Cities “advertisers” for foreign direct investment

Urban areas are not just regions that build up hope and aspirations of many but they are primary catalysts of economic development and prosperity across the world. The Urban areas are regions that generate enormous economies as the platforms for production, trade, innovation and generating formal and informal employment.

In its latest report “The Value of Sustainable Urbanization, World Cities Report 2020”, and the UN Habitat has come up with a series of findings for sustainable urbanisation.

Urban areas accelerate economic growth:

The report states that cities are “advertisers” for foreign direct investment as they are abodes of trade regimes, labour force, infrastructure and institutions. It says that urban regions are also places of integrated knowledge creation and diffusion networks, which create productivity. It also said that spillovers like diffusion of innovation and technologies from urban regions promote regional and national growth.

Sustainable urbanization:

The UN Habitat states that that value of sustainable urbanisation lay in its contribution to productive employment. It said that sustainable cities allowed for more economic opportunities for everyone that included marginalised groups and people with disabilities. This ensured that all the people come under the productive scale.

 COVID-19 restrictions and economic impacts:

It is a known fact that the economy, especially in the urban regions was much badly hit because of the pandemic. This has resulted in loss of job and revenue especially in the informal sector. The report points out that the population in informal settlements and slums were more economically vulnerable as they relied mainly on daily earnings from informal sector. The UN Habit report also mentions of the millions of informal workers in India who returned to their villages when urban jobs were hit. Informal employment was also hit badly because of covid 19 pandemic.


Property rights, land use regulations and poor transport systems:

In several of the developed and developing nations, the poor implementation of property rights or land use regulations have an impact on the economy. Lack of sustainable urban transport systems have resulted in higher commuting costs and less inclusive cities

Key Messages

  • Urban and territorial planning with the support of adequate governance needed to enhance economic value of urbaniasation
  • Local and national governments need to strengthen their urban productive capacities
  • A paradigm shift needed for urban planning and governance frameworks
  • As cities make progress toward realizing the SDGs, more economic value of urbanization should be enhanced
  • Economic growth and consumption potential of cities should be manage in ways that support achievement of sustainable development outcomes
  • Leverage density but protect against crowding
  • Governance, institutional, policy and legal frameworks should be aligned to local realities
  • Effective municipal financing



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