The Global Urbanist

News and analysis of cities around the world


How should private developers take responsibility for Manila?

Manila's urban landscape is characterised by ineffective government planning alongside strong, ambitious private sector developers. Arguably, the city will only develop economically if the private sector takes over the role of planning the whole metropolis. But this means jettisoning Western ideas about government control and transport funding, and requires that developers take their responsibilities to the urban poor very seriously. This may scare Western readers, but there are signs Manila's developers are ready.

Kerwin Datu

Cities: Manila

Topics: Integrated planning, Transport, Development authority, Private sector governance, Poverty and inequality

Planning paradigms in Europe and North America usually assume that it is the government's role to set the strategic direction for urban development, and the role of the private sector to help implement that strategy, their desire for profits regulated by the government's plans.

Yet in Manila, in other Filipino cities, and to a lesser extent in Indonesia, Malaysia and Thailand, governments lack the financial clout of their Western counterparts to influence planning effectively. Here the most strategic urban planning is often driven by the private sector, not government.

London's Canary Wharf and Paris' La Défense were initiated by the Thatcher government and successive French presidencies, but Manila's business district Makati was established by the Ayala Corporation, one of the Philippines' largest companies. And private developers have not only built metro rail lines for the Philippine government, but have proposed whole new lines unsolicited by any of its planning initiatives.

Clearly the Western paradigm of a sophisticated government orchestrating private developers is inappropriate. The question is, if only the private sector have the means to direct metropolitan planning, how should they now take responsibility for the metropolises of Southeast Asia?

Taking responsibility for the urban poor

If economic and strategic planning power rests intractably with the private sector, then it is time for developers to take their social responsibilities very seriously.

This requires a fundamental change in logic. Rather than proposing infrastructure projects to leapfrog unwanted parts of the city, developers must learn how to orchestrate metropolitan development as a whole. And rather than looking to exclude the poor from new developments, the private sector must find ways to include them profitably.

At the moment, its business model relies on excluding the poor to create new retail and residential experiences for the middle class. This occurs not only by gating residential communities, but by excluding the cheapest transport systems from entering commercial developments. Makati prohibits the operation of tricycles, used by the poor as taxi services; the giant Mall of Asia prohibits un-airconditioned jeepneys from its shuttle bays.

Yet these precincts rely on the poor whether their intended audience likes it or not. They are built by the poor, their households served by them, their shops provisioned and staffed by them. The poor must be seen not simply as labour, but as an untapped consumer base with housing, transport and retail needs denied to them by the lack of integrated economic development in their cities.

Developers take inspiration from projects in South Korea and Singapore. Rather than simply admire the sophistication and consumerism of those projects, they should understand the social history behind them — that they were made possible by rapidly developing the economy of the urban poor to create a broad middle class. Manila's developers need to invest in the long term future of the poor to reap the same gains.

Developers need to ask themselves the following questions: How can adequate housing be weaved directly into the fabric of new urban developments? Right now, the housing of labourers and staff is 'outsourced' to informal settlements, which will continue to grow hand-in-hand with modern developments unless properly integrated within them.

How can affordable transport be woven through private projects, rather than requiring workers to walk in from outside the district as many do now? How can compact developments combining the rich and poor reduce the cost of universal access to water and sanitation? How can incorporating a variety of food markets reduce the cost of food provision to all residents?

The ultimate payoff for developers who can compute the benefits of these synergies is a greatly expanded consumer base, and vastly reduced inefficiencies due to patchwork urban development and burdensome security costs. None of this will happen inevitably, but Manila has many talented entrepreneurs who can do a world of good if they focus their energies on the economic development of the whole city, not simply their own lands.

A new model for metropolitan transport

Private developers must also rethink the metropolitan transport model handed to them by the Western planning paradigm. In the West, a strong government plans the system and maintains it through subsidies and ticket sales. The fiscal benefit of these systems is the rise in property prices along new transport routes, which is captured by local government taxes and reinvested through its subsidies.

Yet no part of this model is a natural fit in Manila. The government is not strong, tax collection is feeble, and the bulk of potential commuters can't afford the tickets.

Instead, the private sector is strong, the poor are willing to spend on retail, rent collection from retailers is effective, and land on the periphery is cheap. These opportunities suggest a different transport model for Manila.

How does a shopping mall owner think of transport? Malls bring shoppers to their doors by offering free shuttles, which pay off in increased sales and reduced costs to staff. Can this model be applied across a whole metropolitan area? Integrated developments are planted at every rail station already; how much increased business can be generated by connecting all such developments in the city with free transport?

We know that cities with slum settlements cannot eradicate them without expanding urban areas to provide adequate land for their population. Right now, an underfunded government relocates slum dwellers to the periphery without effective transport and infrastructure, entrenching them in poverty.

Alternatively, developers build free transport systems out to the same areas and make vast profits by building fully integrated projects on the very cheap land available there. This would open up space in the city and serve as a sustainable model for the reintegration of slum dwellers into the wider housing market.

The new lines proposed by the private sector failed to meet this model in two respects: they did not seek to integrate the poor, thereby reducing their potential customer base; and they still asked for government subsidies, instead of calculating all the internal synergies of the project.

Public space and private foundations

Stepping up to the metropolitan scale also gives private developers responsibility for a city's network of public space. It is time for private developers to stop building simulacra of public space, and start planning real cities. Why build shopping malls that look like open streets, when one can build real streets? Why build residential compounds, when one can build residential neighbourhoods? Why build display gardens, when one can build public parks?

All of the arguments in this article are usually made with reference to increased profits over the long term. But it is not really necessary to explain everything back to a profit motive in this way.

In Manila, the private sector has increasingly taken a very active interest in its social responsibilities. The largest companies have established major philanthropic foundations capable of significant development projects, such as cleaning the Pasig river. It is time for these companies to take the next step of intervening in the metropolis as a whole, to recognise their power to reshape cities for the better, and use their entrepreneurial talent to lift those communities up wholesale out of poverty.

And it is up to thought leaders such as ourselves not to resist with derivative models of government planning, but to help those sectors that wield power to channel it more beneficially.


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