The challenge and opportunity of slums: Part 1, the challenges
In mid-March, I had the scintillating experience of participating on a panel in Infrastructure and Real Estate at
“Who knew slums could be funny?”
My fellow panelists were:
Abha Joshi-Ghani, Urban Sector Manager for the Finance, Economics, and Urban Department (FEU) in the Sustainable Development, World Bank.
Songsu Choi, Lead Urban Economist, South Asia Region vice presidency of the World Bank,
Kenneth Munkacy, Senior Managing Director, GID International Group
Dennis Pieprz, president of Sasaki Associates, who’s worked on Dharavi.
Kenneth Munkacy, Songsu Choi, Abha Joshi-Ghani, Dennis Pierpz, David Smith
Our panel, being flanked by Mary Ellen Hammond, HBS ‘09 (left) and Tulika Khemani, HBS ‘09 (right)
Since the conference was all about
My main text is in Times New Roman.
Storefront shop, Mukuru Sinai,
1. The 21st century’s great problem; see Century of the City
Making cities work is the 21st century’s great problem.
Between 1995 and 2025, the world will undergo urbanization never been seen before and that will never be seen again.
[The authors of] a fascinating new PNAS paper, Growth, innovation, scaling, and the pace of life in cities, by a
quintet of authors bookended by Luis M. A. Bettencourt and Geoffrey B. West … make no bones about their
interest in cities and their reasons for tackling the problem now:
Humanity has just crossed a major landmark in its history with the majority of people
now living in cities. Cities have long been known to be society’s predominant engine of
innovation and wealth creation, yet they are also its main source of crime, pollution, and
disease.
I really like a crisp, clear expression of the challenge: cities have always been where wealth was born, yet
bringing so many people together in proximity has all those negative externalities. When one vector (wealth)
goes one way, and another (disease) goes the other, we want to know which (if either) will prevail, or whether
they can reach a happy medium. Moreover, the problem is urgent:
The inexorable trend toward urbanization worldwide presents an urgent challenge for
developing a predictive, quantitative theory of urban organization and sustainable
development.
We may pine for the country villa, but we create the means of building it in cities.
Musket, silk clothing, wrought-iron bench — all from cities
The world’s success or failure in its transformation to cities will define the twenty-first century.
A slice of downtown
As Rakesh Mohan put it when I was at Bellagio:
If the world is urbanizing, it’s because people think it’s a good idea.
Despite the problems of urban environments, overall welfare has increased in cities in every dimension
we can think of. Despite massive inequality, even Mumbai pavement dwellers have access to municipal
schools. They still have a benefit compared to where they came from; they all say, “We are much
better off than our relatives back home.”
Reversing my frequent quote from Fields of Dreams, if they come, you must build it.
We’re here for the jobs
2. Cities will compete on their relative efficiency
To quote Rakesh Mohan, Deputy Governor of the Reserve Bank of
With increasing free trade in services, the price of traded products has almost stabilized across the world. Goods now have very similar prices everywhere; therefore, no city has any advantage over any other in traded goods. Comparative advantage of nations will increasingly lie in the relative efficiency of their cities.
While it was not exactly Saul on the road to
Gives you a new perspective, doesn’t it?
After all, a city is defined by its housing:
Cities are homes plus jobs plus density (which means verticality).
Without housing, there would be no cities – for what is a city without housing?
All of these are parts of a city, but without housing, at night they are just so many dark shells.
Housing is what makes cities bright at night.
It’s not their jobs that keep those lights on at night
City efficiency demands slum upgrading, for it is impossible to have an efficient city with enormous slums, as they generate massive negative externalities, including:
Pollution. Sao Paulo’s slum upgrading was forced upon it by the encroachment of squatters on the slopes around the Guarapiranga reservoir.
Traffic. That many people living in that close proximity without access to proper infrastructure means that they crowd the roads or the trains or the ‘taxis’ that crowd the roads and highways of every African city I’ve visited.
Disease and health. Air and water respect few zoning boundaries.
Crime. Slums are a place of refuge for clandestine occupancy.
Broken window, health clinic, Cite Soleil,
Making cities efficient requires improving their slums. People move to cities to make money, and slums arise when private investment outruns public infrastructure. Mohan again:
If the world is urbanizing, it’s because people think it’s a good idea. Yet our urban planning has a ‘third-class carriage’ mentality: I’m inside, don’t you dare come in, you’re much better off where you are.
Clothing for sale in the open air, Mukuru Sinai,
3. What defines a slum?
Readers know that this question continues to occupy me, because in its diagnosis lies an understanding of the next quarter-century of living for over a billion people.
Many different indicators …
Spontaneous community of people pursuing urban work (even if informal).
Low-value land in close walkable proximity to urban jobs (even if informal).
Where private investment has outrun public infrastructure.
Wealth is extracted from slum dwellers and not invested in the community.
If we are to improve slums, we have to see them for what they are: robust, vibrant, complex, interdependent triumphs of human entrepreneurialism – and at the same time concentrations of poverty, disease, and lawlessness.
A moment of wariness, Vila Nilo,
Having laid out the challenge, I ask, where is the opportunity?
[Continued tomorrow in Part 2.]
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