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Urban Development

Infrastructure Gaps Vary across East Asia and the Pacific – and between Cities and Rural Areas

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Lack of clean water facilities, roads in need of repairs, recurring power outages – these are the realities of many developing countries, including in the East Asia and Pacific region. The Status of Infrastructure Services in East Asia and Pacific, a report by the World Bank Group’s Infrastructure, PPPs, and Guarantees unit, or IPG Group, based at the Hub for Infrastructure and Urban Development in Singapore,  shows in detail the infrastructure gaps that are critical for economic growth.

The findings reflect the composition of the region, a diverse mix of high-income and low-income economies with several large middle-income economies. Infrastructure access is also marked by fragmentation, with notable differences between low-income and high-income ASEAN countries, between ASEAN and the Pacific Islands countries, and between rural and urban areas.

These distinctions inform the three broad groupings with respect to access: highly advanced and well-equipped countries, such as Singapore and South-Korea; a semi-advanced group which includes middle-income countries, such as China, Malaysia, Thailand, and Fiji; and countries with less access, such as Myanmar and most of the Pacific Islands, excluding Fiji and Samoa.

Initiatives are underway to crowd in more private financing in infrastructure investment, as part of the World Bank Group’s efforts to maximize finance for development. Currently, public finance remains the largest source of funding for infrastructure development. In East Asia and the Pacific, private participation in infrastructure investments have recovered to pre-1997 Asian financial crisis levels, but they still account for a fraction of total infrastructure investments. In China in 2015, for example, private investment amounted to less than 1 percent of total investment in transport, energy and water.

Attracting more private investment will require regulatory reforms that impact the investment climate, and also business models that ensure returns. Currently, revenues from service tariffs in many East Asian and Pacific countries do not cover the costs of production. In several ASEAN countries – notably Indonesia, Vietnam, Malaysia and Philippines – average unitary revenues from electricity tariffs do not cover the marginal cost required to generate electricity, let alone to distribute and transmit electricity to users. Only China, Malaysia, and Thailand are operating at general cost recovery levels for electricity production.

The following are the report’s additional key findings:

  • With the exception of Fiji and China, on average water utilities cover their operating costs by tariff revenues. This does not imply, however, that current water revenues are sufficient to cover the capital costs required to expand service or rehabilitate existing infrastructure.
  • Among the countries with available information, only the Philippines, South Korea and Cambodia reported operating cost coverage ratios above two, which would allow water utilities to make capital investments to expand and maintain their infrastructure.
  • Singapore has the most developed infrastructure services, with 100 percent access to electricity, piped water, and sanitation.
  • Though strong economies, Malaysia, Thailand, and Fiji require more infrastructure development. Road infrastructure in rural Malaysia remain lacking, as are urban sewerage facilities in its cities. Water treatment and urban sanitation services in Thailand and Fiji can also improve.
  • The Pacific Island states – particularly Papua New Guinea, Timor-Leste, and the Solomon Islands – report low levels of access and quality of infrastructure services. In ASEAN, Cambodia and Myanmar are in most need of broader access to all services.
  • Access to electricity is relatively broad. Outside of the high income countries, EAP’s cities have 86 percent coverage for electricity, while rural access stands at 65 percent.  However, nearly 60 million people still lack access to electricity, particularly in the Philippines, Lao PDR, Cambodia, and Myanmar.
  • Among the Pacific Island countries except for Fiji and Samoa, access is defined by the urban-rural divide. Electricity access in Vanuatu’s cities is 100 percent, but only 11.5 percent in rural areas.
  • While access to improved water sources is relatively high in the region, access to piped water supply is low. Only Malaysia and high income countries such as Japan, South Korea and Singapore have extensive access to piped connections for residential areas. In low-income ASEAN countries and Pacific Island nations that comprise the third tier, overall household access levels for piped water are only 20 to 30 percent – and only 8 percent and 9 percent in Myanmar and Papua New Guinea, respectively.
  • Piped sewerage connections in cities are limited, with significant differences between economies. Access rates in the cities of some countries are ten times lower than rates in more developed economies, and only high-income economies enjoy full access to urban piped sanitation systems. Cambodia, Malaysia, and Timor Leste also have better access to urban sewerage, at 44 percent, 42 percent, and 18 percent, respectively.
  • Elsewhere in the region – even in the cities – coverage for piped sewerage are at single-digit levels.

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Urban Development

Mapping the juxtaposition of sustainable-affordable housing in the post Covid world

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The pandemic has definitely taken a vice grip of the entire world’s institutional paraphernalia which has severely affected not only the public health mechanisms but also economies across the globe. However, the present piece shall be hovering over an offshoot of this pandemic which has been incessantly ignored by the world at large. The problem in question shall pertain to the issues of affordability as well as sustainability when it comes to housing. Sustainability has been echoed in various international instruments starting from Stockholm Declaration of 1972 to Montreal Protocol in 1987 to Earth Summit in the year 1992[1]. But the Millennium Development Goals and Sustainable Development Goals have put the sustainability debate at the forefront in the international legal regime. But, the inter-relationship of sustainability with the housing mechanism has not been explicitly recognised under the international legal regime. There have been passing references pertaining to clean water and sanitation[2], putting efforts for affordable and clean energy and making of sustainable cities and communities that have been provided in the Sustainable Development goals laid down in the year, 2015. The goals are absolutely silent on the issue of affordable-sustainable housing. However, United Nations Organization has been pragmatic in adopting the Geneva UN Charter on Sustainable Housing[3] in the year 2015 which is the first as well as the fundamental international convention on the issue in question. This international convention explicitly talks about the goal of achieving the sustainable housing system and also lays down the challenges emanating out of the same.

Sustainability- A term difficult to decipher

However, the term “sustainable” housing is difficult to comprehend completely. There cannot be a straight jacket solution in deducing its definition and there are innumerable connotations attached to it. One of the environmental economists Herman Daly has laid down three essentialities for a sustainable housing framework. These include the rate of use of renewable resources, rate of use of non-renewable resources in the premises and lastly, the controlling of pollution emissions. Also, Dow Jones had developed a sustainability index which delves into the parameters of an ideal sustainable framework[4]. But the parameters mentioned hereunder do not reflect an exhaustive list of things to be included in the sustainable and affordable housing framework.

Dichotomy of affordable-sustainable cities: International outlook

In the international domain, the researcher has critically analyzed three genres of models and decoded the sanctity of the same. The first model which was comprehensively evaluated was the USA model which was marked by Clear Act, 1963 but did not live up to the expectations pertaining to the issue in question. But later, U.S. Department of Housing and Urban Development (HUD) has laid down the criterion for affordable housing by attributing 30% of the gross household income but the sustainability factor was completely ignored. The UK Model brought the Geneva UN Charter on Sustainable Housing in the year 2015 deliberated upon the nuances of sustainability pertaining to housing mechanisms but did not take into consideration the affordability element. Lastly, the Australian Model discussed under the realms of Demographic International Housing Affordability Report of 2015 pointed out the soaring prices of housing facilities so deduced rules of affordable system of housing in the city of Melbourne. But, again one of the things the researcher inferred that there has been a necessary disjunct between affordability and sustainability in various legal institutional paraphernalia.  

The Indian approach: A questionable concern

In India, too, the legal mechanism adopted by the government under the realms of Pradhan Mantri Awas Yojana is called as “housing for all”. Under the mandate of the said scheme, the government intended to make houses for everyone at affordable prices. But, this scheme is absolutely silent on the issue of environmental sustainability. The ambiguity emanating out of this scheme needs to be addressed by the government as soon as possible. Even though there have been some governments like that of Trivendrum have been Good Samaritan in this direction by providing sustainable housing facilities at affordable prices as well. Even various private entrepreneurs have now become cautious in respect of their carbon-emissions and have started taking adequate action to substantially reduce them. This is in absolute sync with the Paris Climate Agreement of 2018. Sustainability is not only restricted to controlling and prevention of disparaging of the ecological structure of the world but also, helps in boosting the profits of the company in the long run. Sustainability has become one of the most debatable issues in the modern scenario. Any ideal housing mechanism has to be sustainable and affordable at the same time. Thus, the entire thrust of this research was on developing a sustainable as well as an affordable housing framework for the people in India as well.

But in the post Covid world, the international community needs to re-examine the structures of housing facilities wherein affordability should come in synchronization with the sustainability element as well. Recently, World Health Organization (WHO) deliberated upon the issue of housing so as to de-clutter those ill-made houses so that the spread of highly contagious virus can be contained. Though it has been rightly said by Robert Merton that “It is good to ask questions but it is always better to find solutions to those questions”, but such complex set of questions cannot be answered in one go. They need proper analysis of the problem and then only certain concrete measures could be thought of. The idea behind writing this piece was to ignite the spirit of empathy among the readers about the pitiable condition of the housing.  It would be highly falsified on our part if we bombard the readers with a special set of suggestions because the cost-benefit analysis of each of those suggestions would be varied and comprehensive. Thus, I have left the door ajar so that the readers are able to familiarize with the given set of problems which are staring us in this context and then accordingly ponder about the need of sensitization of the sustainable-affordable housing issue at the domestic as well as the global level. The governments have always exhibited callous behaviour towards environment, human rights and public health issues. Thus, a stern eye needs to be kept on these reckless corporate and governmental entities which have only been disparaging the housing issue since time immemorial.  


[1] JM Lavy CONTEMPORARY URBAN PLANNING, Pearson Education Publications 34-39 (4th edition 2009)

[2] Principle 6, Sustainable Development Goals by United Nations; https://www.undp.org/content/undp/en/home/sustainable-development-goals.html

[3]The Geneva United Nations Charter on Sustainable Housing; https://www.unece.org/fileadmin/DAM/hlm/documents/Publications/UNECE_Charter_EN.pdf

[4]Sustainability Assessment, ROBECOSAM,available athttp://www.sustainability-indices.com/ sustainability-assessment/index.jsp (last visited on 26th June, 2020).

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Urban Development

Building back better in Albania: UNECE supports housing sector reforms and urban ‎resilience ‎

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Albania has made considerable progress in the recent years in the provision of affordable adequate housing to all. Notably, the national government has been providing support to municipal programmes for housing construction; supporting investments into construction of affordable housing, including through public-private partners; and legalizing informal settlements to improve the living conditions of the population.

However, multiple challenges remain due to the lack of available public funds for housing construction and insufficient capacity of some of the municipalities to implement housing programmes. Moreover, natural disasters created new economic and financial challenges: the earthquake in Albania in November 2019 left 14,000 people or 2 per cent of the Albanian population homeless. Another earthquake struck Albania in January 2020, which brought  damage to both public and private properties  amounting to EUR 844 million. The cost of their reconstruction is estimated at EUR 1.07 billion:  about EUR 800 million is needed to rebuild homes while the remaining amount is for repair of damaged infrastructure, such as schools and health centres.

The COVID-19 pandemic further diminished the budget resources available for affordable housing. According to the Albanian Ministry of Finance and Economy, the first phase of the lockdown will cost the economy EUR 16 million in tax revenues. In this context, there is an urgent need to develop new approaches to financing housing construction in Albania.

To discuss opportunities for financing affordable housing, the Albanian Ministry of Economy and Finance and the United Nations Economic Commission for Europe (UNECE), in cooperation with Housing Europe, UN-Habitat, UNDP Tirana and the Union for Mediterranean, organized an online workshop on 18 June 2020 The workshop discussed housing finance challenges and opportunities and the future role of the National Housing Agency in Albania taking into account relevant international best practices. A wide group of housing finance and housing policy experts from Belgium, Croatia, Ireland, Portugal, Slovenia, Spain, Ukraine and other countries shared their experiences on the topics.

The outcomes of the workshop will contribute to the revision of Albania’s National Housing Strategy and its Action Plan. They will also help the formulation of the local housing plans for three municipalities, which will be selected on a competitive basis. Other municipalities will be supported through guidelines that will be developed based on results of tests on the pilot municipalities.

The workshop will benefit the UNECE-Housing Europe-UN-Habitat joint “#Housing2030 Initiative: Improving Housing Affordability in the UNECE region” through the best practices on affordable housing shared during the discussions.

The workshop also initiated the work on the second Country Profile on Urban Development, Housing and Land Management of Albania to be developed by UNECE in 2020-2021, in cooperation with the Government. The first Country Profile prepared for Albania in 2002 focused on the housing sector. The second Country Profile will assess the country’s progress in developing housing and urban development policies and will include a comprehensive set of policy recommendations to support the country’s efforts to overcome persisting challenges in areas such as informal settlements, low energy efficiency in buildings and lack of financial resources for housing construction and renovation.

Following the workshop, UNECE will also provide support to Albania in promoting urban resilience through its United Nations Development Account project “Urban economic and financial recovery and resilience building in the time of COVID-19”. The project will be implemented not only in Albania but in several other countries in the UNECE region as well in 2020-2021.

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Vietnam Can Lead ASEAN through the Smart Cities Network Vision

ANBOUND

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When Vietnam takes over the ASEAN chairmanship in 2020, the country outlined five priorities to be executed throughout the year. Among all, strengthening the institutional capacity of ASEAN and leveraging the Industrial Revolution 4.0 to address inequality, are the most challenging goals to be realized within a year. Other scholars such as David Hutt, meanwhile, even pointed out that Vietnam’s most important goal is to secure a united stand on the Code of Conduct to be negotiated with China this year ⸺ a consensus that if achieved, will ensure any agreement regarding the contentious South China Sea dispute to be mutually favourable for all the disputants involved. 

That said, the unexpected outbreak of the COVID-19 has greatly disrupted Hanoi’s initial ambitions to drive the ASEAN agenda into new heights. Not only the global pandemic postponed the regional bloc’s summits and meetings to later dates, it also compelled leaders of all ASEAN countries to devote great focus on this outbreak at the ASEAN level. While the online Special ASEAN Summit last April was able to result in a joint statement to address the COVID-19 pandemic under the chairmanship of Vietnam, it was by no means, adequate for the country to play an active role as the ASEAN’s driver this year. Given the COVID-19’s disruption to ASEAN’s annual meetings and summits, it is not hard to see why Hanoi is seeking to extend another year of its chairmanship despite this may clash with Brunei’s preparations as the next chairman of the Southeast Asian bloc.

Utilizing Confidence Gain in COVID-19 Response

As the country which managed to control COVID-19 and keep it to an excessively low number of transmitted cases, Vietnam has gained an unprecedented confidence among its ASEAN peers as well as those outside of the region. As highlighted by Coleman and Sheehan, Vietnam became a new model of how a developing country can respond to COVID-19 without devoting mass resources for the purpose. Dubbed as low-cost COVID-19 strategy as coined by different scholars, the Vietnamese success stemmed on its abilities on three fronts: mobilizing all segments of society in responding to the crisis, initiating early prevention measures (mask-wearing policy, targeted testing, contact tracing and quarantine) and utilizing different technologies (website and app) for public communication.

With such coordinated measures, Vietnam has cast itself as an exemplary model in controlling the pandemic despite not having colossal resources in conducting mass testing and epidemic surveillance of South Korea, China and Singapore. As a matter of fact, the Vietnamese COVID-19 response model is a highly attractive model which can be readily emulated by other developing countries with limited resources at hand. Within ASEAN, the Vietnamese model can be replicated in Cambodia, Laos and Myanmar ⸺ countries that would need effective COVID-19 response strategy without their governments devoting huge costs for it. By occupying the ASEAN chairmanship status, its COVID-19 success resonated confidence from the whole regional bloc on its ability to play a leading role in this testing time. To take it further, such gain of confidence within ASEAN, should be further capitalized by Hanoi to implement regional agendas that would bring pragmatic returns to all member states in the short-run.

Pushing for Short-Term Goals within ASEAN Smart Network Cities (ASNC)

With the COVID-19 pandemic yet to be effectively controlled around the world and has the capacity to recur in the near future, no one knows how much longer would the restarted economies in the bloclast. This situation, in turn, made the ASEAN Smart Cities Network (ASCN) as reached by the Southeast Asian bloc in April 2018, an ever more important priority for immediate implementation. From Anbound’s observations, there are two reasons for such urgency.

First, with COVID-19 vaccine yet to be developed at least not in the immediate future, reduction in face-to-face engagements has become a norm of human interactions. As such, there is no other choice for ASEAN players, whether they are the governments, businesses and average citizens, but to adapt to this new norm in their daily activities. By pushing for the immediate implementation of the ASCN, Vietnam will be able to utilize technology to rejuvenate the economy and improve the lives of ASEAN citizens in the post-pandemic era.

By all means, this will establish Vietnam’s legacy as the chairman that brings ASEAN out of the socio-economic crisis that was brought by the COVIS-19 pandemic. Considering that the 36 cities have planned their strategic projects within the Smart City Action Plans document, what Hanoi could do is to call for an online meeting with the respective national leaders and relevant city mayors, and designate certain short-term goals to be realized by the end of 2020. These goals can be any easier and achievable goals in the three pillars of technological utilization, industrial automation and digitalization of economy.

Second, similar to becoming a model for COVID-19 response, Vietnam could also become another model of smart cities for the lower developing peers in ASEAN. In the course of adapting smart cities vision to its local conditions, Hanoi can share with their peers on how to kick-start smart cities governance in three different cities with three distinctive needs, namely, Hanoi, Ho Chi Minh City and Danang. As a latecomer to the smart cities game, these three Vietnamese cities have demonstrated their capabilities to prioritize smart solutions according to their local needs instead of developing all sorts of smart solutions in their localities.

Whereas Hanoi had started the iParking app for drivers and looking to venture into smart solutions in healthcare, education, transport, and tourism, Danang planned to become a green city through the adoption of smart solutions. As such, the latter’ had begun developing its natural disaster management systems that set it apart from Hanoi and Ho Chi Minh City. As for the southern city of Ho Chi Minh, it is planning to become the first smart city of Vietnam and placed emphasis on attaining five capabilities for achieving a comprehensive smart city: development of cloud computing infrastructure, utilization of Big Data, building of data centres, erection of security centres, and establishment of an open data ecosystem. Without question, the cost-effectiveness approach of these three Vietnamese cities, is highly relevant to those lower developing peers in ASEAN in which limited resources are available for them.

An Opportunity Not to Be Missed

Within the ASNC vision, Vietnam is provided with an opportunity (not to be missed) in leading ASEAN toward the next stage of economic development. While it may want to gain specific achievements in the other areas of South China Sea issue and ASEAN’s institutional capacity, realizing these goals requires a lot of diplomacy with the other nine member states. With a little more than half year left, it is still challenging for the country to achieve these goals despite it is not an entirely impossible endeavor to start with. Pushing for short-term goals within the ASNC vision, meanwhile, will help Vietnam to get quick result and one that is also vital for the new course of ASEAN’s economic development.

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