The Governing Council,

Welcoming General Assembly resolution 56/206 of 21 December 2001, which transformed the United Nations Centre for Human Settlements into a full-fledged United Nations Human Settlements Programme known as "UN-HABITAT" to enable it to better deliver its mandate of promoting and facilitating adequate shelter for all and sustainable human settlements development, of coordinating the implementation of the Habitat Agenda and of serving as a focal point for sustainable human settlements development issues in the United Nations system,

Aware of the General Assembly's concern, expressed in resolution 56/206, that urgent steps should be taken to ensure a better mobilization of financial resources at all levels to enhance the implementation of the Habitat Agenda, particularly in developing countries, with a view to improving human settlements, and recalling the commitments of Governments to, inter alia, promoting broad access to appropriate housing financing, increasing the supply of affordable housing and creating an enabling environment for sustainable development that will attract investment,

Noting the failure of the United Nations Habitat and Human Settlements Foundation to develop as the financial and catalytic institution originally envisaged to support the implementation of the Habitat Agenda, including supporting shelter, related infrastructure development programmes and housing finance institutions and mechanisms, particularly in developing countries,

Welcoming General Assembly resolution 56/206, which encourages the Executive Director of UN-HABITAT to strengthen the United Nations Habitat and Human Settlements Foundation and to enhance fundraising efforts to facilitate the implementation of the Habitat Agenda,

Recalling the United Nations Millennium Declaration, and particularly the targets of achieving a significant improvement in the lives of at least 100 million slum dwellers by the year 2020 and of halving by 2015 the proportion of people without sustainable access to safe drinking water,

Recalling also the Johannesburg Declaration on Sustainable Development²³ and the Plan of Implementation of the World Summit on Sustainable Development, and particularly the target of halving by 2015 the proportion of people who do not have access to basic sanitation,

Recalling furtherv chapter 7 of Agenda 21²⁴ , on promoting sustainable human settlements development, for which UN-HABITAT is a designated focal point,

Recalling the Monterrey Consensus of the International Conference on Financing for Development, and in particular the recognition of the need to mobilize domestic financial resources for development and investments, including in the fields of housing and shelter, and to reinforce national efforts in capacity-building in developing countries as well as countries with economies in transition in such areas as public finance and mortgage finance,

Recalling also the Habitat Agenda, particularly its section E on international cooperation and coordination and those elements on domestic financial resources and economic instruments, and the Declaration on Cities and other Human Settlements in the New Millennium made by the General Assembly at its special session for an overall review and appraisal of the implementation of the Habitat Agenda (Istanbul + 5) in June 2001,

Noting that according to recent studies²⁵ there are nearly 1 billion poor people living in urban slums in developing countries, that that figure is projected to double by the year 2030 if present trends continue, accounting for approximately 40 per cent of the projected growth in the world population during that period, and that the anticipated growth of urban poverty and the anticipated increase in the number of poor people living in slums require positive and concrete action at national and international levels to find and implement solutions,

Noting also that financing from international sources can have an important catalytic and preparatory role to play in leveraging domestic investment funding for the alleviation of shelter and human settlement development problems,

Recognizing that financing sustainable urban development and revitalization, facilitating local communities' access to capital and attracting investment to urban development require innovative systems of financing at the international, national and local levels,

Stressing the need to strengthen the United Nations Habitat and Human Settlements Foundation to facilitate requisite investments for improving human settlements for low-income and poor people, particularly in developing and transitional-economy countries,

Having considered the report²⁶ of the Executive Director on strengthening the United Nations Habitat and Human Settlements Foundation,

1. Commends the progress made by the Executive Director in strengthening the United Nations Habitat and Human Settlements Foundation as exemplified by the doubling of total financial contributions in the current biennium, the resumption of funding from some member States that had suspended support pending revitalization and management reforms, the conclusion of multi-year commitments to finance core programmes of the United Nations Habitat and Human Settlements Foundation by some member States and the forging of new partnerships with multilateral financial institutions and regional development banks with a view to developing fast-track credit lines in support of the implementation of the Habitat Agenda and the international development goals of the Millennium Declaration and Plan of Implementation of the World Summit on Sustainable Development;

2. Urges the international community, particularly developed countries and others in a position to do so, to further extend their financial support to enable the Foundation to become effective in mobilizing domestic resources, both from the private and public sectors, for shelter and related infrastructure in developing countries, with special focus on the needs of slum dwellers and low-income people;

3. Requests the Executive Director to continue the work in strengthening the Foundation so as to provide finance for, inter alia:

(a) Supporting the core staff and programmes of UN-HABITAT;

(b) Mobilization of seed capital, domestic and other financial resources for shelter and related infrastructure with due priority to the needs of low-income households;

(c) Technical support services to foster and improve effectiveness in developing countries and countries with economies in transition for the mobilization and utilization of domestic resources for the improvement of human settlements and to assist countries at both national and local levels in the preparation and implementation of projects;

4. Requests the Executive Director to continue to work with the World Bank Group, regional development banks, other development banks, the private sector and other relevant partners to field test approaches through pilot projects and to develop longer term programmes to mobilize resources to increase the supply of affordable credit for slum upgrading and other pro-poor human settlements development in developing countries and countries with economies in transition;

5. Decides to defer decisions on setting funding targets for the United Nations Habitat and Human Settlements Foundation activities set out under paragraph 3 above to the Governing Council at its twentieth session pending review in the light of experience gained and developments during the intervening period;

6. Requests the Executive Director to report to it at its next session on progress made in the implementation of the present resolution.