“Leadership and Project Finance is All You Need” – Whatever Happened to the Notion of Urban Transformation?

By |2020-10-28T11:21:01+01:00October 28th 2020|Categories: Global Urban Debates|Tags: , , |Comments Off on “Leadership and Project Finance is All You Need” – Whatever Happened to the Notion of Urban Transformation?

Round 2 of our special focus week on ICLEI’s Daring Cities Conference includes highly critical and promising insights from Max Lohmann (C40 / GIZ), Hilmar von Lojewski (Association of German Cities), and Sarah Colenbrander (Overseas Development Institute).

Urban development has always been complex, but the magnitude of the challenges and the time pressure for structural change is higher than ever before. However, the lack of broad public engagement and cumbersome bureaucratic procedures seem to lead political leadership to focus on short term flagship projects rather than on slow but profound structural transformation.

Staying Positive is Half the Battle!

Yes, the world is extremely complex, and everywhere we are faced with overwhelming challenges. But I reject the dooms-day scenario of saying that we are drowning in problems: the world has become much better over the past decades! The work of the late physician and statistician Hans Rosling shows that the SDGs are well within reach of being achieved by 2030 and that the world has become a much better place over the past fifty years. A key problem is that we tend to overemphasise bad news, not necessarily because we want to, but because they catch our attention much more easily than a slow trend of improvement over the decades. The result is panic and resignation when faced with the complex challenges of our times – which still includes at its heart the fight against poverty and for inclusive societies.

Local Leadership is Key

Without denying the complexity of our problems, we can say that even though cities are responsible for increasing greenhouse gas emissions and growing inequality, they are also the actors that are best placed to meet these challenges. Local authorities and mayors are the ones who can turn lofty goals into practical solutions – and they need our support. After all, local government is where politics become personal, and therefore tangible! Cities, as extensions of our personal environment, have the best shot at channelling our energy into creativity, enthusiasm, and ownership for the urban transformations that we want to see achieved.

When making the case for complex climate action projects, arguing for reduced greenhouse gas emissions is only one of the elements needed to build political commitment and leadership. The business case for developing and executing ambitious projects also requires a strong positive vision for local improvements, which can inspire the much-needed backing of citizens and the general public. Without this, there is much less chance at securing finance for a project, and no chance for political commitment.

Yet Leadership and Finance is not All we Need

So, the bottom line is No: Leadership and finance is not all we need. In order to achieve urban transformation, we need cities to be engines of creativity and enthusiasm for the change we need, painting a positive vision of the present and future – instead of encouraging panic and fear about the future that is creating its own and new set of challenges around the world.

Impressive Theories are not All that Matters

German development cooperation has developed impressive theories, concepts, skills and numerous practices for better integration and more inclusive urban development. On the other hand, the German development cooperation didn’t get the political mandate, and for the last decades the Ministry of Economic Cooperation and Development (BMZ) has been rather hesitant, not to say reluctant, to think, act and finance simply ‘bigger’. This is an alerting and chronic shortcoming in view of the striking investment requirements needed to truly transform living, housing, working, and mobility conditions in a rapidly urbanising world. Investments simply are the key ingredients to comply with the climate goals and to accelerate the move towards more sustainable economies at a large scale. For this we need to connect our excellent soft skills, such as sophisticated planning strategies, with the necessary “think-and-act-big-projects” – far beyond our typical “light towers”, “experiments” and “pilot projects”.

Between Bureaucracy and Zest for Action

Right now, German experts and programme managers work for three years on negligible budgets, try to acquire additional funds by filling out heaps of papers, arranging inter-governmental, EU-German, and other additional agreements required for funds from third sources – while, for instance, their Chinese colleagues simply roll out high-level systems, water treatment plants, sewerage systems, university and government buildings, and IT-infrastructure across the urban hemisphere of the south – and this completely unintegrated and often times only for the benefit of various donor countries.

Which Way Forward? New Patterns of Investment!

The minimum requirement to drive urban transformation would be to link any project of the financing wing of European and German development cooperation obligatorily with the soft skills of integrated and inclusive approaches – and vice versa: No small-scale project on governance, participation, integration without a strong financing and investment wing. This will certainly improve the integration of financial tools for investments in infrastructure and adapted technologies in the respective political and administrative setting of partner countries. This will also strengthen the utterly needed soft skills and improve the longevity of infrastructure investments in the exponentially growing urban world, regardless whether in Africa, Asia or South America. But this needs to be reflected in the pattern of investment of the Northern hemisphere!

The task simply is not to invest anymore if the projects have not proved their contribution to the SDGs – and if they are not fully part of an integrated investment package which comprises all of the wonderful soft tools which we have developed over the last decades.

Urban Transformation must Serve Cities as a Whole, not the Privileged Few

No-one doubts that cities need massive infrastructure to thrive – but in a growing number of cities, there is now an expectation that large urban projects have to pay for themselves and generate a commercial return on investment. We have forgotten that although cities might form for private profits, they depend on public goods.

A narrow focus on leadership and project finance is fundamentally at odds with establishing more inclusive cities! This is because by definition it is a focus on the interests of the elite. It means that your waste pickers, your street vendors, your domestic workers, your slum dwellers, your people of colour, your poorer migrants will fall through the cracks.

What should we focus on instead? First, establishing local governments with the capacities and resources to do their jobs. Second, creating a culture of rights and justice. Third, we need to think about cities in the context of the national fiscal strategy. This requires a far-sighted and coordinated approach to urban infrastructure investment – but it is necessary to nurture inclusive cities.

Max Lohmann
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Hilmar von Lojewski
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    Sarah Colenbrander
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