The percentage of the world’s urban population living in informal settlements has fallen. So why have the number of people living in these conditions risen?

Informal housing construction in Cairo. Joseph Dana / emerge85

By Brandon Finn | August 17, 2017

The growth of cities is associated with increased development and reduction in poverty. In most of the world, excluding Africa, there is a positive correlation between economic development and urbanisation. The growth of cities in emerging markets, however, frequently coincides with the expansion of informal settlements and accompanying poverty within them. Given growth trends, urban poverty does not receive enough funding nor developmental, media, and scholarly attention. Policies that seek to deny the existence of or prevent the occurrence of informal settlements may be less effective than targeting these areas for development and incorporating them into urban planning.

While the percentage of the world’s urban population living in informal settlements decreased from 39% to 30% between 2000 and 2014, the absolute number of people living in these conditions has increased. Indeed, a 2016 UN report found that one out of every eight people lives in informal settlements – mostly in Africa, Asia, and Latin America.

Local, national, and international organisations have appeared apathetic to this form of urbanisation; meanwhile, active measures to dissuade increasing urbanisation contribute to an anti-urban bias. In Africa and Latin America specifically, anti-urban policies have manifested in authorities and policy-makers ignoring the problems of informal settlements and attempting to prevent rural-urban migration. Developmental policies aimed at addressing poverty must recognise that cities are not merely drivers of economic growth. This will highlight the essential role the provision of resources and infrastructure in urban areas can play in alleviating poverty.

Urban vs Rural Population Growth, 1950-2050

Urban vs Rural Population Growth, 1950-2050

Source: UN World Urbanisation Prospects, 2014

Sustainable cities

In 2015, the UN included “Sustainable Cities and Communities” among its sustainable development goals. This goal is described as making “cities and human settlements inclusive, safe, resilient, and sustainable”, although it has faced criticism for not sufficiently addressing the issue of urban poverty and informal settlements. Specifically, there is little information about how and with what funds sustainable urbanisation can be achieved. This issue is compounded by differing definitions of cities and how urbanisation levels vary across different countries. While the US, for example, considers an area urban if it has more than 50,000 people, India looks to the legal involvement of the state government in a concentrated settlement (rather than population figures) before it considers it urban.

Informal settlements are defined by the UN as urban areas where residents lack access to a reliable clean water source, decent sanitation, sufficient living space, durable housing materials, and secure tenure. A general lack of food security, high rates of crime, and public health hazards within emerging market cities are among the complex problems associated with informal settlements that are often glossed over within broader UN debates on how to achieve sustainable urban development.

Housing tenure, for example, is a developmental tool thought to help people escape poverty. The simple tenure of property, however, says nothing of its location, surrounding urban environment, or proximity to employment opportunities and other essential resources. Here the concept of urban land, and its ownership and relation to country-specific definitions of what constitutes the urban (and therefore, its governance) becomes a critical topic for sustainable urbanisation. It is not just a question of owning land but the type of land and where the land is located that matters.

Informal settlements and poverty

Cities drive economic growth, and their growth often has a positive influence on future development. However, they also cause specific types of poverty, inequality, and insecurity. As urban poverty increases and rural poverty decreases around the world, greater emphasis is needed on how absolute poverty has urbanised.

With more than 60% of its urban population living in informal settlements, sub-Saharan African cities are home to high levels of urban poverty. Informal settlements can often be traced to the region’s colonial past. Western colonisers created centralised and segregated urban infrastructure and housing to serve their needs above those of the local population. Post-colonial governments have been largely unsuccessful in unravelling the colonial past.

In fact, many post-colonial governments have contributed to the perpetuation of urban poverty. The reluctance and failure of governments such as Uganda and Tanzania to invest in urban infrastructure and the active discouragement of urbanisation since independence remains a challenge to the realisation of a positive relationship between urbanisation and economic growth on the continent.

The urban economy

People living in urban poverty are better integrated into the market economy, but they are also more susceptible to its economic shocks than those living in rural poverty. This is compounded by the reluctance of developmental agencies to adequately provide for urbanisation. The World Bank, for example, decreased its spending on slum upgrading in sub-Saharan Africa from $498m (1972-81) to $81m (1992-2005) while spending $14.3bn on rural and agricultural investments during the same time period.

Strangely, urban poverty has long been overlooked by theorists, as pointed out by Susan Parnell, an urban geography professor at the University of Cape Town. Using South Africa as a testing ground, Parnell argues that an anti-urban bias in emerging market countries was a telling component in development theories in the 1980s and 1990s. These theories shifted as development agencies realised the formation and advancement of cities in these areas must play a leading role in facilitating sustainable development and economic growth within emerging economies.

However, Parnell shows that low-density sprawl, segregated urban developments, insufficient public infrastructure investment, and poor governance of informal settlements suggest the urbanisation of poverty within emerging countries is still not taken seriously. Recent urban policies such as those in Zimbabwe and South Africa, which are explicitly aimed at displacing and relocating urban residents from their homes and businesses, demonstrate how many emerging market countries view urbanisation through a narrow, negative lens to the disservice and disadvantage of their own citizens.

Planning for the future

If authorities are to adequately plan for the development of emerging market cities in the future, they should address these shortcomings of governance and development planning. Additionally, policies that stimulate rather than repress economic activity within informal settlements may have a greater impact on reducing absolute poverty within emerging market countries, as these urban environments tend to be more dense socially and economically than rural environments.

Given the problems and potential benefits of urbanisation within emerging market cities, informal settlements need to urgently be better incorporated into models of urban planning and poverty reduction discourse in general. This is particularly important given the growth of cities and their role in the realisation of future, equitable economic growth.

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