Infrastructure

Intermediate cities: a green and transformative post-COVID-19 recovery?

Development Matters Green transition , , , ,

By Dražen Kučan, Sector Lead / Senior Urban and Energy Efficiency Specialist, Green Climate Fund

Guilty as charged: cities and urban populations are among the core drivers of anthropogenic climate change. Cities produce between 71% and 75% of total greenhouse gas (GHG) emissions1. There needs to be a ‘paradigm shift towards low emission and climate-resilient development pathways’. A shift that can happen in developing countries by supporting and investing in high impact climate mitigation as well as resilience and adaptation initiatives.

While the paradigm shift is defined by the ‘degree to which the proposed activity can catalyse impact beyond one-off project or programme investment’, the reality is not so straightforward in the context of the urban sector. Urban areas are complex, multi-stakeholder environments that require holistic, structurally sound, sustainable solutions. They need transformative investments in energy efficient buildings; decarbonising urban energy systems; compact and resilient urban development (including investment in mass transit and non-motorised transit systems and vehicle electrification); grey to green urban infrastructure upgrading; the circular economy; and methane and emissions-free integrated waste management.     

Demand pressure on developing new urban infrastructure is high: new homes and infrastructure will have to be built at great speed for the approximately 2.5 billion new city dwellers expected by 2050. About 85% of new housing demand is projected to be in fast emerging economies (such as China) and in the majority of developing countries. Furthermore, of the 70 million new residents expected to move to pre-existing urban areas each year, the vast majority will live in intermediary cities, mostly in Africa and Asia. This adds to climate pressures, both in terms of accelerated emissions and enhanced vulnerabilities. 

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“Ambidexterous” development: changing the paradigm

Development Matters Building resilience

By Nuno Gil, Professor of New Infrastructure Development, Alliance Manchester Business School, The University of Manchester

After many decades of development assistance, we are still failing the poor. We have reached a broad consensus that promoting economic growth and welfare requires a two-pronged approach: building institutions matters, but building infrastructure matters too. Hence, focusing development assistance on one goal at the expense of the other will not work. Yet, frustratingly, development assistance is only now starting to look for ways to become truly ambidextrous.  

If we go back to the first decades of development assistance, the prevailing approach was to emphasise stand-alone infrastructure projects. At the time, traditional donors used limited conditionality and the deals were not transparent. But by the mid-1980s, the donor community realised that this choice was leading to disappointing results in terms of poverty alleviation and economic growth. By focusing on quick infrastructure building at the expense of institutional reforms and local capability building, the ruling elites could exploit weak institutions, turning the new infrastructure projects into instruments to enrich themselves and capture more rents.

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Quality Infrastructure: putting principles into practice – the viewpoint of a development agency

Development Matters Building resilience, Infrastructure

Takenori Nasu, Senior Deputy Director, Operations Management Division, Operations Strategy Department, Japan International Cooperation Agency (JICA)

Investing in infrastructure is critical for recovering from the COVID-19 crisis and achieving long-term development objectives. The crisis has triggered a reshuffling of investment priorities for governments globally and significant shifts in demand. Moreover, the pandemic adds further pressure on already-constrained fiscal space in developing countries. Ensuring quality in infrastructure development has become more fundamental than ever for the efficient and effective use of limited resources for a resilient and sustainable future.

In 2019, the G20 Osaka Summit endorsed the “G20 Principles for Quality Infrastructure Investment”, a set of voluntary, non-binding principles designed to reflect the G20’s common aspiration for quality infrastructure investment. But how can “quality infrastructure” be put into practice?

Achieving quality infrastructure, in other words maximising the effectiveness of infrastructure projects, has been a long-standing challenge. To maximise the positive impact of projects, many factors must be taken into consideration, such as economic efficiency in terms of life-cycle cost, natural disaster risks, environmental and social impacts, climate change, gender mainstreaming, openness, transparency, debt sustainability, and accountability in line with international standards outlined in the G20 Principles. These factors should be considered throughout the entire project-cycle from project formulation to service delivery and maintenance.

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A tale of two female citizens

Development Matters Gender, Women and Girls , ,

By Mary Waithiegeni Chege, Founder and Principal, EMSI & Associates

The African Union (AU) is very clear in its identification of infrastructure as the bedrock for development in Africa. In fact, sound infrastructure has been identified as a major contributor to economic growth, poverty reduction and attainment of the sustainable development goals. While gender equality is enshrined in the AU’s constitutive documents, recognised in all the goals of Agenda 2063 and has been prioritised through the AU’s Strategy on Gender Equality and Women’s Empowerment (GEWE), achieving these objectives requires an understanding of the multi-faceted nature of women’s poverty and how gender-responsive infrastructure can play a pivotal role in its alleviation. The AU’s Strategy for Gender Equality and Women’s Empowerment specifically notes that as the continent embarks on major infrastructure projects, the coming decade offers the opportunity to open up infrastructure to greater inclusion of women in the design, implementation and benefits that ensue.    

A joint report by the United Nations Office for Project Services (UNOPS) and Oxford University demonstrates that infrastructure can positively influence the achievement of 92% of the targets across all 17 sustainable development goals. With 73 AU-driven priority projects spread across the transportation, energy, transboundary water and ICT sectors for implementation between 2021 – 2030 at a staggering US$270 Billion (PIDA PAP II), it is imperative that we choose to challenge the inequitable participation of women across infrastructure design, implementation and value chain operation and life cycle. The underlying driver of these projects is to promote an integrated, multi-sectoral corridor approach that is employment oriented, gender-sensitive, climate-friendly and that connects urban and industrial hubs with rural areas. Indeed, our time is here. Or is it?

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Why quality assurance infrastructure matters to fight COVID-19 in developing countries?

Development Matters Building resilience, Covid-19 , ,

By Karl-Christian Göthner, Consultant, Physikalisch-Technische Bundesanstalt PTB, Germany

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Quality-Assurance-Infrastructure-COVID-19The COVID-19 pandemic demonstrates that health systems in many countries – developed and developing – were not prepared for such a crisis. Since 2005, several organisations have warned about the consequences of pandemics, issuing recommendations to prepare for critical health situations (WHO 2005, World Economic Forum 2006). However, in many countries few of these recommendations were followed. In September 2019, before the outbreak in China, a study by the Johns Hopkins Centre for Health Security stated that in many countries a lot remained to be done to improve preparedness for pandemics. When the COVID-19 pandemic appeared, most countries had to improvise, with the threat that it would overwhelm their health systems, depending on the timing and extent of their measures and the state of their national health systems. National trade restrictions, interrupting supply chains and impeding medical and protective equipment exports, have also exacerbated the situation. Continue reading →

Energising Africa’s productive transformation: how intermediary cities can be a game changer

Development Matters Africa, Building resilience, Infrastructure , , ,

By Bakary Traoré, Economist, OECD Development Centre, and Elisa Saint-Martin, Junior policy Analyst, OECD Development Centre 

Electricity-in-Africa-shutterstock_563620138A review of on-going industrial strategies (Africa’s Development Dynamics 2019 report) shows that most African countries have the ambition to expand processing activities in sub-sectors such as agro-industries, fertilisers, metals and construction materials. To achieve this, it is urgent to improve the quality of energy supply across the continent. Regional co-operation for energy among Africa’s cross-border intermediary cities can be a game changer.

First, let’s take a look at the main challenges

Today, industrial processing activities and transport services account for no more than 35% of total energy consumption in Africa (see Figure 1, based on the OECD/IEA 2019 database). Africa’s electrical networks are struggling to cope with current needs: on average, firms in sub-Saharan Africa face 8.5 electricity outages a month (World Bank, Enterprise surveys, 2019), and 40.5% of them consider insufficient access to energy to be a major constraint to their growth and competitiveness.
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Africa’s integration: groundbreaking but not so new

Development Matters Africa, Building resilience, Policy , , , , ,

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By Sarah Lawan, Regional Co-operation Advisor, Networks, Partnerships and Gender Division, OECD Development Centre, and Rodrigo Deiana, Junior Policy Analyst, Europe, Middle East and Africa Unit, OECD Development Centre

Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa

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Kwame Nkrumah speaking at the inaugural ceremony of the Organisation of African Unity Conference in Addis Ababa, Ethiopia, in 1963

As early as 1963, in the midst of independence movements, Kwame Nkrumah urged, “Africa must unite or perish!” The first president of Ghana pronounced this injunction at the founding meeting of the Organisation of African Unity (OAU) in Addis Ababa, Ethiopia.

The post-colonial thirst for “breaking with the old order and indigenising the direction of Africa’s economic development”1 led to the shaping of the African Economic Community (AEC), a pan-African single market. Africa reclaimed its leadership and ownership with the goal of promoting a self-sustained and self-reliant development trajectory.

2018 witnessed an acceleration of integration efforts with the landmark agreement on the African Continental Free Trade Area (AfCFTA) in Kigali on 21 March. So far, 49 African countries have signed the AfCFTA, which will be the world’s largest free trade area since the WTO’s creation. As the late Calestous Juma put it: “The continent’s regional integration is the most complex and elaborate effort of its kind ever mounted in human history.”2

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Make AfCFTA a reality

Africa, Building resilience, Development finance, Trade , , , , , , ,

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By Abdoul Salam Bello, Advisor to the Executive Director, Group Africa II, World Bank Group; Visiting Fellow, Africa Center, Atlantic Council; and Author of “La régionalisation en Afrique: Essai sur un processus d’intégration et de développement” (L’Harmattan 2017)

Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa

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The March 2018 signing of the framework agreement to form a continental free-trade zone throughout Africa is raising a lot of expectations. In fact, the African Continental Free Trade Area (AfCFTA) would be the largest free trade agreement since the founding of the World Trade Organization. It will include 1 billion people and up to USD 3 trillion of cumulative GDP.

Amongst the AfCFTA’s expectations is a significant boost in intra-trade. At just an 18% share of total trade, Africa has the lowest levels of intra-continental trade in the world. While the continent’s trading blocs have helped to improve these figures, the level of intra-trade in Africa is a far cry from the levels witnessed in Latin America (35%) and Asia (45%). Furthermore, Africa’s intra-continental trade has been substantially outpaced by trade with the rest of the world – often by as much as 90%.

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Raising capital for intermediary cities

Africa, Asia, Building resilience, Development finance, Infrastructure , , , , ,

By Jeremy Gorelick, Senior Infrastructure Finance Advisor, USAID’s* WASH-FIN (Water, Sanitation and Hygiene – Finance) Programme, and Joel Moktar, Project Leader, Open Capital Advisors

This blog is part of an ongoing series exploring the intersection between intermediary cities in developing countries and sustainable development

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Intermediary cities are the fastest growing cities in the developing world. Often referred to as secondary or second-tier cities, intermediary cities typically have a population of between 50,000 and one million people. They play a fundamental role in connecting both rural and urban areas to basic facilities and services.[1] Driven by population growth and rural-urban migration, intermediary cities worldwide are projected to grow at almost twice the rate of megacities (those with more than 10 million inhabitants) between now and 2030.[2] Of these, the fastest growing cities are in Africa and Asia.[3]

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Bridging the green investment gap in Latin America: what role for national development finance institutions?

Development Matters Development finance, Green transition, Latin America and the Caribbean, SDGs , , , , ,

By Maria Netto, Lead Capital Markets and Financial Institutions Specialist, Inter-American Development Bank, and Naeeda Crishna Morgado, Policy Analyst – Green Growth and Investment, OECD              

Green-investmentThe developing world urgently needs more and better infrastructure. Affordable and accessible water supply systems, electricity grids, power plants and transport networks are critical to reducing poverty and ensuring economic growth. The way new infrastructure is built over the next 10 years will determine if we meet the Sustainable Development Goal (SDGs) and the Paris Agreement objectives. Considering the long lifespan of most infrastructure projects, the decisions developing countries make about how they build infrastructure are critical: we can either lock-in carbon intensive and polluting forms of infrastructure, or ‘leap frog’ towards more sustainable pathways.

Many countries in Latin America are making this shift: thirty-two of them have committed to cut their emissions and improve the climate resilience of their economies, in infrastructure and other sectors, through Nationally Determined Contributions (NDCs). The cost is estimated at a staggering USD 80 billion per year over the next decade, roughly three times what these countries currently spend on climate-related activities. What is more, this is in addition to a wide investment gap for delivering development projects and infrastructure overall – the World Bank estimates that  countries in Latin America spend the least on infrastructure among developing regions in the world.
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