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Sustainable Communities

Railways are the future—so how can countries finance them?

Martha Lawrence's picture
Photo: Kavya Bhat/Flickr
As a railway expert working for the World Bank, I engage with many client countries that are looking to expand or upgrade their railway systems. Whenever someone pitches a railway investment, my first question is always, “What are your trains going to carry?” I ask this question because it is fundamental to railway financing. 

Railways are very capital intensive and increasingly need to attract financing from the private sector to be successful. That is why the World Bank recently updated its Railway Toolkit to include more information and case studies on railway financing. Here, in a nutshell are the key lessons about railway financing from this update. 

Sri Lanka at 70: Looking back and forward

Idah Z. Pswarayi-Riddihough's picture
A view from the Independence day parade.At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
A view from the 2018 Independence Day parade. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation. Credit: World Bank

Like many Sri Lankans across the country, I joined Sri Lanka’s 70th Independence Day festivities earlier this month. This was undoubtedly a joyful moment, and proof of the country’s dynamism and stability. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
 
The country’s social indicators, a measure of the well-being of individuals and communities, rank among the highest in South Asia and compare favorably with those in middle-income countries. In the last half-century, better healthcare for mothers and their children has reduced maternal and infant mortality to very low levels.
 
Sri Lanka’s achievements in education have also been impressive. Close to 95 percent of children now complete primary school with an equal proportion of girls and boys enrolled in primary education and a slightly higher number of girls than boys in secondary education.
 
The World Bank has been supporting Sri Lanka’s development for more than six decades. In 1954, our first project, Aberdeen-Laxapana Power Project, which financed the construction of a dam, a power station, and transmissions lines, was instrumental in helping the young nation meet its growing energy demands, boost its trade and develop light industries in Colombo, and provide much-needed power to tea factories and rubber plantations. In post-colonial Sri Lanka, this extensive electrical transmission and distribution project aimed to serve new and existing markets and improve a still fragile national economy.
 
Fast forward a few decades and Sri Lanka in 2018 is a far more prosperous and sophisticated country than it was in 1954 and, in many ways, has been a development success story. Yet, the island nation still faces some critical challenges as it strives to transition to another stage of its development and become a competitive upper middle-income country.
 
Notably, the current overreliance on the public-sector as the main engine for growth and investment, from infrastructure to healthcare, is reaching its limits.  With one of the world’s lowest tax to gross domestic product (GDP) ratios -- 12% in 2016, down from 24% in 1978 —Sri Lanka’s public sector is now facing serious budget constraints and the country needs to look for additional sources of finance to boost and sustain its growth.
 
As outlined in its Vision 2025, the current government has kickstarted an ambitious reform agenda to help the country move from a public investment to a more private investment growth model to enhance competitiveness and lift all Sri Lankans’ standards of living.
 
Now is the time to steer this vision into action. This is urgent as Sri Lanka is one of the world’s most protectionist countries and one of the hardest to start and run a business. As it happens, private foreign investment is much lower than in comparable economies and trade as a proportion of GDP has decreased from 88% in 2000 to 50% in 2016. Reversing this downward trend is critical for Sri Lanka to meet its development aspirations and overcome the risk of falling into a permanent “middle-income trap.”

Can cash transfers solve Bangladesh’s malnutrition?

Rubaba Anwar's picture
Silvi and her mother arrive with Silvi’s birth certificate to enroll into Jawtno. a cash transfer program aimed to help 600,000 poor families in Bangladesh access prenatal and child care.
Silvi and her mother arrive with Silvi’s birth certificate to enroll into Jawtno. a cash transfer program that aims to help 600,000 poor families in Bangladesh access prenatal and child care. Credit: World Bank


Silvi is eight months old. She lives in a remote village in one of the poorest regions of Bangladesh.
 
Her mother Maya often reflects on her pregnancy and worries about her daughter’s wellbeing as she recalls her morning sickness, the uncertain and painful birth, and the long nights at Silvi’s side as the baby lay wide awake wailing, fighting one illness after the other.
 
She remembers, too, the thrills of hearing Silvi giggle at the sound of her rattle, and when she began to crawl.
 
Despite the little joys that her baby brings to Maya, Silvi’s early childhood was marked with apprehension: Shouldn’t she be a little heavier? When will she learn to walk? Will she be healthy and intelligent enough to earn a decent living when she grows up? Or would she be handed down her parents’ poverty and get married like Maya had to, at only sixteen?
 
But with the right kind of support, Silvi can have a chance at a better life and bring her family out of poverty.
 
Growing evidence has shown that adequate nutrition before birth and the two years after – or in the first 1,000-days – has lasting effects on a child’s intelligence and brain development.
 
When they’re properly fed and exposed to learning, children can reach their full potential and break the poverty trap.
 
Thus, investing in early childhood nutrition and cognitive development (CNCD) is critical to curbing poverty in a country like Bangladesh, where 36 percent of children below the age of 5 are stunted —or too short for their age--, low birth weight is prevalent, and maternal nutrition remains poor.
 
Sadly, poor families like Maya’s are not utilizing services available to them.  

UN-Habitat Executive Director: Let’s work together to implement the New Urban Agenda

Sameh Wahba's picture
During the Ninth Session of the World Urban Forum (WUF9) in Kuala Lumpur, Malaysia, the World Bank delegation met with Maimunah Mohd Sharif, Executive Director of the United Nations Human Settlements Program (UN-Habitat).

Ms. Sharif became the Executive UN-Habitat in December 2017, succeeding Joan Clos of Spain. She was previously Mayor of the City Council of Penang Island, Malaysia, where she led the Municipal Council of Seberang Perai to achieve its vision of a “cleaner, greener, safer and healthier place to work, live, invest and play.”

How do city leaders get things done? Learning from mayors in Japan

Sameh Wahba's picture
Also available in: Español | 日本語 
Picture of the Competitive Cities Technical Deep Dive participants enjoying a walk through the Minato Mirai 21 area (with the Cosmo Clock in the background), which aims to concentrate high-value added activities and a high quality of life in an integrated urban core in downtown Yokohama. Photo Credit: TDLC
The task of mayors and city leaders is no longer limited to providing efficient urban services to their citizens. Job creation is at the forefront of the economic development challenge globally.

Cities need jobs and opportunities for their citizens and the means to generate tax revenues to fund projects that meet their populations’ growing demand for basic services. The WBG flagship report on Competitive Cities outlines how creating jobs in urban areas – urgently but also at scale– is essential.
 
In November, 2017, we spent a week with approximately 30 city and national government officials and policymakers from several countries, including Argentina, Chile, Croatia, Egypt, Ethiopia, Malaysia, Philippines, Romania, South Africa, Tunisia and Uganda. These leaders represented diverse cities across the world, all with a common objective – how to make their cities and regions more competitive?

Many were dealing with a fragmented institutional landscape, often with overlapping jurisdictions – necessitating clarity of institutional circuits and processes. Some struggled to coordinate economic development strategies with private sector. Lack of adequate sub-national socio-economic data to drive evidence-based policy making compounded issues. City leaders are not looking for a lesson in theory – but evidence of what works and what doesn’t, and practical, implementable examples of how to get things done.
 
We spent the week as part of a Technical Deep Dive, studying and living the experience of two exceptional Japanese cities - Yokohama and Kobe. These cities have dealt with:
  • population influx,
  • industrialized at a rapid pace,
  • responded to environmental challenges,
  • reached the technological frontier,
  • undergone a housing bubble,
  • and even went through a major disaster (the Kobe earthquake) and recovered from it.

National and local leaders in Latin America: Sustainable cities are resilient cities

Sameh Wahba's picture
Cities are critical engines of global growth. But as cities grow, they’re increasingly vulnerable to climate change and natural disasters.
 
The year of 2017 was one of many recent reminders of that “new normal”—from Hurricanes Harvey, Irma, and Maria that pounded coastal United States and the Caribbean to the severe drought that struck Somali, which led to the displacement and even life losses of individuals and families.
 
Even when lives are not threatened, livelihoods are at stake: Without major action taken to invest in urban resilience, climate change may force up to 77 million urban residents back into poverty by 2030.
 
[Report: Investing in Urban Resilience]

This helps explain why many city leaders attending the World Urban Forum in Kuala Lumpur, Malaysia this week resonate with the same message: Sustainable cities are resilient cities.
 
At the forum, we spoke with national, municipal, and civil society leaders on the issue of urban resilience—including ministers and mayors from three Latin American countries, a region full of emerging cities and aspiring populations that are no stranger to hurricanes, earthquakes, and other natural disasters. 
 
Watch the videos below and leave a comment to let us know what your city may be doing differently to enhance urban resilience.
 
 


Michael Berkowitz
President, 100 Resilient Cities

Antananarivo: A city for whom?

Salim Rouhana's picture
Photo: Michel Matera/World Bank


Planning is a theme in cities as ancient as Rome, Cairo, and Athens to as modern as New York and Singapore. It is used as an instrument to manage collective living. Planning remains key in shaping the urban contract of how and to what end people are willing to inhabit the same space.
 
Madagascar is witnessing rapid urbanization. From an overall population of 24.8 million (2016), the country has close to 7 million urbanites, compared to 2.8 million in 1993. Cities generate about 3/4 of the national GDP, with the capital city, Antananarivo, contributing more than 50%.

In Africa, sustainable urbanization starts with effective financial management

Sameh Wahba's picture
In most developing countries, cities are struggling with the demands of growing urbanization. A major challenge is the lack of sufficient, effectively managed financial resources. For instance, the global investment needed for urban infrastructure is $4.5-5.4 trillion per year, a figure that dwarfs official development assistance.
 
To bridge the municipal financing gap, cities must take coordinated action with partners, such as private investors and multilateral development agencies to build financial management institutions that are sustainable, accountable, and stable.
 
[Report: Africa’s Cities: Opening Doors to the World]
In East Africa, the World Bank has an operational portfolio of almost $1 billion in urban projects focused on improving financial and institutional performance across multiple local governments in Ethiopia, Kenya, Uganda, and Tanzania, as well as operations that focus in-depth on big city governments. 
 
For example, in Uganda, World Bank projects in Kampala increased its inflation-adjusted revenues by approximately 10% in one year, and the secondary city clean audit report performance has improved from 36% to 100% over a period of two years.

Watch a conversation between World Bank Director Sameh Wahba (@SamehNWahba) and Jennifer Musisi (@KCCAED), Executive Director, Kampala Capital City Authority to learn more about Kampala’s transformation in recent years in municipal financing, and what other countries and cities can learn from this experience.
 

Maximizing finance for sustainable urban mobility

Daniel Pulido's picture
Photo: ITDP Africa/Flickr

The World Bank Group (WBG) is currently implementing a new approach to development finance that will help better support our poverty reduction and shared prosperity goals. This crucial effort, dubbed Maximizing Finance for Development (MFD), seeks to leverage the private sector and optimize the use of scarce public resources to finance development projects in a way that is fiscally, environmentally, and socially sustainable.
 
There are several reasons why cities and transport planners should pay close attention to the MFD approach. First, while the need for sustainable urban mobility is greater than ever before, the available financing is nowhere near sufficient—and the financing gap only grows wider when you consider the need for climate change adaptation and mitigation. At the same time, worldwide investment commitments in transport projects with private participation have fallen in the last three years and currently stand near a 10-year low. When private investment does go to transport, it tends to be largely concentrated in higher income countries and specific subsectors like ports, airports, and roads. Finally, there is a lot of private money earning low yields and waiting to be invested in good projects. The aspiration is to try to get some of that money invested in sustainable urban mobility.

Creating a flood resilient city: Moving from disaster response to disaster resilience in Ibadan

Salim Rouhana's picture
The Eleyele Dam spillway in Ibadan was damaged during the 2011 flood. Ivan Bruce, World Bank


As we reflect on 2017, the truly devastating impact of climate change is being felt across the globe. The evidence has never been clearer that the impact of climate change is happening now. The World Bank's “Shockwaves” report estimates that, without major investment, climate change will push as many as an additional 100 million people into poverty by 2030. 


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