1. Responses to the Crisis An Urban Perspective
Judy Baker
The World Bank

2. Impacts in Cities Cities are being hit hard
Decline in fiscal resources
Local Governments constrained
Job losses and wage reductions in urban industries
Manufacturing, construction, financial, service sectors
Reductions in remittances and reverse migration
Social unrest
Stark inequalities are more visible in cities
Urban areas more prone to protests, riots, social unrest

3. Impacts in Cities Urban Poor are particularly vulnerable
Previous crises show that urban households felt the impacts disproportionately
Heavy reliance on cash economy
Lack of agricultural production for consumption
Poor will fall into extreme poverty
Children, women particularly vulnerable

4. Crisis Responses: Urban Areas
Cities will be part of the solution
Important driver of growth and job creation
Infrastructure investments in cities are critical to growth, jobs, building lasting assets for economic and social development
Employment impacts of infrastructure:
First round – Direct employment
Second round – demand for construction materials
Third round – spending by workers
Use of local resources (labor, material, contractors), has positive impacts on local economy

5. Priority Urban Investments under Crisis
Goals: growth, job creation, mitigating poverty impact, social equity
All can be designed to include labor-intensive approaches
Urban Infrastructure Funds (UIFs, MDFs)
Financing instrument for lending to local governments, utilities, communities
Slum Upgrading
Enormous demand (1 billion in slums, poor conditions, at great risk- health, environmental)
Investments in water and sanitation, electricity, roads, drainage, community and social infrastructure
Local labor can be used

6. Priority Urban Investments under Crisis
Affordable housing
Bank has had limited involvement
Microfinance for incremental housing (spur investment at the household level and create supply of rental housing)
Rehabilitation, maintenance and operations
Often neglected
Repair of roads, maintaining water systems, drainage, community facilities
Investing now reduces costs in the long-run

7. Urban Investments Urban Agriculture Slum prevention
Can provide for consumption, generate income, employment, positive environmental impacts
Estimated that 15 percent of food production is in urban
Issues of health and sanitation, requires TA
Slum prevention
Providing affordable land for purchase
Can spur private investments in housing, transport networks

8. Other Responses Targeted Safety Nets Conditional Cash Transfers
Challenges in urban; targeting, transitory populations
Public Works Programs
Can be very effective in crisis
Need to ensure that works are relevant, wage rates are set low
Example: Urban Poverty Project Indonesia

9. WBG response: Infrastructure Recovery and Assets (INFRA)
Under Vulnerability Fund (GFRP, IDA Fast Track, Rapid Social Response)
Infrastructure spending as a fiscal stimulus
Coordinated Response (IFC, MIGA, WB)
Platform includes:
Direct Finance
Parallel Finance
Concessional Finance (OBA for slum upgrading)
Diagnostic Tools being developed (water and sanitation, energy, transport, ICT, urban)
Funds being identified (GPPs, donors)