Around 180.000 people move into cities every day in search of better jobs and living conditions, but far too many end up in informal settlements, struggling to meet their most basic needs. To deal with urban poverty and its expansion, cities must be better equipped to plan with inclusion in mind. Abha Joshi-Ghani from the World Bank Institute explains how. With urbanization happening at an unprecedented scale and speed, the cities of tomorrow have set sail towards the promised land of smart cities. But cities have not performed as well as expected in their transformative role. After all, one room shacks and mud huts in overpopulated slums are what one third of the world’s urban population call home. And with 2.7 billion people expected to move into cities by 2030, the urban planners need to think about the implications now, rather than trying to catch up later. We talked with Abha Joshi-Ghani, the Director of Knowledge Exchange and Learning at the World Bank Institute, to learn more about how to address the challenges of urban informality. The Challenge of Inclusion “The biggest defining phenomenon of informality is exclusion or lack of inclusion.” Abha Joshi-Ghani says, when asked about the challenges that face our megacities today. For long, the history of global cities has been a story of increasing prosperity and progress. But behind the alluring tale, lurk a number of troubling questions posed by the changing nature of urbanization in many developing countries. “The informal sector is the first port of entry for rural migrants to a city. So it plays a crucial role in terms of allowing people into a city’s socio-economic fabric. Slums were very common in London and Paris, when these countries were industrialising in the 19th century, but people were able to move on to better housing, education and health.” Abha Joshi-Ghani explains, and continues “What has happened in slums in developing countries is that you find first, second, third and fourth generations of people still living in slums and that is what we need to address. This shows a huge failure of the government, private sector and markets to provide housing and basic services to the people that have come looking for opportunities.” Instead of being a transitory place for rural migrants attracted by the possibilities that cities represent, the informal sector is increasingly a large and persistent part of urban reality. “Millions of less advantaged workers benefit from the employment the informal sector provides, but informality is far from a perfect solution.” Abha Goshi-Jhani argues, and explains “In the gray market, there are no rules protecting worker safety and there is little legal recourse for workers who have been maltreated. Informality may be a reasonable response to a bad situation, and it may foster entrepreneurship and create jobs. But that does not mean there are not significant costs to having millions of workers without safety nets.” In many developing countries, the gathering of street-vendors, slum-dwellers and waste-pickers in the informal sector are estimated to account for as much as 40 percent of city GDP. Given the sheer size of the informal economy, questions arise to whether cities can even afford to leave its inhabitants out of the process of planning and policy-making in the future. Addressing Informality But how can we address the challenges of informality while building on the ingenuity of the people who have found ways to thrive within informal settlements? According to Abha Joshi-Ghani the key lesson of informality is better planning, land use, service provision and preparing for the future. “Plan with inclusion in mind. Can you lay out grids in anticipation of the city expanding?” Abha Joshi-Ghani asks, and explains that as urban growth continues, the planning horizon of cities must extend beyond current needs. “It has become clear that narrowly focused neighbourhood slum upgrading interventions, while often effective, have fallen well short of addressing the magnitude and scope of expanding informality and slums.” “In addition to pursuing sound macroeconomic policies aimed at enhancing growth, cities need to be better equipped to address urban poverty.” Abha Joshi-Ghani argues, and calls for a stronger political will to pursue top-down approaches with pro-poor strategies at heart. “Cities and national governments should address urban poverty by expanding policy-based interventions and scaling up investments in services for the poor citywide and nationwide. It will be underpinned by urban poverty analysis to guide policy decisions.” “In this regard, there are major knowledge gaps and data limitations that need to be addressed. Cities often lack the tools to diagnose urban poverty and assess the extent to which their policies are pro-poor. And building an information base at the city, country, regional, and global levels, as well as the capacity to use the information, is a top priority. New tools such as geographic information systems and poverty mapping are important instruments for urban poverty analysis.” Abha Joshi-Ghani concludes. Fostering City-to-City Dialogues Looking into the future, the demographic shift taking place in many developing countries will require that more than 80 percent of the city to exist in 2060 will be built over the next five decades. This creates a unique moment in history that we cannot surpass. According to Abha Goshi-Jhani this calls for more sustained learning partnerships and knowledge sharing. “We need to think of city capacity building and learning networks as part of the habitat tree going forward.” Abha Goshi-Jhani explains. To exemplify, she points to the World Bank’s Global Lab on Metropolitan Strategic Planning that was created one year ago. “We are in partnership with the regional planning association of New York (…) and we took that opportunity to bring 15 of our cities together to learn from each other on how to plan better. These are cities like Istanbul, Nairobi and Mumbai sitting together with New York, Barcelona and Seoul learning how to make our cities more inclusive.” By bringing cities together to share their particular stories of informality, the urban planners can learn from a pool of cumulated experiences of urban transformations. While successful solutions and pro-poor policies are not easy transferable, they offer valuable lessons on how to confront the apparatus of planning with inclusion in mind. And more importantly, it shows that more liveable and sustainable cities of tomorrow can reach even the periphery of the city.