In the last few years, many countries have experimented unprecedented economic growth, driven by the cities and the new employment opportunities which they offer. As a result, most demographic growth occurs in urban areas. Largely for political reasons, however, public infrastructure investment continues to bypass cities in many countries, and public expenditure barely covers maintenance costs. In this era of urban neglect, many cities suffer disproportionately from reduced fiscal and financial resources despite their major contribution to national development.

The combination of accelerating urbanization, long-neglected infrastructure and weak urban funding over many years has resulted in increasing urban poverty, with the urban poor now representing 49% of the urban population in developing countries. Including industrial countries, the total number of urban poor currently stands at about 1.1 billion.

Dramatic social conditions also affect the ability of a city to attract domestic and international investments. In this regard, the mobilization of international capital investments has not succeeded in significantly improving access to basic services for the poor, in particular in least developed countries, due to inadequate capacities to supervise privatization processes and the generally poor competitiveness of many cities when it comes to attracting investors. One of the most important factors in attracting private investment is for a city to function.

In most least developed countries, however, in contrast to the acknowledgement of the need for an integrated approach to rural development, the urban issues were not considered as a priority and specific sector in establishing recent Poverty Reduction Strategies.

As a sign of hope, the World Bank and UNCHS (Habitat) have joined forces to launch the Cities Alliance: an expanding partnership of those institutions, including International associations of Local Authorities, and donors who believe the time has come to forge a new approach to urban development and to support the initiatives of the poor. Other development agencies have joined to expand the partnership to a scale commensurate with the nature and size of the challenge. The Cities Alliance is now a global partnership to help cities meet the urban challenges of the 21st century: pro-poor policies; good urban governance; and prosperous cities without slums. In summary, the Cities Alliance recognizes cities and towns as engines of growth and arenas for country-wide sustainable development. In particular, the Cities Alliance should provide an appropriate vehicle to engage more fully with the private sector in order to address the bankability of cities as well as of the urban poor themselves, finally demonstrating the financial viability of pro-poor policies.

Focus of the Marrakech Conference : Productive and Inclusive Cities

The Conference has further elaborated on the urban dimension of the contrasted economic and social approaches that were recently brought at the forefront of the international agenda through Davos and Porto Alegre Forums.

Two position papers, within which the issues are considered under different angles, have introduced the work of the two main sub-groups:

The first report has reviewed existing approaches and document practices related to various factors positively influencing urban productivity and regional development, including fiscal regimes and fiscal decentralisation, urban infrastructure, mobility and transportation systems, building human capital and labor productivity, urban safety, institutional frameworks, governance and decentralisation. Impact of new Information and Communication Technologies (ICT), investment relocation and Export Processing Zones, mass tourism and other changes influencing urban and women employment structure have been documented through illustrative cases. The report has finally addressed the capacity of productivity to generate inclusiveness, from an economic point of view.

The second report has emphasised the social aspect and preconditions for low-income and vulnerable groups to access opportunities generated by new technologies and the globalizing economy. Illustrative cases demonstrating social factors with potential to generate productivity and economic development have been documented. Special attention has been given to security of land and property tenure, improved access to services and transportation, access by women to revenues and gender equality, flexibility of education systems, social nets and enhanced access to health facilities, urban safety and sound and participatory governance.

• The two working-groups have reviewed the following themes, from their respective perspectives:
• Infrastructure & Information and Communication Technologies (ICT)
• Employment Policies & Finance
• Housing & Social Integration Policies
• City Governance

A specific session of the Forum has addressed the role of city-to-city and region-to-region cooperation in developing city productivity and inclusiveness. Experiences of capacity-building through city and local authority networks has been presented. Recommendations to enhance partnership between cities, cities and local authorities international associations and international development agencies, have been elaborated.

After hearing the recommendations from the sub-groups, a reconciliation panel with major urban champions will propose balanced guidance to Habitat Agenda partners. The outputs of the Conference will propose guidelines for mediation and dialogue between urban partners to build productive and inclusive cities. Recommendations to urban decision-makers will be developed along the following lines:

• Competitiveness and Equity,
• Sustainability and Profit,
• Exclusion against peace and development.