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Alternative Approaches to Addressing the Needs in the Region

Emerging and Sustainable Cities Initiative

Latin America and the Caribbean is one of the most urbanized regions in the world, with 80 percent of its population living in cities. Among the poor, 66 percent live in urban areas. The Bank has long financed projects in the largest cities in the Region, but another element of the urbanization process – the growth of medium-sized cities – is providing an opportunity for a dynamic and multisectoral approach to sustainable urban development.

Medium-sized cities with populations from 100,000 to 2 million have become hubs for new investment and economic development in Latin America and the Caribbean. These cities account for 25 percent of regional GDP, and in some countries their contribution to the national economy is even more significant. For example, Panama City accounts for 58 percent of Panama’s GDP, even though it is home to only 37 percent of the country’s population.

However, the growth of these cities is also posing new challenges. Much of their expansion is unplanned and dispersed, exacerbating social segregation of the poor due to the challenge of extending public infrastructure and social services toward increasingly sprawling urban fringes. Taken together, these factors make it extremely difficult to raise urban quality and living standards, which in turn feeds a vicious circle of poverty by limiting access to opportunity.

The IDB’s Emerging and Sustainable Cities Initiative (ESCI) was created in 2011 to address these challenges by providing technical assistance grants to assess urban quality and sustainability in an integrated manner across 120 indicators, perform three baseline studies – a greenhouse gas (GHG) emissions inventory, an assessment on the risk of natural disasters, and an analysis of urban development patterns – and carry out a multistakeholder prioritization process. Using these inputs, the Initiative works with each city to lay out an Action Plan that identifies critical interventions to promote sustainable urban development. The initiative currently operates in 71 cities in the region and is only one country short of achieving its goal of operating in all IDB’s borrowing member countries.

The Initiative’s comprehensive and multisectoral urban planning methodology, along with its resulting prioritized interventions, are used to carry out pre-investment studies that will help tackle roadblocks that constrain the sustainable growth of emerging cities. These in-depth studies help craft the policies and works that can improve the quality and sustainability of urban services, strengthen citizen security, protect the environment, improve natural resource management, and mitigate and adapt to climate change at a local and increasingly metropolitan level.

The Cities Initiative has benefited local governments by strengthening their technical capacity and facilitating policy dialogue. It has also empowered civil society by putting in place systems where citizens are responsible of monitoring local performance on urban sustainability indicators and projects. Importantly, the Initiative has provided both international and national development banks with access to a portfolio of projects with high-impact potential that they might look to support. Because of this value added, the Initiative has been able to expand its influence and become a public good for the Region. Through the establishment of alliances with a range of local development agencies, funds have been made available to replicate the methodology without financial support from the Bank.

Furthermore, many of the cities that have completed their Action Plan have begun deploying interventions linked to the Bank’s regular operational programming. The 23 loans linked to the Initiative’s work are either in design or approved stages, and total US$1.48 billion. In addition, the Initiative has also played an important role as an experimentation playground where the Bank has been able to try new ideas that different sectors have been advocating for several years in order to adapt to the rapid pace of technological change and to the uncertainties brought about by phenomena such as climate change. As a part of the new Housing and Urban Development Division within the Sustainability and Climate Change sector, the Emerging and Sustainable Cities Program will continue working to reduce financing and infrastructure gaps with the aim of supporting growth and innovation in emerging cities that are both inclusive and sustainable.

For more information, please visit the Emerging and Sustainable Cities Initiative website.