DIRECTIONS IN URBAN DEVELOPMENT JUNE 2017 Intermediate Cities in Bolivia: A priority agenda Why are intermediate cities in Bolivia important? urbanization levels seen in other Latin American countries. Between 1950 and 2012, the urban population Bolivia faces a unique opportunity to harness the grew at an annual rate of 3.7 percent; today, nearly two benefits of urbanization and avoid the pitfalls that thirds of the Bolivians live in urban areas1. According other countries have made in the past. The urbanization to United Nations (UN) estimates, nearly 75 percent of process in Bolivia is one of the last to occur in the region the population will be urban by 2025 (UN, 2012). Within of Latin America and the Caribbean, while its rapid pace a favorable macroeconomic context, cities can offer a requires expeditious action in addressing the challenges number of opportunities for reaching higher per capita associated with this transformation. incomes and a better quality of life through improved access to public services and economic opportunities for To achieve the goals of sustainable urban development all. in a global context, it is critical to focus on smaller cities whose populations are growing the fastest. Now that more than 7 million people live in urban While intermediate cities are the fastest growing with areas, they will play a central role in contributing limited financial resources and capacity, they still have to the national agenda of poverty reduction and a manageable size. Their population sizes provide a sustained growth in Bolivia. Due to the rapid pace of window of opportunity to take strategic action the urbanization process, there is an urgent need to now. Strengthening the role and management of implement policy actions in order to achieve the benefits intermediate cities will be key to achieving the country’s national development goals, such as reducing the gap in the provision of basic services or contributing to better living conditions and avoiding possible negative effects of unplanned urbanization. This note analyzes the urbanization process in Bolivia, proposes a new definition of intermediate cities, evaluates challenges and opportunities common to intermediate cities, and provides recommendations for action. The urbanization process in Bolivia Although the urbanization process in Bolivia started relatively late, the country has rapidly approached Oruro, Bolivia Credit: sunsinger, Shutterstock This note was prepared by Zoe Elena Trohanis, Ana I. Aguilera and Roberto Tejada, with valuable contributions from Melanie Kappes and Sophie Chanson. It is a summary of a more extensive report in Spanish that was prepared by a World Bank team led by Ms. Trohanis. The authors would like to express their gratitude to the Ministry of Development Planning of the Plurinational State of Bolivia, the Ministry of Public Works, the Vice Ministry of Autonomies, the National Statistical Institute, the Autonomous Departmental Government of Beni, and the Municipal Autonomous Government of Trinidad. JUNE 2017 DIRECTIONS IN URBAN DEVELOPMENT Table 1. System of cities in Bolivia (cities with more than 10,000 inhabitants) Average Annual Urban Population City classification by population size No. Population Population 2012 Growth — 2012 2012 Cities with more than 500,000 4 3,671,555 1.6% 99.4% Cities between 100 thousand and 500 thousand 9 1,582,889 2.7% 91.6% Cities between 50 thousand and 100 thousand 6 418,230 5.0% 83.9% Cities between 10 thousand and 50 thousand 41 863,049 3.6% 63.3% Total 60 6,535,723 2.3% 89.7% Source: National Population and Housing Census, National Statistics Institute (2012). offered by cities. At the same time, potential costs and The system of cities negative effects of urbanization need to be avoided, such as pollution, congestion, or the rapid growth of Currently, the system of cities comprises about 60 informal settlements in hazard prone areas that would Bolivian urban areas2 that are mainly small and medium put the population living there at risk. in size, with a rapidly growing population. Together, The national government, through the PDES 2016- these 60 cities are home to more than three-fifths of the 2020 and the national urban development vision set approximately ten million people nationwide. Of these, out under Habitat III, recognizes that the urbanization small and medium-sized cities are the fastest growing, process is advancing rapidly and that the government especially those located around metropolitan areas and must take action to make sure its cities grow in a border cities, which are recipients of migration from sustainable way. The national vision launched in Habitat other areas of the country and offer more dynamic III is to build "Urban Communities to Live Well". That is economic opportunities. to say, to offer a better quality of life by extrapolating the tradition of community life found in rural areas and Proposing a new definition of intermediate cities applying it to the urban environment by preserving common spaces, respecting cultural traditions, and the Intermediate cities in Bolivia, as proposed by this study, environment. are classified as those with a population between 50,000 and 500,000 inhabitants 3 and economies typically specialized in tertiary services or industry. Using this classification, 15 intermediate cities have been identified: Oruro, Sucre, Tarija, Potosí, Sacaba, Figure A. Intermediate cities in Bolivia according to their primary function Source: own elaboration. 2 JUNE 2017 Quillacollo, Montero, Cobija, Trinidad, Warnes, La Challenges and opportunities of intermediate cities Guardia, Riberalta, Yacuiba, Viacha and Colcapirhua. Urban planning and land management: Intermediate As a next step, following the methodology of Roberts cities in Bolivia have expanded over time resulting in (2015)4, these 15 intermediate cities could be classified urban sprawl and low population densities. According into three groups according to their primary function to the World Bank (2014) 5 , this rapid growth was within the system of cities. These groups are: (1) experienced especially in cities located in suburban areas strategic intermediate cities; (2) intermediate cities in and in border cities, has occurred in a disorderly and metropolitan agglomerations; and (3) intermediate cities has resulted in low-density patterns. One example is in corridors or border cities. Figure A shows the list of 15 the city of Trinidad's pattern, where the urban footprint intermediate cities, classified by group according to their expanded at a rate of 4.9 percent annually, faster than strategic role. the national urban average of 4.4 percent (see Figure B). 1. Strategic intermediate cities (administrative, Provision of basic services and housing: Rapid urban manufacturing, agricultural or resource growth often leads to higher costs associated with development centers) : are cities that serve as the provision of infrastructure and basic services. In services, manufacturing or marketing centers for Bolivia, one out of three families living in intermediate trading local goods and products. cities lack access to sanitation, while large cities offer 2. Intermediate cities in metropolitan agglomerations: better conditions, with an average access rate of in Bolivia, as in many other countries of the world, 76 percent. The lack of affordable, high quality and most intermediate cities grow around large well-located housing also adds to the challenges that metropolitan agglomerations. These cities fulfill intermediate cities face in the midst of urban growth. an important role for connecting workers and Rapid urbanization has amplified the challenges that producers located in the urban periphery with the are concentrated in cities (Maria, Acero, Aguilera, & economic city center. Garcia Lozano, 2017). In intermediate cities such as Trinidad, more than 40 percent of families live in 3. Intermediate cities located in corridors or along informal settlements located in the urban periphery, national borders: typically specialized in logistics, which typically lack access to basic services and have they exhibit competitive advantages due to their precarious housing conditions. Inadequate housing geographical location and are often integrated into conditions are associated with greater vulnerability to regional or international value chains. risks of natural disasters. At the same time, low-cost housing provided in remote areas results in the average Figure B. Evolution of the urban footprint in Trinidad (2007-2015) Trinidad, March 7, 2007 Trinidad, June 15, 2015 Source: Own elaboration with data derived from satellite images. 3 DIRECTIONS IN URBAN DEVELOPMENT Figure C. Own-source revenue vs. intergovernmental transfers in 2015 for select municipalities 800 700 Large cities average Intermediate cities average Own source (US$109) Own source (US$ 142 ) 600 Transfers (US$175) Transfers (US$348) Own source Total transfers Per capita US$ 500 400 300 200 100 - Cobija Trinidad Potosí Tarija Oruro Sucre El Alto Cochabamba La Paz Santa Cruz Intermediate cities Large cities Source: Jubilee Foundation based on data from the Ministry of Economy and Public Finance (MEFP). Latin American family spending between 26 and 53 is to strengthen municipal collection, planning and percent of its budget to cover the costs associated with management systems in order to meet the challenges of housing and transportation (World Bank, 2017)6. providing services and infrastructure. Municipal management: Intermediate cities have limited Natural hazards and climate change : It is estimated financial resources to deal with growing pressures that 43 percent of Bolivia's population lives in areas to provide services and infrastructure. The capacity exposed to a high risk of flooding. If urban sprawl and of a municipality to collect property taxes is directly disaster risk reduction are not adequately managed, linked to the efficiency of its cadastral system. Large these trends could result in significant economic losses. municipalities such as La Paz and Santa Cruz have more In addition, forecasts indicate that climate change will complete and accurate cadasters, which allow to raise result in longer dry periods and glacier retreat. Since, more own-source revenue (see Figure C). However, in combination with watershed degradation, this will most intermediate cities in Bolivia are highly dependent lead to a reduction of available water resources, it is an on intergovernmental transfers. Therefore, one of the important aspect to be considered in urban planning and great opportunities to better equip intermediate cities infrastructure design. Figure D. Area flooded in 2007 superimposed with residential growth in vulnerable zones in 2015 Source: own elaboration with data derived from satellite images. 4 JUNE 2017 The city of Trinidad is a good example of how these a. Although there is a wealth of tools for urban risks affect intermediate cities in Bolivia. The expansion planning available, they are being underutilized at of informal settlements has been more pronounced in the local level. Even though large cities use up-to- peripheral areas, especially in the low-lying areas south- date territorial development plans that govern west of the urban center, which have traditionally been urban growth, intermediate cities such as Cobija or vulnerable to disaster risks. Figure D shows that from Trinidad have yet to reach their full potential in the 2007 to 2015, the construction of informal settlements use of such tools. It is also important to ensure that (as well as some planned residential developments) has disaster risk management data and information is taken place in areas susceptible to flooding. included as key elements in the formulation and implementation of these plans. Recommendations b. Lessons learned from the case studies of Trinidad, Sucre and Cobija point to the need to focus To maximize the benefits of urbanization, a key issue investments on the provision of basic services that the Government of Bolivia could prioritize over and infrastructure. In many cases, urban growth the long term is the development of a national urban has been unplanned with limited coordination policy. With the country’s vision for urban development with municipal authorities to guarantee access launched at Habitat III and the objectives outlined in to water and electricity networks for housing. To the PDES 2016-2020, the national government has a respond to these challenges, a strategy focused basis for starting the dialogue, establishing a national on intermediate cities can prioritize investments in urban policy and reviewing institutional and financial three key sectors: (i) water, sanitation and drainage; arrangements to support cities the implementation of (ii) urban infrastructure, including urban mobility this policy. and public spaces; and (iii) solid waste management. A strategy for intermediate cities could focus on five c. The growing demand for urban services will require priority areas: (a) enhance the integrated territorial new investments in intermediate cities and greater planning system with a view to improve urban capacity for own source revenue generation and management; (b) focus investments on improving management. Today, cities are highly dependent on coverage and quality of basic services and infrastructure fiscal transfers, which limits their ability to execute to strengthen local economies and improve living their own budgets. In this sense, three tools can be conditions; (c) strengthen municipal management prioritized to strengthen the financing mechanisms and diversifying financing mechanisms for municipal needed to address the growth of intermediate cities: autonomous governments, encouraging greater (i) territorial assessments of land use and the local collection of own resources and improvements in housing market; (ii) modernization of municipal the administrative and financial management of cadasters; and (iii) strengthening local capacities to these resources; (d) design strategies to promote increase revenue collection. local economic development by taking advantage of d. A national strategy for intermediate cities should economic potential; and (e) as a cross-cutting theme strengthen emerging sectors that are a source of and foundation for sustainable development, integrate employment and improve the connectivity of these urban resilience to protect population and assets against cities to regional markets. Efforts to energize local climate change and disasters (see Figure E and the economies have repercussions on the supply of descriptions): jobs and opportunities, as well as can increase local Figure E. Priorities for a strategy of intermediate cities in Bolivia 5 DIRECTIONS IN URBAN DEVELOPMENT revenues. For example, in the case of Trinidad, the early warning systems, and so on. This analysis city exhibits comparative advantages that favor could be adapted based on the current situation of the manufacturing industry and the services sector. each intermediate city, according to its exposure to From an analytical exercise that consisted of the disasters and its vulnerability. classification of 50 economic activities, it was found Finally, a strategy for intermediate cities must that 30 activities are growth promoters and absorb recognize the particularities of each city typology. 65% of the employed population of the city. Although there are common elements and challenges, e. To prepare intermediate cities to deal with the the dynamics that take place in cities vary across the potential impacts of natural disasters and country. With high variability from population size to climate change, it will be important to develop local economic size and geographic context, each of a suite of diagnostic and training tools. Three these cities has its own realities that require particular categories could be used to group these activities: policies and development management that must be (i) development of information and data systems; designed and implemented by local governments. See (ii) evaluation of risk management tools; and (iii) Figure F for a summary of the categories of intermediate identification of funding opportunities. This support cities and their unique characteristics that could be would result in improvements in urban management areas of focus within a particular strategy (Main report, capacity and availability of geospatial data for better Trinidad case study). asset management, flood and disaster management, Figure F. Guidelines for a strategy of intermediate cities in Bolivia 6 JUNE 2017 End Notes 1 The National Statistics Institute (INE) defines urban areas as jurisdictions with more than 2,000 inhabitants. 2 In this report, “cities” are considered all those urban areas with more than 10,000 inhabitants, sorted by size categories as described in Table 1. 3 The use of these population thresholds based on the categorization of cities by population ranges published in the report Technical Assistance Urban Development (World Bank, 2016) and a review of international literature. 4Roberts, B. (2015). Gestionando Sistemas de Ciudades Secundarias. Brussels, Belgium. Washington, D.C.: BID, Cities Alliance. 5 Banco Mundial. (2014). Estudio de Urbanización en Bolivia. Washington, D.C.: Banco Mundial. 6 It is estimated that an average family spends between 14 and 27 percent of its budget to cover costs associated with the purchase or rental of housing, and between 12 and 24 percent to cover transport costs (World Bank, 2017). Copies of this Note are available at: Development DIRECTIONS Global Programs Unit; Social, Urban, Rural and Resilience Global Practice; The World Bank Telephone: 202-473-3222, Fax: 202-522-3232 http://www.worldbank.org/urban in Urban gpsurrkl@worldbank.org If you are interested in submitting an article for consideration, please contact us at the email address above. The views expressed in DIRECTIONS in Urban Development are those of the authors and do not necessarily reflect the views of the World Bank. 7