20160128 kamiya. municipal finance and the new urban agenda
TRANSCRIPT
Municipal Finance, the New Urban Agenda and UN-HABITAT
Marco Kamiya
Nairobi – 28th January 2016 (v4) UN-HABITAT Urban Dialogues
UN HABITAT Urban Economy Branch
Main Conclusions
Municipal Finance (From HIII Issue Papers and Policy Framework)- Unclear “rules of the game” and lack of basic norms for “rule of law”- Incoherent expenditure assignment and lack of efficiency- Small generation of revenues, and declining transfers from central government- Poor financial management- Poorly developed municipal debt markets
UN-HABITAT role: - Develop metrics and indicators for superior financial management- Train municipalities on the financial and the economics of Urban Expansion (PCE)- Provide blueprint and support to enhance legal framework for finance- Support design of investment schemes to pay for local infrastructure- Provide advice to central and local governments for better financial governance
The Big Picture
“I Got the Power”… but not the walletCity Income per Sourcein ASUD Cities
Source: UN-HABITAT (2016)
“We Will Rock You”…but need to be strongerLocal Revenues per Capitain Major Cities (Excluding Borrowing)
High Income Country Comparison
Seattle (US) $7,357 per capita
Vancouver (CA) $1,891 per capita
Pittsburg (US) $1,857 per capita
Bristol (UK) $1,483 per capita
Brisbane (AU) $1,084 per capita
Developing EconomiesDelhi $1,025 per capitaBangkok $523 per capita
Cape Town $1,073 per capitaBuenos Aires $3,138 per capitaNairobi $100 per capita
Source: UN-HABITAT (2015)
The Conditions
Land registration office in Uganda
Source: http://www.fig.net/International Federation of Surveyors
Town Clerk in Tokyo(1950s)
Source: Movie “Ikiru “ (1956) by Akira Kurosawa
The Issues and Policies
ISSUE 1: Expenditures and Financing InfrastructurePower to the People… without a piggyback
Cost of Planned City Extension in City of Rubavu, RwandaUS$160 million, but budget is only US$16 million per year
Source: UN-HABITAT (2015)
Main problems:• Assignment of expenditure responsibilities is often centralized.• Incoherent intergovernmental systems of investments• Expenditures assignments devolved to cities but without sufficient
resources• Sometimes resources are allocated but there is insufficient
technical capacity to spend
UN-HABITAT role:• Facilitate understanding and dialogues between central and local
government through the New Urban Policies.• Support design of investment instruments to pay for local
infrastructure.• Promote action oriented training and technical capacity
ISSUE 1: Expenditures and Financing InfrastructurePower to the People… without a piggyback
ISSUE 2: Rules of the Game and CapacitiesEverybody can Rule the World…If the rules are clear
Obtaining a construction permit in Kabul, Afghanistan
Source: World Bank: Doing Business Database
ISSUE 2: Rules of the Game and CapacitiesEverybody can Rule the World…If the rules are clear
Main problems:• Constitutions or statutory frameworks don’t allocate clear powers• Inexistent enabling legislation for local collection of revenues• Weak judiciary capacity and procedures to solve property or
collection disputes• Municipal fragmentation for demographic and economic structures
UN-HABITAT role:• Have a basic set of norms and rules for local governments to
facilitate private investment, construction and registration• Provide support to drafting basic regulation at local level• Facilitate dialogues with central government and ministries on
urban expansion and financial issues.
ISSUE 3: Revenues and FinanceCan’t Buy my Love…without money
Source: Urban Economy Branch, Discussion Paper on Kiambu
Kenya: Kiambu County, Revenue Sources
2014 2018
Main problems:• When revenue collection is devolved, central government retain funding• Capacities for collection are frequently weak and inappropriate for context• Informality poses severe challenges• Core funding from central govt’ declining and does not reflect expenditure
and infrastructure allocation
UN-HABITAT role:• Increase Land Value Finance with targeted projects• Support eGov systems and ICT for financial management and tax
collection• Apply “Rapid Financial Assessment” and provide quick knowledge
ISSUE 3: Revenues and ExpendituresCan’t Buy my Love…without money
Source: Urban Planning and Design Branch
Accessibility to Open Public Space in Riyadh
ISSUE 4: City Extensions, Finance and Local DevelopmentShow Me the Meaning…of your words
Main questions:• How does lack of planning affects livelihood and efficiency in neighborhoods?• Planning is good, but how is it paid for?• How does planning helps me to combat poverty?• Does planning contributes to Local Economic Development?
UN-HABITAT role:Prepare smart answers to those questions:
• UN-HABITAT’s PCE is more than design, it brings finance and legal• Good PCE means good urban layout, and that’s means better
conditions for productivity and mobility• Good PCE pays for itself and brings short and long term benefits
ISSUE 4: City Extensions, Finance and Local DevelopmentShow Me the Meaning…of your words
Back to Main Conclusions
Municipal Finance (From HIII Issue Papers and Policy Framework)- Unclear “rules of the game” and lack of basic norms for “rule of law”- Incoherent expenditure assignment and lack of efficiency- Small generation of revenues, and declining transfers from central government- Poor financial management- Poorly developed municipal debt markets
UN-HABITAT role: - Develop metrics and indicators for superior financial management- Train municipalities on the financial and the economics of Urban Expansion (PCE)- Provide blueprint and support to enhance legal framework for finance- Support design of investment schemes to pay for local infrastructure- Provide advice to central and local governments for better financial governance
We also have something to say…
Financial Ideas from Global South
For example: 1. Mexico, Colombia, Brazil: Municipal Development Agencies in Latin
America, Banobras in Mexico, Findeter in Colombia, Caixa in Brazil.2. India: Development Corporations for Infrastructure in India,
Jawaharlal Nehru National Urban Renewal Mission.3. Philippines: Performance-Based Funding through Matching Grants.4. Indonesia: Capacity Building for Urban Infrastructure Management
in Indonesia.5. Uganda: Municipal Development Program, KCCA linking
registration, property taxes and revenue enhancement.6. Myanmar: Small Scale Public Private Partnerships in local
governments
Municipal Finance, the New Urban Agenda and UN-HABITAT
Marco Kamiya