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Urban Development

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

MD Staff

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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

Creating Smart Cities for Innovative Tourism Experiences

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The UNWTO Conference on City Breaks: Creating Innovative Tourism Experiences (15-16 October 2018) concluded today in Valladolid, Spain, with a call for cities to become smart tourism destinations, where tourism governance and the digital economy mesh together to offer travellers diverse and authentic experiences.

The conference brought together tourism leaders from the public and private sectors to analyse how to respond to the growing trend of city breaks as leisure experiences. They concluded that public-private partnerships, the inclusion of local communities and the creation of smart destinations are crucial for urban destinations to gain the knowledge and define the policies they need in order to respond to the new demands of hyper-connected and hyper-informed tourists.

“We must understand the evolution of tourists towards greater sustainability and inclusiveness, using new technological tools,” said Jaime Cabal, Deputy Secretary-General of the World Tourism Organization (UNWTO). “Creativity and innovation are needed when designing the experiences they are increasingly demanding.”

The Councillor for Culture and Tourism of Valladolid, Ana Maria Redondo, echoed this call, adding: “We need a better understanding of the fundamentals behind the current demand for city break experiences. Smart destination tools are our means to obtain this knowledge.”

The Deputy Director-General for Tourism Development and Sustainability of the Ministry of Tourism of Spain, Ruben Lopez Pulido, suggested that cities and all destinations change their models of tourism development to respond not only the most demanding tourists, but also to the rise of the digital and knowledge economy. “Being a smart destination is not just a label, but a process towards the comprehensive transformation of destinations, while always aiming at the achievement of the Sustainable Development Goals,” he said.

Speakers at the conference included Dieter Hardt-Stremayr, President of European Cities Marketing and CEO of the Graz Tourism Office in Austria, who described what he considered key challenges for the growth of city breaks: transportation issues, seasonality, and the dispersion of tourism demand within a city and over time. “Our main challenge is to attract visitors to come right at this moment. To overcome it destination managers should focus on parts of the tourism offer that are ‘temporary’,” he concluded.

The main conclusions of the conference referred to urban tourism governance models. Participants highlighted that, with the growth of high-speed, low-cost transportation links that provide more and more visitors with access to city breaks, city destinations must respond by prioritizing investments that benefit residents and tourists alike.

They also concluded that with the technological advances that allow the creation of smart destinations, destination management organizations must shift their focus from only promoting the experiences available for tourists in cities, to managing urban tourism in all its complexity. For their part, tourism policy makers should use smart destination tools to study the impact of tourism on the profitability and sustainability of a city, and place the destination at the centre of policy changes. These conclusions will be taken into account in the UNWTO work plan on urban tourism.

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Urban Development

Melaka a model green city

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In the last five years, Melaka has made great strides toward building a sustainable, green city.

By 2020, the government-run 7248ha Melaka World Solar Valley aims to power most of the daily activities of manufacturers, housing developers, farmers and other stakeholders.

Recently, a public-private partnership installed 100,000 LED street lamps along the Alor-Gajah-Melaka Tengah-Jasin Highway, which will improve road safety and reduce carbon dioxide emissions.

The urban landscape has also changed. Walkable neighbourhoods with mixed-use development have increased foot traffic and reduced car use.

The Melaka River, long a polluted backyard drainage canal, is now a popular gathering place and tourist attraction.

Melaka’s transformation is the result of meticulous planning, a comprehensive approach supported by government policies and projects, private sector engagement and citizen initiatives.

The Asian Development Bank (ADB) is proud to have worked with Melaka to develop its roadmap, the Green City Action Plan.

In addition to a technical assistance grant to underwrite the plan, which was completed in 2014, ADB also helped Melaka implement it, including by structuring bankable projects for solar energy and street lighting, setting up a database to track indicators in environment and economic growth, and conducting training in urban development, environment planning and knowledge sharing.

The Melaka projects are the first to be implemented under the Green Cities Initiative of the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), an ADB-supported sub-regional cooperation programme focused on the development of 32 provinces in these three countries.

It aims to help states and provinces discover and use their relative comparative advantages to work together in the sub-region.

So far, four other cities – Songkhla and Hat Yai in Thailand; Medan and Batam in Indonesia – have developed similar plans.

A “green” city means an area that is resilient and inclusive, manages its natural resources well, promotes low carbon growth to remain competitive and improves the livelihoods of all citizens.

With each green city plan, countries are moving away from business-as-usual economic growth models to forge a clear, concise vision for a city’s future based on factors such as comprehensive analysis and consensus among key stakeholders.

These plans present a paradigm shift, where cities pursue integrated urban development and environmental planning as they make a transition to a cleaner, greener and more prosperous future.

The initiative is very relevant, because cities are the primary drivers of economic growth across countries in the Association of Southeast Asian Nations (Asean), producing about 70% of the region’s gross domestic product.

Almost 300 million people in Asean already live in cities, and another 90 million people are expected to move in by 2030, pushing up the urban share of the population to nearly 45%.

Urbanisation is placing a growing environmental strain on cities, such as air, water and noise pollution, traffic congestion and inadequate solid waste management.

Tackling these challenges will require city governments to integrate social and environmental considerations into locally customised economic development plans.

It will require innovation, testing and application of new ideas, learning and sharing of lessons, and development of new approaches to emerging challenges.

The Green Cities Conference, to be held on Oct 1 in Melaka, will bring city leaders together to collaborate on green growth strategies.

It also seeks to continue to support the Green Cities Network established under the IMT-GT and the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area.

ADB strongly supports the network of Asean green cities, which serves as a platform for knowledge sharing.

Coinciding with the 25th anniversary of IMT-GT, the conference also provides a window for action following Melaka’s success in transforming into a green city.

It’s time now for policy makers to make their own Green City Action plans a reality. The implementation process requires strong coordination between multiple government agencies, the private sector and communities.

It will also require a management approach easily adaptable to project monitoring, data analysis and citizen feedback.

ADB stands ready to provide knowledge and financial support to further develop competitive, inclusive and green cities across Asean.

ADB

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Urban Development

Urban Tourism: We Need to Build Cities for Residents and Visitors

MD Staff

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At the 7th UNWTO Global Summit on Urban Tourism in Seoul, Republic of Korea (16-19 September), the Secretary-General of the World Tourism Organization (UNWTO), Zurab Pololikashvili, laid out a vision looking to 2030 for urban tourism that contributes to sustainable and inclusive cities.

“A vision of urban tourism for 2030 needs to be inclusive, resilient, innovative and smart”, Mr. Pololikashvili said at the conference, which was held in partnership with the Seoul Metropolitan Government and engaged 900 participants from 50 countries in how to build cities for both residents and tourists.

Key amongst the conference conclusions was that technology and innovation will play a key role in this vision, but only if cities invest in the right infrastructure and skills, set an enabling regulatory framework and break the silos that exist among data sources. Speakers also stressed the role that tourists themselves play in respecting the local communities, traditions and values of cities.

The conference was opened by Park Wonsoon, Mayor of Seoul, who stressed that “Seoul has improved its tourism because we have been able to predict changes in tourism, technology, society and environment to follow trends and react appropriately to challenges”.

Do Jonghwan, Minister of Culture, Sports and Tourism of the Republic of Korea, commended the summit for producing “an array of suggestions on cities’ function and role in tourism, the value and significance of cities to be shared with travellers, and how tourism can bring financial benefits with added values for residents.”

Memorable experiences were discussed at length as a major shift in motivation for tourists. “Tourism is a top sector in the experience economy, which is now becoming the transformational economy – cities, to be competitive, need to be authentic and provide transformational experiences,” said the conference’s keynote speaker B. Joseph Pine II, author of the best-seller ‘The Experience Economy’.

The conference stressed that tourism can and should contribute to the New Urban Agenda and the Sustainable Development Goals (SDGs), particularly Goal 11 on safe, resilient, inclusive and sustainable cities.

For that, participants called for tourism to be included in urban governance; led by cooperation among public, private sector and civil society; planned and managed considering local community needs and benefits; and smart in using technology and innovation to promote authentic experiences, monitor tourism impact and promote dispersal policies to spread benefits to the whole city and manage congestion. These four key areas of action will be taken forward to the 8th UNWTO Urban Tourism Summit, to be held in Astana, Kazakhstan in 2019.

On the occasion UNWTO released the report ‘‘Overtourism’? Understanding and managing urban tourism growth beyond perceptions’, produced in collaboration with the Centre of Expertise Leisure, Tourism & Hospitality (CELTH), Breda University of Applied Sciences, and the European Tourism Futures Institute (ETFI) of NHL Stenden University of Applied Sciences. The report proposes eleven strategies and 68 measures to help understand and manage visitor growth in cities.

The 7th UNWTO Global Summit on Urban Tourism was organized by UNWTO and the Seoul Metropolitan Government with the support of the Ministry of Culture, Sports and Tourism of the Republic of Korea, the Korea Tourism Organization and the Seoul Tourism Organization.

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