By Shipra Narang Suri, Ph.D. Chief, Urban Practices Branch, Global Solutions Division, UN-Habitat and Federico Bonaglia, Deputy Director, OECD Development Centre

6 July 2021 - Cities and local authorities around the world have played a key role in the response to the COVID-19 pandemic, applying prevention and containment measures, providing swift humanitarian response, as well as taking the first steps towards post-pandemic recovery. They implemented nation-wide measures, but also experimented with bottom-up recovery strategies. Local authorities are an indispensable “ring” in the governance chain necessary to prevent and respond to pandemics and advance a One Health Approach.

At the same time, COVID-19 has spotlighted, amplified and exacerbated underlying structural inequities across cities, and the capacity and financing gaps facing local governments, especially in developing countries. The pandemic may have initiated or accelerated a shift towards a new urban paradigm of “inclusive, green and smart cities” but it is still too early to say whether cities in developing countries will be able to embark on this transformation. Confronted with massive increases in poverty and vulnerability, those objectives might look like less relevant, distant or even unattainable goals. Estimates from the World Bank and UN entities suggest that local governments may on average lose 15 to 25 percent in revenues in 2021. First-hand accounts from African mayors confirm they face phenomenal trade-offs and have to repurpose their scarce resources to advance a green transition to tackle the consequences of the pandemic.

As developing countries urbanise at unprecedented rates, cities play more important roles than ever in the attainment of the Agenda 2030, meeting the SDGs targets and ensuring a proper response to climate change and the loss of biodiversity (OECD-UN-Habitat, 2021 forthcoming). By 2050, cities will account for the majority of the global population. But these will not necessarily be, nor need to be, very big cities. In fact, over 2010-2030 cities with less than 1 million inhabitants will account for 32% of total urban population growth in Latin America, 38% in Asia and 47% in sub-Saharan Africa.

Among these cities, intermediary ones hold a particularly important and transformative potential. Intermediary cities are small and mid-sized settlements or agglomerations that connect metropolitan and rural areas, as well as different groups of cities within urban systems. They play a major role in connecting rural and urban populations to basic facilities and services and relieving infrastructural pressures that can be endemic to megacities. As on-going work by the OECD Development Centre and UN Habitat shows, they act as hubs for the provision of goods and services and the structuring of rural-urban linkages, thereby providing a conducive environment for job creation and income diversification (OECD and UN-Habitat, 2021 forthcoming). Driven by population growth and rural-urban migration, intermediary cities worldwide are projected to grow at almost twice the rate of megacities, with the fastest expected to be in Africa and Asia.

Thanks to their relatively smaller sizes, intermediary cities naturally enjoy certain benefits over larger metropolises. Due to their size, these cities offer opportunities for more effective governance and management, and may facilitate improved social cohesion, a greater sense of identity and belonging, as well as a balanced relationship with the surrounding natural environment. Intermediary cities bring local governments closer to their constituents, not only giving elected representatives a better understanding of the local needs and priorities but also facilitating inclusive participatory governance. For this reason, intermediary cities have a higher agility and therefore enjoy relatively easier decision-making processes, paving the way for greater investment and business opportunities, when managed effectively.

Despite this significant potential, these cities face daunting challenges. They account for the largest share of the urban poor and tend to have lower amenities and financial resources compared with larger cities. Often they lack targeted support from national or regional governments and are left out of the national urban development strategies.

If intermediary cities in developing countries are so crucial to achieving the SDGs, why aren’t they receiving more attention? The answer is complex. Part of it has to do with their (in)visibility: it’s easier to work with larger or more vocal local or sub-national governments. As in the well-known “drunkard’s search principle”, there is a tendency to search in the easiest places, rather than the ones that are the most likely to yield results.  Availability of good data is a problem when it comes to intermediary and small cities, rendering decision making more challenging, reducing attractiveness for potential investors, and, in the end, pushing these cities off the radar of national authorities and development co-operation agencies.

Failures by national government mechanisms to involve intermediary city authorities in policymaking, financial and institutional building processes have left many of these cities with systems, plans and codes that do not correspond with their needs and priorities. In turn, the weak legal, fiscal, technical and administrative capacity of intermediary cities is only likely to further exacerbate the deprivations and development challenges that their residents face, making this a vicious cycle.

It is therefore very welcome that the Italian G20 Presidency decided to highlight the relevance of sustainable urbanisation and rural-urban connectivity in the post COVID-19 global development agenda, focusing in particular on addressing the gaps that constrain intermediary cities. The G20 Ministers of Development and International Co-operation reconfirmed their commitment to support a global, inclusive and sustainable recovery, recognising the need to engage more closely with local authorities, notably those of intermediary cities, and promote a territorial and localised approach to the SDGs.

Localising the SDGs means transforming the goals into reality at the local level, in coordination with national frameworks and in line with communities’ priorities. More than 65% of the SDG targets (or 105 of 169 SDG targets) relate to the mandate of local and regional governments, who must work hand-in-hand with their national governments to localise the SDGs.

SDG localisation is a continuous and multi-dimensional process. The building blocks of SDG localisation include advocacy and awareness raising so that local and regional governments embrace the SDGs as their guiding framework for development, as well as policy, planning and budgetary alignment to the SDGs, which requires normative guidance, standards, and tools. The process also involves aligning projects and investments to the SDGs, which requires technical assistance, ability to assess SDG impact of investments, and matchmaking finance with impactful projects, and finally, monitoring and reporting on SDG achievement at the local level, which requires the appropriate indicators. Knowledge sharing, capacity-building and peer-to-peer support are essential to realise all these dimensions.

Unleashing the potential of intermediary cities in fostering an inclusive recovery and localising the SDGs requires a multi-level dialogue across local and national stakeholders and the international development community. Such a dialogue can help overcome the gaps identified above: in terms of data and knowledge, in terms of policy design and implementation, and in terms of access to financing OECD and UN-Habitat, 2021 forthcoming). There are effective solutions at local level that can be adapted and transferred from city to city. Local actors in countries at all levels of development can build innovative partnerships, as advocated in the development in transition approach to international co-operation. It is time to quit looking under the “streetlight” and move closer to where the “keys” are likely to be.

The time is ripe for scaling up efforts in support of intermediary cities and promoting greater synergies between local, national and international efforts to accelerate progress in the Decade of Action. The revamped UN-wide Local2030 initiative also calls for such joined-up action. OECD and UN-Habitat stand ready to answer the call from the G20, building and brokering knowledge, facilitating policy dialogues and peer-learning, and fostering partnerships to help address some of the critical constraints in the localisation of the SDGs.