Posts tagged under Highlights
— Author of this guest blog entry —
Jan de Graaf graduated this year from the Lee Kuan Yew School of Public Policy at NUS. He recently finished an internship with the Peacekeeping Department of the United Nations in New York.
The topic is remittances – a subject that deserves attention given its potential to help migrants and their families. The volume of remittances that is sent by migrants around the world to their countries of origin is huge. In fact, the remittance flows to developing countries are more than three times as high as the level of Official Development Assistance to these countries. Still, the money transfer is often a painfully expensive undertaking. And yet, the issue does not receive the policy attention one would expect. I wrote my master thesis on this topic and promised to share some of the final results. They were at times unexpected and truly fascinating:
As was mentioned in the earlier blog-post, I did not observe correlations between the level of remittance costs and almost any factor that related to receiving countries. Market conditions in sending country seemed to be much more influential. It was hard to determine what such correlations imply, but I found that it was mostly economic factors – which I proxied by looking at:
The Vietnamese capital is undergoing several drastic changes. The city’s look and feel are changing, and the city’s inhabitants have evolved their preferences and demands. This presents new risks and challenges that policy makers must juggle. Thus, the kind of choices that city planners take will heavily influence Hanoi’s aspiration as a modern and inclusive metropolis.
The ATM survey indicates that health services, good schools, work opportunities, and financial services are the most critical unmet needs of the poor. Finding solutions is especially urgent due to the population pressures caused by growing share of rural-urban migrants trying their luck in the “big city”. Current strategies will fail: slum clearing and restrictive eligibility criteria for government benefits are short-term strategies to drive people away from Hanoi, but these disincentives are no match for what the city has to offer.
In order to equip planners with a framework to base their policy design, we have developed four alternative futures for Hanoi. They are centered along two critical junctures:
- 1) the pace of rural-urban migration and its consequences for urban infrastructures
- 2) the service delivery method for the urban poor.
The Asian Trends Monitoring team continues its reporting on the state of urban poverty in Southeast Asia. After the first two issues on Jakarta and Manila, the team now releases a bulletin on a city that is markedly different from the first two: Hanoi, Vietnam.
Unlike the more developed economies of Indonesia and the Philippines, Vietnam is very much an economy in transition. With its recent rise into the cluster of middle income countries (countries with a GDP per capita of US$1,000 or more), Vietnam has an opportunity to adjust its growth strategy to become more inclusive and lift millions of its people out of poverty. One of the best places to start would be its capital city. Hanoi, unlike Jakarta and Manila, is not quite a megacity, but it is definitely heading in that direction. Thus, Hanoi must rethink its strategies and models for service provision in order to remain inclusive and accessible throughout this period of growth.
This issue of the Asian Trends Monitoring Bulletin analyses the living conditions that Hanoi’s poor residents must contend with, and the services that are in place to assist them. More specifically, we look into the potential roles of empowerment strategies such as microfinance and social businesses as viable ways to close service gaps in cities like Hanoi.
This week UN Habitat held the World Habitat Day “Changing cities, Building opportunities” to reflect on the state of our towns and cities. UN Secretary-General Ban Ki Moon emphasized that global success stories can guide the future for cities facing tremendous challenges today – rapidly growing cities like Hanoi.
“From necessity springs opportunity. Better planned and better functioning cities can help guide us to the future we want: cities where everyone has adequate shelter, water, sanitation, health and other basic services; cities with good education and job prospects; cities with energy-efficient buildings and public transport systems; cities where all feel they belong.”
Ban Ki Moon, Secretary-General, United Nations on October 1, 2012
The Habitat Day slogan “Changing cities, Building opportunities” aptly describes a process that Hanoi needs to go through, if it wants to avoid becoming the next disfunctional megacity. The survey our team conducted (also see last week’s blog post) among Hanoi’s urban poor shows that close to half the respondents struggle to find work opportunities in the city. The informal economy offers many different economic activities to engage in, however only a small proportion of micro-entrepreneurs manage to make their business profitable enough to escape poverty.
New video from the ATM team! We interviewed a number of small vendors around That Luang Stupa to ask them about their lives and their businesses. Watch them here:
As mentioned in a previous post, one of the topics that the team examined in detail during the research trip to Vientiane was pro-poor tourism. However, during the trip we realized that the issues Vientiane faced were not the issues we expected. The biggest problem with Vientiane’s tourism sector is not that micro and small businesses get a disproportionately small share of tourism revenues; the problem is that there is not enough tourism revenue!
A 2010 estimate of the Laos tourism sector put annual visitors at roughly 2 million per year with total tourism receipts of nearly US$ 300 million (just to clarify, these are nationwide figures, not city figures). When you compare these national numbers to those of other tourist locations in the region, such as Indonesia (US$ 7.6 billion in revenues in 2010) and Singapore (13.2 million international visitors and S$ 22.2 billion revenue in 2011), it is clear that Laos as a whole, let alone Vientiane, is very far behind.
As a final post before we end the Laos field visit, I wanted to share some photos of what was most noticeable about Vientiane: its roads.
The ATM team and our surveyors never stepped outside of Vientiane municipality, but the road conditions that we found were quite shocking. These pictures of roads were taken from what is supposedly the most developed districts in Laos, due to their proximity to the city center. One can only imagine what roads further into the rural areas look like.
One of the main barriers to spreading economic development into peri-urban and rural area is road access. If it is difficult for rural and peri-urban producers to get their goods to the markets in the urban center, the economic potential of that business drops significantly. Thus, some serious investments to pave roads in the areas just outside Vientiane city center could go a long way to improving the economic condition of Vientiane’s poor in the long run.
After just 15 minutes of driving North from Vientiane’s city center past the famous Pha That Luang Stupa the asphalt road suddenly changed into a wide dirt road. Due to heavy rain during the night the road was full of potholes and bumps. We were still well within the city’s boundaries but the roadside already looked liked a small rural town.
After another 25 minutes we reached our destination, PhoneThong Village, a small community of 150 households. Nothing in that area would hint at the fact that this is part of Laos’ capital, PhoneThong is as rural as it gets. Well, after the reality check earlier this week, that “urban” poverty might be a little bit of an overstatement for conditions in Vientiane, we were not surprised.
The village chief described to us that the village has seen continuous improvements in recent years. Many inhabitants were able to undertake house improvements, expand their farms and purchase motorbikes or cars due to rising incomes. However, the quality of education and health services leave a lot to wish for according to him. The village has one primary school and shares a secondary school with the other villages in the district. He would love to develop some vacant land into a simple sports field to offer the youth some activities and keep them away from drugs – one of the issues the village wants to address. But the vllage budget is too small.
While preparing for our trip to Vientiane, one of the things we wanted to explore was pro-poor tourism. The logic behind it was quite simple:
- International tourism accounts for 17.5% of total exports, much higher than Indonesia, Philippines, and Vietnam (all at around 5%)
- Tourism is a sector that is generally thought to provide opportunities for low-skilled employment and micro-entrepreneurship
Given this information, we expected that Vientiane’s major tourist attractions would be similar to what we would typically find in most other Southeast Asian tourist destinations: a hub for the informal economy. We thought the surrounding streets would be lined with small food stalls. We expected to see many peddlers of small children’s toys and souvenirs. We were ready to face the rushing army of informal tour guides who would give us unsolicited information about the historical significance of every rock.
Boy, were we wrong.
The cultural tourist attractions were mindbogglingly sterile. When we visited Pha That Luang, one of the more prominent stupas in the city, we did not see many businesses at all. There were only a couple of food vendors to accommodate the handfuls of off-peak tourists that came to visit. Perhaps it has something to do with a recent government sweep of “undesirables” in preparation of the upcoming ASEM 9 Summit, but some people we spoke to had different explanations.