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 In 20 years, the urban population in the Asia and Pacific region is expected to be 1,970 million or 46 percent of its projected total of 4,298 million. Urban areas today account for 35 percent of the total population of 3,515 million. On average, municipalities secure about US$ 150 per capita in revenue per year.
Urbanization in Asia and the Pacific raises red flags, particularly because an increasing number of the region's poor live in urban areas. The size and urgency of the problem requires different ways of managing cities and their related infrastructure and service requirements. Recently, macro-economic and financial crises have cast doubt on conventional approaches and concepts. The financial crises of the 1990s affected millions of lives and aggravated social vulnerabilities. In East and Southeast Asia, the social consequences of the financial crisis have been felt more in cities, reflected in increased poverty brought about by cutbacks in both public and private employment as well as in public expenditures for health and education.
 However, the increased pace of urbanization and its linkages to economic globalization have reinvigorated interest in the process of governance and its links to economic growth. Decentralization and local autonomy are gaining more momentum, and with this, the interest in building the capacity of local governments is growing. While several Asian countries have adopted decentralization policies, excessive controls are still exercised in others on the functional, financial and administrative responsibilities of local government. As a result, there is a mismatch between the functional powers of local governments and the financial resources available to them.
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