Managing the Transition from the Village to
the City in the South Pacific

III. HOUSING

Throughout the Pacific, rural areas do not have a serious housing problem. The availability of secure land with a basic level of services, usually at no cost, easy access to appropriate building materials, community-based construction efforts and a limited need for finance together ensure that all households have adequate housing. However, in urban areas these basic housing inputs either do not exist or are unaffordable, especially for the middle and lower income sectors of the urban population. The formal housing market caters largely to the upper income groups because of the cost and access to long-term loans. Those without access to affordable housing are left to their own initiative and various ad hoc solutions are devised in the context of the prevailing land tenure and socio-economic situations.

A. International initiatives

The inability of the urban poor to access adequate housing is a universal trend and considerable efforts have been made at the global level by the United Nations and the World Bank through programmes such as sites and services and settlements upgrading, to ensure adequate and affordable housing for the poor. In the last two decades, the United Nations Centre for Human Settlements (UNCHS) has undertaken a series of initiatives to encourage governments to improve national housing policies.

The International Year of Shelter for the Homeless (IYSH), observed in 1987 and for which UNCHS was the organizing secretariat, marked a major change in the commitment of the global community to improve national housing policies. The programme for IYSH identified a number of innovative solutions in different countries to provide adequate shelter for the poor. The IYSH South Pacific regional workshop reviewed many of the key issues and prepared a series of recommendations for action to improve housing (Papua New Guinea University of Technology 1985).

The global momentum generated in the search for affordable housing for the poor resulted in the adoption by the General Assembly of the Global Strategy for Shelter to the Year 2000 (UNCHS 1988). This programme focused on "enabling strategies" whereby governments were to be facilitators, enabling the deployment of the resources of the private, household and community sectors.

A further development for assisting governments in improving their national housing policies was the development of the urban and housing indicators by UNCHS and the World Bank. The application of these has enabled all stakeholders to identify aspects of housing policy that acted as constraints to access to affordable housing. In the South Pacific these were thoroughly considered at the Global Shelter Strategy South Pacific Sub-regional seminar, held in Brisbane in 1993 (University of Queensland 1993).

These international and regional initiatives have assisted many governments to address constraints to the orderly operation of markets in the housing sector. The focus of international initiatives has been on formulating enabling strategies, with governments concentrating on establishing the institutional and legal frameworks for land supply, planning, infrastructure and housing finance, leaving it to people’s initiatives through the operations of the private sector, community and cooperative organizations and household efforts to seek housing solutions.

Many examples throughout the developing countries indicate that people, with only limited official assistance, build better and cheaper houses than government agencies. Many squatter and informal settlements have been transformed into regular suburbs over time, given the support of central and local governments to supplement people’s initiatives.

B Housing policy responses in the South Pacific

In the Pacific almost all governments have taken initiatives to address the housing problems of the needy in urban areas. In the absence of a viable private sector market, the official responses have been varied and have gradually changed over time.

The Fiji Housing Authority and the Papua New Guinea National Housing Corporation have accumulated extensive experience over three decades and have come up with a range of solutions. Their programmes provide a choice of housing solutions for different levels of affordability and preference. Serviced sites are provided for people to undertake self-building. The actual building operations can be undertaken on a self-help basis by engaging specialist trades people such as plumbers and electricians or by letting out a contract to a small-time builder. Other choices include complete houses or core houses for purchase, houses or flats for rental at subsidized rates, serviced sites and cash loans for self-building, settlements upgrading and village and rural housing.

A variety of factors have constrained their output, in particular the non-availability of a regular supply of land for development and the high initial standards for infrastructure required by the approving authorities, which place their products beyond the financial reach of many in need of affordable housing. The subsidies on the rental housing schemes could not be sustained for long and the reforms introduced during the 1990s in all Pacific island countries focus on the financial sustainability of public housing programmes.

The Papua New Guinea National Housing Corporation’s new policies are to develop serviced plots for leasing on a self-financing basis, to sell the existing housing stock while increasing rents on the remaining houses to market levels, and to leave rental housing construction to the private sector (UNCHS 1993).

In Fiji, the rental housing programme was initiated for the very poor who were not eligible for other housing solutions because of the levels of their income. They paid around 15 per cent of their income as rent but since the rental subsidy could not be absorbed into the financial restructuring of the Housing Authority the public housing rental programme was transferred to a newly created Public Rental Board. This body does not have the financial capacity to undertake a building programme to respond to the need. Consequently, the urban poor have a serious housing problem and church groups have taken some initiatives to provide housing solutions for the poor.

Other countries have limited experience in institutional responses to the housing need. The Kiribati Housing Corporation caters only for civil servants. The Samoa Housing Corporation is a financing organization. In Solomon Islands, the Housing Authority was disbanded after some years and settlements with basic standards were developed on sites designated as "traditional housing areas". In Vanuatu, the Housing Corporation, established in 1985, is trying to address serious problems with very limited capacity.

C. Housing markets

The demand for affordable housing is increasing as a result of the growing urban populations. The demand comes from new household formation within the existing population and from new migrants. Existing houses are constantly being upgraded. In almost every country, except possibly Nauru, housing market mechanisms are not functioning due to constraints on the development of customary lands and the absence of financial mechanisms that meet different affordability levels. The absence of security of tenure, which normally provides collateral or security for a housing loan, inhibits the development of housing finance mechanisms.

As a result of these factors, the private sector plays a limited role in housing. The limited housing stock commands high prices for purchase or rent. The building industry is therefore unable to play its usual role as a generator of economic growth and creator of employment opportunities. Additionally, those small businesses and micro-enterprises that are dependent on the building industry are unable to contribute to alleviating unemployment.

Towns in Papua New Guinea have inherited the colonial tradition of employer- provided rental housing. Thus, there is only a very small private housing market, mainly for expatriates, and no tradition of home ownership. Moreover, both the government (the major employer) and private enterprises want to rid themselves of the costly role of employee housing provision. Those urban residents who do not have an employer willing to provide formal sector housing must either depend on relatives who do have houses or turn to informal self-help, which usually means squatter settlements (UNCHS 1993).

In Cook Islands and Niue, a growing number of houses have been abandoned by the owners who have emigrated. The houses are left in a state of disrepair but the house cannot be sold to interested parties owing to the complexities of the customary ownership system.

Building materials

Except for the atoll islands, most of the region has adequate timber products. However, many other types of building materials are required to meet the growing expectations of urban dwellers. The size of the market, even in Fiji and Papua New Guinea, is insufficient for the level of investment required for local production of a wide range of building materials. Thus, an important feature of the building industry in the South Pacific is the high amount of importation, particularly from Australia and New Zealand to Melanesia and Polynesia, and from the United States of America to the Federated States of Micronesia. In the Marshall Islands, maintenance of the housing stock is becoming a serious issue.

In Papua New Guinea, the construction industry still operates in an environment inherited from colonial days. This results in excessive dependence on large construction companies, imported building materials, and construction methods developed for high-wage and high-technology societies. This situation results in a very large gap between traditional methods and materials and formal sector methods and materials (UNCHS 1993).

A particular aspect of residential buildings is cyclone-resistant design and construction. Despite the many advantages of traditional design of roofs and superstructure, there is a strong desire for building houses to modern western designs and using modern materials.

D. Housing finance capacity

Housing finance systems, managed by public sector institutions, already exist in several countries and the prospects of expanding their capacities are improving as national provident funds mobilize more savings. Commercial banks and insurance companies could also play a role in mobilizing capital for housing and there is potential for community-based saving schemes.

However, most formal sector financing systems require loan security and thus the land tenure system plays a crucial role. The legislation and procedures for mortgage lending have to be well established in order to enable a housing finance system to function.

In Fiji, where the housing finance system is well developed, the Fiji National Provident Fund serves as the main provider of investment funds and the Housing Authority as the provider of loans for the middle income sector. The Home Finance Company, which serves the higher income market, is more closely linked with commercial financial markets and mobilizes capital for housing loans from these sources.

In the absence of security of tenure for mortgage financing, alternate approaches need to be devised. In Fiji, many village housing schemes undertaken on lands that cannot be leased or mortgaged are backed by legally accepted guarantees from appropriately resourced persons or bodies. The Samoa Housing Corporation, which functions mainly as a housing finance institution, accepts assurances from senior clan members as security for housing loans.

Overseas examples of community financing need to be studied for their adaptation in the South Pacific urban culture. The Grameen Bank, a private initiative, has provided loans to a large number of rural poor in Bangladesh on the basis of community loan guarantees. A small group of successful past borrowers provides guarantees for repayment by the borrower and the loan repayment levels achieved are higher than those of commercial banks. The Urban Community Development Office of the Government of Thailand operates as an independent programme out of the National Housing Authority. Seed funding and loans to community-based savings and credit schemes are provided for a range of community improvement activities, among which housing is predominant.

E. Informal settlements

High construction costs, resulting from the high cost of imported building materials, costly building regulations and high urban wages add to affordability problems for the poor seeking adequate shelter. The experience of the Fiji Housing Authority over the past 30 years shows that some 70 per cent of the applicants for housing are unable to afford the repayments for the purchase of low-cost houses, which conform to legal requirements. The poor are left to find solutions in overcrowded accommodation or as squatters. The result is the haphazard growth of informal settlements on unsuitable sites and on the urban fringes of most large cities in the region. In these types of settlements, the settlers make arrangements with the landowners to occupy a building site on affordable terms but without security of tenure. Hence, there is no incentive for making permanent investment in housing, and corrugated iron shacks are the standard form of construction. People tend to expand houses incrementally, adding and improving according to the increasing needs of the growing family. A whole new generation of young people is growing up in these settlements throughout the South Pacific.

In most of the larger cities there are many pockets of such informal housing developments with very limited or no infrastructure and services. In Suva, there are 26 squatter settlements within the city boundaries (UNCHS 1992). In Papua New Guinea, squatter settlements housing up to 50 per cent of the population have developed around Port Moresby, Lae, Mount Hagen and Rabaul (UNCHS 1993). Relatively large settlements also exist at Blacksands and Federation in Port Vila, Vanuatu. If this trend remains unchecked, it will result in a serious deterioration of the living environment and will pose a serious danger to public health.

Eviction

Informal settlements are of different types. They range from pure squatters on state lands to quasi-legal renting of customary lands. Squatters on state lands are illegal occupiers of the land. On customary lands, there is often proper negotiation with the leadership of the landowning clan. The construction of houses takes place with the explicit or implied consent of the landowner. Sometimes, there are middlemen operating either on behalf of the landowners or on behalf of a particular needy group. The arrangements made are insecure and lead to misunderstandings.

The removal of settlers is sometimes necessary to enable public utility works to be undertaken. Wherever this happens on state-owned land, adequate compensation and resettlement arrangements are made. There have been cases where the owners of customary land have evicted settlers born on their lands in urban areas. In such cases, no resettlement arrangements are made. Some past cases of evictions, for example in Lae, have resulted in major calamity for the urban poor. The irony is that evicted squatters have to go and settle elsewhere. In most such cases the local, provincial or national governments have been unable to offer permanent solutions.

A more sympathetic view of informal settlements is gradually emerging. This is arising from a number of developments, which include the following:

• Greater realization that the efforts of the poor in constructing houses in informal settlements represent an economic and social investment and that the bulk of the savings of the poor are directed to housing.
• The settlers usually build up strong community relationships as these settlements represent a mingling of people from different parts of the country.
• Greater awareness of projects where squatters have improved their living environments after acquiring security of tenure.
• Increasing pressure on national governments from international organizations such as UNDP, UNCHS and the World Bank for upgrading informal settlements, introducing enabling strategies and alleviating poverty.
• The growing movement on the right to adequate housing promoted by the Centre for Human Rights and major international NGOs such as the Habitat International Coalition.

The whole scenario of eviction is a symptom of the failure of governments to appreciate the dynamics at play in the economic development and urbanization processes. Land is recognized by economists as a basic ingredient of economic growth and the failure of housing is largely a failure by governments to ensure affordable and secure access to land. The need to resettle people can be avoided by a proactive programme of sites provision. However, where there is need for resettlement, the process needs to conform to sound principles.

The Asian Development Bank, in recognition of the need for some guiding principles, organized two workshops on the subject, one of them specifically for the Pacific island countries. These principles are shown in the box 4.

Settlement upgrading

Settlement upgrading has become a common practice in many developing countries. Wherever the land occupied in informal settlements is not required for an essential public purpose, tenure is granted to squatters and infrastructure and services are upgraded. The major features of such programmes are:

• Community involvement in the planning and execution of the upgrading project.
• Improved security of tenure for the residents.
• Improved infrastructure services such as vehicular and footpath access, water supply, sewerage, drainage and electricity supply.
• Provision of social facilities such as kindergartens or schools, health facilities, religious and community buildings.
• Opportunities for income generation through the establishment of market buildings.

Perhaps the most well known example of a large-scale national settlement upgrading programme is the Kampung Improvement Programme of Indonesia. This programme has improved the living conditions in thousands of informal urban and rural settlements throughout the country.

In the South Pacific region, an example of a large-scale housing project that involved a considerable amount of settlement upgrading and squatter resettlement is the Vitogo and Drasa scheme at Lautoka in Fiji undertaken by the Housing Authority. These two programmes are described in box 5, based upon information from internal files and progress reports of the Housing Authority.

IV. LAND SUPPLY AND DEMAND

Land is an essential component in the urbanization process. The increasing population in the cities requires new areas for housing, schools, recreation areas and religious buildings. Where suitable, affordable and secure sites are not available, these needs are met by informal or illegal means. The pace of urbanization is such that new attitudes and approaches to land development in urban areas are necessary in almost every Pacific island country.

Land supply constraints are at the heart of many problems of sound urban management in the Pacific. As noted above, there is a clear linkage between security of tenure, the development of housing finance systems and the performance of the building industry. Security of tenure is thus directly linked to prospects for employment generation and income-earning capacity and therefore to poverty alleviation.

However, in all the countries in the region, the land market does not function normally since a large section of national land assets does not enter the urban land market. Approximately 80 per cent of land in the Pacific islands is under some form of customary land tenure, which is governed by a range of policies and practices that constrain national development.

A. Customary lands

The customary land tenure system is based on ownership of lands by indigenous families or social groupings. The diverse tenure systems in the Pacific were devised for subsistence agriculture, in situations where people produced almost all their own food (Crocombe 1989). The systems were flexible and catered adequately for changing needs in a rural setting. After the advent of colonialism, western systems of rigid rights were introduced.

In most countries, a certain portion of the land was alienated soon after contact with Europeans and this practice was stopped by legislation. In some countries, there are restrictions on the allocation of customary lands under leases. Land has a special significance for the people but, in urban areas, there is now a conflict between traditional views and the modern needs of urban development. A major issue is the need to adapt tenure systems to populations up to 10 times higher than they were at the time of first contact with European cultures, and these populations are concentrated in towns and other non-traditional centres and earn their living from non-subsistence activities (Crocombe 1994).

B. Demand for land

Land supply is failing to keep up with the demands of urbanization in almost all countries. Land is generally not available for most aspects of urban development, including infrastructure, industrial estates, housing, social facilities and recreational needs.

A number of countries have freehold land but the amount is very limited and most of it is developed as these parcels are located in or near urban settlements. Most countries also have state land, known as Crown land in some countries. This is also largely developed, in urban as well as rural areas.

Scope is limited for increasing land through reclamation in lagoons owing to the well-documented negative impacts on the ecology, including food sources, and therefore on nutrition and health. Land shortage is serious in some of the atoll countries and land reclamation is being undertaken in a number of urban centres in the Federated States of Micronesia. In Kiribati, land is so scarce that reclamation of lagoons is seen as a way of providing the government with new sites for various uses.

Governments in some countries have been unable to negotiate with the landowners for the use of land for public purposes. Some have shown a lack of political will to exercise eminent domain powers for compulsory land acquisition for public purposes even though the necessary legislation exists.

In Papua New Guinea, where some 95 to 97 per cent of the land is under customary ownership, these lands cannot be sold outright or mortgaged, effectively disqualifying the use of the land as collateral for loans and reducing incentives to conserve land. Almost none of the land is surveyed or registered, so disputes are usually settled through violent feuds rather than courts of law. With rising demographic pressures, land disputes have become more common (UNCHS 1993). The customary land tenure system is complex due to the different levels of decision-making and the varying interests of the different owners of a particular parcel of land. In some countries, customary land may not be made available to people outside the clan of the owners.

In Fiji, the administration and development of native lands is the responsibility of the Native Lands Trust Board (NLTB). The Board obtains consent from the landowners, subdivides the land and leases the new plots to meet the demand. It administers several thousand leases for all types of urban and rural uses.

NLTB has been in operation for about 50 years and retains around 25 per cent of the rent income to defray its administration costs. The remainder of the rent is distributed to the landowners and their chiefs. Because it operates as a trustee organization, NLTB has not been able to set aside a development fund. Similarly, the landowners have not been able to allocate some of the regular rent income towards a development fund. Sometimes, customary lands can be obtained for urban uses through ad hoc arrangements with the land owners without the involvement of NLTB, but the insecurity of tenure discourages entrepreneurship and investment by the tenant, as is witnessed in the peri-urban settlements in Fiji.

In Papua New Guinea, in recognition of the future need to utilize customary land for development purposes, the government developed the Land Mobilization Programme in 1989, aimed in part at urban areas. However, success has been slow. It has become common for land tenure to be secured through private agreements with the customary owners rather than the official process of government registration and lease title (UNCHS 1993). In Vanuatu, some bold measures were taken by declaring public ownership over urban land. Matters concerning the allocation of rental income to the original native owners and legal contests against declaration of public ownership over customary lands in the urban area are being resolved. In the Marshall Islands, there is no public land and coastal erosion is being caused by the extraction of sand and rock.

C. Land subdivision standards

The supply of land for urban uses involves more than mere availability. A minimum level of infrastructure in terms of access roads and water supply is essential for settlement at urban densities.

A combination of central and local government regulations and procedures set high standards for land surveying and the installation of infrastructure for creating smaller parcels or subdividing land for urban settlement. Complying with the high standards results in unaffordable costs even to middle income groups. The standards are set high partly because local government bodies do not have the capital resources to upgrade the infrastructure later. This is a problem facing many urban centres and needs to be resolved to activate the formal land market.

Solomon Islands has addressed the issue of standards by creating "traditional housing areas". These have gravelled roads, open drains, no sewerage system and a shared water supply. This has enabled people to settle within their affordability limits.

D. Constraints on the development of customary land

Land rights are an integral part of the Pacific cultural and social systems and a number of factors constrain an orderly land supply to meet the demands of urban growth. These include the following:

• Customary landowners are not culturally disposed to alienating land and have a tendency to retain full control of their land in case future generations have need of it.
• The procedures for leasing and development of customary land are either not well developed or are very complex and time-consuming.
• Those customary landowners who have responded to the demand find difficulties in meeting the high land subdivision standards and the cost of basic infrastructure in order to provide potential tenants with security of tenure.
• The system does not encourage capital accumulation for land development.
• Rent income is spread out. The owners are therefore unable to take advantage of the growing demand for urban land.

E. Land titling

Only a few countries have adequate cadastres showing land parcels, ownership, rights and easements over land, charges and encumbrances. Land mapping and titling is incomplete in many countries, and this creates considerable delays in the resolution of disputes over boundaries, ownership and user rights. There are many advantages in having good records but the process of establishing a system is long and costly.

In Samoa and some areas in the Federated States of Micronesia, land titling projects have been initiated but, owing to lack of adequate resources, little progress has been made. Modern electronic technologies can speed up the mapping process and facilitate these procedures but the process of clearly settling conflicting claims needs to be undertaken through adjudication.

Fiji has benefited from continuous advances in mapping and aerial photography of the national territory and the use of electronic land information systems for various aspects of land management. It also maintains the position of Commissioner for Native Lands for the resolution of disputes concerning native lands and associated rights.

Many countries have established a geographical information system (GIS) unit in land management agencies. This has simplified certain procedures but the full potential of GIS has not been realized. The technology requires constant upgrading of skills, as well as computer hardware and software.

V. COMMUNITY PARTICIPATION AND HUMAN RESOURCES

Urbanization poses new problems, as well as opportunities for the involvement of people in resolving problems at a scale never encountered in the rural areas. Urban areas comprise a rich mixture of people from different parts of the country, with different approaches to the resolution of problems. They all have the common goal of improving their quality of life and it is a challenge for central and local governments to channel all public and community initiatives towards this goal.

The global trend is for greater public participation in decision-making for urban management through public consultations, urban and civic forums and similar organized groupings. Through the information revolution, people are more aware of what is achievable to meet their rising expectations. Thus, appropriate mechanisms are necessary at the central and city levels to enable people to articulate their needs and to contribute to solutions.

A. Community participation

The people are a major resource in the Pacific and this resource needs to be fully utilized. In the rural areas and villages, participation of communities, under the traditional leadership structures, is quite common and effective in decision-making for local development.

However, in urban areas, the social cohesion of the rural areas is no longer present and therefore opportunities for community participation are rare. As problems in urban management can be quite complex and often concern the interests of particular groups, the involvement of communities can help to resolve complicated issues.

In all consideration of public participation it is important to distinguish between participation with labour or sweat equity in a project requiring physical effort and participation in which the participants are fully involved in the process of policy formulation, affecting the local environment, including the raising of sensitive issues. There are many examples of the former but not many of the latter.

B. Urban and civic forums

Urban summits, along the lines of the national summits being used widely in the Pacific, could be organized for all stakeholders in a particular urban area or on a specific issue to consider options and select lines of action to seek solutions. The stakeholders include settlers, landowners, local authorities, government agencies, NGOs, community associations, academics, the business sector and religious organizations. Urban forums have become a useful vehicle for public participation in many Asian cities.

C. Non-governmental organizations

Non-governmental organizations working in housing, infrastructure and services are active in many countries, acting either individually or as national networks. Their actions range over many aspects of human development and include the following:

• Working with and for disadvantaged people such as children, women, refugees, the indigenous, elderly, poor, hungry, disabled, and disaster victims.
• Addressing disadvantage through projects and programmes such as welfare services, education, skills training, income generation, housing, credit and financial services, food production, and small-scale manufacturing.
• Raising awareness through information and communication, research and training, campaigning and advocacy, networking and collective action.
• Taking action on issues detrimental to the well-being of people or society such as peace, human rights, the environment, gender issues, and economic structural adjustment.

Among the more prominent NGOs active in the region are the Urban Shelter Network of Lae, HART (Housing Assistance and Relief Trust) and the Methodist Church in Fiji, the Samoan church groups that provide housing for rural migrants and some cooperative societies. Their work is often hampered by legal and procedural constraints and they require support from national and local governments in many small ways to enable them to deliver assistance to those in need.

D. Private sector

The real estate industry has a limited role in land development and housing in the region owing to the limited availability of land for urban development. The private sector has been active in the building and infrastructure construction and transportation areas but not in the management of services such as water supply. Although very few countries in the Pacific could provide the economies of scale required for private sector operations, governments could encourage the private sector to manage certain aspects of services. There will be a growing demand for the private sector in housing development if the land supply constraints could be removed.

E. Human resource development

Trained professionals are in short supply in the fields of urban management, urban and regional planning, urban infrastructure and land development, and construction disciplines. The improvement of institutional arrangements for urban development at the central and local government levels would encourage greater interest in these professions.

The land management and development course at the University of the South Pacific, (USP) as well as the courses in architecture, civil engineering and urban and regional planning at the Papua New Guinea University of Technology (Unitech), have trained a number of professionals but more trained professionals are needed, and with a more holistic approach to human settlements development.

The USP course in land management and development has a comprehensive curriculum providing students with a choice of urban or rural focus. This course not only covers the technical subjects of land surveying, valuation, construction technology, property development and GIS but also relevant aspects of macroeconomics, commerce, accounting, law, sociology and management, together with a full coverage of the principles and problems of land tenure.

In addition to the land management and development course, USP offers a basic undergraduate course in town planning for those already working or interested in working in town and country planning without having to leave the region. However, the courses offered are running below capacity and USP is therefore unable to introduce courses to cover other aspects of human settlements management. Training is also needed in a range of skills at the technician level (for example, for electricians, plumbers and carpenters). This is being provided at national institutes in many countries in the region but the volume of trainee intakes would need to be increased to supply the demand that would be created by positive improvements in national programmes for improving urban development.

The training of local government councillors has been identified by the Commonwealth Local Government Forum as being an essential need. In the Pacific, this is a new sphere of public administration and adequate training for both elected representatives and local government personnel is essential to develop the capacity for addressing the new situations posed by growing urbanization.

VI. URBAN GOVERNANCE AND MANAGEMENT

The issues briefly covered above concerning planning, infrastructure, housing, land supply and community participation need to be addressed in an integrated manner through a division of responsibilities between the central and local governments.

At the central government level this calls for a high level of coordination among the different agencies that provide services in urban centres and a proactive interest in developing the administrative capacity at the city level.

The concept of sound urban governance involves the establishment of effective management systems for the mobilization and utilization of physical, economic, cultural and human resources and for transparency and accountability to the community.

The techniques of sound urban governance have been thoroughly explored by the World Bank, UNDP and the United Nations Centre for Human Settlements under the Urban Management Programme. The principles have been applied in many cities in the developing countries through technical assistance programmes (UNCHS 1998).

A. Political commitment to urban governance

The comparative newness of the urbanization process and the scale and speed of urban growth have made it difficult for national, provincial and local governments to facilitate the supply of the key factors of urban production: land, shelter, infrastructure and services. Inadequate planning and provision of services are felt primarily by the poor, resulting in an increase in inequality within towns and cities.

Increasing demand for urban services calls for sound urban management and planning practices suited to local political and social contexts, supported with improved technical competence and financial inputs. Sound urban governance and management should be considered a crucial part of the national economic development process.

In Samoa, the seventh national development plan proposed to introduce new legislation for the establishment of an Apia municipal authority with powers to control land use, improve services and promote the economic and social development of the city. However, progress has been slow. Cook Islands also considered establishing a local authority for the urban area of Rarotonga but no concrete action has been taken. In both countries, the idea of a western-style local government is contrary to the traditional systems of leadership and customary land ownership patterns.

However, urban areas are modernizing at a fast rate and the traditional structures do not have the capacity for the kind of urban management that is needed. Perhaps a mixture of both systems could be devised with the assistance of transitions such as the Asia-Pacific section of the International Union of Local Authorities (IULA-ASPAC) and the Commonwealth Local Government Forum. The Forum identified some of the key actions necessary to decentralize power and responsibilities at its South Pacific round table, as is shown in box 7.

B. Economic reforms

The Pacific island states have some serious economic and natural constraints. These include small domestic markets and distance from larger markets, narrow resource bases, lack of economies of scale, limited domestic revenue-generating capacity, a high degree of dependence on external assistance, importance of remittances, the public sector and imports, and vulnerability to external shocks and natural disasters.

Many governments in the region are currently implementing economic and public sector reform measures coordinated by the Asian Development Bank targeted towards increases in income and employment and improvements in human development indicators. The critical goals of the reform process that could have a positive effect on the approaches to urban management are:

• Achieving macroeconomic stability.
• Instituting good governance with greater public participation in government.
• Making public service more accountable for efficient and effective service.
• Catalysing private sector investment to provide more incomes, employment, goods and services.

C. Capacity to address new challenges

Local government in the Pacific is generally based on western models in Melanesia and the Federated States of Micronesia. Under the provisions of the relevant legislation, a proposal to declare a city or a town over a defined area is publicly notified and representations are dealt with. Local elections are organized and the elected body forms the local government. Papua New Guinea and Solomon Islands have a provincial system of government, which has responsibility for local government.

In Vanuatu, the Municipalities Act of 1985 sets up municipalities with responsibilities but capacity is lacking at the local level. In Apia, in the absence of elected local government, an arrangement is made based on traditional local leadership structures of the different villages that form the urban centre.

Fiji has a well-developed system of urban local government, with two city councils and 11 town councils. In many centres, urban development has spread beyond the municipal boundaries into areas under the jurisdiction of rural local authorities. These authorities have the basic function of preserving public health and come under the supervision of a different government ministry. No district councils have been constituted for such areas under the Local Government Act. For the administration of native affairs there is a system of provincial governments.

A general characteristic is that local government bodies of either model have insufficient capacity to manage and respond adequately to the pace of urban growth. Usually, there is a division of responsibilities and in most countries in the South Pacific major infrastructure services are provided by central government agencies and local authorities have the responsibility for management of the local environment and manage public facilities such as the markets. However, the crucial role for the local government is the planning and coordination of local and central government initiatives. Most do not have the legal authority or the financial capacity or the human resources for this essential task. This has been the experience of the Honiara Town Council in the implementation of the Honiara Town Council Development Plan 1988-1992.

Although most governments recognize the need for a decentralized form of government at the urban level, political support for the growth of local government is limited. Local councils receive limited financial support from central governments and external aid is seldom directed towards increasing local government capacity. The smallness of some countries leads to limited government interest in promoting subnational urban government, which is seen as duplication. In some countries, urban government is currently in the process of evolution and democratic processes have been introduced in recent years. The Commonwealth Local Government Forum, at its South Pacific round table, has identified a set of useful suggestions for good government at the local level.

D. Urban financial base

Urban government bodies in the South Pacific operate with insufficient funds but their responsibilities are growing. Most city and town councils are barely able to finance regular service functions and have little or no reserves for undertaking minor capital works. Yet they serve a wide region beyond the municipal boundaries.

Most local government authorities are expected to mobilize their own finances and they rely largely upon property taxation raised from the area within their jurisdiction. Some have the authority to charge business licences and some, like Suva and Nadi in Fiji, have constructed commercial buildings which are being managed successfully and with positive financial results.

In countries that do not have a land-taxation regime, local authorities are totally dependent on financial support from the central government. In Apia, there is no formal local authority and no property taxes are imposed. Additionally, there is no requirement to register property developments with any government agency (UNCHS 1996b).

Local governments in the region experience many problems in the area of finance. The major ones are the collection of property rates or taxes, especially arrears, inability to collect rates on unleased customary lands and lands occupied by squatters, and political difficulties in raising rates to the maximum level permitted in the local government legislation. The tax-paying responsibilities of an urban landowner are not yet fully recognized by customary landowners in cities and towns in most countries. The land revenue base is a potential source of finance for supporting the development of local government in the South Pacific but it remains untapped. Meanwhile, the provision of services in urban areas remains a financial burden on central governments.

Local government bodies with a record of sound financial management have the possibility of accessing capital markets but this often requires a guarantee from central government. This aspect clearly demonstrates the responsibility that central governments need to discharge to encourage sound urban development. This type of central government support of a facilitating nature for local governments is required not only in the area of finance but also in the area of land supply. Effective central government initiatives are urgently required in order to activate the land market mechanisms that promote orderly urban growth. Such action can have the effect of strengthening the revenue base of local governments on a sustainable basis.

VII. REGIONAL COOPERATION

Countries have been addressing urban management problems with little information from or contact with other countries in the region or outside. Many international programmes in human settlements bypass the Pacific for a variety of reasons, including distance, relative smallness of the problems and the absence of a regional voice on human settlements issues. A regional programme in human settlements would benefit countries in the following ways

• Increasing awareness of the problems in urbanization and the opportunities for economic and social development that sound urban management can generate.
• Enabling a collaborative approach to seek solutions.
• Providing information on the many successful experiences to improve national responses.
• Provide a unified position at global and major regional forums.

Specific items for regional collaboration include improvement of human resources in the urban development fields, urban/local government administration, customary land development, waste management and application of urban and housing indicators.

PART TWO: TOWARDS A PACIFIC HABITAT AGENDA: SUMMARY OF RECOMMENDATIONS

VIII. URBANIZATION AND PLANNING

National populations are increasing rapidly in most of the Pacific island states and an increasing proportion of the national populations is now living in urban centres. In spite of past and current emphasis on rural development, the future of human settlements in the Pacific is an urban one. This new phenomenon in the development of the Pacific islands needs to be recognized by governments as a reflection of social advancement and modernization. Urbanization has many positive social, economic and environmental aspects and these need to be addressed in an integrated manner at the national, provincial and local levels to ensure a constantly improving quality of life for people.

A. Formulating national plans for urbanization

As the Pacific island economies become more closely linked with the global economy, the pressure for efficient urban management will increase. Governments need to consider urbanization as a crucial part of the national economic development process and adopt a positive and proactive approach to urban growth by taking measures that enable towns to grow in an orderly way. This will be a departure for many governments but there is sufficient experience in the Pacific to build upon. An example of a recent national initiative is the National Plan of Action on Urbanization submitted by the Government of Papua New Guinea to the United Nations on Human Settlements Conference (Habitat II). Governments should consider formulating national plans for urbanization and include these as integral parts of the national economic development plans or similar national planning instrument.

B. Coordinating physical planning with economic planning

Most countries have undertaken medium-term strategic development planning but physical planning has been a relatively neglected area. For efficient and sustainable development, physical planning needs to be integrated or at least coordinated with economic and social development planning. This can best be achieved at the regional level to incorporate economic, social and physical planning, taking into account current and projected symbiotic relationships between the town and its surrounding areas. Such an approach would strengthen coordination between urban planning and national economic development planning. Appropriate institutional arrangements and legislation would need to be introduced suited to the national and local contexts.

C. Promoting integrated rural and regional development

The promotion of rural development is essential since a substantial proportion of the national population lives in the rural areas but these should be complemented with urban development policies. Regional cities and rural centres need to be strengthened to service the rural areas and outer islands.

IX. URBAN INFRASTRUCTURE

It is important to recognize that adequate provision of urban services is the key to orderly development of cities and, considering the high cost of investment, it is essential that existing assets are rehabilitated and maintained and that the consumer base is expanded.

A. Conserving water resources

Water resources need to be protected, especially catchment areas outside the urban areas, as well as underground water resources. Improved management practices are required to preserve the viability of existing water supply systems.

B. Providing sewerage

Proper sewerage services are essential even for normal urban densities and there is a limit to the efficiency of septic tanks in the geological conditions of urban centres such as Honiara, Port Moresby and Suva. The investment in sewerage reticulation and treatment facilities is relatively high but the long-term costs of avoiding such investments are much higher. Information also needs to be disseminated on suitable on-site technologies such as ventilated improved pit latrines, which have had some success in Vanuatu.

C. Improving solid waste management

The gravity of the problem of waste management needs to be recognized and the cultural constraints on sound waste management need to be addressed. Possible action could include the following:

• Community consultations could resolve the issue of the availability of suitable lands for waste disposal.
• Waste minimization programmes could be launched through public information.
• Waste recycling programmes could be encouraged.

D. Financing infrastructure

A number of initiatives could be undertaken to mobilize funds for the adequate provision of services. These include:

• Making better use of existing urban infrastructure investment, using community decision-making processes to clarify cost-recovery and management issues, improve arrangements for long-term maintenance and formulate investment plans.
• Encouraging the potential role of the private sector, as well as community associations and cooperatives, in building and owning categories of infrastructure, particularly in the larger island countries.
• Sharing the burden of financing between the central government and the urban local government.
• Examining the possibility of accessing provident funds, which now dominate the finance sector in most island countries, to become a regular source for infrastructure financing.
• Examining the possibility of selected urban authorities issuing bonds, under government guarantee, for financing the urban infrastructure.

X. HOUSING DEVELOPMENT

The growing level of urbanization will generate a constant demand for housing at all affordability levels. Housing is an important component of the construction industry and a recognized generator of employment opportunities. Global experience indicates that poor people build cheaper and more satisfactory houses than governments through self-help systems or through private sector initiatives. The key to solving the urban housing problem is to enable markets to produce as many solutions as possible in different physical, social and financial environments.

A. Developing local building materials

The development of local building materials could be encouraged and local building regulations could be adapted to suit local affordability levels and permit incremental construction of houses. The informal sector could have an active role.

B. Improving housing finance mechanisms

Alternative ways for developing mechanisms for housing finance include:

• Accessing members’ credits with the provident fund for equity for loans provided by housing corporations, commercial banks and the development bank.
• Developing housing capital markets by encouraging the setting-up of private housing finance entities, with or without government equity. The Commonwealth Development Corporation and its local partners in the region could provide a lead in this field.
• Clan-based guarantees to housing loans, as in Samoa.
• Credit unions and similar community-based saving schemes.
• Adapting the "banking on the poor" approach of the Grameen Bank in Bangladesh and the Urban Community Development Office of the Government of Thailand, to provide small loans for housing, small businesses and services.

C. Providing secure and serviced sites for the poor

All Pacific people have the ability to construct simple shelters through the assistance of family members and friends. For this they need sites with basic services and a secure tenure, legal or customary, and small loans. Thus, the meeting of housing needs is dependent largely on improving the land supply mechanisms.

D. Upgrading informal settlements

Policies should be put in place to safeguard the housing investment that people have made in informal settlements and to upgrade such settlements by providing security of tenure through negotiation with the landowners and providing the basic services at affordable levels. The community can manage the upgrading process over time with support from the appropriate agencies and NGOs. Reviewing the mandates of national housing agencies to enable them to play a more strategic role in urban development could do this.

XI. LAND SUPPLY

Urbanization requires the availability of serviced land on a regular basis for a whole range of private and public urban uses. As most government and freehold land in and around urban centres is built up (except for government lands in Tonga), most of the land development will have to take place on customary land. Governments and landowners throughout the Pacific need to formulate ways of adapting the management of customary land to the modern opportunities and requirements of orderly urban development. Moreover, there is an urgent need to optimize the use of existing developed land through appropriate urban planning and fiscal tools.

A. Reviewing new initiatives

New land policy initiatives to adapt customary land procedures to modern needs and innovative approaches to bring land on to the market would facilitate not only orderly urban development but also economic development generally. The following experiences in the Pacific could be reviewed to this end:

• Fiji’s Native Land Trust Board roles as a custodian and as a developer of customary lands.
• Landowner initiatives in the peri-urban areas of Papua New Guinea and Fiji to meet the demand by creating informal urban settlements.
• Vanuatu’s initiatives in urban land reform.

B. Considering an incremental approach to land development

Land subdivision standards could be adjusted to allow incremental development of infrastructure so as to increase affordability by tenants and thus activate the land market. Under such an incremental approach only the essential services would be installed first, enabling people to settle at affordable prices. Upgrading of infrastructure can be undertaken later through a combination of central and local government and community investments.

C. Enabling customary landowners to become active in the land market

Governments could launch or support capacity-building programmes to enable customary landowners to be active in the land market. Governments could provide basic infrastructure to guide the opening-up of land for orderly settlement. Legislation could be introduced to facilitate long-term leasing of customary land, with adequate protection for landowners and tenants. Land readjustment processes could be introduced to facilitate adjoining owners of small parcels or irregularly shaped lands to be developed in an orderly manner.

D. Expanding the application of GIS

The application of GIS could be expanded to facilitate land-titling processes. This technology is also able to support all aspects of urban land management at the central and local government levels.

XII. COMMUNITY PARTICIPATION AND HUMAN RESOURCES

The people of the Pacific have demonstrated considerable skills in community participation for resolving issues of common concern through traditional leadership structures. At the urban level, community organizations, leadership structures and the issues are different and complex. People represent a vast resource and genuine public participation can resolve the crucial political and institutional issues for orderly urban development.

Human resources development will be a constant requirement as urbanization increases and the need for adequately trained personnel at the managerial, professional and technician levels cannot be underestimated.

A. Encouraging community participation and urban forums

Community participation could be encouraged in the following ways:

• Governments could support community participation by holding urban forums to establish a political process that would involve all stakeholders at the national, provincial and local levels for developing a consensus on policies and strategies for urban management.
• Women’s groups can play an active role in community consultations.
• Communities and landowning groups could undertake real estate development after acquiring some knowledge and skills in subdividing land, mobilizing finance and producing and supplying building materials and organizing housing construction. They could be provided with guidance in such ventures by the relevant government agencies and NGOs.

B. Developing human resources

Sustained programmes for urban management would attract larger intakes of students in the built environment courses in the region.

• Embark on human resources development programmes to provide skills for land development, infrastructure management, physical planning, housing, financial management, local government administration and business management within the institutions existing in the region.
• A regional programme could be considered to increase human resources in these fields.
• Technician-level training at the national technical institutes could be strengthened.
• Information exchange on human settlement matters within the Pacific is currently non-existent but could be initiated.
• Opportunities could be provided for staff from one national or urban government agency to be attached to a similar agency in another country.

C. Enhancing NGO contributions

The contribution of NGOs could be enhanced through government action to remove the many constraints on their operations and by providing active support.

D. Involving the private sector in urban management

The private sector can play an active role in certain urban management operations on a cost-plus basis and there are many services which people are willing to pay for if these are reliable and efficient. Avenues for services to be provided by the private sector need to be explored in the context of each city since the economic reforms currently under implementation will tend to encourage the expansion of the private sector.

XIII. URBAN GOVERNANCE AND MANAGEMENT

The issues described above relating to planning, urban infrastructure, land and housing need to be addressed in an integrated manner since all are closely related. Appropriate institutional arrangements need to be made at the national and the urban centre level for the various aspects of the planning, development and management of urban areas, with a clear division of responsibilities and with adequate channels for effective public participation. The difficult problems in urban development (except for the investments for infrastructure) are not so much technical but political and institutional.

It may not be necessary in all the Pacific countries to have a distinct local government authority based on western models. Experience in most developing countries indicates that, after a certain size, a dedicated urban level of government is necessary to address the growing volume and complexity of issues of a local nature through representatives of the local residents. Any urban-level government will be a creature of the central government and its structure will need to take into account the social, cultural and economic context in which it is expected to deliver governance.

A. Generating commitment to good urban governance

Governments could ensure sound urban governance by:

• Creating appropriate capacity at the ministerial level for guiding the urban management process and for ensuring effective government at the urban level.
• Taking a proactive role in the development and improvement of effective local models for urban management.
• Enabling urban governments, whether of the western model of elected councillors or those based on traditional leadership structures or other models, to manage efficiently.
• Encouraging the development of transparency and accountability in urban government administrations.
• The process of generating commitment to urban governance may be achieved through a series of community consultations. Experiences in the Pacific that could be referred to include:
• Kiribati’s consultation process for the formation of the Urban Management Plan for South Tarawa.
• Consultation process in Palau for the preparation of the urban plan.

B. Strengthening urban governments

Greater political support could be given to develop the capacity of urban governments by:

• Encouraging partnership programmes among different levels of government, the private sector, NGOs and community organizations.
• Providing training, facilitating dialogue on good urban government and increasing information dissemination at the national and regional levels.
• Achieving gender balance among local government representatives.
• Improving the legislative framework relating to urban government.
• Strengthening the capacity of urban government bodies to plan, develop and manage urban centres more efficiently and with greater involvement of local communities and regular upgrading of human resources.

Fiji’s current review of the local government legislation for strengthening municipal management could be of interest to the region.

C. Improving urban finances

Devolving power to the local level without commensurate financial capacity is meaningless. There is a need to improve the resource base and financial management capabilities of urban governments to enable them to regularly undertake minor capital development works and to mobilize finance from capital markets for major capital works. Actions include:

• Resolving the issue of fiscal support to local governments through effective dialogue between central and local governments.
• Removing institutional and legal constraints to collection of rates.
• Exploring additional means of revenue generation, including the operation of markets and bus stations and wider collection of business licences.
• Making arrangements for the sharing of the revenue base and administration among urban authorities within the urban region.
• Enabling selected local governments to borrow development funds from capital markets.
• Generating community confidence through improved discipline in financial management.

D. Encouraging the small business and micro-enterprise sector

A proactive approach could be taken to encourage the growth of small businesses and micro-enterprises, which usually operate in the informal sector, so that they can absorb some of the unemployed. Strategies include:

• Providing serviced sites, relaxation of some regulations and provision of small loans.
• Providing technical and marketing guidance.
• Ensuring a constant programme of land development with basic infrastructure and incremental housing construction that could engage the informal sector on a regular basis.
• Setting up "weekend markets".
• Encouraging the formation of profession-based cooperatives etc.

XIV. REGIONAL COOPERATION

Countries have been addressing urban management problems with little information from or contact with other countries in the region or outside. Many international programmes in human settlements bypass the Pacific for a variety of reasons, including distance, the relative smallness of the problems and the absence of a regional voice on human settlements issues.

A regional programme in human settlements would benefit countries through:

• Increasing awareness of the problems in urbanization and the opportunities for economic and social development that sound urban management can generate.
• Enabling a collaborative approach to seeking solutions.
• Providing information on the many successful experiences to improve national responses.
• Providing a unified position at global and major regional forums.
• Improving human resources in the urban development fields, urban/local government administration, customary land development, waste management and application of urban and housing indicators.

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