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Urban Squatters and Slums
Urban Development and Urban Poverty

Hari Srinivas
Concept Note Series E-151. April 2022.

Over the last few decades, cities in both developing and developed countries have emerged as the major form of human settlement. By the turn of this century, we will be witness to an ubiquitous scenario where more people will live in and around cities than in rural areas. In 1800, only 50 million people lived in towns and cities worldwide. By 1975 there were 1.5 billion, by the year 2000, this will be three billion - more than the entire population on Earth in 1960.
Better access to paying jobs, more varied diets, better education and better health care have made cities a 'destination of choice.'
Cities have, in effect become a barometer of humankind's "progress" into the 21st century, whether this is an upward trend or downward. Concentration of economic, social, political and administrative organs of a nation or region in cities has made it a magnet for rich as well as poor households.

Doomsayers have long predicted the downfall urban conglomerations or 'megalopolis' showcasing the explosive unbridled growth of cities in many developing countries. Such 'death of the megacity' has been predicted as a natural cycle of civilizations that grew and died as a result of epidemics, conflicts or ecological/natural disasters. This, in current mega habitations, is supposed to be hastened by a combination of environmental, health and social factors.

A growing school of pragmatists on the other hand, have emphasized the 'inevitability' of urban conglomerations, pointing to the essential gregarious nature of humans and positive contributions of cities. For example, despite of the environmental and social problems that it is facing, Bangkok's contribution to the national GDP has been estimated to be more than the combined output of all other cities in Thailand. Better access to paying jobs, more varied diets, better education and better health care have made cities a 'destination of choice.' Besides the technological advancement facilitated by the talent and proficiency of its inhabitants, cities have also been a well spring for the arts and culture. While aggregate figures might suggest economic and social progress and development, it hides the essential dichotomy and disparities between 'rich' and 'poor' that exists in most cities. It has been estimated that the richest fifth of the population in developing countries control more than 80 percent of the resources and economic activity in terms of GNP, world trade, commercial lending, domestic savings and domestic investment. On the other hand, the lowest fifth of the population control less than 1.4% of the resources and economic activity.

Thus when the rural migrant family arrives in the city, they discover that the housing, jobs, incomes and amenities that had 'pulled' them to the city are not available or is inaccessible. The authorities are not willing to help them find the 'dream' they aspired for, or simply ignore them. As a result, in cities of most developing countries, 30 to 75 percent of the population work and live in squatter settlements making a living with the few informal resources that is accessible to them.

In India, the proportion of the country's people living below the poverty line estimated on the basis of consumer expenditure distribution, has been steadily declining to its 1990 level of approximately 26 percent, over 60 million of whom live in urban areas. In the four largest cities of Delhi, Bombay, Calcutta and Madras, over half of the population is estimated to be below the poverty line. Most of the households have some kind of job, though poverty is largely the result of low productivity and underemployment. Also, a very large portion of them work in the informal sector, which accounts for 45 percent of the total labour force in urban areas. The informal sector is, however, a vibrant sector which provides a variety of goods and services being able to absorb the unemployed and in many cases facilitate setting up of small and medium enterprises.

Effect of Policies of the Government.

But the problems and shortcomings are not simplistic and 'single-cause' in nature, and many factors contribute and cumulate to create the deteriorating situation and conditions in urban areas today. The problems in housing, infrastructure, credit, land and other sectors in urban areas of Asia are a result of shortcomings inherent in both the government and its various agencies, as well as the urban poor themselves. Within the government, shortcomings such as inadequate financial resources, ineffective institutional structures, weak legislation or their implementation, lopsided policies and lack of adequate trained man power tend to compound shortcomings of the urban poor themselves: lack of marketable assets, low skills and education levels, low income jobs, etc. in the informal sector.

Such a scenario also has ripple effects on a variety of sectors: education, health, labour/job markets, and economic activities, both directly and indirectly. Services provided by the government are insufficient and inefficient, and do not reach or 'trickle-down' to most low-income groups. This forces the low-income households to seek alternative means to obtain services like housing, and other network and social infrastructure. This is done by their own means and sources, often duplicating the distribution and network mechanisms of the government.

As a result, two parallel sectors of economic and social sectors have developed. A "formal sector" provided for and managed by the government and an "informal sector" which lies outside the purview of the government and primarily serves the low-income groups. But this concept of a 'dicotonomus economy has come under scrutiny, with counter-arguments illustrating that such activities in fact form a continuum. This is because, the dividing line between formal and informal sectors is hazy, and there are many grey areas in between. For example, a shopkeeper may 'sell' electricity on a point-by-point basis to pavement traders in front of his shop during the night (when his own shop is closed) or an itinerant seller may sell water by the container to households who do not have piped water connections. While this is a very simplistic explanation, it serves to understand the situation of urban low-income groups.

ADB (1991). The Urban Poor and Basic Infrastructure Services in Asia and the Pacific. Volume I, II and III. Proceeding of a Regional Seminar, January 22-28, 1991. Manila: Asian Development Bank and Economic Development Institute.

Hardoy, J. and David Satterthwaite (1989), "The Emergence of New Attitudes and Policies for Housing" from Hardoy, J. and David Satterthwaite Squatter Citizen: Life in the Urban Third World, pp. 118-145.

Kumata Y, et al. (1996) , "A City is not a City: Refletions on a New Language for Megacities". Paper presented at the Pre-Habitat II Conference on the World Cities and the Urban Future, 23-25 August, 1995.

Sanders, Rickie (1987) "Towards a Geography of Informal Activity" Socio-Economic Planning Science Vol. 24, No.4, pp. 229-237.

Sanyal, Bishwapriya (1988) "The Urban Informal Sector Revisited" Third World Planning Review Vol. 10, No. 1, pp. 65-83.

Smith, Wallance (1975), Urban Development: The Process and the Problems. Berkely: University of California Press, 381 pp.

Srinivas, Hari (1996), "Sustainable Partnerships for the Habitat Agenda: New Roles for Professional NGOs" Paper presented at the City Summit [UNCHS-HABITAT II], Istanbul, Turkey 4-16 June, 1996.

Turner, J.C. (1968), "Housing Priorities, Settlement Patterns, and Urban Development in Modernizing Countries" AIP Journal, No-vember, pp. 354-363.

UNDP (1991) Cities, People and Poverty: Urban Development Cooperation for the 1990s. A UNDP Strategy Paper. New York: United Nations Development Program, 94 p.

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