The twenty-first session of the Governing Council of UN-HABITAT last week approved a resolution proposed by the Government Kenya giving the agency with new policy instruments to fight urban poverty.
The resolution approved by the 58 governments in the Council that meets every two years to set UN-HABITAT’s work programme and budget is entitled, “Sustainable public-private partnership incentives for attracting large-scale private sector investment in low-income housing”.
“I am convinced that this further strengthens the focus on partnerships and the need to bring the private sector on board in our mission,” said UN-HABITAT’s Executive Director, Mrs. Anna Tibaijuka. “We are all only too aware that governments alone cannot finance the amount of housing need to lift people out of slums. We have to have the private sector with us here.” The resolution emphasizes the importance of public-private partnerships on poverty reduction and states that public-private partnerships have the potential to contribute to reducing urban poverty by catalyzing market activities to create growth and employment on a wider basis.
Officials described it as pivotal because it addresses the fundamental problem of “going to scale” which neither UN-HABITAT nor governments can achieve without the full participation of the private sector. Going to scale comes down to reaching as many people as possible resulting in a significant reduction of poverty.
They said the reduction of poverty in urban areas was not being addressed effectively precisely because of lack of scaling-up and a narrow focus on pilot and demonstration projects. Up -scaling can only be achieved through the full participation of the private sector, which normally provides 80 percent of the required financial resources for urban development. However, it is important to note that the private sector will only engage as a partner if there are incentives in place that make it profitable for businesses to work for the poor. That is why the resolution highlights the strategic importance of incentives.
Public-private partnerships have the potential to contribute to reducing urban poverty by catalyzing market activities to create growth and employment on a wider scale, a UN-HABITAT expert said.
Given effective housing and infrastructure incentives, many young unskilled workers could be absorbed in the formal economic process, who would otherwise be idle, unproductive and a source of instability. The housing sector can play the role of an engine of growth and development.