Seoul south korea graficashutterstock 207urban

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Seoul, South Korea.
©Grafica/Shutterstock

207
URBAN GOVERNANCE, MANAGEMENT AND FINANCE

208
THE STATE OF ASIAN CITIES 2010/11
Introduction
6.1
U
rban governance, management and finance had
been on the policy agenda in the Asian-Pacific
region for two decades or so but with the
worldwide economic crisis that began in 2008
these issues have taken on a more visible and acute dimension.
As governments turned to fiscal stimulus in a bid to kick-start
flagging economies (see Chapter 3), the main beneficiaries
were none other than cities in the expectation that they would
generate substantial multiplier effects. Clearly, this recognition
of the major role of cities in national economic prosperity was
not unwelcome per se; however, it also highlighted the various
institutional deficiencies and shortcomings that leave Asian
cities ill-prepared to face present and future challenges.
As the ripple effects of the US financial crisis began to
spread across the world, the Asian Development Bank
(ADB) and the International Monetary Fund had already
measured up the amounts of capital expenditure required if
the Asian region as a whole was to upgrade both physical and
institutional infrastructures to face up to those challenges:
it would take US $4.7 trillion over 10 years to meet urban
infrastructure requirements, an additional US $1.6 trillion
to replace aging infrastructure and another US $3.1 trillion
to strengthen institution-building and management capacity
(Asian Development Bank, 2008a; IMF, 2008a, 2008b,
2009), or close to US $10 trillion in total.
In recent years, many Asian cities have sought to improve
governance in a bid to achieve sustained economic and social
development. However, the recent economic crisis has tended
to worsen conditions in some cities already plagued by vari-
ous governance-related woes such as slum and squatter settle-
ments, traffic gridlock, inadequate water supply, poor sani-
tation, unreliable energy systems and serious environmental
pollution. The gated communities of the rich and the ghet-
toized enclaves of the poor come as dramatic illustrations of
an ‘urban divide’ (UN-HABITAT, 2010a) often characterized
as ‘a tale of two cities.’ Inner cities deteriorate as development
moves to outlying areas and results in automobile-induced
urban sprawl. Pervasive graft and corruption mar the imple-
mentation of many projects. All these problems dent the ca-
pacity of urban areas to act as development hubs and call for
a vital need for improved governance.
The general concept of governance has evolved over the
years. In 1992, the World Bank defined governance as “the
manner in which power is exercised in the management of
a country’s economic and social resources for development”
(World Bank, 1992:3). However, the Bank’s emphasis on
management has been deemed too government-orientated. A
few years later in 1995, the Organization for Economic Co-
operation and Development (OECD) defined governance as
“the sum of the many ways individuals and institutions, pub-
lic or private, manage their common affairs” (OECD, 1995).