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Missing the slums for the cities

Cities in Asia are hubs of production, innovation and wealth, funnelling into themselves immense resources, water, energy, food, drawing in from nearby districts and far-off provinces families and entire communities. If a city doubles in size, say researchers of the urban, then wages, wealth, the number of patents and number of educational and research institutions all increase by approximately 15% on a per-capita basis - it is a sort of scaling wherein the larger the city, the more the average individual resident owns, produces and consumes, whether it be goods, resources or ideas. But that equation is for the systematically administered cities of the industrialised North, and not for the fast-growing, plan resistant urban agglomerations of the South. The negative side of urban life can be found in a similar urban scaling in terms of deprivation, crime and health hazards.

In Asia, any effort to study the human condition will require an application of the science of complexity to levels unknown in the industrialised North. That is why urban and town planners in developing Asia have worked in a theoretical oasis, sealing their calculations and their datasets off from the non-city and the non-metro, for to make the connections is too daunting a task, and to draw the apparent socio-economic conclusions too professionally dangerous an activity. Most of Asia's central and provincial governments hold a pair of views that they should not, certainly not at the same time, if they want to achieve the social justice and equity all claim to aspire to. The opposing pair of views is: (1) economic growth is good (inevitable / necessary / mandatory) and since such growth depends on populations organising themselves in cities, we need cities; (2) rural poverty requires a variety of programmes and campaigns, some large and others small, which will revive the agricultural fortunes of farming households and in so doing deliver food security to our country.

China's rural migration reached proportions in 2001-02 that were unprecedented, the world's largest seasonal movement of people, as rural provinces were drained of populations that moved towards the country's coastal growth zones. There they found work in tens of thousands of new factories and construction sites, but they left behind a rural farm landscape which was to remain neglected for several growing seasons. China's answer to its immense food security question was to use its growing riches to buy food, just as it was buying raw material for energy and infrastructure from all over the world. When the global financial downturn began to be felt in China's seaboard provinces, the factories and services collapsed, sending a wave of the jobless back to the provinces in the west, where they struggled to revive a farm economy that had literally gone to seed.

But as in China, for India, Bangladesh, Indonesia, the Philippines and Pakistan too, the urban domination of resources and energies - human and industrial - is an imbalance that is still scarcely acknowledged. Cities in these countries are marked by two contrasting types of development: one is large peri-urban areas with informal and illegal patterns of land use. This is combined with very little infrastructure, public facilities and basic services, conditions made worse by little or no public transport and a grey zone of administration which is neither municipal nor village.

The other is a form of economic class-driven suburban sprawl in which residential zones for high- and middle-income groups and highly-valued commercial and retail complexes are well-connected by individual rather than public transport. "Urban sprawl adds to the urban divide, pushing social segregation along economic lines that result in spatial difference in wealth and quality of life across various parts of cities and metropolitan areas run down inner cities and more suburbs," said the 2010 UN-Habitat report, 'State of the World Cities 2010/2011: Bridging the Urban Divide'.

Urban sprawl involving the poor is what accretes to a town or city as raw shanty settlements on its outskirts or on city lands between planning zones or along major public utility channels (railways, highways, pipelines). Authorities either pay little attention to these new accretions or aspiring politicians pay too much attention to them, treating them as valuable new vote banks by exploiting the rural class-caste systems that are transported with them when they move to cities. This aspect is dealt with well by the comment in the Daily Times of Pakistan.

What of the country which was once upon a time called East Pakistan? The 2010 population of the city of Dhaka has been forecast at 17.6 million, with up to 60% of this number living in city slums. Dhaka is becoming to Bangladesh what Bangkok is to Thailand, a populous country dominated by a single metropolis. An estimate places Dhaka's contribution to Bangladesh's GDP at 30%! A recent survey (described in one of the reports linked to in this selection) finds that 56% of those who migrated to Dhaka have done so for economic reasons. However, reasons described as economic also have environmental roots - the impacts of climate change in Bangladesh are manifest as flood, drought, cyclones and riverbank erosion. Agriculture suffers dreadfully, and often removes agricultural incomes from a household's earning options. That is when the decision to migrate becomes the only possible option.

World slum populations by region

World slum populations by region

These reports illustrate the size and scale of the economics-urban problems being faced by Asian countries. The gulf between an administrative understanding of the rural-urban divide and the consequences of that gulf continuing to exist are brought home by the news feature in the Sydney Morning Herald of Australia. An extract from a news report in The New Nation of Bangladesh states that Dhaka, the capital, "accommodates about 4,500 small and big slums" which house some 5 million people! "A number of factors said to contribute to rural-urban migration. During the famine of 1974, the percentage of rural migrants in urban population rose to 8.9% from 5.2% in 1961. The readymade garment industries in recent years have also been a major reason for rural people to be attracted to slums." The posting on living conditions in a Dhaka slum and the findings of a major survey conducted describe routine conditions for over 590 million slum dwellers (see table) in South Asia, Africa and East Asia. The comment in The Economist, a (distinctly transatlantic) weekly that is an avowed advocate of the 'free' market and of globalisation, is nevertheless useful as it provides a window onto the perspective of the multilateral lending institutions and their clients, that of social policy being required to follow economic goals.

What happens to social sector economics and the provisioning of urban services when the following of those goals - at the cost of community, environment and social equity - becomes the end rather than an option? Two reports, one from China Daily and another from Global Times (also China), describe how much China plans to spend on infrastructure until 2015 despite its planners receiving ample warning signs of the growing income divide in the country. Growing urban populations whether in townships or in slums need to find food staples, and it is that shared need that has led a group of South-East Asian countries (China included) to administer a 'strategic rice reserve', as the Japan Times report calls it.

- Rahul Goswami

Life improves for migrant workers

Sydney Morning Herald

(17 May 2010)

China's once-downtrodden migrant workers may have earned double-digit pay rises last year, as labour shortages began to bite. A new survey of rural households shows migrant wages surged about 15 per cent (after adjusting for consumer price deflation), even as the global financial crisis temporarily flattened export-focused manufacturing.
The results of the survey of 22,000 households by the Ministry of Agriculture's Research Centre for Rural Economy will soon be published in the Chinese Academy of Social Sciences 'Green Book' on Population and Labour. Other data shows migrant workers continue to pour out of the Chinese countryside to urban centres. They are increasingly moving to towns and cities in central and western provinces, rather than the coast, and are demanding better wages and conditions to move.
National Bureau of Statistics data shows the number of migrant workers rose to 152 million by the September quarter of last year, from 151 million in the June quarter and 147 million in the March quarter. "The migrant worker employment situation was dire in January and February last year and it is amazing how quickly demand for labour returned," said Louis Kuijs, a senior World Bank economist in Beijing. "China is now entering the stage where the fruits of development can be shared more widely and [there are] rapidly rising living standards," he said. "Anyone calling for improving domestic demand or the conditions of migrant workers should be very happy."
Arthur Kroeber, the managing director of the Beijing consultancy Dragonomics, said China was entering a new inflationary stage where wages exceed gross domestic product growth. He expected inflation to average between 4% and 5% over the next decade, compared with just 1% in the previous decade. "Inflationary pressure will be greater than in the past but fully consistent with sustained high-growth periods in Japan 1958-72 and Korea 1982-96, where GDP grew by 8-9% and inflation averaged 5-6%," he said .
The new Ministry of Agriculture migrant worker survey data is previewed in a paper by professors Du Yang and Wang Meiyan, of the Chinese Academy of Social Sciences, to be published by Peking University's China Centre for Economic Research. Their paper shows the secondary and tertiary sectors added 86.9 million jobs between the 2004 and 2008 economic censuses and also that China's demographic tailwind is beginning to turn. Annual growth in the working age population will shrink from 7.4 million in the five years to this year to 3.1 million in the next five years, the authors say. And beyond 2015 the working age population will start to decrease. "It's not hard to understand why the labour shortage is becoming more and more serious," they say.
China's labour market data is notoriously opaque and unreliable. But several series now show that rural migrants to the city are earning steep pay rises and households are getting a much larger share of the country's economic spoils. A smaller unpublished survey of 4,000 people by the People's Bank of China, also revealed in the professors' paper, shows a migrant wage increase of about 10% last year. A larger, more reliable rural household survey by the National Bureau of Statistics shows real migrant wages grew 7% from the previous year - with the lower number apparently reflecting an earlier survey date.

Life of misery in Dhaka

Perspective Bangladesh

(17 May 2010)

The Bangladesh Demographic and Health Survey (BDHS) is a periodic study of the population and urban areas, including the slum areas. Some findings: 83% of slum ('bostis')land is privately owned, and permission is needed to build a bamboo shelter to use as a home; land owners and bosti owners are not thought to pay government taxes and are not accountable for the conditions or safety of the slums; all families live in one-room dwellings, usually made of bamboo frame, fencing and roof; an average of five people live in each room (some families have over eight individuals in one room); slum residents usually find work as housekeepers, labourers or in the garment piecework industry; male adults more often work as rickshaw pullers, labourers, brick breakers, drivers or carpenters; the average income per family was Taka 3,725 per month (USD 53.63 / EUR 42.66) and the average expenditure was Taka 3,218 per month; many families reported expenses greater than income and dependence on loans for survival.

Most respondents (89%) did not feel that they lived in a hyzenic environment, and 93% felt that living in the slum had led to disease or ill health in their families. The most desirable place to live was felt to be in their villages of origin (57%), while others dreamed of living in higher-class places in the city (14%). Only 6% were happy in their current location. Problems described were unclean latrine facilities (30%), harassment by slum owners and the demands for bribes (10%), lack of employment (32%), mosquitoes (86%) and lack of available fuel/gas (17%). The most-cited barrier to relocating elsewhere in the city and out of the slum is a lack of funds (91%).

There are also some positive factors. A 2005 study on migration and poverty in Asia by the International Organization for Migration notes that "even if migrant jobs are in the risky informal sector, the gains to be made can be several times higher than wages in rain-fed agriculture". Many slum dwellers are enterpreneurs. At the individual level, women benefitted in terms of mobility and skill, self-confidence, widening of interests, access to financial services, building savings, competence in public affairs and status at home and in the community that lead to women's empowerment.

The tricky search for forms of economic growth that will offer opportunity and protection for everyone

The Economist

(13 May 2010)

Shiny Asia's rapid economic growth over the past two decades, driven by cheap land and labour, technological change and the play of globalisation, has had a spectacularly improving effect on the lives of hundreds of millions. Since 1990 the number of those in extreme poverty, defined as earning less than $1 a day, has been halved, to under a fifth of developing Asia’s people.

So far so miraculous. Yet the shiny face has a tarnished flip side. Poverty and the vulnerabilities associated with it remain entrenched. Further, inequalities are rising fast. The realisation is spurring a rethink among development experts. Until recently, economic growth and social policy were thought of separately. Inequalities and social exclusion, as Sarah Cook of the United Nations Research Institute for Social Development puts it, were viewed as a residual outcome of necessary market-led growth. The development response was to get markets right first and then deal with any remaining pockets of the poor. Persistent poverty and growing social exclusion call the approach into question.

China and Vietnam have seen huge improvements but in South Asia extreme poverty remains widespread. What is more, Ifzal Ali and Juzhong Zhuang of the Asian Development Bank (ADB) argue, when measured by a $2-a-day threshold, Asia’s performance in cutting poverty is less impressive, with about half of developing Asia remaining poor, and so susceptible to natural disasters, global economic turmoil and daily uncertainties.

Income inequality matters. For one, it entrenches discrimination in other areas, such as access to education and health care. Child mortality, school enrolment and the like have improved more slowly than have straight measures of poverty. Second, exclusion raises social and political tensions. The evidence lies not only with persistent armed conflicts, especially in South Asia. In China, President Hu Jintao's call for a “harmonious society” recognises the risks from growing inequalities between regions, between cities and the surrounding countryside, and within cities.

The most ambitious social-protection scheme is India’s National Rural Employment Guarantee Act (NREGA). Every rural household has the right to 100 days of work a year spent improving village infrastructure such as irrigation systems. In 2009 some 50m Indian households signed up, in places slowing migration patterns from poor to rich regions. The long-run benefits of such schemes, however, remain unclear. In the case of Indonesia, indicators for health and education remain dismal. As for the NREGA, even in the short-term demand for work outstrips supply and wages and benefits are often paid late or not at all. Ms Cook says that the scheme misses a trick by not building schools and redeveloping slums. And that the scheme was needed at all is a consequence of India’s abject failure to create enough jobs.

China to invest 7t yuan for urban infrastructure in 2011-15

China Daily

(13 May 2010)

China is to accelerate construction of urban public facilities by investing as much as seven trillion yuan ($1.03 trillion) during its 12th Five-Year Plan from 2011 to 2015, the 21st Century Business Herald reported Thursday, citing chief economist from the country's urban planning body. Municipal facilities lag behind China's urban development, as the rapid urbanization process leads to an explosion of the urban population, said Li Bingren, chief economist of the Ministry of Housing and Urban-Rural Development (MHURD). Li also expects fixed-asset investment on urban infrastructure to top 1 trillion yuan in 2010.

The MHURD estimates that investment on urban rail transit to surpass 700 billion yuan in the 12th Five-Year Plan period. Aside from urban infrastructure construction, China will also invest heavily on transportation and rural infrastructure in the next five years. It needs to invest three trillion yuan on railway construction, and 3.05 trillion yuan on rural infrastructure construction, according to the investment institute of the National Development and Planning Commission (NDRC), China's economic planning agency.

The length of China's railway in service is to reach 120,000 km by 2010, with lines for passenger transportation reaching 16,000 km at that time, according to An Guodong, vice chief-engineer of the Ministry of Railways. China's fixed asset investment may grow 16.2 percent during the twelfth five-year plan, down from the 24.7 percent in the previous five years, according to the NDRC' institute of macro-economics. It said government investment will rise to about 9.57 trillion yuan, or 5.2 percent of the total investment.

A United Nation Development Programme research said for a developing country, urban infrastructure should take 10 to 15 percent of the country's total fixed asset investment, or three to five percent of its GDP. As for China, urban infrastructure investment accounted for six percent of the fixed asset investment on average from 1994 to 2006, and averaged 2.6 percent of the GDP during the same period, according to the paper.

Structural reasons for poverty

Daily Times

(11 May 2010)

It is this power nexus that systematically deprives poor people of the opportunities to improve their own lives and those of their next generations. There are still major parts of predominantly agrarian areas including southern Punjab and Sindh where land ownership remains very unequal, despite the fact that there are very limited opportunities to do anything else but work on a farm. The size and power of landlords can vary significantly. Some landlords have access not only to hundreds of acres of agricultural land, but also simultaneous urban industrial interests and an elaborate network of caste- and class-based alliances. Landlords provide their landless dependents access to credit, and their inability to pay it back promptly traps them and obliges them to work part time on the landlord’s farm - bonded labour. Landlords can also exert immense influence over landless people who often do not even own the land on which their homes are built. This in turn enables them to ensure that, when elections are held, their landless dependents vote according to the specific wishes of the landlord, who may be directly contesting the elections.

China's poverty gap close to 'red line'

Global Times

(10 May 2010)

The gap between the rich and poor among the areas, industries and groups in China is escalating and the Gini index of the country now exceeds the "red line". These series of problems brought by the escalating poverty gap have drawn concern from the public. Chang Xiuze, an expert at the Academy of Macroeconomic Research (AMR) of the National Development and Reform Commission (NDRC), said that according to the figures from the World Bank, China's Gini Index reaches 0.47.

"China's Gini index has seen consecutive rises after it exceeded the international warning line of 0.4 ten years ago, and the country's poverty gap has broken the limit line," he added. According to Su Hainan, director of the Institute for Labor and Wages Studies of the Ministry of Human Resources and Social Security (MOHRSS), currently, the incomes of urban residents are 3.3 times those of the rural residents, while it is at most, 2 times in the international community.

Also, the incomes among different industries are in large difference, the incomes of the employees in industries with highest salaries are 15 times higher than those in lowest-salary industries. The senior managers in the listed state-owned enterprises (SOEs) see their incomes 18 times higher than the incomes of their employees, and on average, the senior managers' incomes are 128 times higher than the average wage in the whole country.

Li Shi, director of the Income Distribution and Poverty Research Center at Beijing Normal University, said that the income gap between the top wealthiest 10 percent people and the 10 percent poorest people has risen to 23 times in 2007 from 7.3 times in 1988. Analysts believe that with China's economic development in the recent years, factors like production of the land, resources and capital play an important role in the income distribution. The industries of property, minerals and securities can bring exorbitant profits in a short time, and therefore a few people manage to get wealthy quickly.

East Asian nations closer to pact on emergency rice reserve

The Japan Times

(08 May 2010)

Ten Southeast Asian nations plus Japan, China and South Korea are close to achieving their goal of establishing an emergency rice reserve to deal with sudden instability in supply and production. Agricultural and forestry ministers from the 13 countries aim to sign the agreement when they meet in October in Cambodia, following more meetings among senior officials to thrash out the details.

It would be the first time for the region to have a permanent mechanism for an emergency rice reserve and stock based on cooperation among the 10 members of the Association of Southeast Asian Nations and the three Northeast Asian countries. The 13 countries have agreed in principle to earmark rice stock amounting to 787,000 tons for the emergency reserve, with pledges of 87,000 tons from ASEAN member countries, 250,000 from Japan, 300,000 from China and 150,000 from South Korea. The earmarked rice will be kept in their respective countries for use as emergency reserve for Southeast Asia.

They are also expected to contribute a smaller amount for an actual rice stockpile, which will be stored in a Southeast Asian location yet to be decided. There is also a proposal from ASEAN members for the 13 countries to establish a $4 million endowment to cover the costs of running and maintaining the emergency rice reserve, out of which $1 million would be contributed by ASEAN as a group with Japan, China and South Korea each contributing $1 million, the officials said.

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