Urban Economy Forum 2019

Introduction

    UN Sustainable Development is one of the main agendas in the development of communities and societies; cities have the potential to play a pivotal role in realizing SDG’s in the world. An avenue that has been created in order to realize progression is Envision 2030 https://www.sustainabledevelopment.un.org. This agenda contained 17 Sustainable Development Goals (SDG’s) that have been adopted by the United Nations (UN) General Assembly in September 2015 with a goal of realization of 2030. 
   
    Through executing the international conference in Geneva, Switzerland and the success of the round table at The Munk School in Toronto, Canada, we would like to introduce UEF’s inaugural event Urban Economy Forum on October 28th & 29th, 2019 in Toronto, Canada. It is through the process of hosting the past events that we present this forum to be a world-class pavilion in the sphere of urban economic resource.

Message

    If urban economy is at optimal functioning capacity according to the New Urban Agenda and Sustainable Development Goals, we can expect that the executive sector move well too. Urban Economy is the adoption of an approach to urban development, and when we discuss financial resources of a city, it is the principles a city is committed and the importance of it to said city. Perhaps prior to discussing plans for urban development, it is vital to first focus on urban economy and to come up with the appropriate strategies that align with international standards such as SDGs and NUA.
    Urban Economy and Municipal Finance is an interdisciplinary subject matter that tackles development matters, and is a fundamental component of the development engine. Urban Economy is the output of urban management; it is the engagement of urban lives and urban management issues. Urban economy is a highly contextual matter, and it is rooted in the concept of the urban context. It can be concluded that any changes in urban economy could bring changes in urban management approaches and vice versa and it impacts the quality of life in its participants. These facts display the importance of urban economy.
    Innovation plays an integral role in promoting suitable economic models. In other words, it is the projects that define the approaches. However, urban Economy is based on approaches and plans. The workspace of municipalities is project-oriented rather than plan-oriented. Therefore, a comprehensive plan must be devised to shape these programs worldwide so municipalities have precedent to follow. This is the primary role of UN-Habitat. UN-Habitat has the ability to define special innovations on urban economy, which can be formed based on technology. This can include small residential complexes, small cities, towns or parts of a city. According to new technologies, it is important to come up with accurate assessments of cities to determine their capacities, researching sustainability of resources and precise algorithms that provide precise depiction in relation to the country’s economy and local capacities. For this to be achieved it requires good planning and networking so cities may benefit from innovations. This will provide a clear picture of their expenses and incomes and then turn their capacities into economically valuable assets presentable to banks and financiers.
    It is, therefore, imperative to establish a dialogue between the two major stakeholders; municipalities and banks. Urban Economy Forum and UN-Habitat was designed to create the space in which the dialogues between major stakeholders in urban economy and municipal finance can take place. The handbook titled “Urban Economy for City Leaders” which is in alignment with our previous cooperation with UN-Habitat for the handbook titled “Finance for City Leaders” will be a major component in the shaping of topics and discussions. We need to address urban economy in a collective way and UN-Habitat shall be steering it and we urge countries to allocate necessary financial resources for city assessments. The approach allows for changes for a sustainable urban economy, realization of sustainable development goals and the beginning of joint activities with banks and financial institutions. It is a vital initiative in creating a global effective network.


Marco Kamiya
Co-Chair
UN-Habitat, Head Urban Economy Branch



Objectives

•    Learning and exchange of best practices on financial issues and financing solutions of city management regarding the SDGs and the CPI framework

•    Developing and applying principles of healthy finances based on the global Rapid Assessments for finance by UN-Habitat Urban Economy and Finance Branch in cooperation with UNDESA and IMFG (University of Toronto)

•    Creating an international platform for mayors, financial officers and banks.

•    Creating an interactive global network of city leaders, urban development organizations and financial institutes

•    Launch World Mayoral Network with the aim of creating a, “Global Community of City Sustainable Urban Economy,”  global community of Mayors and Urban Leaders

•    Given the importance of the New Urban Agenda (NUA) and Sustainable Development Goals (SDGs), UEF will make an effort to play its part in promoting and aiding their implementation.



Approaches
A fundamental step towards realizing these goals is learning and exchanging of best practices in high and middle-income countries. By taking a balanced approach that addresses urban planning, economic and environmental issues, the UEF 2019 will provide senior banking and municipal finance officials with an unrivalled opportunity to share common challenges, learn from best practices and prepare a practical response for global communities. This forum will be an opportunity to increase knowledge on:


Financial Urban Assessment
•    Urban Economy & Municipal Finance; opportunities, challenges, priorities
•    Discovering financial urban resources on various scales
•    Rapid financial assessment
•    Urban assessment for urban economy, using CPI Methodology as a tool
•    Bank Loans and Bonds
•    Urban Recession; tools to measure and circumvent

Future
Youth; creating, innovation for the future of urban economy

Environmental
•    Supporting climate change dialogue
•    Blue urban economy
•    Securing financing for investment in green growth policies and infrastructure



Themes

I.    Infrastructure and Capital Budgeting
Cities in all parts of the world are faced with the mandate to use their finite capital resources to provide and maintain basic infrastructure and services in the most cost effective way possible. This requires making difficult choices about the best allocation of funding. Models for capital investment planning and funding prioritization range from simple to highly technical, from transparent to opaque, and from siloed to interdisciplinary. Finding the right approach depends upon local capacity, budget size, stakeholder interests, and the extent of local responsibilities. This topic will be explored to examine good practices and success stories in order to facilitate cross-city learning with attention to contextual factors and issues of local capacity.

Special issues for middle-income countries: Many cities in middle-income countries are growing rapidly, with urban population expanding faster than funding for extension of infrastructure and services. The result is the growth of informal and underserviced settlements lacking the most basic human necessities such as clean water and sanitation. At the same time, the existing urban fabric which frequently serves the existing economic engine of the city must be maintained so that it does not fall into disrepair and undermine the urban economy. Difficult tradeoffs exist for the prioritization of infrastructure projects. Where there are fragmented social and political divisions, these decisions become even more difficult. City leaders must find tools that help them to weigh the costs and benefits at hand in objective ways to support informed public discourse and decision-making. These tools must be simple enough to match the capacity of local leaders and enable rapid analysis so as not to delay critical investments.

Special issues for high-income countries: Local governments in high-income countries have a broader range of tools to choose from based on their capacity and the existing institutional frameworks for planning and decision-making. Benefit/cost analysis in high-income countries can incorporate a wealth of data and research into models of life-cycle costs, travel behavior, the real estate market responsiveness, business growth, and other impacts of infrastructure spending. However, multilayered trade offs in capital budgeting still exist and must be carefully managed. In some cities where population growth has slowed or even leveled off, extension of developed land still continues at a disproportionate rate, requiring growing operation and maintenance expenditures per person. At the same time, aging infrastructure must be rehabilitated or replaced in order to preserve urban functionality. Spatial inequality and the specific needs of varying business interests add additional complexities. Selecting the appropriate tool to assist in infrastructure prioritization must consider the city’s unique position and interests.

II.    Financing Local Government and the Role of Commercial Banks
In cities throughout the world, there is a financing gap between the expenditures required to meet social, economic and environmental goals, and the resources available to local governments. The private sector can support the closing of this gap. Leveraging the capacity and resources of private commercial banks holds potential to this end. Even in high-income countries where municipalities have very good access to capital markets, the involvement of commercial banks can help cities find the right financial product for key projects. The experiences of cities in this area will be share to promote cross-city learning and support initiatives to broaden the financial options available to cities in both high and middle-income countries. Ways to match the right projects with the right financial products will be explored.
 
Special issues for middle-income countries: In many middle-income countries, creditworthiness is a first step toward accessing financial products, including from commercial banks. These cities must focus on basic financial management including budget predictability and control, transparency, and capacity for administration of revenue sources. Cities also often need to build capacity to develop bankable projects. Many cities have experience in delivering social assistance projects but lack knowledge about income-generating public investments. Because cities in middle-income countries represent enormous untapped financial potential, commercial banks have an interest in partnering with governments to develop bankable projects.

Special issues for high-income countries: Many high-income countries already have access to a range of options for subnational borrowing. However, many smaller communities face larger economic challenges and at the same time may not have extensive experience in bond markets. Commercial banks can fill a lending niche or support bond issuance through underwriting. Commercial banks can bring efficiencies in risk assessment and loan management, and help to spread the assumption of financial risks between the public and private sectors. In some cases, national governments can work to bolster the offering of competitive commercial bank products to municipalities through the offering of long-term low interest credit ( for example, as in Czech Republic).

III.    Financial Governance of Municipalities
Innovative financial tools rely on an enabling set of rules and regulations. The clarity and strength of the regulatory framework is particularly important for PPPs, land-based financing, and access to borrowing. Issues of vertical coordination are important to consider: the ability of sub-national governments to change or utilize regulatory frameworks is often linked to national-level legislation. Another consideration is financial governance at the metropolitan level which, if structured well, can enable savings from economies of scale and coordination. Policy approaches will be shared and considered in the context of good governance and innovative financial management.

Special issues for middle-income countries: In middle-income countries, there are often barriers to sub-national borrowing embedded in national-level frameworks. Policy change to enable a wider range of financial tools should enable sub-national governments to achieve higher financial independence and responsiveness to local needs, while at the same time protecting sub-national governments from excessive risk taking. Extra attention must be paid to matching legislative frameworks with capacity for implementation. Enabling policies should in many cases be paired with enhancement of basic revenues and capacity building for local governments.

Special issues for high-income countries: In high-income countries, particularly those partnering with the private sector, including commercial banks, shaping the right sub-national regulatory framework is a way to manage risk for both the government and private sector parties. Because there are many regulatory options for supporting efficient financial management, there is potential for cities to learn from the experience of others in terms of innovative and successful approaches, as well as ways to mitigate challenges faced.

IV.    Real Estate & Municipal Finance
With large amounts of municipal resources coming from the real estate market it is a vital component of municipal finance.  The increase and decrease of the market is intricately intertwined in urban economy, municipal policies, and the quality of life that residents aspire and attain. Real estate is the pulse of a city; its opportunities and challenges are directly linked to the success or failure of a city and provide a snapshot of the future of development opportunities and challenges of a city.  Although there are many factors that affect an economy the real estate market provides a bulk of its operating budget (i.e. Toronto 33% from property taxes). By having efficient urban management it allows for a city to utilize the resources they acquire to be wisely reinvested in development projects that plays a major role in the stimulating the economy and providing sustainable positive externalities. By city leaders, mayors, councilors etc. networking effectively with stakeholders of real estate (developers, agents, lenders etc.), it opens up dialogue regarding needs of municipalities that can filled and reciprocated. By cooperating with each other they also have the ability to lead urban economy with a strategy in the direction and that benefits the municipality as a whole.
The UN’s SDG’s & New Urban Agenda provides a compass towards sustainable development for municipalities to work towards. Current situations show that there is a disconnect between the optimistic sustainable development goals of developers and the capacity of municipalities, by working towards mutual ambitions it ensures that urban economy remains the focus and all stakeholders, (developers, banks, municipalities, jobseekers etc.) benefit from the growth.    

V.    Blue Urban Economy
With the ocean covering about 71% of the earth’s surface it plays an integral part in how the world’s population functions and lives. Nearly 40% of the worlds population lives in costal cities and 15 of the 22 mega cities is a costal city, it is imperative that blue urban economy be at the forefront of decision-makers agenda. Because of the continuous migration trends of people moving to larger urban cities the blue urban economy has great challenges but also great opportunities for growth and change. Local governments play a vital role in blue urban economy because it’s their policies and regulations that will result in well-planned resilient cities that can thrive from the benefits of healthy oceans, and other bodies of water. A healthy blue urban economy can play a major role in job creation, raising standards of living for communities and grow a robust local economy. United Nations Sustainably Development Goals, goal 14, “Life Below Water,” is intended to spark people’s realization that in order for the world to continue growing in a sustainable manner, taking care of the oceans is critical.  

Rationale

    UN-Habitat’s Urban Economy Branch is responsible for urban economy and municipal finance projects, working both to provide support to field projects and to develop international guidelines, tools, and good practices. A global network supports the work of the UEB, including universities, research centres, think tanks and independent experts. In the area of municipal finance, UEB works to support field projects around the world, including revenue enhancement, land value finance, property tax reform, creditworthiness, bonds, infrastructure financing and other areas of technical advising. UEB has also produced a number of international initiatives and training session, including a handbook on Finance for City Leaders, a toolkit and training on land-based finance, a methodology for rapid financial assessment, and guidelines for financial planning for planned city extension. In addition, the branch is working with partners to map global urban expansion and create a global municipal database with a public finance focus.

    Following the Geneva Conference on Municipal Finance and Urban Economy, Platform for Municipal Finance and Urban Economy in collaboration of UN-Habitat would like to organize an Urban Economy Forum on October 29 & 30 2019. This forum will be held to present final reports and agree on recommendations that can be piloted by commercial banks and local governments in a number of cities. Also, the forum will launch a handbook on Urban Economy for City Leaders

    The forum will provide an opportunity to bring together a number of leading partners to highlight key principles and strategies of municipal banking. Financing the growth of cities and the livelihoods of their inhabitants are among some of the greatest challenges facing leaders around the world. Creative approaches are required to build awareness across finance and government sectors to better design, build, and finance our cities are agents of development, in reference to the urban SDGs.

Side events
Side events will include a Mayors forum, possibly split by country group, and case study or topical workshops on topics such as rapid financial assessment, land-based finance, municipal credit unions, urban development corporations, and PPPs. World Mayoral Pavilion Network would be another side event as well.

Partners and Sponsors
Urban Economy Forum will explore different partners to (1) assess current financial resources and solutions in different countries, (2) have case studies on local infrastructure financing and (3) find case studies and best experiences on property tax and land value management. The main partners in UEF 2019 will be:

•    Academia: University of Toronto
•    International Organizations (i.e. ICLEI, UCLG, WCS, etc.)
•    Canadian Organizations, banks and financial institutes
•    Local and central government with some cases from high to medium income countries

Audience
•    Banks & Funds
•    Financial institutions, investments firms, insurance companies
•    Municipalities
•    Real estate market (developers, lenders, agents)
•    Universities
•    Research Centres
•    International Organization
•    UN officials
•    Private Sector


Date and Venue
October 28 & 29 2019, Toronto, Canada

Finance
•  Tickets will be sold based on purchase date (early registration, regular registration, late registration)
•  Sponsorship package available upon request
•  UEF will be making a financial contribution and writing collaboration to publish a handbook on urban economy

Secretariat
The secretariat of forum is located in UEF building which is located 36 King street E, Toronto, ON, Canada. All of the correspondence would be performed through the E-mail Address: info@ueforum.org

Steering Committee decides on the priorities, manages the general course and determines the criteria for accepting papers and presentations. The steering committee is responsible for the long-term evolution of the forum. The steering committee members will be selected from academia, international organizations, local governments and banks.

Keynote Speakers will be professionals, scholars, government officials whose knowledge and expertise in their fields will be headlined at the forum.

Secretariat will handle all administrative and regulatory aspects of the forum; including registration, ensuring that attendees are getting the most of the forum, and networking opportunities are realized.

Registration Timeline: July 10th –October 23rd 2019


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