Jun 06, 2007

The Slum Opportunity

by Laura Starita

This is the year of the city. For the first time in history, more people live in urban areas than rural environments, and millions more of the rural poor are expected to migrate to cities this year. The fastest growing cities are in the developing world, and the fastest growing part of many cities are their slums. Anyone who has visited an urban slum in the developing world has wondered, “Why are more people coming to live in conditions like this?” Living in a slum means inadequate housing, violence, polluted water and disease.

But the rural poor see clear benefits of slum living, as a recent article in The Economist points out. Cities offer access to jobs, markets, roads and possibly other civic infrastructure. These dynamics are self-promoting, because large numbers of people entering cities create new markets and economic opportunities. In short, slum dwelling can provide an immediate improvement for some people, while offering at least the hope of future benefits for their children (the article cites a correlation in Asia between increases in city-dwelling in the last 30 years and improved education and life expectancy). In essence, the rural poor are often willing to take a chance at a better life, even if it carries a risk of being worse off.

So what can be done to improve the odds for slum dwellers? At the highest level, the answer is economic growth.

The main conclusion to be drawn from the success stories is that few poor people in cities will grow richer if their local economy is not growing, and few local economies will prosper if the national economy is not also prospering.

Several related issues are relevant to private donors. While population density brings problems, it also can dramatically lower the costs of service delivery in health and education. Perhaps one of the most innovative and promising approaches is related to developing property rights for slum dwellers. Initiatives to provide a degree of property rights are being tried in several cities in Africa and India with generally positive results so far.

Economist: A cul-de-sac of poverty