Strategic Management Project Ccd - PDF

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					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.

				
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