Chile must start building cities as places of opportunity after the pandemic – World Bank

RIO DE JANEIRO, BRAZIL – The concentration of population and economic activity in cities is often positive, contributing to productivity, job creation, and innovative solutions. It can also contribute socially and environmentally by financing better living conditions and reducing poverty rates.

However, despite all the potential benefits, Chilean cities and territories currently suffer from profound inequalities in the well-being of their inhabitants and their access to the world of work.

Read also: Check out our coverage on Chile

Amid the economic boom and all the questions it raises, the World Bank has dedicated one of its “Development Pieces” to cities and how they can become places of opportunity for the entire population.

Ayah Mahgoub, the Senior Urban Development Specialist at the World Bank, tells DF Newspaper that the pandemic has hit many cities hard, mainly because of the severe restrictions to combat it, which involve social distance and personal interaction.

“For cities to recover from the pandemic in short to medium term, they need more flexible, demand-driven management, infrastructure, and service delivery,” she explains. She clarifies that this is particularly the case in Chile, which stands out among OECD countries for its centralization.”

The WB analysis identifies three structural challenges as some of the “main causes” of the country’s inequalities and vulnerabilities.

It highlights that urban policy and intervention decisions have been poorly coordinated and rigid in planning, implementation, and development. It also argues that the “centralized” approach to urban decision-making – combined with “weak subnational governance” – has led to a disconnection from local needs. Finally, she criticizes that the mismatch between financial resources and subnational needs has exacerbated territorial inequalities within and between cities.

ENGINES OF GROWTH

Mahgoub argues that there is an urgent need to enable cities to be engines of productive growth and access to opportunity for all. She argues that “there is a need to address the demands and social discontent of recent years that may persist in the months and years ahead due to slow growth and limited structural change.”

The study argues that the momentum of the “bold” measures taken for post-pandemic reconstruction can be used to initiate structural reforms that will make cities “more productive and livable.”

To this end, the study’s authors identify three possible courses of action. The first is to establish a legal and institutional framework that clarifies the responsibilities and instruments of subnational governments and helps coordinate actors.

In the short term, they suggest strengthening spatial planning instruments, making them more flexible and cross-sectoral, and linking them to investment. They offer to formulate a strategy that sets the framework for public and private investment in the medium and long term.

The second path is to give governments responsibilities at the subnational level that allow them to be closer to the needs and solutions of their citizens. In the short term, it calls for further institutionalization of coordination mechanisms between regional governments, line ministries, and public agencies and strengthening the responsibilities of subnational governments.

For the future, it calls for the development of political and administrative arrangements to activate multilevel governance systems and enable them to improve investments in their respective jurisdictions.

The third suggested way is to strengthen subnational governments to fulfill effectively and efficiently their new roles and responsibilities. This should be done by complementing national policies with instruments designed to remove binding constraints at the local level, thereby increasing productivity while ensuring equity. Going forward, it is recommended that funding needs in underfunded lagging areas be improved.