Mr. Chairman
Your Excellency Dr. Wolfgang Schäuble, Minister of Interior, Federal Republic of Germany
Dr. Ernst Uhrlau, President of BND (Bundesnachrichtendienst)
Dr. Arndt Freiherr Freytag von Loringhoven, Vice President of BND
Distinguished Guests
Ladies and Gentlemen

It is a privilege for me to join you at this important symposium on the crisis of governance. I would like to express my sincere gratitude to Dr. Ernst Uhrlau, the President of BND for according me the honour of sharing the podium with His Excellency Dr. Wolfgang Schäuble at this opening session.

I am delighted to be here and to join this gathering in reflecting on the challenges of governance within a context of a rapidly urbanizing and globalizing world and the complex social, economic and political trends that have come to follow it. In this respect, I wish to pay tribute to BND for directing our attention to the urgent need for understanding the multiplicity of forces that we need to face in order to enhance governance and foster stability from the global to the local level in the world that is now practically a global village because of radical advances made in transport and information technology.

Indeed, this symposium challenges us to explore new horizons in comprehending emerging realities. It compels us to transcend assumptions and perspectives that are treated as a given. It also forces us to question traditional constructs in policy and analysis.

Mr. Chairman,

As we meet at this symposium, and at the advent of this new millennium, we are witnessing the evolution of a new global landscape. At the political front, the dominant bi-polar structure has been substantially re-shaped. Following the end of the cold war global governance seemed for while to be dominated by unilateral forces but it would seem these are also quickly leading to a situation where multi-polarity on the world scene could come to be a new way of existence.

Network arrangements are as prominent in the new landscape as relationships between state capitals.  Indeed, at the global level, there are more actors involved than at any other time before. Interactions take place at many levels – global, supranational, international, trans-national, national, regional as well as local. The boundaries between domestic and external spheres are increasingly diminishing with the global environment exerting a significant impact at the domestic level. In many instances non-state actors and coalitions generate changes in the international landscape that escape conventional notions of control. Typical examples include the unprecedented flow of capital, goods and services, communications and information. However, this has not been matched with the commensurate free flow of labour and people leading to clear tensions in the world on this issue. This has led to a misallocation of global resources. Economic pressures towards correction of this emerging problem is growing. The challenges on how to secure a harmonious international migration and movement of people is already being discussed in policy making bodies including the UN General Assembly and at G8 summits, to mention just a few.

In these circumstances this conference is therefore timely to discuss what can be termed the crisis of governance. I commend you Mr. President for your vision and foresight to pay attention to this important subject. Technology shapes institutions and if we will live happily in this new global village, there is a view that we must improve and re-design global governance structures and make them more effective. This is feasible because governance structures have historically been shaped by the realities of the time. The 19th century saw the emergence and governance of empires. As populations became more aware of their circumstances and took more charge of their destiny, the 20th century was to be dominated by the emergence and governance of nation states deeply entrenched in the principle of national sovereignity. But as I will show in this discussion, changing demographic shifts and settlement patterns are destined to change both the policy and the polity towards the rise of City States in the 21st Century. And pressure towards this direction is already building up.

Since the second UN Conference on Human Settlements held in Istanbul in 1996, Habitat II, dubbed the City Summit, local government actors have been asserting themselves to be recognized as an important form of government that needs be recognized better at the world stage. While their attempts to have the UN General Assembly pass the World Charter on Local Self-Government have not yet materialized, Mayors and Local Authority leaders are becoming a force to reckon with both within nations and at the global scene. Mayors have been pushing for more say and recognition and more rights commensurate to their responsibilities. They have formed more representative international Global Networks to make their case. The main umbrella is the United Cities and Local Government UCLG that is based in Barcelona but has regional chapters covering Africa, Asia, Latin America and Western Europe and other developed nations. In recognition of these new governance configurations, the UN General Assembly, while upgrading my agency, UN-HABITAT to become a fully fledged programme of the UN, recognized Local Authorities as our key partners in implement the Millennium Development Goals and the Habitat Agenda. The Governing Council of UN-HABITAT, itself a subsidiary organ of the UNGA has, this April, endorsed the guidelines of decentralization. These guidelines could well be a first step towards their ultimate objective of adopting a world charter on local self-government to stipulate internationally agreed norms and principles on good governance in matters of decentralization and empowerment of communities.

It is in this complex emerging scenario that there is a coexistence and competition of norms, tools and governance systems. Some analysts are even suggesting that we seriously consider new concepts such as navigation and moderation. They imply that instead of aiming to change the direction of processes, it is more viable to try to influence their intensity and tempo.

Ladies and Gentlemen,

In this year of 2007, humankind as a whole has crossed the Rubicon and has become a pre-dominantly urban species – homo urbanus. The majority of human population globally is now residing in urban centres, with all the attendant effects and consequences. Even for the less developed societies of Africa and Asia the rate of urbanization is rapidly rising.

Today, cities are increasingly assuming a leadership role amid the phenomenon of globalization. With the liberalization of the world’s economy, human, technological and financial resources are concentrating in cities. Hong Kong, London, New York and Tokyo have become global centres of financial services followed closely by Frankfurt, Sao Paolo, Shanghai and Singapore. Cities such as Dubai have capitalized on their physical location to become global transportation hubs. Yet other cities such as Bangalore, Seattle and Silicon Valley have emerged as key players in information technology. 

In terms of contribution to economic output, cities drive national economies in the industrialized countries. For example, in the USA, cities outpace states and even nations in economic output. If treated as nations, US metropolitan areas in 2000 would comprise 47 of the world’s largest economies. The combined gross economic output of the top ten metropolitan areas in the USA in 2000 was US$2.43 trillion. This is an amount greater than the combined economic output of 31 states in the USA. If the 5 largest metropolitan areas in the USA (New York, Los Angles, Chicago, Boston and Philadelphia) were treated as a single country, it would rank as the fourth largest economy in the world.

In developing countries also, cities have increased not only in size but also in economic importance. Many cities in developing countries generate a large share of national income. For example, Mexico City, with 14% of Mexico’s population, accounts for 34% of its GNP. Sao Paulo, with just over 10% of Brazil’s population produces 40% of its GDP. Shanghai, with just 1.2% of China’s population, generates over 12% of China’s GNP. Bangkok has only 10% of Thailand’s total population but contributes nearly 40% to its GDP. Cities in Africa contribute 60% to the continent’s GDP, yet only about 34% of the continent’s people live in cities. Johannesburg and Cape Town, respectively, account for 15% and 14% of South Africa’s GDP. But if one includes Johannesburg and East Rand as one entity, then the region contributes nearly 23% of South Africa’s GDP.

Cities, therefore, are potent instruments for national economic and social development.  They attract investment and create wealth. They enhance social development, harness human and technological resources resulting in unprecedented gains in productivity and competitiveness. Indeed, cities are the repositories of knowledge and the agents of socio-political change. And within this new constellation, cities are serving as the nexus of production, innovation and specialized services, as well as generating new forms of social organization.

Mr. Chairman

The paradox is that cities have also become a locus of excruciating poverty and deprivation. This is particularly the case in developing countries. Rapid and chaotic urbanisation is being accompanied by increasing inequalities which pose enormous challenges to human security and safety.

My organisation, UN-HABITAT, has been raising a red flag for several years on the rapid and chaotic aspects of urbanisation and of the plight of the one billion urban dwellers all over the world who eke out an existence in slums deprived of the most basic amenities such as water, sanitation, security of tenure, durable housing and sufficient living space. The deprivation suffered by these people constitutes a major threat not only to their welfare, but also to the overall security and stability of their respective societies. If present trends continue, their numbers are likely to increase to two billion by 2030. If immediate and effective interventions are not made today, this situation will become a major threat to social stability, and thus to global peace and security.

Allow me to briefly illustrate the magnitude of this phenomenon:

1. About 60 per cent of urban dwellers in developing and transitional countries have been victims of crime in the last 5 years, many of them are women
2. In Latin America, cities such as Rio de Janeiro, São Paulo, Mexico City and Caracas account for over half of the violent crime in their respective countries
3. Organized crime accounts for US$1 billion in illicit capital that is circulated daily by criminal groups among the world’s financial institutions
4. Global estimates indicate there are 100 million street children
5. Between 133 million and 275 million children experience violence at home annually, with the largest proportion in South, Western and Eastern Asia, as well as in sub-Saharan Africa
6. It is estimated that between 700,000 and 1 million persons, especially women and girls, are trafficked around the world each year
7. Youth gang membership is also estimated to be in the millions worldwide, with institutionalized youth gangs concentrated in cities that have high violence rates

With such statistics, it is tempting to conclude that cities are actually crucibles of instability and insecurity.  It is even more tempting when account is taken of the increasing level of terrorist attacks on cities all over the world.  

Our latest Global Report on Human Settlement that was launched only a few weeks ago provides a listing of over 20 high profile terrorist incidences between 1997 and 2006 that have taken a heavy toll on human lives, causing deaths, grave injuries and serious damage to property.  These incidences are well known and range from Luxor, Egypt, to the World Trade Centre in New York, and from the bombings in Bali, Madrid, London and Mumbai.

Although these acts of terrorism are local events, they were designed to have international repercussions. They therefore tend to receive greater media and international coverage than, for example, riots or disturbances in an urban slum that claim many more lives. In this regard let me point out that in terms of terrorist attacks, more attention has been on incidents in the North compared to the South. For example, the index case in urban terrorist bombings, which perhaps did not receive the attention it deserved that might have prevented what was to follow, was the bombing of the US Embassies in East Africa, Nairobi and Dar es Salaam simultaneously in August of 1998. We now know that no one seems to be safe, whether in the North or the South. A crisis in urban governance, manifesting itself in this manner in a remote City in the South could well have meaningful consequences for someone in the North, and vice versa. We are indeed in a global village.

I should hasten to add that the threat to security and stability within the urban context is not only limited to crime and violence. Indeed, there is also a rising incidence of natural and human-made disasters in the last three decades. Our surveys have shown a three-fold increase in the number of natural disasters from 1975 to 2006 while human-made disasters multiplied ten-fold in the same period. In this connection, climate change alone has led to a 50% increase in extreme weather events between 1950 and 1990.

One can go on almost ad infinitum to list out the dysfunctional dynamics arising within urban contexts which contribute to rising insecurity and threaten national and global stability. Traffic accidents; epidemics; conflicts arising from forced evictions; human trafficking and illegal immigration are some of the processes increasingly being associated with cities and urbanization and having significant national and global ramifications.

At this juncture, and in the spirit of the critical inquiry underlying this symposium, the question that needs to be posed is: what is the linkage between the contemporary metropolis and these seeming pathologies and dysfunctions. How can the urban condition that fosters insecurity be transformed into a catalyst for stability and sustainability. I have emphasized in my statement that within the context of a globalizing world, cities have become the engines of growth and the locus of knowledge and innovation. How can these positive aspects of urbanization be harnessed to promote social integration and inclusion, and this contribute to our collective stability?

Ladies and Gentlemen,

Our experience at UN-HABITAT in working with governments, local authorities, communities and the private sector all over the world provides several important insights. While we do not pretend to have all of the answers, I do believe that our work on the ground has allowed us to ask some of the right questions.

The urban crisis – or the slum crisis – is indeed a crisis in governance and government. When many urban dwellers, the majority of them young people between 20-40 years old feel themselves excluded from decision making processes in their cities and towns, they will react. I therefore suggest that we deconstruct this issue into its causal factors. I fear that without such a deconstruction, we risk to continue to debate the same issues, propose the same solutions, based on the same theoretical constructs. These constructs are none other than creating democratic space through inclusion of all city citizens in crucial decision making processes, promoting the rule of law, law enforcement, and the protection of human rights. These are critical to a world vision based on equity and justice, but they require long-term and protracted efforts in civic education and changes in institutional behavior. There are many pressing issues which, in the mean time, need to be addressed in very pragmatic terms. 

Underestimating the social consequences of rapid urbanization: misguided public policy

Very seldom have we had a crisis in the making for so long. As far back as the 1970s, urban specialists and demographers were predicting the explosive growth of cities. But we have continued to base our national economic plans and our international assistance programmes on several false assumptions, assumptions that continue to this day to ignore some very basic facts and what is actually happening on the ground. The first assumption is that by investing in rural development we can arrest or slow down rural-urban migration. Not only has this not happened, much of our development efforts in, for example, education provided the impetus for young people to leave rural areas in search of better use of their skills. Today, the point is moot. We have reached a stage where most of the urban growth in developing countries will be due to the natural increase of the existing urban population, and not to migration.

A second assumption was that slums and the informal economy which they are part of would be absorbed by the formal economy over time, and that what is needed is to provide the enabling space and policy framework for the private sector to thrive. This assumption has only turned out to be partly true. In most of the least developed countries the informal economy is the real economy. In sub-Saharan Africa, which is witnessing the most rapid urban growth, the informal economy accounts for up to 70% of domestic output and 8 out of every 10 jobs created.

The failure of planning

A second lesson we have learned is that we have failed in the area of planning. We have ignored the spatial dimension of rapid urbanization and the morphology of social change. We have assumed, for the better part of two decades that people living in cities are better served than their rural counterparts by virtue of their proximity to infrastructure and services.

The 2006-2007 State of the World Cities report, published by UN-HABITAT reveals what we have suspected for a long time – that slum dwellers are more likely to die early, suffer from malnutrition and disease, be less educated and have fewer employment opportunities than any other segment of the population. On the health front, studies have shown that prevalence of the five diseases responsible for more than half of child mortality, namely pneumonia, diarrhea, malaria, measles and HIV/AIDS, is directly linked to the living conditions found in slums and not to poverty or level of income. These conditions are overcrowded living space, poor security, lack of access to potable water and sanitation, lack of garbage removal, and contaminated food.
In essence we have confused proximity with access, and we have reached a point where between 30% and 70% of the population in developing country cities now live in life-threatening conditions.

Under-investing in urban development – the failure of state intervention
One result of misinformed or misguided public policy regarding rapid urbanization is that investments in housing and urban development lag way behind demographic growth and the physical expansion of towns and cities. An analysis of national development plans and budgets among rapidly urbanizing countries reveals that, with few exceptions, housing and urban development rank among the lowest in terms of national budgetary allocations and public expenditure. While the bulk of resources devoted to housing and urban development typically comes from the private sector, public policy and public expenditure in urban infrastructure and services are critical to leveraging private investment and to providing the necessary incentives for interventions targeting the urban poor.  
The end result is that the rate of growth of the urban population estimated at 2.24% is virtually synonymous to slum growth, which is proceeding at the rate of 2.22%. Regional variations in urban and slum growth are significant, ranging from 0.75% and 0.72% in the developed world, 2.89% and 2.2% in South Asia, 2.96% and 2.71% in West Asia, 4.58% and 4.53% in sub-Saharan Africa. These rates imply that the vast majority of people migrating to or born in cities are joining the ranks of the urban poor.

Some observations on safety and security

We have strived to understand the underlying causal factors of instability and insecurity. One of the key lessons we have learned is that threats to safety and security cannot be regarded as ‘events’, but rather as ‘processes’. These processes are tied to the underlying social and economic conditions within cities and countries. Understanding these local socio-economic realities is an essential first step to finding direct measures to confront them.

While stability and sustainability are systemic challenges that need to be mainstreamed in economic, social and political processes, immediate steps and corresponding gains can be made in planning, urban design and urban policy. In institutional terms we must prepared to engage in much more participatory processes where people and their communities are fully engaged in planning and managing their physical environment. It is when we engage in such processes that the issues of inclusion or exclusion, access or denial come to the fore. It is when communities understand how instability and insecurity can either be exacerbated or reduced by the morphology of the city, that they become willing to address other socio-psycho pathologies and aberrant behaviours.

Similarly, when people and their communities debate and discuss urban policies, including policing, they become more aware of the issues at stake. It is these processes that broaden our collective perspective of safety and stability and allow us to address the issues of risk and vulnerabilities at various levels of our society.   

One important facet of risk and vulnerability reduction is the level of institutional capacity and preparedness. I believe this is the major contribution of this symposium. None of the key actors here today, namely the police, the internal security agencies, local authorities or civil society can enhance stability and reduce vulnerability by themselves. Each actor has a role and local authorities are in many ways our frontline actors.

Finally, the aspect of governance that underlies the difference of how some cities seem to be performing better than others lies with our urban management systems. The new constellation of actors in the urban milieu calls for more participatory management of our cities. Participatory processes which actively engage citizenry, the private and civil society sectors have proven to be effective. Similarly, streamlined inter-governmental relations are key elements for governance for stability. And to ensure the full deployment of societal energy, we must keep the gender dimension omnipresent in all of our work. Just ask any woman and she will tell you what works, what doesn’t work and what needs to be fixed in our cities to make them safer, more just and more user-friendly.

Let me conclude by an optimist note. At a very extreme level, cities such as Mogadishu or Baghdad demonstrate the powerful resilience of urbanism in coping with adversities and destabilizing tendencies. This inherent quality can be retrieved and salvaged. We do read in history that cities, with their surrounding walls and protective physical features, have been places of refuge for long periods of time. The global community can work towards achieving the vision of a safe city, which in essence is a just city !

Similarly, the resurgence of cities such as Hiroshima, Freetown, Mostar, and more prominently, our host city- Berlin - are a testament to the inherent capacity of urban places to regenerate, gain their glory and contribute to national, regional and global peace, security and development. I do believe that this symposium provides a valuable opportunity for sharing lessons of experience and reaffirming our commitment for collective action.

I believe that in the emerging global order, the city is not only a catalyst but an agent for stability and sustainability. It is for this reason that the UN General Assembly created the World Urban Forum as a biennial open ended non-legislative meeting to discuss and share best practices and experiences in everything urban. I wish to end by inviting all of you to participate and bring your experience to the next and 4th session of the World Urban Forum that will take place in the ancient City of Nanjing China, home o the Ming Dynasty. Mr. President, I invite you in person to be present at that global meeting expected to attract more than 15,000 international participants. The conclusions of the World Urban Forum will be very important for the theme of this symposium.

I Thank You for Your kind Attention and wish this conference fruitful deliberations!