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Urban Development

Projects include innovative areas such as violence prevention and culture

The Inter-American Development Bank in 2003 approved 18 loans totaling $929 million in financing for urban development projects in a wide variety of areas, including water and sanitation, housing, transportation, violence prevention and culture.

Many of last year's operations will help to strengthen the increasingly sophisticated managerial capacity of municipal governments in the region to plan and carry out projects and to foster the participation of citizens in planning and implementing new initiatives.

Latin America is one of the most urbanized regions in the world, and a steadily expanding portion of IDB lending is directed at meeting the urban population's needs for housing, water and sanitation, and transportation.

"The Bank's urban development portfolio is proof o the continued concern of urban governments for addressing the most dire and pressing needs of their citizens," said Eduardo Rojas, IDB principal urban development specialist.

The growing importance of urban development will be highlighted by a seminar set for the IDB's March 2004 Annual Meeting in Lima, Peru, on innovations in integrating different social groups into the urban development process. The program includes a session in which mayors from Latin America and Caribbean cities that have been implementing social integration policies meet with their counterparts from the Bank's non-borrowing countries.


Among the IDB-financed housing operations last year was $60 million to Peru to support the first phase of a $200 million program aimed at introducing a wide range of reforms in the housing sector to mobilize the private sector for investment and increase the supply of homes for households in all income brackets. The resources will help provide subsidies for low-income homeowners and upgrade low-income neighborhoods, encourage private sector investments in lot development, improve infrastructure and services in low-income neighborhoods, and support an ongoing process of modernization of public administration in charge of housing and urban development.

A housing project in Colombia will assist in the consolidation of sector reforms allowing low-income people to purchase and improve homes. A $150 million IDB loan will finance technical assistance to strengthen sector institutions and finance approximately 61,000 subsidies for the purchase of homes for urban households earning between one or two minimum wages, or a maximum of about $250 a month. Another component of the program will finance 10,000 subsidies to improve existing low-cost housing units that lack basic services or facilities.

Water and Sanitation

Other IDB loans approved last year will help cities provide water and sanitation services to growing numbers of residents. In Brazil, a $100 million IDB loan will help improve drinking water and sanitation services and living standards in towns and cities in the northeastern Brazilian state of Ceará. In the capital of Fortaleza, the program will improve water quality along the beaches and in the rivers by expanding coverage of wastewater collection and treatment from the present level of 52 percent to 70 percent in 2008.

Urban Rehabilitation

Also in Brazil, an IDB loan for $100.4 million will help finance the renovation and transformation of the central core of the downtown area of Sao Paolo. In this industrial center, where poverty is still a serious problem, the program will finance the rehabilitation of buildings and homes, temporary housing for street families, establishment of high-technology service industries and regularization of informal businesses.

Settlement Upgrading

Improvements for shantytowns will be the focus for a new program in the metropolitan area of Guatemala City. A $46.8 million loan will provide access to basic infrastructure and sanitation services, as well as to improved social services, for 85,000 residents of 32 shantytowns in three municipalities of Guatemala City's metropolitan area. Projects will be chosen in close consultation with the beneficiary communities.

Emerging Urban Issues

Sao Paulo will also benefit from an innovative IDB project to finance cultural and artistic activities to promote social inclusion of at-risk children and youth. The program, which will be financed by a $20 million IDB loan, will include courses in art, music, theater, sculpture, design, woodwork and multimedia. Studies shave shown that arts education improves overall academic performance of children and youth, social inclusion, family unity and citizenship. Communities will participate in designing and evaluating the activities.

IDB lending for urban development also includes programs to prevent violence. Last year the Bank approved $20 million to Honduras to help reduce juvenile crime and violence through social prevention services, the strengthening of institutions responsible for security and the promotion of activities against domestic violence and to help former mara gang members integrate into society in 17 municipalities in the Valle de Sula region.

Cities as Engines of Growth

Over 75 percent of Latin America's 523 million inhabitants live in cities, and 49 cities in the region have a population of over one million. Four of them are among the 10 largest in the world: Mexico City, Sao Paulo, Buenos Aires, and Rio de Janeiro.

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