Shifting Investment Decisions Toward Inclusion in Manila and Jakarta

11 April 2018


By Smruti Jukur, Fleur Henderson, Sheela Patel, and Anne-Marie Rakhorst

City development is increasingly financed through global, national, and local private sector investments. Local and national governments welcome these investments. The public sector rarely has the resources or expertise to undertake large-scale investments to meet urgent needs. Increased private sector funding may be both the cause and the result of declining influence of state institutions, but this has not led to greater inclusion of the urban poor. Slum dwellers find themselves and their neighborhoods just as invisible as before. What is more, the risks of forced eviction and the destruction of neighborhoods and livelihoods are on the rise.

Too many city and national governments either look the other way or are complicit in accepting the negative consequences that too often result from these investments. Though politically elected by the same constituencies that get the short end of the investment stick, they see no other way of bringing in the investments they need. The problem is compounded by the fact that in most cities, the existing legal policies and frameworks deem “squatting” by the urban poor as illegal.

While it is acknowledged that there has to be business in order for urban development to take place, it cannot be business as usual—not if we truly seek inclusive, equitable, and sustainable urban development. Politicians and administrators cannot hide behind nineteenth-century legal frameworks to address twenty-first-century problems. The private sector cannot abdicate responsibility but must make investments that ensure good governance, inclusion, and scalable solutions that work for all. An organized constituency of the urban poor is a critical precondition for remedying flaws in how development takes place. But how can urban poor social movements play this role when they are forced to concentrate all their time and resources on constantly fighting evictions? The new millennium needs new alliances and new partnerships to break these exclusive and exclusionary practices.

Testing Out New Alliances

This is the story of an emerging strategy that seeks to create the disruption that is needed. It shows how SDI federations have sought to engage large multinational private sector companies, universities, and communities of the urban poor to produce new institutional arrangements with the express intention of encouraging learning and action on the ground. By creating space for the urban poor around the negotiating table, SDI is creating conditions for the emergence of precedent-setting financial solutions that are inclusive and scalable. In order to ensure that communities do not enter these negotiations empty-handed, SDI is helping the affected communities organize themselves around the data they collect and manage.

SDI is working with a Dutch-based institution, the Human Cities Coalition (HCC), in two locations in Asia: Manila, in the Philippines, and Jakarta, in Indonesia. HCC is a public-private partnership of organizations from Dutch business, government, NGOs, and academia dedicated to making cities more inclusive and sustainable. The partnership chose to focus on Jakarta and Manila because they are both megacities in a river delta. Such cities face specific challenges for which HCC is well equipped, as some members of the coalition are worldwide leaders in water management and infrastructure. At the same time, Manila and Jakarta are two of the most populous cities in Asia. A significant percentage of the population lives in informal settlements, albeit on a small fraction of land, a considerable portion of which faces severe risks in terms of flooding and waterborne diseases caused by inadequate sanitation and potable water supply.

On the positive side, both cities have governments that have acknowledged the infrastructure deficits that characterize slum areas and are therefore encouraging private interventions to bridge these gaps within a policy and regulatory framework designed and overseen by the state. Both cities have decided to undertake major water infrastructure interventions through a bidding process that places international engineering companies in the frame. These developments will produce investment plans worth trillions of dollars. They are co-financed by private companies with links to the Netherlands as well as local companies and government. HCC and SDI recognize that the current, mainly private sector, financing strategy may further marginalize the poor. There is a strong likelihood that the risks will escalate and will accelerate evictions and forced relocations of coastal slums and those in flood-prone areas. There can be no disputing the fact that these investments are urgently needed, but the challenge is how the urban poor will fare as a result. The intended outcome of the HCC/SDI collaboration is to turn this situation around by designing inclusive bidding and procurement protocols to guide investments. These protocols will demand assessment of the investments’ impact on the poor.

An Emerging Strategy

When HCC chose to work in these two locations, its board and the SDI Secretariat developed an intervention strategy. SDI and the Shared Value Foundation (SVF) undertook slum profiles in the metro areas affected by the port plans. In the Philippines, this was facilitated by the Homeless People’s Federation of the Philippines Incorporated (HPFPI), an SDI affiliate. In Jakarta, where there is no local SDI affiliate, the profiling was done by an international SDI team comprised of Indian and Filipino federations and support professionals. Data was collected using Know Your City protocols, meaning that once settlements had been identified by SDI and HCC, they were mapped and profiled by community teams. In both cities, with the support of SDI and members of HPFPI, the information was fed back to the communities before being presented by community leaders to city officials.

A singular contribution made by the community-gathered information was not the content alone but the conclusive proof it provided that the government agencies commissioning the planning through their bidding processes had hardly any data about informal settlements. As a result, they did not consider it essential to provide information to the planners or agencies applying. Indeed, the effect of the development on tens of thousands of slum families went unmentioned. At the same time, the private sector companies themselves did not find it necessary to seek or examine the information that was lacking.

The raw data itself did not produce much that was new. Today, with Google Maps in the public domain, informal settlements are no longer hidden, and the maps clearly show informal structures and settlements to anyone who takes the time and makes the effort to examine them. While open source data portals make a lot of information readily available, they cannot help communities get organized or facilitate their participation in discussions of issues that will affect their lives. The new collaboration with HCC enabled the organized communities to access new data platforms, way beyond (but not excluding) their city government. This has produced new opportunities for communities seeking to advocate against negative change and for inclusive development. At the same time, it has enabled HCC to bring an important but hitherto neglected voice into city development debates.

Long-Term Outcomes

A probable outcome from the HCC/SDI collaboration in Jakarta and Manila may be an all-important mechanism to produce a procurement and bidding protocol for water infrastructure investments and general-area developments. This would ensure, first, that local communities are involved when planning for the execution of infrastructure projects is undertaken, and, second, that residents’ needs and concerns are incorporated so that sustainable solutions are achieved. SDI and HCC can contribute to a future reality in which basic rights such as tenure security and basic services are guaranteed when international companies make investments in water-related infrastructure projects in the Global South. This could produce self- induced industry-wide commitments, backed up with inspections, to ensure that this self-regulation works.

While the details of the agreements would vary from place to place, some important requirements could be universally applied. The clearest examples would be no forced removal; no relocation without prior approval, and only to well-located land; and priority interventions identified through intensive community consultation. Through HCC, these protocols could be applied to Dutch companies seeking work in the Global South. If successful, they would be replicated elsewhere. It is clear that such a process would benefit the HCC and SDI constituencies: potential investors who are looking for suitable projects; and the urban poor, who currently suffer the negative effects of such investments.

Short-Term Outcomes

These larger plans almost always span decades. In the short to medium term, the more immediate needs of the communities become the focus for local action, with a view both to develop solutions that serve residents’ basic needs and, more importantly, to undertake these in a way that helps city administrations and other tiers of government address some fundamental issues with regard to land security and access to basic amenities and services. The dialogue, triggered by and revolving around Know Your City–generated data, initially brings to attention the unmet needs of affected communities, leading to exploration of a range of possibilities and the taking up of demonstration projects to test impact, cost, and usefulness.

In the long run, the urban poor produce concepts for upgrading or relocation of settlements and participate in developing spatial designs, house plans, and the prioritization of the kinds of services needed. They also commit to making contributions in cash and in-kind, to the extent they can. At the same time, the city and other centers of government, where possible, allocate budgeted resources and effect the changes in policy that are needed to make participatory planning and development work. The private sector undertakes the production and execution of the project and helps train the communities in future maintenance. The three-way commitment of community, government, and private sector is affirmed in practice, building interdependence and trans-sector accountability.

Priorities will differ from one situation to the next. In Malabon City, in Metro Manila, the diagnostics based on the maps and profiles pointed urgently to lack of access to electricity. While this can be provided by private agencies, it is still largely linked with tenure status: no formal title, no legal connection. This is why SDI and HCC have responded jointly by developing business propositions around community-managed solar energy hubs.

In Penjaringan, in North Jakarta, the diagnostics based on the maps and profiles pointed to lack of access to affordable, safe water and sanitation. Water in Jakarta is largely supplied by private concessions but is generally inaccessible to the poor. Whatever they buy for drinking water purposes costs three to four times what those who live in formal neighborhoods pay and represents 20 percent of their income. A possible solution may be found in business models that look at more effective provision of safe water using existing networks.

SDI’s primary role is to ensure that communities are organized and equipped with the knowledge and capacity not only to produce data but to use it in the cut and thrust of negotiations. Interdependence does not necessarily mean shared vision and shared interest. From SDI’s perspective, it means a recognition by all stakeholders that the urban poor are sufficiently capitalized socially, politically, and economically to have skin in the game. Partnerships with private sector initiatives like HCC strengthen their position.

SDI encourages all organizations of the urban poor to count in order to be counted. Without information about themselves and without being organized, the poor will remain on the outside looking in. There are many examples in the other papers in this document that demonstrate that community-gathered, owned, and managed data can link the disparate worlds of the slum dweller in a shack and the government official behind a desk. It is also the instrument that triangulates this arrangement, drawing in the private sector player and making sure he does not enter the game with eyes wide shut.

In February, SDI launched a landmark publication titled “Know Your City: Slum Dwellers Count,” showcasing the extraordinary contribution of the Know Your City (KYC) campaign to creating understanding and taking action to reduce urban poverty and exclusion. We are posting a new chapter from the book every week. Enjoy! 

Download the full publication here: