 51% urban by 2025. Asia already has more than half of the world's mega-cities, even those urban clusters made up of small and medium-sized cities are growing at a faster rate. A conventional wisdom of "guarding against urbanization" is no longer a suitable solution in Asia's contexts. The Flagship Study initiated by city cluster development (CCD) Group under Urban Community of Practice (CoP) attempts to address challenges and opportunities arising from recently emerging urbanization patterns in Asia. ADB's adoption of a long term development strategy to alleviate poverty in developing member countries (DMCs) through “inclusive development and growth promoting activities” provides an excellent opportunity for achieving economic and social development, through CCD. The Flagship Study presents various modalities for the application of CCD and a strategic framework to assess the growth potential of CCD. Issues and implications of CCD on ADB's urban sector operation are discussed in the study. Applications of the strategic framework to Indian cities are presented. What is city cluster development? CCD is an urban-led approach that can optimize the economic growth potentials of cities and towns within an extended-urban-region by strategically linking their development fields through efficient provision of urban infrastructure, services and innovative financing techniques. CCD is a process where the “urban fields” of a number of urban settlements expand and combine to form a “city region.” Urban fields are economic, social and technological activities that are linked functionally through economic and social transactions and information connectivity, as well as structurally by urban infrastructure and services. CCD is best achieved if urban infrastructure and services are provided in a multi-sector strategy that covers the whole city region, e.g. an integrated water management system as in figure 1. Figure 1. Integrated Water Management System Forming city clusters There are four types of city clusters. Urban corridors occur when the urban settlements take a linear form (figure 2A). Mega-city dominated clusters occur when the expansion of a dominant mega-city engulfs surrounding areas and creates a cluster of cities and towns (figure 2B). Sub-national regional clusters occur where several urban settlements form a cluster but not one dominates development in the whole city region (figure 2C). Trans-border clusters occur where adjacent urban settlements located in different countries pursue collaborative development activities for the whole city region despite different political structures or legal regimes (figure 2D). A. B. Figure 2. Examples of City Clusters: A. Tokyo- Nagoya-Osaka-Kyoto-Kobe urban corridor, B. Mega-city cluster development in Bangkok, C. Pearl river delta sub-national regional cluster, and D. Singapore- Johore-Riau Growth Triangle trans-border cluster. C. D. Maximizing gains through inclusive development CCD promotes inclusive development. It calls for a unified multi-sector approach to reach common development goals among local government bodies and stakeholders in both urban and rural areas in a city cluster for the benefit of all social and economic segments of the population, especially the urban poor. It improves financial viability and credit rating of local government bodies of the city regions by facilitating area-wide fiscal measures and reforms, tapping on the economic land value and the benefits of private sector participation. It facilitates effective governance through cooperative and coordinated actions among local government bodies within the city cluster. CCD likewise demands joint action from all local government bodies (LGBs), the private business sector, civil society and community-based groups to safeguard the environment and ensure its sustainability while reaching for economic growth and development. How do we evaluate the growth potentials of CCD? Table 1 provides a strategic framework for assessing growth potentials of CCD with respect to institutional, demographic, and structural factors, among others. Table 1. Strategic Framework for Assessing Growth Potentials of CCD MITIGATION FACTORS BARRIERS STRATEGIES MEASURES 1. Institutional and • Anti-urban mindset; • More information to Use region-wide governance • Local autonomy; LGB officials about planning to usher in mechanisms • Governmental merits of CCD; region-wide fragmentation • local government governance reforms 2. Demographics; • Population size; Accommodate more • Provide resources; and spatial • Urban poverty; rural to urban migrants infrastructure; aspects • Geographic dispersal • Locate city cluster close to big urban centers 3. Development • Low planning • Support more data • Formulate and planning issues capacity; gathering and adopt regional plans; • Data lack; dissemination; • Use plans for • Non-implementation • Train more planners ushering in of plans governance reforms 4. Land resources • Strong adherence to Tax reforms to capture • Unlock economic and land tenure private property; economic value from value of land; • People’s resistance urban infrastructure • Use land banking; to “land grabbing” for provision • Use land exchange project use schemes 5. Economic and • Low level of Tap resources from • Provide urban trade issues economic productivity; existing academic and infrastructure to • Lack of industrial- research institutions attract enterprises; commercial clusters • Set up SEZs, industrial parks 6. Taxation, fiscal • Low revenue • Install area-wide tax • Improve tax issues generating capacity of reforms; collection machinery; LGBs; • Train local officials • Invite more PSP • Dependence on in revenue raising investments; higher level fund techniques, budgeting, • Set up transfers and grants-in- and fiscal mechanisms to aid accountability enhance transparency and accountability 7. Infrastructure and • Poor state of urban Tap central and • Encourage PSP for informational infrastructure and provincial/state infrastructure connectivity services; governments to investments; • Lack of coordination provide more • Set up SEZs and in infrastructure infrastructure industrial parks provision 8. Private sector • Low level of PSP; • Facilitate PSP by Provide mechanisms participation • Lack of mechanisms streamlining for more PSP in the for PSP; procedures; financing of urban • Lack of transparency • Tap banks and infrastructure and and accountability; other financial services • Widespread rent institutions for seeking investments How can we optimize the benefits from urban infrastructure, services and innovative financing techniques for CCD? Table 2. SWOT Analysis of CCD MODALITIES STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Integrated Area-wide Outmoded Plans can be • Local development planning for CCD master planning followed by autonomy planning unified • Fragmented governance LGBs Institutional/ Laws make for • Private land • Legal reforms Legislative legal structures level playing field ownership • New tax laws failure to enact for CCD • Local laws autonomy Governance Effective and Political Support of LGB efficient urban objections to entrepreneurial fragmentation management CCD local leaders Financing • Improved tax • Outmoded • Tap private Strong collections procedures sector resistance to • Higher credit • Rent seeking participation subsidies ratings • Foreign investments Special Infrastructure Impact limited • Locate close to Resistance Economic Zones provision to SEZs big cities from land for CCD • Use for green owners & field development farmers Land Land as • Private land • Use of green Resistance development resource for ownership fields as CCD from land CCD • High cost of sites owners & land farmers Inclusive • Develop rural • Strong rural Civil society Partisan development and urban areas bias support politics • Include urban • Nimbyism poor THE ADB AND CCD STRATEGIES: The Urban Sector at ADB Assessment of ADB’s Urban Sector Strategy The 2006 Special Evaluation of ADB’s Urban Sector Strategy found that ADB’s “institutional focus on the urban sector has been lost.” It saw a fragmented organizational structure within ADB that deal with the urban sector. Its voluntary Urban Community of Practice lacked a coordinated multi-sector approach on its focus areas of municipal finance, transport, waste management, and city cluster development. The Evaluation also showed a need to build capacity among staff to supplement the growing importance of the urban sector in the development of DMCs. To address the findings of the Evaluation, it is recommended that ADB restore and strengthen its urban sector mandate. ADB can consider restructuring its urban sector program and establish an effective coordination mechanism for urban sector activities. The Bank may also adopt a multi-sector urban-led strategy such as CCD. ADB may also consider strengthening the capacities of its professional staff in the urban sector, including those in its country offices and local institutions in DMCs through education, training, observation-study tours, and expanded information dissemination efforts. Proposed Roadmap for Mainstreaming CCD 1. Include urban sector initiatives in Country Development Strategies 2. Identify potential city regions for CCD initiatives in DMCs 3. Adopt a set of guidelines for choosing CCD projects and use these in actual operations. 4. Seek and use local expertise in formulating and managing CCD projects 5. Mobilize domestic and international resources, including PPP, for financing CCD schemes 6. Identify centers of excellence in the field of urban development in DMCs and support local institution building efforts through specialized training, holding of seminars and workshops, and commissioning research projects. 7. Encourage ADB urban sector staff to develop professional and technical capabilities by providing opportunities to engage in research, supporting study leaves, and active participation in urban forums, seminars and workshops. 8. Strengthen the information dissemination activities of ADB in the urban field by publishing and distributing results of technical studies such as monitoring and evaluation reports. Guidelines in Choosing CCD Sites - Cities: - size of cities, proximity among each other and with large cities, current condition of transport and communication, presence of academic and research centers, - demand for urban infrastructure and services, development potential of cities in a cluster - prior experience in integrated development planning - LGBs: - good track record in governance (i.e. transparency and accountability), project management, and commitment of local government bodies to urban development - good financial performance, proof of efficient use of financial modalities, availability of financial resources that can be leveraged to support CCD Applying the CCD Strategic Framework to India Barriers to adoption of CCD in India Proposed measures to mitigate the barriers - Management inefficiencies often - Pick LGBs with entrepreneurial exacerbated by graft and corruption leaders that have good track among local officials. records and reputations. - Ideological commitment to local - Encourage the formulation of autonomy and decentralization; integrated development plans fragmentation of LGBs. covering whole city regions and use the plans for eventual establishment of cooperative federations of LGBs or unified regional governance systems. - Lack of industrial and commercial - Concentrate infrastructure development clusters in many small investments in a few city clusters and medium-sized cities that limit that have developmental potentials resources that can be tapped for for CCD (e.g., industry clusters, CCD high-tech enclaves, renowned academic and research institutions, etc.) - Weak local government capabilities - Enhance capacity building and (lack of trained staff, outmoded institutional development in planning techniques, weak government and private sector. organizational mechanisms, and - Mobilize foreign investments in inadequate financial resources). urban development and encourage private sector participation (PSP). - Strong local political pressures; - Get the support of community partisan electoral politics. leaders and civil society in pursuing - Cultural attachment to private land CCD schemes. ownership. - Strong cultural and ideological commitment to rural development; anti-urban bias. - Poor condition of infrastructure and - Provide infrastructure and services services in many urban areas; in area-wide schemes; avoid existence of slum and squatter setting up single sector projects. colonies reflecting high levels of urban poverty. Potential sites for CCD in India 1. Bangalore-Tumkur-Mysore City Cluster in Karnataka - One of the fastest growing regions in India because of advanced information technology development - Has excellent academic institutions supplying human and technological expertise - Karnataka state has invested heavily in infrastructure and urban services - Has excellent record in tapping private sector participation in financing projects. - Excellent reputation of Karnataka state officials as managers of urban projects - Good management capabilities of city officials in running urban services, especially transport 2. Pune - Pimpri Chinchwad Cluster in Maharashtra - Cluster benefits greatly from proximity to Mumbai as a development hub - Highly developed industry clusters, especially vehicles manufacturing - Advanced development in information technology - Good access to educational and research institutions, Pune known as “the Oxford of India” - Good reputation of Maharashtra state in governance and management of urban infrastructure and services - Past experience in using PPP for financing public projects - Excellent record in combating graft and corruption 3. Coimbatore - Tiruppur Cluster in Tamil Nadu - Major industrial center in Tamil Nadu, especially in textile, automobile production and international trade - Tamil Nadu ranks third among Indian states in HDI, with high literacy rate, excellent school system, and public health services - Presence of “reformist ideology” among state and local government officials responsible for efficient and democratic governance - Strong civil society sector that supports management and governance reforms - Good urban infrastructure and services linking the various cities and towns within the cluster 4. Haridwar - Dehra Dun - Rishikesh Cluster in Uttarakhand - The three cities in the cluster have excellent prospects for tourism development as religious pilgrimage sites because of their religious significance to Hindus, Buddhists, and Jains. - City cluster is also the gateway to the high Himalayas and has excellent prospects for eco-tourism and adventuring. - Uttarakhand (formerly Uttaranchal) is a newly created state (formed in 2005). As such, state leaders are eager to pursue development schemes. - New state leaders have good reputations as reformers as they have rejected the graft and corruption practices of the - Presence of information and technology enclaves in the city cluster. - City cluster has well known universities and colleges to supply professional and technical human resources.