Seoul South Korea GraficaShutterstock 207URBAN GOVERNANCE MANAGEMENT AND

Seoul south korea graficashutterstock 207urban

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207 URBAN GOVERNANCE, MANAGEMENT AND FINANCE
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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).
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