Dr. Solomon Benjamin

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Thinking Urban Poverty, Economies,and
Politicsin Contested Terrain
Dr. Solomon Benjamin Bangalore INDIA Urban
Development for Poverty Reduction Towards a
research agenda The World Bank Dec. 9 to 11
2002
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• Urban poverty in highly contested urban settings
• Millennium goals through an understanding of how
  the city functions at the grassroots -- not to
  ruin whats already working..
• Existing dedicated poverty programs ghettoize
  economically and politically..limited in
  addressing contested economic terrain ..(but
  positive impact of the PDS for the recognized
  poor)
• Poor groups, even those chronically poor as
  active political and economic agents
• Land issues as an economic asset and as a
  mechanism of political leverage
• Politics by Stealth and working the system
  rather than only explicit policy..

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Structure of the Presentation
Part 1 Pro-poor employment and livelihood
settings
Part 2 Pro-poor politics and an empowered local
government
Part 3 Institutional road blocks Contested
terrain in divided cities.
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Part 1 Pro-poor employment emerges from
complex incremental processes

• Dynamic and complex small firm centered economies
  in towns and cities
• Diversity of livelihood processes, and
  opportunities for skill upgrading
• Extensive urban - rural links extending economic
  benefits

• Sophisticated financial mechanisms connect
  markets
• Urbanization funded by emerging land markets
  Pro-poor local real estate critical
• Incremental land development inter-relates with
  emerging economies

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METRO CASE ILLUSTRATIONS Neighborhoods as
Factory .. Viswas Nager East Delhi (Seen above,
size 1 mile long, ¼ mile width) A Productive
slum -- Indias largest domestic cable and
conductor manufacturing cluster One of Delhis
20 main economic clusters and 40 smaller ones
inter-connect into a larger economic
system Voting 1991 pop. 21,000 Employment in
2000 firms 25,000 Indirect employment 30,000.
Negotiated with the electricity authority to
increase revenue from 33,300 to 333,300
annually to reduce TD losses from 53 to 18
and to fund a more efficient digital power
management system
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SMALL TOWN CASES...Ramanagaram Population
100,000 with 30,000 in direct processing and
70,000 in support activities. Direct links in
villages in a 20 km distanceWage rates for
specialized skills higher than BangaloreEmploymen
t in trade as important as in silk processing and
manufacturing On the job trainingSilk cocoon
market doubles as an efficient and dedicated bank
rotating funds over a three day production
cycle.. Kanchipuram Population 200,000 with
weaving enterprises and trade catering to 80 of
towns population. 30,000 looms in towns and
direct links to 20,000 more in villages in a 30
km distance. Village youth here seek skills of
weaving and trade in the towns production system
Also political economy driven by local
democracy...
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Seeds of Local Democracy..learning to know how to
work the local governance circuit..
Residence
Factory
Cycle rickshaw
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Poorer groups find increased access with
incremental land development, varying tenure
regimes and infrastructure levels main public
support has been via basic infrastructure and
regularization
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Inter-connections between various economies and
markets help spur employment, livelihood, and
productivity Employment in trade as important as
in Processing Manufacturing -- helps mobility
of poorest towards more stable economic
situations
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Flexible response to emerging regional
markets...inter-connected at the grass roots
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• Poor groups as active agents in complex financial
  circuits
• Lumpy investments in land and infrastructure
  development, and local economic assets can be
  financed by incremental flows
• Example

• Chit funds (group financing schemes) is one of
  the basic mechanisms to rotate and consolidate
  funds.
• Funds are sophisticated and operate for varying
  periods
• Chit funds also link to Bhogey -- investing in
  land on a three year lease

• Chit funds and Bhogey help consolidate funds of
  incremental cash flows for lumpy investments
  needed in both rural and urban settings

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An illustration of various types of Hawkers
Higher-end, and Low end types A, B, C are
players in varying funding cycles .. these
relate to the seasonal supply of fruits,
vegetables, other urban services
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LOCAL ECONOMY COALITIONS in Bangalore 1) Small
businesses, service activities, small
manufacturing and fabricating activities locating
in and around the three wholesale trade and
retail nodes The KR Market area, The City
railway station, and the Shivaji Nager area.
Type of Land Setting Traditional city row
buildings 2) Small business and home based
production units in and around the industrial
belt on the Western, South Western, and Northern
parts of the city Type of Land Setting Pvt.
Land subdivisions, Village land subdivisions,
"Vattarams", Urban Villages 3) Small scale
Fabrication and Service activities Type of Land
Setting Pvt. Land subdivisions, Village land
subdivisions 4) Small scale garment business
oriented towards exports Type of Land Setting
Urban Villages 5) Small business, trade, and
service sector locating in commercial streets.
Type of Land setting City Improvement Trust
Board (CITB) developed residential neighborhoods

• FLEXIBLE LAND AND LOCAL ECONOMIES
• Flexible as
• Evolved under municipalized governance
• Incremental development Mixed land use
• Diverse tenure settings

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Research Agenda Pro-poor employment and
livelihood settings

• Land an incremental process
• regulation
• Diverse complex tenure regimes
• Pro-poor real estate markets
• Incrementally evolving economies
• Understanding existing financial circuits
  (looking beyond micro-credit)

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Part 2 Poor groups as active agentswithin
municipal governance
Municipal Government empowered on land issues on
a day to day basis Importance of Local
Democracy within diverse governance circuits
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Local Democracy on a day to day basis

• Municipal government and councilors provide a
  provides both voice and access
• The Porous Bureaucracy and Politics by
  Stealth reflecting the day to day politics and
  inner bureaucratic wheels being critical .. and
  not the formal budgeting process, or election
  time politics
• Infrastructure and services responsive to an
  emerging economy and divergent claims

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• Institutional circuits for ward level works
• Lower level municipal bureaucracy
• Emphasis on regularization
• Upgrading of basic infrastructure

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A local civic process driving urban change...
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Even Master Planning forced to recognize
incremental development
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Negotiation between associations and Local
Government controlled service providers (To
upgrade electric supply on a cost sharing basis.
Excerpts from a file noting)
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Research Agenda Pro-poor politics and
institutions

• Day to day politics (vis a vis election time
  politics)
• Pro-poor channels of institutional access
• Centrality of a Regularization approach
  maintain diverse tenure regimes rather than a
  narrow focus on titles
• Opportunities for negotiations by local groups at
  levels of government
• Not only participatory budgeting but extent of
  influence over procedures and implementation

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Part 3 Institutional road blocks

• Dis-empowered Local governments
• Rise of Special Purpose Agencies (SPVs) with
  little or no local elected representation
• SPVs s Mega Projects drawing on international
  funding to reinforce their monopoly
• Directive role of un-constitutional Task Forces
  dominated by Big Business over SPVs
• New forms of even more authoritarian Master
  Planning allocates land to the elite and at
  times to Mafia led groups

• From basic to high end infrastructure reinforcing
  segmentation of cities
• Control of land settings in high growth
  peri-urban areas by the elite
• Demolition and eviction
• Access of poor groups to productive economic
  locations replaced by symbolic resettlement
  housing
• Increased indebtedness of Municipal government,
  loss of ability to act strategically

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CORPORATE ECONOMIES in Bangalore 6) Commercial
zone around the central parts-- specifically the
MG Road area Type of Land setting Master
Planned CBD Office Block 7) Newer Hi-tech IT
firms in smaller office blocks in high income
neighborhoods Type of Land setting Master
Planned residential neighborhoods 8) Hi-tech IT
firms in High rise office blocks Type of Land
setting Master Planned Integrated Urban design
project 9) Large scale public sector private
sector companies Type of Land setting Master
Planned Industrial Estates, Dedicated Industrial
estates
Land settings for Corporate economies Large
consolidated parcels, high end infrastructure,
and homogenized tenure Emerge from (subsidized)
Master Planning with regressive impacts for the
poor
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Ministry of Urban Development
National Government Level
National level political Party and agents
Institutional circuits for anti-poor urban
renewal Higher level Bureaucracy controlled
Special Purpose Agencies promoting large mega
projects.. Wiping the urban terrain clean ---
Little real civic participation of key issues
Housing and Urban Development Corporation in a
routing and Technical advisory role
Pre- Selection Criteria mainly based on
experience of similar Mega Projects
Provincial Government Level
Minister for Urban Development, MLA, MLCs, MPs
Major "Political aspects" of the "Selection"
process
Principal Secretary
The Project A Mega Project
Secretary (Municipal Adm. Urban Dev.
Authorities)
Selection Criteria mainly based on experience of
similar Mega Projects
Karnataka Urban Infrastructure Development
Finance Corporation (Para-statal under the State
Government)
Some "Political aspects" of the day to day
implementation process
"Informal" connections to ensure inclusion in the
project allocation process
Local Government Level
Bangalore Municipal Corporation
Comm.
Negotiation over re-settlement and final allotment
Standing Committees
Standing Committees
Standing Committees
WARD LEVEL INTERESTS A select coalition of
mostly larger economic players
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Urban renewal an anti-politics machinery
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• Consequences on the Poor among other local groups
• Increased Bribes and decreased and un-stable
  incomes
• Resettled away from productive locations (tougher
  zoning and legislation
• Stress on titling excludes the poorest and
  facilitates elite and big business takeover of
  peri-urban areas

Institutional speculation on peri-urban area land
markets structurally impact options for poorer
groups to use land as a way to more stable
economic situations. Dumping NGOs with
damage control and symbolic agendas
Increased poverty, sustained chronic poverty,
urban conflict
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• Consequences on Local Government
• Increased indebtedness (Reserve Bank of India
  against State Guarantees)
• Increased political control
• Trapped in an authoritarian party politics
  fueling ethnic conflict
• Forced to divert funds from basic infrastructure
  and services to service loans of regressive mega
  projects

Bangalores IT Corridor A take over of pro-poor
peri-land settings
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...No problem at all, Sir. If the plan is cut we
will give up the water supply scheme and convert
all this into our housing project
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Institutional trends in divided cities...
Provincial Government
Service provider authorities (Water / Electricity
/ roads and drains) Symbolic or no link to
municipal authority, Symbolic public
participation
Stage 2
Stage 1
Municipal Government
Empowered Elected committees
Dis-empowered Municipal Government
Service provider authorities (Water / Electricity
/ roads and drains)
Symbolic Elected committees
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Stage 3
City Agenda Task Force (Big Business dominated)
Chief Minister / CEO
Provincial government
Special Project Planning, Funding, and
Implementation agencies Directive link to
Service Provider authorities No link to
municipal authority
Service provider authorities under directions of
Special Project-- No link to municipal
authority (Water / Electricity / roads and drains)
Municipal Government Dis-empowered, Elected
committees split by authoritarian party politics
New Airports
Expressway
Satellite Townships
Urban Renewal Mega Projects
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Routing of National and international development
funds via higher level governance circuits
strengthens anti-poor institutions, exclusionary
and regressive policy, and day to day
administrative procedures
International Funding
National Level Financial institutions
Provincial Government
Local government left with little power to act
strategically and flexibly
Special Project agencies
Tightened Financial and political control
Dis-empowered Local Government under increasing
debt..escrowing of remunerative fund
flows..less allocation to basic infrastructure..
Divided cities and increased poverty
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A Research Agenda in contested cities
Grand planning" approach replaced by a pro-poor
one of incremental processes of economic and
political change -- the urban territory as a
contested arena Large project agencies fit within
a locally representative governance structure If
pro-poor economic and political settings are
destroyed by regressive institutional structures
will other efforts towards the Millennium goals
be symbolic?