URBAN DYNAMICS OF A DEVELOPING COUNTRY
Dr. A.M. THIRUMURTHY
School of Planning and Architecture
4, Block-B, I.P.Estate
New Delhi .110202. INDIA
ABSTRACT
The magnitude and complexity of urban problems in developing countries in
general and India in particular have not received the attention they deserve
from policy makers especialy in the context of the vital role of Essential
Environmental Facilities. in promoting Socio-economic and political development.
of the country. The basic need for Essential Environmental Facilities in
adequate quantity and quality is the driving force behind much of the economic
activity which is vital for sustained urban development. Creation and
maintenance of Essential Environmental Facilities have traditionally been
considered to ensure health and safety to the urban dwellers. In recent years,
the delivery system of such facilities has seen greater set back. Increasing
population both natural and social has been a major cause for concern.
Obsolete taxing system, poor returns from the investments already made and
large scale investment on unproductive. social welfare and public protection
schemes coupled with improper devolution of financialpowers between
governmnts at various levels have aggravated the problems. Lack of drive
towards identification of new source of finance and inffective. urban
management system have added to the severity of the proble:.
Past efforts directed towards ameliorating the urban sickness has not
yielded the desired results as they were limited in scope and piecemeal in
nature with adhoc financial support. The acute shortage in all segments of the
Essential Environmental Facilities sector is giving rise to social ‘tension,
impeding economic development to the extent of increasing urban poverty and
decay. Reversing the trend with a positive direction towards enhancing the
quantity and quality of the facilities stock becomes imperative. This calls
for long and short term programmes deviced to ensure adequate reach to the
different cross section of the population. Operational efficiency and
effectiveness for optimum returns should be the prime concern of the
programmes. To state the obvious, it is not an easy task to achieve all of
them within a short period. given the socio-economic and political fabric of
the cities.
In this paper a small attempt has been made to bring out the major
problems arising out of the process of urbanisation and the impact on the
economic activity, the Essential Environmental Facilities which include the
“Basic Services”, “Complimentary Services” and “Special Urban Services’ and
the kind of Urban development programmes relating to Indian conditions. This
methodology is intended to serve as an approach for the much needed research
work using the principles of systems dynamics particularly for developing
countries.
Page 588
System Dynamics ‘91 Page 589
1. Introduction:
The urban areas in the developing countries have exhibited a radically
different character during the past few decades from those in the developed
countries in terms of population growth and urbanization. The pace of socio-
economic development being rather slow, the urban magnet has been able to
create and maintain an illusive image of higher employment potential and other
Socio-economic benefits. The one way migration resulting from this urban pull
has severely aggrevated the complexities of urban living. Today we see the
cities scarred by congestion and decay, speculation and ugliness. The
migration of rural folks to urban area has primarily been for a better job and
living conditions. The unprodiictive low level of skills often land them in
jobs which are either informal in nature or can be classified as nongainful
employment. Yet the surge of people into the cities continue as the perceived
income level in the urban areas are better than what they otherwise would gain
in rural ‘areas. Nevertheless, the income level in the cities is not
commensurate with urban living standards call for and grossly inadequate to
afford for all the services that are essential to lead a healthy living. Thus
the huge concentration of people in a city crushes all attempts to improve the
essential Environmental Facilities (EEF) in terms of quantity and quality.
The EEF includes the entire infrastructure and service facilities namely;
Health, Education, Water supply Sanitation, Transport and recreation.
Facilities utilized beyond their designed capacity often warrent greater
investments for regular maintenance and replacement resulting in very low
level of investments on creation of new stock. While the non affordable
characteristics of a vast majority of population bring in less revenue to the
coffers of the city govenment, there has been increasing demand for social
welfare and public protection. Diversion of huge segment of the city ‘budget
for such welfare schemes has not brought any significant level of improvement
either in the quality of life or in the general economy, signifying the
fruitless efforts diverted-to filling up of a bottomless pit. Several schemes
intended to ameliorate the living environment of the “less fortamate’ section
of the population, so far proved to be of no significant effect. Efforts. made
towards alleviating one problem aggrevated the other. Inspite of several
studies and problem assessment exercises, often urban managers are found
confronted with the problem of identifying an appropriate technical tool which
could address the whole range of the urban problems, the deficiency levels,
the trade offs, the resources, the constraints and the system which could
provide the most appropriate basis for exercising various options within the
socio-economic constraints for providing a better living environment and
sustained growth in the long run. In this direction, a small attempt has been
made in this paper to conceptualise an Urban Development Model appropriate to
a developing country.
2.9 URBANIZATION IN INDIA PROBLEMS AND PROSPECTS:
The magnitade of the problems faced by the urban areas in India can be
gauged by the phenomenal increase in urban population over the past four
decades. While the people living in India has more than doubled from 350
million in 1947 to nearly 820 million today, the urban population has been
growing almost twice as fast and in real terms quadrupled from 56 million in
1947 to over 204 million ‘in 1988. It is also anticipated that the population
will reach 350 millions if the present trend is continued uncontrolled.
Problems:
Urban living environment is more often gauged by the affordability. level
Page 590 System Dynamics '91
of people in availing essential environmental facilities in terms of quantity
and quality. Unquestionably the most severe challenge is the urban poverty.
Offcial estimates place 27.7% of the urban population below poverty line. The
urban poverty manifests itself in different forms and it is visible in the
proliferation of slums with deplorable living conditions, malnutrition, high
birth rate and high mortality rate, low level of literacy, rapid growth of
informal. sector with increasing casual labourers with less or negligible
skill, over utilization of civic facilities resulting in very low level of
service and increasing incidence of social crimes.
Urban population is composed of a vast segment of rural migrants and the
recent studies established that the natural and social increase of population
is almost at the same level (4% per anmum) with very little prospect for
reduction in Birth rates and outmigration. It is generally believed that the
demographic profile of urban poor is characterised by age and selective
migration and there is preponderance of males particulary in the age group of
20-58. Studies conducted on the demographic profile of urban poor in cities
like Madras has estabilished that interms of sex ratio and percentage of male
female in the age group of 24-50 there is a demographic balance contrary to
the“ general belief and the migrant movement may be of the whole household
rather than individuals. Thus pockets of rural india is very mucha part of
urban India.
INFORMAL SECTOR:
Unabated and unidirectional influx of population into urban centres is
the primry cause for the growth of informal sector. Dwindling job creation in
the formal sector is also equally responsible for the current state of
affairs. While dwindling job creation can be attributed to various other
reasons arising out of industrial location policy, energy crisis, industrial
sickness, labour unrest, restrictive legislation and limited housing activity;
improvement and creation of new infrastructure and service facilities in
adequate quantity and quality which has enormous potential for job
opportumities has been a major stumbling block in creation of new jobs.
Notwithstanding the problems of definition and measurement there has been a
general consensus that the informal sector is growing at a fast rate with more
casualness. This is also further corborrated by the income-investment ratio of
informal sector activities which is 3.6 as against 9.71 in the formal sector.
PROSPECTS:
Urbanization has brought in a host of problems to the urban area and the
urban area is generally characteristic of irrational land use disposition,
inefficient and ineffective land development and utilization, uncontrolled
physical deterioration, acute housing shortages and environmental degradation
to a varying degree. On the contrary, urbanization can also be perceived as a
process by which the surplus human resources (in-migrants from rural area),
if subject to gainful emplyoment in non-agricultural activities will act as a
catalyst for economic development. Mere transfer of rural poverty to urban
environment can only result in misery. Alleviating poverty and improvement in
the general economy call for understanding of the basic issues in terms of
providing for job opportamities, enhancing resource allocation to. provide for
the basic services to ensure healthy environment and the urban management
system that is required to deliver such services. The emphasis on such
understanding becomes crucial from the fact that all the surplus agriculture
labourers are to be gainfuly employed only in non-agricultural activities. The
positive role of urbanization can materialize only if the cities are
System Dynamics '91 Page 591
economically viable and capable of generating economic growth in a sustained
mamer. The cities mast become economically vibrant centres making the best
use of human and natural resources “instead of remaining as isolated economic
entities. This calls for treating the process of urbanization as a part of a
mega strategy-of generating economic growth, not one of adhoc allocation of
residual funds for housing slum clearance, sanitation schemes and pumping in
of foreign funds for augmenting resources for such development. From the
overall national economic development view point, Urbanization is an economic
necessity and to be considered as a positive factor. Although there are good
prospects that it will proceed at an accelerated pace in the future, the
process of urbanization in India is mainly due to the “posh” factor of
depleting the rural income rather than the. “pull” factor of assured jobs in
the urban area. There are two distinct dimensions to the process of
in the economy on one hand, on the other hand it is also characterised by
enviromental imbalance. The process of urbanization viewed from these two
sides of contradiction leads to a basic question of whether or not to restrain
urbanization. However, conclusions drawn from several studies indicate that
inorder to achieve equity and social justice the national income must be
shared by urban and rural citizens by not adopting measures which will contain
the villegers in rural areas and not curtailing employment generation in urban
areas.
Poverty can not be charactrised sufficiently in terms of incom,
expenditure or consumption patterns alone. Poverty is complex in context,
texure, characteristics, impact and implications. The thrust should be on
tuman degradation. resulting from poverty not only on numbers. Thus it becomes
imperative to focus attention on mltidimensional concept which encompasses
the living environment, access to services and social and psycological
supports. This calls for systematic examination of macro policies and
programmes for their positive and negative effect on urban poverty and urban
poor. It also needs to be appreciated that the urban and rural . poverty are
inextricably interlinked; which at the same time does not. mean that. urban
poverty is the spill over of rural poverty. It is, and has to be considered as
autonomous and independent phenomenon and the whole urban system is
responsible for its ills or well being. This is further strengthened by the
inescapable situation that however effective and efficient the rural
employment programe may be, meeting the demand for millions is an uphill task
and a vast rural segment will still continue to migrate towards urban | centres
in the coming decades. Thus the enormous influx will have greateer impact on
employment. and poverty. Thus urban and rural poverty are two different
dimensions and needed to be addressed simultaneously. Countering the forces
responsible for underdevelopment by strengthening the forces of growth can
achieve optimum development of growth potential. This can be achieved by
avoiding misdirected developments causing depletion of the essential resources
responsible for widening inequality.
2.1 URBAN POVERTY ALLEVIATION-- PAST EFFORTS AND FUTURE NEEDS
PAST EFFORTS: |
Poverty alleviation programmes in the past were proposed based on the
strategy which included provision of gainful employment to the unemployed,
particularly women and youth raising the earnings of those in low paid jobs,
stepping up the productivity and earnings of self ewployed workers and
improving the access of the urban poor. ‘to basic amenities such as education,
health care, sanitation: and safe drinking water. While these programs
Page 592 System Dynamics '91
produced mixed results, conclusions drawn from the objective assessment of
these programmes indicated that the reach of these programme is limited, the
high degree of flexibllity and the lack of convergence of programmes missed
even the targeted population.
FUTURE NEEDS:
Future eforts needed to formulate programmes for poverty alleviation by
enhancement of income and employment opportamities need to be considered as a
mega strategy for long and short term benefits. Employment training programme
can be a rational progranme aimed at training to suit to the needs of the
industry or for self employment. For successful self employment programmes
similtaneous efforts mast be directed towards credit support. facilities for
micro-enterprises, technological . upgradation to make the enterprises
economically viable, and infrastructure development support.:for marketing and
production. Promotion of new programmes for creating public assessts will
generate gainful employment to the urban poor. However «success of these
programmes greatly depend on the degree to which extension of basic services
in terms of formal and non formal education facilities, family planning and
health education support, shelter improvement schemes and extension of public
services coupled with appropriate subsidy programmes.
2.2 URBAN FINANCE AND MANAGEMENT- PROBLEMS AND PROSPECTS:
PROBLEMS :
The local bodies responsible for maintaining the “City Services” are
perenially short of resources both for maintenance and creating new stock
required to meet the demand created by the ugly consequences of urbanization.
Phenomenal growth of slums and unplanned development, absence of services and
the ruming dowi of those that already exists; encroachment. on public land and
underutilization of prime lands in urban centres; inefficiency in the
management system and the emergence of urban chaos reflect on the paucity of
funds with the urban administration. This can be corborrated by the share of
-mmicipality in the overall governmental expenditure by Centre, State and
Local governments combined as 8% in 1960-61, it had declined to less than 4.5%
percent in 1984-81. On the contrary the urban population from about 16% of the
total in 1960-61 increased to 24% in 1984-81 and during the same period the
municipal revenue registered an increase of 15% per annum when conpared to
17.5% in -the case of Central and State revenues. Increasing dependence is
noticed for financial support from State government in the form of grants and
loans due to declining tax revenue. To add to the crisis, there is niether a
System of guaranteed non-plan assistance for maintenance of facilities created
by other governmental agencies established to attend to specific
developmental sector nor the mmicipal bodies are free to impose adequate user
charges. In the absence of a system of regular devolution of State funds to
local bodies and preparation and implimentation of State plans combining
mmicipal plans also, the schemes funded and executed through different.
agenceis remain isolated and unmaintained. The mmicipal bodies although
vested with powers to collect taxes from several activities of the city are
subject, to State government control. and the revenue is not commensurate with
the increase in the level and intensity of activities. The system of taxing is
more often used as a tool to meet political ends rather than a effective
system of regulating the city developments.
All~ governments, particularly the city govrnment should function on the
basis. of funding of its programme through tax revenues. Besides refining the
System Dynamics '91 Page 593
existing tax structure, new areas of tax potential should be brought under the
ambit of system deviced to enhance the resources of city government. Business
ventures (including industries) are located at centres where there are
economies because this makes good economic sense. The contribution by the
business houses towards. maintenance of the services availed by the industry is
virtually nil. While new ventures induce economic activity and urbanization,
the economies of urbanization which should really be treated as social
resource are thus converted into private resource by the business commmnity.
This trend needs to be reversed and appropriate revenme harnessed to augment
the soGial wealth of the city. Simultaneous efforts are needed to be
undertaken to streamline the system of utilization of the generated resources
of the industry for restructuring the city instead of allowing the entire
resources generated to keep the obsolete industries fimctioning. by which
parts. of city getting decayed can be prevented and introduction of new
ventures to revitalize the growth of the decaying parts promoted.
URBAN MANAGEMENT:
Urban management is yet to be liberated from the Utopian approach.
Creation of several agencies to plan and impliment individual sectors of urban
organ has not been effective in solving several problems confronting the urban
area. Since the planning and implimentation is entirely the responsibility of
individual agencies which are already facing great difficulties in generating
their own resources, are ineffective in fulfilling the demand. The schemes are
adhoc and piecemeal in character, thus creating grave imbalance between the
sectors as the schemes are not formulated on a comprehensive basis. Methods
based on capital budgeting, pricing, costing and accomting are very rarely
used as tools. Creation of several agencies in the urban areas have reduced
the basic functions of a “City Government” which is entirely responsible for
the improvement and development of urban areas. Resource generation and
allocation on comprehensive basis, based on the sectoral needs priorities and
the urban development. policies needs to be done under one umbrella for
achieving optimm results. Thus there is an imperative need to form an urban
government.
2.3 ESSENTIAL ENVIRONMENTAL FACILITIES- PROBLEMS AND PROSPECTS:
The Essential Environmental Facilities of an urban area includes; ~Basic
Services” which reflect the basic needs of the population. Examples of such
sectors are; water supply, sewerage, storm water drainage, solid waste
managment, roads, park and play fields. These sectors are wholly financed by
the public authorities out of the general revenue of the local body or the
State government. The second type of services which are termed as
“Supplementary Services*are; education and medical sector. Although the
supplementary services can also be classified as “Basic Services’, the
difference lies in the major involvement of private sector. The third form of
service is the ‘Special Urban Services” namely; ‘transport, Housing,
Comamication ete which operate on commercial basis, whether operated by
public sector or private sector. Major componenets of urban managment are;
providing and maintaining the basic service and involvement to a greater
extent in the suplewentary services too. There are several deficiences in the
area of planning, implimentation, financial resource allocation and management,
in providing for these facilities in adequate quantity and quality.
The “basic services” sector needs to be developed cornmensurate with the
population growth arising out of urbanization. Provision of basic services in
adequate quantity. and quality can itself act as an economic activity
Page 594 System Dynamics '91
generating enormous employment opportumity. In the absence of adequate returns
from the existing services facility stock, over utilisation, lack of
maintenance and very low contribution from the State and Central Governments,
these service facilities are grossly inadequate and inefficient. Neither there
is a long term plan for creation of new stock nor a short term programme to
upgrade the existing stock. Capital budgeting is conspicuously absent to
address the needs and priority of each sector and the overall financial need
which in turn will focuss attention on policies and programmes for resource
mobilisation. A ‘systematic assessment of the exiting and future deficiency
levels of the facility stock, economic engineering and managemnt,
shortcomings and future requirement is the basic need of the hour. Delivery of
these services ‘jin adequate quantity and quality is a formidable task
especially in urban ares where one third of the population has a very low
affordability, a vast majority~is. lower or medium affordable group and the
rest (about 22%) fall under the high affordability group Since optimun
returns for the services will depend on the affordability characteristics of
the commnity to be served, it becomes crucial to device appropriate subsidy
Programmes, so that the needy benefitted the most. The sectors like solid
waste management needs application of appropriate technology for waste reuse,
recycling and disposal. Basic services as a whole should be conceived as a
major source of employment wherein skilled and unskilled urban unemployed can
be utilized gainfully. This in turn will enhance the affordability
characteristics of the urban poor and the level. of participation in the
economic activity will also simultaneously be increased to sustain the urban
development. momentumn.
2.4 NEED FOR SYSTEMS DYNAMICS APPROACH:
Symptoms of “Higher order urbanisation is highly pronounced by the
chaotic conditions prevailing in Indian cities. This is the stagnation stage
wherein further growth is severely hampered because of poor management system.
To reverse the situation and to foster urban growth there is an imperative
need for policy and investment intervention either to speed up or channalize
the process of both and calls for initiation of realistic urban development
programmes. It is equally important to understand that how should the
investment be conceived and directed and what should it achieve?. Planned
investments certainely call for satisfying several sets of questions. However
the most pertinent issues that it should strive to achieve are (i) meet the
challenges of the felt needs and priorities, which means that (ii) it should
perform with greater operational efficiency and effectiveness, (iii) it should
be cost effective and provide for higher financial return. At the same time
(iv) it should be operational within the constrained financial resource base.
Further it should lead to (a) a sectorial policy (eg. low cost ana
environmentally acceptable Housing programmes and job training programme) (b)
the sectorial or total investment programme given the development objectives.
To state the obvious, it is not an easy task to achieve all of them,in a short
period of time given the socio-economic fabric of the population. The. whole
Process needs an appropriate and scientific tool, which could address. the
sectorial systems in a form which could be easily understandable by the city
managers and the people for whome the programmes are intended. It ‘is
imperative that this scientific approach represents the dynamic
characteristics of the urban system and ewbodies all the sectorial parameters
which have clearly. estabilished inter-relationships and act upon each other so
that sectorial information feed back is established on vital issues. Figure.1
establishes the. concept of Urban Development Model. This approach also .needs
System Dynamics '91 Page 595
FAMILY PLANNING
PROGRAMME YN 7
e POPULATION REGIONAL
\6 ’ QO er REGIONAL vr
(
BIRTHS. of INMIGRATION PROGRAMME
k-) -
(co)
ae ig
JOB TRAINING
PROGRAMME
OUTMIGRATION
JOB
OPPORTUNITY ECF) ¢
+)
aa JOB
T
ff (ORGANISED PROGRAMME
SECTOR) \.
2
EDUCATION
PROGRAMME
5 ae fees
INFORMAL
‘es a (29 SECTOR
6
GOVERNMENT rm)
fy! Ft —
even \FFORDABILITY
Xe Ne) INFORMAL
EXTERNAI SECTOR
SOURCE OF i BASE 5 UPGRADATION
FINANCE
TAX SUBSIDY,
PROGRAMME
PROGRAMME
FIG. 1. CONCEPTUAL FRAMEWORK OF AN URBAN
DEVELOPMENT MODEL.
Page 596 System Dynamics '91
to focus attention on a set of control parameters on variables, which when
acted upon based on policy perspectives and priorities, should clearly
with long and short term desired results. Considering the validity and
suitability of the “Systems Dynamics” principles put.forth by Jay.W.Forrester
an urban management model can be formilated. Thus the conceived model should
address the following issues pertinent to developing countries particularly
India.
(1). The first and the foremost issue is the increase in the affordability and
literacy level. The entire urban management system needs to be based on this
issue which is considered to be vital for any urban management programme.
(2) The serious problem of population growth and the importance of family
plaming programmes in alleviating poverty and enhancement of literacy.
(3). Plaming and management of EE facilities and their relevance to different
age group and affordability levels of different segment of population.
(4). The impact of EE facilities standards in terms of quantity and quality on
the natural and social increase of population.
(5). Relevance of costing and pricing of the services inaccordance with the
affordability characteristics of different segments of population for
identification of resource implications and resource generation through
appropriate tax structure.
(6). Exercising control on both natural and social increase of population
through economic activity by appropriate incentives and disincentives.
(7). Generation ‘of ewployment opportumities and job training programmes in
tame with the need and demnd to foster increase in the affordability
characteristics and economic upward mobility.
(8). Creation of new ventures for employment generation, and reorientation of
informal sector to bring it under the fold of organised sector for gainfull
employment.
(9). Need to evolve a system which can narrow dow the existing deficiency
levels and to achieve long term benefits.
(18). It is vital to ensure that the Plan period in the Model does not ‘exceed
more than 20 years to be realistic.
System Dynamics '91 Page 597
REFERENCES:
12.
13.
14.
Jay W Forrester 1961. Industrial Dynamics
Jay W Forrester 1968. Principles of Systems
Jay W Forrester 1968. Urban Dynamics
Jay W Forrester 1974. World Dynamics
Jay W Forrester 1974. Systems Analysis as a Tool for Urban Planning-
Readings in Urban Dynamics Volume-1I:13-28.
Jay W Forrester 1975. Collected Papers of Jay W Forrester.
Michael W.Laird 1974. Dynamic Migration Model~Readings in Urban
Dynamics Volume—I:75-86.
Michael R. Goddman and Peter M.Senga 1974. Issues of Emperical Support
for the Migration Formations in Urban -Dynamics- Readings in Urban
Dynamics Volume-I:87-122.
Natheniel J.Mass. 1974. Business Structure and Economic Activity in
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. Natheniel J.Mass 1974. Self Learning Revival Policies in Urban Dynamics-
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Thiruwarthy A.M, Etsuo Yamamura and Seiichi Kagaya.1987. A Study on the
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Thirunurthy A.M, Etsuo Yamamura. 1988. Delivery System of Essential
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