Center for Local and State Solutions
Other Resources--Neal Peirce Column

Category: Article (Journal or Newspaper)
Jurisdiction: City/County Government, International
Management Issues: Catalytic Government, Community Based Strategies, Community/Economic Development
Policy Area: Cities/Counties

For Release Sunday, August 12, 2007


© 2007 Washington Post Writers Group

WORLD’S SLUM DWELLERS:
MORE LIKE US THAN WE THINK 


By Neal Peirce
                
BELLAGIO, Italy -- UN-HABITAT suggests that within the next 30 years, one in every three inhabitants of our globe will live in the “slums” of the world’s exploding cities, most located in Africa, Asia and Latin America.

Already some 1 billion people live in urban poverty in such settlements as the vast “favelas” of Brazil, the huge Kibera slum in the heart of Nairobi, Kenya, or the Dharavi slum on the outskirts of Mumbai, India. 

Life for the worst off means existence in seemingly total squalor-- tightly packed shacks, piles of litter, and sewage running freely.  Women routinely risk robbery and rape to bring a bucket of water from some central well or tap.

Are these slum dwellers a different species?  Or are they more like us than we think?

Dreams abound even in these hard-pressed places.  Schools, churches get founded.  And youth have dreams easy to identify with.  An Asian researcher, at the Rockefeller Foundation’s just-concluded Global Urban Summit here, told of interviewing young people from low-income families in Karachi, Pakistan:

 “Every boy wants a motor bike, a cell phone and a girl sitting on the bike behind him.  Every girl wants a job so she can be more independent, a cell phone, and a boy on whose motor bike she can ride.”

Most new urban slums are euphemistically called “informal settlements” -- unrecognized by government, lacking basic services, and with no legal basis for land ownership.  Yet they struggle upward.  Take the favelas around Sao Paulo: from 1980 to 2000 those dwellings with piped water rose from 33 percent to 98 percent, public sewer connections 1 percent to 51 percent, electric power 65 percent to almost 100 percent.

Check today, reports Suzana Pasternak of the University of Sao Paulo, and you find most of the adults in Brazilian favelas are gainfully employed and their makeshift homes have added rooms, and there are quantities of stoves, radios, refrigerators, color tv’s, even computers and some cars.

Such advances, though, are far from automatic and especially tough to register in such deeply poor countries as those of Sub-Saharan Africa and Southeast Asia. The challenge is all the tougher for slum residents living without any kind of land title or way to collaterize a loan for basic home improvements.

The best answer yet developed: collective action of slum dwellers to upgrade their own settlements and lobby the political system for neighborhood improvements.  Slum Dwellers International, formed in India in 1996, has become a multi-nation federation, active from Cambodia to South Africa.  It leverages government contributions and works with grassroots groups of residents -- mainly women -- who are ready to share their meager savings and strategize to gain clear legal right to the land their houses occupy, and then upgrade their units.  Over 2 million slum dwellers, in 24 countries, have been mobilized.

Now it appears that the principle of micro-financing, first developed to introduce small amounts of outside capital to help individuals in poor nations start up home enterprises such as a weaving studio or small bakery, is ready to spread dramatically to housing and such shared basic services as water and sewer connections.

Can the greater world help?  The answer from the experts gathered at the Bellagio summit was a clear “yes” -- that with collective grassroots action of neighbors assuring each other’s loan paybacks, there are emerging opportunities to build a series of intermediary capital institutions that can provide links all the way up to mainstream international capital markets.

Globally, roughly $150 trillion in capital is available for investment.  If there’s sound, collective local credit capacity, why not find ways to tap it?

Such a system will take time to build -- but its payoff could be immense. The big lesson is that it needs to be carried off with great care.  The model not to follow is the way unprepared people were pushed into subprime loans in recent years in the U.S., with fiscal devastation for so many at the end.  The route for upgrading the world’s slums needs, by contrast, to be deliberate, paced to local self-help and collective action to assure true creditworthiness.  It needs to be inventive to deal with financial markets transactional costs; it should start modestly, then grow with experience.

There is potential magic here.  Globalization be shaped to benefit the least and not just the richest among us.  Conditions that breed human misery, disease and possible pandemics, can be substantially reduced. 

We Americans might in fact start to ask ourselves: if building personal equity has been an engine of the American Dream, couldn’t the same principle, developed indigenously in some of the world’s poorest neighborhoods, also help to build a global dream of clean and decent homes and the basic services people need?  The slum-dwellers of the developing world are more like us than we think.

Comments may be addressed to npeirce@citistates.com