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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

Thailand’s Smaller Cities Can Help Drive Economic Growth and Reduce Inequality

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Thailand’s cities outside Bangkok can accelerate the country’s growth but will need to find ways to access private capital to improve urban infrastructure, a World Bank study produced with the Program Management Unit on Area Based Development (PMU-A) and Khon Kaen University says.

Bangkok has long been the country’s hub of economic growth and productivity. But as that growth slows, cities such as Chiang Mai, Khon Kaen, and Rayong could pick up the baton with investments in mass transit systems, renewable energy, and other urban infrastructure, which will be critical for Thailand’s competitiveness and ability to adapt to a changing climate according to the study, “Thailand Urban Infrastructure Finance Assessment.” However, to fund these investments, cities cannot rely solely on central government budgets, and should consider municipal borrowing and public-private partnerships, the report says.

Urban growth will provide benefits to city and country populations alike through more reliable transportation and electrification and access to markets, education, and health services. It will enable people, goods, and services to move efficiently within and across cities to promote growth, jobs, and improve the quality of life. Public services such as water and wastewater and solid waste management bring environmental as well as health benefits.  A more robust urban infrastructure will provide resilience against floods and droughts.

“Secondary cities can drive growth and alleviate rural poverty by generating accessible opportunities for those living in rural areas,” said Patricia Mongkhonvanit, Director-General of the Public Debt Management Office, Ministry of Finance. “The Ministry of Finance will leverage the insights and findings presented in the study to support urban growth in these cities to meet the needs of the residents, businesses and industries.” 

Enabling Thailand’s secondary cities to raise capital themselves would avoid increasing burdens on the national government’s fiscal resources, the report says. Yet, Thai cities and local governments remain fiscally dependent on central government for infrastructure investments despite decentralization legislation in the 1990s. However, municipalities have the tax bases and operating surpluses necessary to develop creditworthiness and borrowing capacity.

The study urges a “paradigm shift” to give secondary cities the authority, tools, and expertise to finance local infrastructure. Recommended steps include articulating a national strategy to attract private investment for public infrastructure and the creation of government units to monitor and support local infrastructure projects and planning. Greater flexibility, fiscal autonomy, and accountability are necessary for secondary cities if they are to develop their ability to attract investors and lenders, the report says.

“As Thailand strives for sustainable urban development, local fiscal autonomy emerges as a vital pillar,” said Fabrizio Zarcone, World Bank Country Manager for Thailand. Enabling cities to generate and control revenue streams fosters innovation, accountability, and responsiveness to community needs, ultimately leading to more resilient and self-reliant urban areas.”

The study assesses the feasibility of project proposals in five Thai cities – Chiang Mai, Rayong, Nakhon Sawan, Khon Kaen, and Phuket. The report also discusses policies and institutions that govern how city authorities manage their finances, including raising capital for infrastructure investment.

“Municipal borrowing and public-private partnerships offer a reliable path to urban infrastructure development that has been proven in countries around the world,” said Poon Thingburanathum, Deputy Director of Corporate Planning at the Program Management Unit on Area-based Development. “What is needed is a pragmatic national effort to attract private sector capital to invest in urban infrastructure.”

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Urban Development

Walkability in Pakistan

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Walking is a fundamental human activity that has been around since the dawn of civilization. However, with the rise of motorized transportation, cities around the world have been designed to cater to cars rather than pedestrians, this trend has had devastating consequences for the environment, public health, and perhaps most importantly social cohesion.

In Pakistan, the negative effects of car-centric urban planning are particularly pronounced, since this has a social class dimension to it, add to this the presently rising petrol prices and the issue becomes even more imperative. The concept of walkable cities has yet to take hold in the country. Nonetheless, creating a pedestrian-friendly environment is crucial for Pakistan’s sustainable development, and it is not too late to take action.

The concept of a walkable city is simple; it is a city where people can walk safely and comfortably, without facing any barriers. The idea is to create a pedestrian-friendly environment that promotes walking as a mode of transportation. The walkable city concept is not only limited to transportation but also encompasses other aspects such as accessibility to amenities, social interactions, and public spaces.

In Pakistan, the discourse on walkable cities as an urban development strategy is relatively little to zero. An observable manifestation of this can be seen in most of the real estate schemes that have popped up, and the pre-existing urban infrastructure, which seems to be developed to accommodate vehicle mobility rather than pedestrian. Moreso, this lack of pedestrian-friendly infrastructure could also be linked to class differences since most of the pedestrian traffic within Pakistan’s urban hubs comes from individuals of lower socio-economic standing, and often the owner of a vehicle is deemed to have a better economic standing.

What could be done?

The first step towards creating a walkable city is to assess the existing infrastructure and identify the areas that need improvement. Pakistan has a long way to go in this regard. The country’s urban areas are characterized by poor pedestrian infrastructure, unsafe roads, and a lack of accessibility to amenities. The roads are designed primarily for vehicular traffic, and the pedestrian’s needs are often ignored. Furthermore, this increase in vehicle use is often what contributes to traffic congestion and plays part in further degrading the air quality here. It is estimated by WHO that around 60,000 premature deaths occur in Pakistan every year due to air pollution and vehicular emissions are a major contributor to this.

To create a walkable city, Pakistan needs to revamp its infrastructure. The government should invest in developing pedestrian-friendly streets with dedicated sidewalks, crosswalks, and bicycle lanes rather than mega infrastructure projects –This as a consequence will do much to increase our public savings which could be directed toward developing pedestrian infrastructure and other projects geared towards community empowerment. The streets should be well-lit, and the footpaths should be wide enough to accommodate pedestrians and people with disabilities. The government should also prioritize the development of public transport systems that are well-integrated with the pedestrian infrastructure.

Another critical aspect of walkable cities is the availability of public spaces. Public spaces like public parks, and town squares are integral in encouraging greater social interaction and community building. Pakistan’s cities are marked by their lack of green spaces, parks, and playgrounds. The government should invest in creating public spaces that are accessible to everyone. These spaces should be designed in a way that encourages social interactions and fosters a sense of community. And importantly, are made safe for the use of women and children.

Apart from infrastructure, promoting walking as a mode of transportation is also essential. The government should launch campaigns to raise awareness about the benefits of walking and the importance of a healthy lifestyle. The campaigns should target all segments of society, including children, women, and people with disabilities. As noted by the World Health Organization, 19 percent of deaths that occurred in 2016, were caused by heart-related diseases. Similarly alarming, is the number of adults (33 million) that are living with diabetes in Pakistan. Such chronic conditions are easily preventable if individuals engage in regular physical activity like walking.

A goal as such should not seem unattainable since across the globe, examples of walkable cities have illustrated persistently that policies that encourage walkability are met with success and cultivate a greater sense of well-being among its residents.

Walkable cities are the future of sustainable urban living. Pakistan has a lot of catching up to do in terms of creating pedestrian-friendly infrastructure and promoting walking as a mode of transportation. But this idea of creating a walkable city is not quite out of reach, we already have examples of these from the mohallas of Pindi or Androon Peshawar, or the walled city of Lahore, that have a rich history of pedestrian-friendly alleys and streets.

 The government and the private sector should work together to invest in projects that prioritize walkability. In addition to investment, community involvement and engagement are also crucial in creating a walkable city. This can be achieved through community-based initiatives and grassroots movements that prioritize walkability and advocate for pedestrian-friendly infrastructure, which is crucial since a substantial number of individuals’ primary mode of movement is walking.

Moreover, the involvement of women in these initiatives is essential to ensure that the pedestrian infrastructure is safe. Unfortunately, women in Pakistan are often subject to violence and harassment in public spaces, which makes them hesitant to walk or use public transport alone. Therefore, it is necessary to involve women in the planning and design, to ensure that it meets their needs for safe use.

Finally, creating a walkable city requires a shift in mindset and a change in urban planning practices. Instead of prioritizing vehicular traffic, Pakistan’s urban planners need to prioritize people and their needs. This requires a long-term vision that takes into account the changing demographics, tech advancements and global trends in urban planning. A walkable city is not only a more sustainable and inclusive city but also a more vibrant and livable city where people can connect with each other and their environment.

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A City-Led Climate Resilience

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Climate change is becoming a major cause of an increasing rate of weather catastrophes. The heat-trapping greenhouse gas is making Earth’s temperature warms up rapidly from what was planned since the industrial revolution and leading to overlapping problems, especially for the lower to middle-income countries around the equator. Many efforts are strived by stakeholders to minimize negative externalities from climate change, one of them is discussed about loss and damage. For more than 30 years this issue has been raised by developing countries, but the developed countries as the largest emitters always avoid this topic. Last year, at the UN annual climate talks or known as Conference of Parties (COP) 27 at Sharm el-Sheikh, there was a breakthrough regarding the loss and damage. Several countries including Denmark, Belgium, Germany, Scotland, New Zealand, Austria, Ireland, Canada, the US, the UK, Spain, the EU, and France show their commitments to addressing loss and damage fund. When we have been waiting for compensation in an uncertain time and current national action plans are not on track for under a 1.5oC, prior responses from other levels to cope with climate change are done by cities. 

Cities are home to 55 percent of the global population and are expected to grow by 2.5 billion people to 68 percent by 2050. As climate change deprivation many people’s livelihoods, these conditions drive millions of people to migrate to cities with the hope they would gain more opportunities to survive. As a result, many cities have experienced overpopulated and rapid urbanization under climate change without efforts to increase resilience is exposing cities to gain more climate risks. Recorded approximately 225.3 million internal displacements in the Asia and Pacific region happened during 2010 – 2021, especially in the five sub-regions (East Asia, Southeast Asia, South Asia, Central and West, and Pacific). Increasing mobility in the cities has led to the production of approximately three-quarters of energy-related CO2 of the total global emissions. Recorded that as much as 70 percent of cities worldwide are already dealing with the effect of climate change. 

In efforts to tackle the climate crisis, the local government of the cities needs to reinforce the two-prolonged approach which is mitigation and adaptation. Undertaking a human rights-based approach (HRBA) as city-led climate agenda is a tool for realizing ecosystem-based agenda (EbA) which can be implemented through a local climate change action plan where human rights are a fundamental value. For example, Bilbao is a city council that adopted Charted Values, and Utrecht is a Global Goals City that cooperates with local businesses to raise awareness of their rights and monitors progress on the SDGs dashboard. In Asia, Gwangju has established a human rights department, hosted the annual World Human Rights Cities Forum as one of the most relevant events for bringing local government officials with organizations and other actors to establish and arrange systems to ensure human rights as a core, and implementing localization projects. Another example, in efforts to reduce emissions, Seoul has mandatory for their citizen that should be used all new vehicles to be electric from 2025. In addition, to support this program, the city is released electric vehicle charging infrastructure powered by solar panels which are accessible and provides subsidies for electric vehicles of up to 20 percent with additional support available for low-income households. This policy is expected to reduce emissions by approximately 43 percent compares with 2005 levels and create almost 15.000 jobs.

Moreover, hundreds of cities also show their commitment to accelerating net zero emissions by building networks. Recorded as many as 130 American cities are stepping up their ambition to reduce emissions by joining the Cities Race to Zero to help the US reach its goals of reducing emissions by 2030 and achieving net zero by 2050. Last year, the European Commission also announced 100 cities from the EU member states with 12 additional cities participating in EU Mission for climate-neutral and smart cities by 2030 or known as the Cities Mission. Under this mission, the cities will receive millions of funding in the period 2022-2023 to address clean mobility, energy efficiency, and green urban planning, and offer the possibility to build joint initiatives and ramp up collaborations with other EU programs. The ranking compiled by CDP shows that only 43 out of 596 cities or similar to 7 percent received a top rank for their climate leadership and reduction of emissions, which twenty-one of them are in North America, nine in Europe, four in Australia, one in Latin America and Africa, and four in East Asia.

The proportion above, Asia and Africa have a minimum ‘A’ city in reducing emissions. The report mentioned five barriers that limit urban resilience that are multi-level governance, finance, a local capacity, access to technology and innovation, and equity. The Mayor of the City of Bonn, Mr. Ashok Sridharan said that “The adaptation fund has been instrumental in advancing adaptation to the most vulnerable over the past 10 years and ‘walks the walk’. Cities and regions stand ready to help as global adaptation needs continue to rise”. Nowadays, the ten members of ASEAN with a majority of developed countries have slow progress and struggling in energy transition because they have insecure funds. To achieve ASEAN’s target of 23 percent renewable energy supply by 2025 need an investment of US$ 27 billion per year. However, from 2016 – 2021, the ASEAN countries received no more than US$ 8 billion per year. At the global level, the World Bank estimated an amount of US$ 4.5 – 5.4 trillion per year which 9 – 27 percent part of it is aimed to make an urban infrastructure low-emission and resilient to climate risks. However, UNFCCC released there is a gap of US$ 1.8 – 2.4 trillion per year in financing for climate-resilient infrastructure globally with the majority of needed in urban areas.

Cities become a frontline in adaptation and mitigation because they prioritize sustainably local projects faster than a state. Therefore, with the financial barriers to access technology faced by the local governments, the discussion about climate funds should mobilize in the UN annual meeting about climate to enhance climate resilience as a priority within all of the cities, especially in the developing countries in Asia and Africa.

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