UNCHS (Habitat) Regional Symposium on Urban Poverty in Asia
Fukuoka, 27-29 October 1998

The Informal City
by Arif Hasan

1. The Informal City Is Not Only Informal Settlements

If this paper had been written two decades ago, one would only have written about informal settlements for that is how the informal city was perceived. However, today the informal sector in Asian cities provides a large range of services, not only to informal settlements but also to the formal sector. These services include water, transport, generation of jobs and skills, solid waste management, education and health facilities, and warehousing and storage for trade and commerce. There is intensive interaction between the formal and informal sectors and they service each others needs increasingly.

This paper will deal with the physical and social changes that have taken place over the past two decades in informal settlements and in the informal provision of services and jobs. It will also deal with changes in the perceptions of government and other formal sector actors in the informal city drama and how these relate to the Habitat agenda. The city of Karachi will be considered as a case study to illustrate the issues that the paper identifies as important.

2. Informal Settlements

2.1 Changes in the Nature of Settlements

There is no need to give the reasons that lead to the development of informal settlements. These reasons have been given again and again and are well understood. All that needs to be said is that in spite of two Habitat conferences and the 1987 UN Year for the Shelterless, the building and the bulldozing of informal settlements increases every year, if not in percentage terms then certainly in scale (Ref.1).

However, the nature of settlements and their location has changed over time and it is necessary to understand this change and what it means to the city as a whole. The earliest settlements were developed on private land as land rentals or through unorganised invasions of state and private land by migrants from the rural areas. These developments took place between 30 to 40 years ago and were within or just outside major Asian cities which were comparatively small cities at that time. Most of these settlements have ceased to be. They have been replaced by commercial complexes and residential apartment blocks. They are now within the inner city and their residents have relocated elsewhere. The settlements that do survive are under threat of eviction.

The next phase of development of informal settlements was through illegal but organised subdivision of state and private land. These settlements are farther from the city centre and the extent of their de-facto security of tenure, which the majority of them seem to have, depends very much on government policies. Due to their favourable location, their densities are increasing and in many cities they are becoming extremely congested.

The cities of Asia have expanded into the rural areas and this expansion continues. This means that villages become urbanised and agricultural land is informally subdivided and sold to the poorer and lower-middle income residents of the city. Due to inflation and the increasing difficulty of acquiring land for house building, land prices have increased considerably. As such, the lots in these new subdivisions are becoming increasingly smaller, access roads narrower, and open space non-existent (Ref.2). In addition, these ad hoc subdivisions are causing considerable ecological damage.

Given the increasing cost of land, informal settlements are continuing to develop in ecologically dangerous areas such as areas that are prone to flooding and land slides, waste lands and old quarries. Where such areas lie within the city, the residents are removed since the areas are considered dangerous, and through building of appropriate infrastructure they are made safe and constructed upon by formal sector developers and/or state agencies.

Large scale relocation settlements have also been developed in many Third World Asian cities. These settlements are often 20 to 30 kilometres away from the city centre and poor residents from bulldozed areas are relocated here. Although these are formally planned settlements, their residents build their homes in a process similar to that of informal settlements. In addition, they more often than not, have no social or physical infrastructure. This also they acquire in a manner similar to that of informal settlements. One can safely say that these are the informal settlements of tomorrow. Their main problem is the absence of an efficient and cheap transport system that can take them to their places of work which are within the inner city or on its periphery.

All the settlements described above have been created and developed through middlemen. It was they who brought low income residents as renters on private land. It was they who arranged for the subdivision and sale of state and private land by establishing an informal understanding with corrupt government officials. It was they who often negotiated with government and politicians for infrastructure and protection against demolition. It was they who today negotiate with agricultural sector landlords and state officials for acquiring agricultural land, planning its subdivision, often in defience of state laws, and arranging the necessary financial deals. This immense knowledge of identifying appropriate beneficiaries, planning and delivering services at affordable prices, and negotiating with relevant interest groups, is an asset that state agencies do not possess. Without this asset they cannot deliver land and services to the poor.

2.2 Social and Physical Changes

Major social and physical changes have taken place in the informal settlements that have survived and these changes have often been transferred to new settlements that have been created. For an informal settlement to survive there are two basic requirements. One, security of tenure, and two, infrastructure, especially water and electricity. To acquire these communities have had to organise themselves and form associations. In many countries giving a formal shape to the organisation is necessary so that it can be taken seriously. As such, many organisations are legal persons and have elections, audits and rules and regulations. This brings about a major cultural change in poor communities and establishes a more equitable relationship with state and formal sector organisations.

Over the years communities have also learnt that they cannot acquire infrastructure and tenure security simply by lobbying politicians. Where a level of de facto security is available, they invest large sums of money in building their own infrastructure and improving their homes over time as they feel these investments increase their tenure security in addition to providing a better environment. Their struggle for tenure security brings them in conflict against a powerful developer's lobby supported by bureaucrats and politicians that wish to evict them and build on their land. It also brings them in conflict against a lobby of consultants, contractors and government planners who promote insensitive projects which ultimately displace them. Therefore, increasingly residents of informal settlements opt for taking the matter to court or seeking the support of the press. These actions again create a new type of leadership in these settlements and bring the informal settlement closer to the formal processes. A number of important judgements have been given by the courts in this process which are considered "pro- poor" and are important precedents for future court actions.

It has been observed that in the processes described above, those settlements which have external support have a greater chance of success (Ref.3). For example, where NGOs and professionals have given technical support to communities, infrastructure quality has been much better and its cost has been cheaper. Insensitive government projects that displace people have also been abandoned or altered if communities have been able to present estimates of damage that the projects would cause along with viable alternatives. Again, such estimates and alternatives have invariably been prepared by concerned professionals and NGOs. Also, in the struggle of informal settlements against the land hungry, politician-bureaucrat-developer nexus, the press and NGOs have played an important role and communities are learning to access this support increasingly.

However, the most important change that has taken place in informal settlements is that trade, commerce, manufacturing and education has developed in them. This, along with the struggle against the various lobbies that operate against them, has produced a large number of leaders and activists who are constantly in touch with formal sector agencies and service providers. What is also important is that this leadership and its activists belong to the second generation of informal settlement residents. Unlike their parents or grand-parents they are not pioneers. They have a claim on the city and have an urban culture. Hence, it is not in their nature to accept marginalisation quietly, and much of the violence and conflict that Asian cities face today is the result of the marginalisation of the second generation of informal settlement dwellers.

The state agencies, more often than not, do not know how to relate to this new leadership. This is because the manner in which the state thinks and functions has not undergone more than just cosmetic changes whereas sociological change in the informal settlements is immense. Because of this state functionaries are uncomfortable with the new leadership and it is this leadership that is increasingly determining the economy and the politics of low income settlements.

3. Informal Service Delivery

A number of services are delivered by the informal sector in Asian cities. This informal sector has a close link with the informal settlements. The most important function that the informal sector fulfills is the creation of jobs and employment. In most Asian cities over 50 per cent of jobs are generated in this sector and in certain cases they may be as high as 76 per cent (Ref.4). With inflation and recession (in many countries both of these are in double figures) formal sector industries let out piece-meal work through small contractors to families in informal settlements. As such, they bye-pass laws related to the minimum wage, working hours and employment regulations. In addition, numerous small workshops and manufacturing units in the more established informal settlements produce consumer items for the city as a whole and for formal sector industry, and increasingly for its international partners. Also, surveys suggest that most skill development related to manufacturing, light industry and management of businesses is developed within the informal sector itself through apprenticeships. These skills are then transferred to the formal sector and upgraded if necessary. The major problem that informal businesses and manufacturing units face is the absence of credit and advice for the expansion of their work and production. Whenever they require funds they have to borrow at exorbitant rates of interest from the open market (so they borrow only small funds for short periods) or from the middlemen and contractors who exploit their labour (Ref.5). Where funds at normal bank rates have been made available through NGOs, almost always without colateral, the informal business have expanded, generated jobs and faithfully paid back their loans. Without the labour force and the entrepreneurs of the informal city, most urban economics of Asian countries would collapse.

In many Asian cities, informal sector loans also finance transport. It is through such loans that the Karachi and Jakarta mini-buses, Manila jeepnis and Dhaka rickshaws are financed. These modes of transport are the backbone of the transport industry in these cities. The informal sector has invested billions in this process. The relationship between the financiers of these modes of transport, their owners, the police, and the transport department of the city is also informal and is not based on any larger transport plan. However, in all these cities there are transporter's associations that constantly negotiate with government agencies so as to guard their gains and present their claims. They have an understanding of delivering transport to the poor at affordable rates which government agencies do not seem to have. Again, in cities such as Phnom Penh and Bangkok, there are informal motorcycle taxis that, in the absence of formal sector provisions, take care of the transport needs of the city.

In delivering land and housing the informal sector's major problem is not the acquiring of land but of acquiring tenure security for the land that has been acquired. Even where the land can be purchased by people living on it, credit for land purchase is not available to the poor because they can offer no collateral and because they are not "loan-worthy". However, housing quality has improved wherever de-jure and de-factor security of tenure is available. The vast majority of these houses are constructed by small building contractors or skilled masons (with support from the house owners) who live within the settlements and who often provide materials on loan and cash loans to their clients as well (Ref.6).

Again, in almost all Third World Asian cities, residents of informal settlements organise to manage the solid waste disposal within their neighbourhoods even if there is no security of tenure. In addition, in most Asian cities there is a large informal sector which collects and recycles all inorganic solid waste. This generates considerable employment and takes care of the major problem related to the disposal of inorganic materials.

In many South and South-East Asian cities, the provision of warehousing and storage has not kept pace with the expansion of wholesaling and port activities. Here again, an informal sector provides these facilities and labour for them. Again, in most informal settlements health facilities are provided by informal private clinics, many of them practicing traditional medicine. Also, where government facilities are not available, schools are also opened by the informal sector and are surprisingly affordable to the residents (Ref.7).

4. The Informal City and The Limitations of Government Planning

Over the last 20 years, the attitude of governments to informal settlements and practices has become one of comparative tolerance. Because of political expediency, informal settlements in almost all Asian cities now officially have a vote, councillors and services such as water, post offices, police stations, government clinics and schools. However, the standards for informal settlement developments are well below those for formal settlements.

In spite of these changes, the formal city residents and most planners continue to view informal settlements as parasites, drug-pushers, criminals and land grabbers. This perception has created difficulties in the implementation of many innovative government projects and prevented them from expanding into national programmes.

Some of the more important state programmes are the Community Mortgage Programme (CMP) in the Philippines; the Kumpung Improvement Programme (KIP) in Indonesia; the Katchi Abadi (squatter settlement) Improvement and Regularisation Programme (KAIRP) in Pakistan; and the Million Houses Programme (MHP) in Sri Lanka. In conceptual terms, the CMP is the most important of these programmes because it provides loans to the communities not only for building a house but also for acquiring land and infrastructure. The MHP was perhaps the more successful of these programmes but once political support to it was withdrawn, it could no longer operate effectively (Ref.10).

It is not necessary to describe these programmes since their objectives and methodology are well known. However, apart from the MHP, the other three suffer from the same problems. One, that they are on too smal a scale to make any difference to the over-all housing and settlement situation. Two, communities require technical advice and managerial support to access these programmes and to implement their part of it. Such support is not available from government institutions. In the rare cases where such support has been provided by NGOs and concerned professionals, a large measure of success has been achieved (Ref.11). And three, state inputs regarding infrastructure have been poor in quality since contractors and their government supervisors do not consider work done for low income communities as important and communities do not have the expertise to supervise this work or the political power to prevent it being substandard.

Most Asian cities have some form of a master plan. However, in the planning process the representatives of the informal settlements and the informal sector service providers are never involved. Their point of view and their interests are not considered and the immense knowledge that they have on how the city really functions is not made use of. Consequently, most urban planning, physical, social or economic, is based on wrong assumptions, most of which are drawn from the First World planning experience.

As a result of the non-involvement of the informal city in city planning, insensitive projects that displace communities are constantly approved and often funded by international agencies. In addition, infrastructure development plans do not document or accept the work that has been done by the communities at their own cost. The powerful informal sector lobbies related to land, transport and solid waste, do not become a part of the plans related to their respective sectors. And the politician-bureaucrat-developer nexus is able to sabotage those aspects of development plans that are not in its interest.

The above process is aided by the fact that most planners and administrators are conventionally trained and do not have an understanding of and links with the informal city. Their main objective is to integrate the informal within the formal. If this happens (luckily it can not) then the poorer sections of the city will not be able to afford the cost of urban services, and jobs for large sections of the urban population will not be generated.

5. The New Agenda and The Informal City

Almost all Third World Asian countries have been subject to structural adjustment and have adopted economic policies based on neo-liberalism. As a result of this, many of them are embarking on privatisation of service provision, education and health. In all these sectors previously there have been major government subsidies, both in operation and maintenance and in setting up of services and institutions. In most countries structural readjustment and the new market economy has been accompanied by inflation and recession. All these factors have led to an increase in the cost of services and the curtailing of government expenditure in the social sectors and in the development and O & M of physical infrastructure for the future. In addition, land has at last become unashamedely a comodity, and its sale or acquisition at subsidised rates for house building for low income groups, is going to be increasingly difficult.

The result of these policies is that the informal sector will have to find new ways for acquiring land and developing services for the poor. There is no doubt that as a result of these policies, informal settlements are going to increase and that their location will be well outside the city and on subdivisions of agricultural land or in ecologically unsuitable areas. Also, there will be a further densification of existing settlements. The informal sector will have to produce consumer items (such as soap, shoes, garments, automobile spare parts etc.) in larger quantities and cheaper prices, not only for residents of low income settlements but also for those of lower-middle and middle income settlements. This process has already begun, in both South and South-East Asia.

However, the most serious result of these developments is going to be the further division of the city into poor and rich areas. More so because neo-classical economic policies have introduced a powerful corporate sector as an important player in urban and national economics. Its life-style and culture is one of affluence and it has introduced a First World physical and social environment in its work and residential places. This conflicts with the reality, not only of the informal city, but also with that of the less affluent planned areas. This process of division is well on its way in many Asian cities. The rich increasingly live in ghettos, surrounded by armed guards and security services. Their recreational, educational and cultural institutions and activities are now also being located within their own areas, separated from the rest of the city.

What impact this is going to have on the informal settlements or what their response will be is yet to be understood. However, there are a few trends that are important. One, that the informal settlements are producing more aware and educated activists and leaders who have a close link with formal sector institutions. Their awareness level, and those of their supporters, are helped considerably by the media revolution. Also, that an increasing number of professionals, NGOs and concerned individuals are forging links with the informal city, researching into its problems and lobbying on its behalf. Yet, it has been noticed that their links are stronger with the more developed informal groups and settlements and that their relationship with the really marginalised groups, soon becomes a patron-client relationship. In addition, the power of the informal sector, both as an independent entity and as a support to formal sector institutions and processes, is increasing. And finally, in the political process, the vote bank of the informal settlements is resulting in the promotion of a populist political culture. All these trends, conflict with the neo-liberal policies of the state and with their emphasis on privatisation and market values for land and services.

6. The Poverty Alleviation Agenda

To mitigate the adverse effects of the new agenda described above, the poverty alleviation concept is being promoted and applied in a big way. The effect it has having in Pakistan is, to say the least, alarming for both the formal and the informal city. The term poverty alleviation is creating a mind set that increasingly ignores the causes of poverty and seeks only to address their effects. The fact that poverty is the creation of macro and micro level economic and physical planning is conveniently set aside.

In the urban areas this mind set has already created a de-facto situation where two different methodologies, one for the rich and the other for the poor, have evolved. They have different standards, technologies and procedures of implementation. For the poor areas, the technologies and standards are still in the process of experimentation and exploration and are as such half baked.

As a result, official plans in Karachi for instance, give the poor areas as compared to the richer areas, less water per capita; poorer road specifications; open drains and soakpits for sanitation instead of underground water borne sewerage; and less public open space per capita although the poorer areas have higher population densities. In addition, in the rich areas private health clinics administer immunization whereas in the poor areas immunization camps are set up although most poor areas also have private practitioners. The architecture of government facilities, for the rich and poor areas has also started to differ considerably. The list of differences in planning standards and procedures is endless. These trends, most of which are now being supported by poverty alleviation programmes, along with the privatization of university education, are dividing our cities for good and creating conditions for social strife and civic conflict. There is a need, above everything else, to question the financial allocations that considerably favour the richer areas rather than the shared institutional, recreation and cultural spaces of the city centre and the low income residential and work areas. Here it must be said, that unlike the past, there are strong lobbies in the urban areas today that, if supported by legislation, can pressurise the state into changing its inputs and planning processes so that they are more equitable. Unfortunately, most of these lobbies have also started to look at our cities as two separate entities which require two separate forms of development.

The methodologies and strategies of a number of important NGO development projects are being promoted for poverty alleviation planning. The fact that the principles and procedures developed by these projects are equally valid for the richer areas of the urban centres is completely ignored.

The mind set described above has entered Pakistani universities, research organizations and most NGOs. Pakistan has been invaded by poverty alleviation experts and loads of money for poverty alleviation programmes. From the looks of it, it seems that we will soon have poverty alleviation as a subject at the university level, and after that we will have our own poverty alleviation experts.

Any policy orientation related to poverty alleviation must take into consideration the issues discussed above.

7. The Case of Karachi

Karachi is a typical Third World Asian city with a populist political culture. About 50 per cent of the city consists of informal settlements created by the illegal subdivision of state land by middlemen. An additional 20 per cent of the population lives in formally planned settlements who have built their homes informally through financial and technical support of small contractors. They have also acquired their infrastructure informally through "self-help".

The city requires 79,000 housing units per year. However, an average of about 26,000 housing units per year have been produced through formal processes over the last 5 years. The rest of the demand has been met through informal and illegal subdivision of state land or through densification of existing homes and settlements. As such, the informal settlements in Karachi expand at the rate of 9 per cent per year against a total urban growth of 4.2 per cent per year. Due to the support given to the housing process by informal contractors, the housing stock in the informal settlements in Karachi has improved considerably between 1969 and 1986 (Ref.12). This work of the informal sector in housing and land delivery has so far not been integrated into official planning and nor has it been supported. Every plan over the last 45 years has attempted to curtail or finish off the development of katchi abadis and every plan has failed to do so.

A survey of 136 Karachi katchi abadis was carried out by the Orangi Pilot Project. These katchi abadis have a total of 79,426 houses in 8,479 lanes in them. 81.6 per cent of these lanes have built sewer lines at their own cost and over 90 per cent of the homes have linked themselves illegally to government water supply systems. The people and their councillors had invested over 203 million rupees (US$ 3.4 million) in this work. However, this work is never integrated into official sewage and water supply systems being planned and implemented under various programmes which are supported by international loans. If they were, the projects would be a fraction of their present costs; they would be completed in a fraction of the time it takes to complete them now; and the poor, instead of the contractors and consultants would be their beneficiaries.

The informal sector also plays a very important role in the provision of transport in Karachi. 72 per cent of Karachi's commuting public uses 13,500 mini buses. These mini buses have been purchased by individual operators with loans from the informal sector. The operator pays for them in installments over a three to four year period. The payment he makes is about three to four times the actual cost of the bus. So far the operators have paid over 27 billion rupees (US$ 450 million) for buses whose actual cost is less than 12 billion rupees (US$ 200 million). These buses operate on about 750 kilometers of roads. There are no bus terminals, depots or workshops for them and the roads serve these purposes causing huge traffic problems. Government plans never try to improve these services or to integrate them appropriately in city transportation planning. It is worth noting here that a recent plan for a mass transit system for Karachi is going to cost over 39 billion rupees (US$ 650 million) for a 13 kilometer light rail (Ref.13).

Karachi generates about 6,000 tons of solid waste every day. About 2,600 tons of this is separated and recycled through informal processes at over 400 recycling units. The yearly turn over of these units is 1.2 billion rupees (US$ 20 million) and they provide employment to over 40,000 families. Solid waste management plans of the local government not only totally ignore this reality, but actively work to destroy it.

The most important role of the informal sector in Karachi is in job generation. According to the Karachi Master Plan 2000, just over 76 per cent of the population of Karachi works in the informal sector. In 1972 this figure was 66 per cent. Informal sector business houses and manufacturing units are mostly located in informal settlements or in the formal areas of the inner city and port. Surveys of the informal settlements of Orangi (carried out by the OPP) which have a population of one million plus, show that there are 42,000 small workshops and businesses in the settlements which employ about 150,000 people or over 50 per cent of the work force. Because of this, almost 68 per cent of Orangi residents work within their homes or walk or cycle to their work places. No formal sector loans are available to these informal units with the result that they cannot expand their businesses and generate more jobs and better incomes. However, it is because of these informal job and income providers that Karachi's class complexion has changed over the last few decades and the lower middle class has become the dominant group (Ref.14).

Similarly surveys of Orangi show that there are over 400 private clinics in Orangi and only 18 government and formal sector health facilities. In addition, there are only 72 government schools and over 700 private schools, most of them set up initially as informal ones. Yet, there are no government programmes for supporting private health facilities or using them for preventive health purposes; or for supporting the creation and operation of private schools through teacher's training, loans for physical improvements, or development of appropriate curriculum.

Karachi's port activity in 1951 was 2.8 million tons per year and 96 per cent of it was by rail road. The entire storage capacity for this activity was available at the Karachi Port Trust storage terminals. In 1991, this port activity was 26 million tons and 78 per cent of it was by road. Formal sector storage facilities could only accomodate 50 per cent of the need (Ref.15). The rest of the need, both for warehousing and cargo terminals, have been fulfilled by informal arrangements in the old city where old building have been torn down and replaced by warehousing on the ground floor and male only labour dormatories above.

The most serious problem in Karachi however, is the rapid consumption of all land for commercial development through a powerful politician-bureaucrat-developer nexus. Even historic buildings of considerable cultural importance are being demolished illegally and being replaced by commercial complexes by this nexus. This is denying the city space for much needed infrastructure and for low income housing. It is also denying the city space for recreation and community and cultural activities. Even in the informal settlements open spaces are being occupied and there is a constant struggle between informal settlement residents and land developers to present this from happening. In this struggle, many lives have also been lost. The main problem that communities have in protecting open spaces is the absence of access to landuse plans, land ownership papers, corridors of power and to a system of justice in the courts of law. Connected to the land issue is the promotion of grandoise projects consisting of expressways and mass transit systems that displace people and do not build on what already exists or on what people are doing. It seems that Karachis' planners and its politicians consider Karachi's needs as only commercial and residential and that too for the income groups who can pay for them at inflated prices.

In recent years, a number of Karachi professionals and middle class citizens have come together to struggle against what they call "the land mafia" and against insensitive government projects that do not solve the problems of the city. In this struggle, their main support comes from the informal city consisting of community activists from informal settlements and the informal service providers. Where this struggle has been aided by professionals and scientific research, there has been considerable success against deeply entrenched vested interests (Ref.16).

Two organisations, both NGOs, have had a considerable impact on government thinking (if not policy) in Karachi. These are the Urban Resource Centre (URC) and the Orangi Pilot Project (OPP). The Urban Resource Centre does research on Karachi's problems with the involvement of the informal city actors and thus, this research has a strong populist bias. It has created a space to share this research through forums with community representatives, informal sector service providers, professional and academic institutions, and government planners and bureaucrats. This has resulted in a understanding on how the city really functions and the press has taken up these issues (for profile of URC see Appendix 1).

The Orangi Pilot Project on the other hand, carrying out research on the processes in informal settlements and tries to understand who-does-what-and-how and who-gets-what in the process. It also identifies constraints and potentials in the process and supports the work of the people and the informal entrepreneurs through technical advice, credit (no grants) and managerial advice. As a result, its work has improved environmental conditions in informal settlements and created a more equitable relationship between government agencies and communities on the one hand and between small entrepreneurs and loan-sharks and formal sector contractors on the other hand (for profile of OPP see Appendix 2).

8. The Habitat Agenda and Its Implementation

In 1996 at the second Habitat conference, the nations of the world committed themselves to six important things. These were: adequate shelter for all without discrimination; sustainable human settlements (socially and economically equitable and integrated); agenda for enablement (decentralising authority and resources, promoting access to information); gender equality; financing shelter and human settlements; and, assessing progress (support to UNCHS). However, it must be said that this agenda is not the agenda of Asian governments who are now committed to neo-liberal economistic policies.

Even if that were not ture, given all that has been said in this paper above, the Habitat agenda cannot be implemented unless the process of the formal and informal cities to become one on equitable terms is initiated. It is often said that if effective local government is created, and its capacity and capability is increased, and if devoluation of power takes place, then appropriate planning will be possible and that will bring the two cities together. However, in the opinion of this author, devoluation of power without a change in the mind set of the planners and the methodology of planning, will not bring about any major changes in the formal-informal relationship and nor will it necessarily result in a change in land policies and project identification and development priorities. For this to happen a number of important steps will be required.

To bring about the change that can ultimately integrate the two cities, four important steps need to be taken before or along with any devoluation of power. These steps are: One, a space for interaction between government agencies, interest groups (formal and informal) and communities must be created, nurtured and institutionalised over a period of time. This means that citizens and interest groups have to be supported by scientific research and the media so as to interact effectively with government agencies and deeply entrenched vested interests in the development, consultancy and real estate business. Two, all plans at city, sector and/or neighbourhood level must be publicised at the conceptual stage and objections and suggestions should be invited especially from formal and informal interest groups, professional and academic institutions, and from the beneficiaries and victims of the plans. Only after this process, should detail work on the plans be undertaken. Three, steering committees for various policy decisions, plans and implementation processes must be created. These steering committees must have a representation of NGOs, relevant formal and informal interest groups (for example, for transport related plans, representatives of the formal and informal transporters must be on the committee) and professional expertise in them. In addition, these committees must have executive power. And four, all public sector institutions must prepare and make public a list of their real estate holdings, its current and proposed landuse and market value. Such real estate holdings should by law only be used for the benefit of the city and its poorer sections of the population and not as a commodity or for the development of commercial complexes. In addition, no landuse change should be permitted without proper public hearings and again decisions on them should only be taken by committees of interest groups, NGOs, concerned professionals and representatives of communities which are likely to be effected.

In this manner, the emphasis on increasing the capacity and capability of government agencies will be replaced by an emphasis on transparency and accountability. As it is the old agenda of increasing capacity and capability has failed miserably in spite of huge investments in it. This is because the assumptions in government planning, especially when dealing with the informal city, were not based on reality and an understanding of how this city functions (now ofcourse the two cities are closely interconnected). In addition, the emphasis has also been on getting the sector and poor communities to support these government plans rather than the government plans supporting the good practices of the informal sector and regulating the bad ones sympatheticaly.

However, to make the four point agenda outlined above successful, and to bring the two cities closer on equitable terms, it is necessary to understand how the informal city functions, who its actors are and what are the relationships between these actors and between the informal sector and the formal institutions. Unless NGOs, interest groups and concerned professionals are armed by such a research, they will not be able to play their role which is crucial to the success of such an agenda.

For the agenda to be successful, it is also necessary, that professionals and administrators who understand both the formal and informal processes and are sympathetic of the former, should take over as city planners and bureaucrats. This can only happen if academic institutions that train professionals and administrators change their curriculum and anchor it in the larger social reality of the city and in its political context. Where changes in curriculum have taken place, changes in policy and implementation procedures have shown signs of developing within a decade. Such changes also result in the development of people and environmental friendly consultants and planners.

Appendix - 1

Profile of Urban Resource Centre, Karachi

The Urban Resource Centre (URC) was set up in 1989. Its general body and executive committee consists of urban planning related professionals, representatives of NGOs and grassroot community organisations and teachers at professional colleges and universities in Karachi.

The objectives of the URC are to create a space for interaction between CBOs, NGOs, professionals, private (formal and informal) sector interest groups, academic institutions and government agencies so as to increase awareness and make planning more responsive to social and environmental issues. To make this possible, the Centre carries out research on all major urban development projects and problems in Karachi and then holds forums in which the government planners and the beneficiaries (usually the rich) and the victims (usually the poor) of these plans are invited. This interaction has generated debate and discussion in the press and brought about substantial changes in how problems and planning are viewed by government agencies and different stakeholders. The URC also holds forums in which poor communities interact with each other and identify their problems and how they can be solved. The URC then puts these communities in contact with relevant NGOs and professionals who can be of assistance to them. The URC's work is published through reports and a monthly publication entitled "Facts and Figures" which gives details with statistics of what has transpired in Karachi during the last month.

As a result of URC's work, the Karachi Mass Transit Project was modified considerably because of pressure from citizen's groups and was made more environmental and cost friendly. Also, due to the information and alternatives supplied to communities living on the Lyari River corridor, the Lyari Expressway, which was going to uproot 125,000 people was abandoned. The Expressway project has been replaced by the northern bye-pass for which the URC pressed. In addition, some communities have begun to build their own sewage systems, and/or to monitor government work in their localities effectively, because the URC put them in contact with the OPP and resource individuals.

The URC also has a training programme for young people in low income settlements so that they can actively assist their communities through technical and managerial support.

Appendix - 2

Profile of Orangi Pilot Project, Karachi

Orangi Pilot Project has been working in Orangi, a low income settlement of one million population in Karachi since 1980. OPP considers itself a research and training institution whose objective is to analyse outstanding problems of the poor living in Orangi and through action research and extension provide solutions. OPP believes in the development of existing managerial and financial potential of an area. It promotes community organisation and management by providing social and technical guidance to collective action. In 1986, the OPP's sanitation and housing programme were converted into OPP-RTI and its credit programme into the Orangi Charitable Trust (OCT).

Based on the above principles, the OPP operates the following programmes.

Low Cost Sanitation Programme

This programme enables low income families to construct and maintain an underground sewage system with their own funds and under their own management. For this programme, the OPP provides social and technical guidance (based on action research), tools and supervision of implementation. The OPP's work has shown that people can finance and build underground sanitation in their homes, their lanes and neighbourhoods. This development is called "internal" development by the OPP. However, people cannot build "external" development consisting of trunk sewers, treatment plants and long secondary sewers. This only the state can provide. In Orangi, people have invested Rs 73.15 million on internal development in 5,823 lanes consisting of 87,734 houses. The state would have spent over six times this amount to do this quantum of work. The programme is being replicated in 7 cities of Pakistan by NGOs and CBOs and in 49 settlements in Karachi by the SKAA. As a result of the programme, infant mortality in those parts of Orangi that built their sanitation systems in 1982, has fallen from 130 per thousand to 37 in 1991. A number of projects of government-OPP collaboration have or are being implemented where the state is building the external and the communities, supported by OPP, are building the internal infrastructure.

Health Programme

The OPP's health programme consisted of developing women's organisations at the lane level in lanes that had built their sanitation systems. A mobile team of experts gave advice to such organisations, through discussions and meetings, on common diseases in Orangi, their causes and ways of preventing them. It also gave advice on hygiene, immunization and family planning. As a result, 90 per cent of households that were part of this programme, immunized their children and over 45 per cent families adopted birth control. However, the OPP could not reach more than 3,000 families through this method and the project was revised.

The revised model has now been introduced under which the health programme imparts training on primary health and vaccination to local lady teachers, managers of family enterprise units and doctors in private clinics thus anchoring the programme institutionally in schools, private clinics and family enterprise units. A health centre is operated at OPP office which provides vaccines and family planning supplies to the activists in these centres.

Family Enterprise Economic Programme

This programme is run by the OCT which was formed in 1987. The OCT borrows from commercial banks and then on lends to small family businesses but without red-tape and collateral. These loans vary between Rs 1,000 and Rs 75,000. The aim of these loans is to increase production and generate jobs. Loans are usually given to people who have expertise in what they plan to do or are already operating businesses. Interest is charged on the loans at the current bank rate of 18 per cent. Presently, there are 6,016 units being supported by OCT loans of Rs 110,701,260. Out of these Rs 80,450,626 have been paid back with a mark up of Rs 19,706,611. The recovery rate is 97 per cent. The World Bank has also given a grant as a revolving fund for the programme.

OPP's Education Project

OPP tries through social and technical guidance to improve and upgrade the physical conditions and academic standards of private schools in Orangi. Physical improvements are made with loans from OCT and advice from OPP's sanitation and housing programme. Academic improvements are made by arranging teacher's training through existing relevant organisations; provisions and use of libraries and audio-visual aids; and publication of manuals and guide books.

Financial support is extended during three stages of establishment of these schools. One, a small start up grant of Rs 3,000 to Rs 6,000 for setting up the schools. Two, within a year the school is institutionalised and then arises the need for physical expansion. This amounts to Rs 20,000 to Rs 30,000. This support is very important for the survival of the school. And three, loan for upgrading is needed as the school is by now a formal education institution and can take loans which can be repaid through its income.

OPP has provided 356 loans to such schools. Teacher's training through Allama Iqbal Open University is also being coordinated. The education entrepreneurs also hold their monthly meetings at OPP office, where they share information on registration and teaching methods.

OPP Housing Programme

OPP's low cost housing programme provides loans and technical assistance (based on research) to building component manufacturing yards in Orangi so that they can mechanise their production, improve their products, train their staff and increase their production. In addition, the programme also trains masons in using the new technologies and components that are being developed at the manufacturing yards. Also, house builders are given advice on how to relate to the manufacturing yards and masons and also advice on design, light, ventilation and other hygiene related design aspects. To provide such advice, the OPP is in the process of training para-professionals who are mostly young unemployed youth from the Orangi communities and who will then be paid by house builders or those who want improvement to their homes to help to assist them. The OPP housing programme thus tries to create a more equitable relationship between the actors in housing drama, as a result of which housing has improved in Orangi.

Impact of OPP Programme

International and government agencies, NGOs and CBOs are all in the process of trying to replicate OPP programmes or develop their programmes on OPP principles. So far, working with government has not been very successful except at the level of some projects. However, work with some NGOs has been most successful. The main constraints in the replication of OPP concepts is one, the absence of appropriately trained technical persons in low income communities; and two, the difficulty of conventionally trained bureaucrats and professionals in government to relate to the social dynamics of low income groups.


1. Monte Cassim: The Housing Demand-Supply in Asian Metropolises: Dawood College-Aga Khan Program, Karachi

2. Kenneth Fernandes: Forced Evictions and Housing Right Abuses in Aisa 1996-97: City Press,Karachi

3. Arif Hasan: Seven Reports on Housing: OPP-RTI, Karachi, 1992

4. Karachi 76 per cent, Bombay 65, Jakarta 60. Quoted in Urban Housing Policies in a Changing Asian Context: City Press/ACHR, Karachi, 1997

5. Akhtar Hameed Khan: Orangi Pilot Project Programmes: OPP-RTI, Karachi, 1994

6. Arif Hasan: Study on Karachi's Fringe Areas: (unpublished) Karachi, 1988

7. Johan Silas: Housing in Surabaya

8. Aromar Rav: in a paper presented at a PLAN Conference in Sri Lanka, 1994

9. Akhtar Hameed Khan: Orangi Pilot Project Programme: OPP-RTI, Karachi, 1994

10. Susil Sirivardana: An Analysis of Poverty Alleviation Through Community Based Programme in Sri Lanka: paper presented at the RWCBP-UPA Seminar at Kuala Lumpur, May 1994

11. Example, the ADB funded sewage project under the Karachi Special Development Plan in Orangi, 1994. See Arif Hasan: Working With Government: City Press, Karachi, 1997

12. According to the Karachi Master Plan 2000, in 1970, 17.62 per cent of the Karachi housing stock of 490,000 houses was of a non-permanent nature.In 1986, only 8.4 per cent out of just over one million houses was of a non-permanent nature.

13. Figures provided by the Urban Resource Centre, Karachi, 1997

14. According to the Karachi Master Plan 2000, 14.42 per cent of Karachi's 51,000 households in 1973 were classified as the lower-middle income group. In 1989, 31.4 per cent of Karachi's 1.6 million households belonged to this group.

15. Figures provided by the Urban Resource Centre, Karachi, 1997

16. In Karachi, the Lyari Expressway Project, which was going to displace 125,000 households has been shelved as a result of community-NGO efforts.