Asia's Fastest Growing Economies Have the Fastest Growing Slums

(Bloomberg) -- Fast-growing emerging economies in Asia are grappling with the conundrum that a boom brings:  hordes of villagers flocking to cities only for  many of them to end up living in slums.

About 55 percent of the urban population live in shantytowns in Cambodia, 43 percent in Mongolia, 41 percent in Myanmar, and 38 percent in the Philippines, according to World Bank data that covers East Asia and the Pacific. The ratio is more than 20 percent in Vietnam, China and Indonesia, which are among the fastest-growing economies in the world.

In some respects these nations have become a victim of their own success amid massive urbanization, where inward migration is outstripping governments' ability to supply necessary infrastructure and services. In places like Manila and Jakarta, a dense sprawl of illegal or unplanned housing have sprouted up to offer homes for millions of workers who power their economies.

"Emerging slums are proof that the economy is growing and the opportunities are often in cities," Makiko Watanabe, a World Bank senior urban specialist, said in an interview in Manila. "But governments cannot keep up with providing adequate housing. There is a need to improve land use policies and make housing finance more affordable."

Developing nations can look to the success of countries like Singapore, South Korea and Japan, which also struggled with slums in the past, Watanabe said. In Singapore, the government transformed the city from a largely rural town with squatter colonies to the modern cosmopolitan city that it is today by building affordable housing.

"If there is political will, it can be done," Watanabe said. 

Another strategy is to strengthen urban centers outside of the main capital cities by building schools, hospitals, highways and airports to encourage more investment, she said. From Beijing to Bangkok, governments are trying to counter the draw of the dominant capitals that soak up the lion's share of workers and investment. In the Philippines that means spreading some of the wealth that's concentrated in Manila, an urban sprawl of about 22 million people that accounts for more than a third of the nation's economy.

"If you succeed in building regional economic hubs, you can disburse the population," Watanabe said. 

Click here to read how a city in the Philippines plans to build islands to accommodate migrants.

There is a need to change the perspective that slum-dwellers are a burden for the government and for the society, Watanabe said.

"They offer a lot of jobs required in cities, they generate a lot of economic opportunities but they aren't captured very well because they are in the informal sector," she said. "But in fact they are the backbones of the economy."

To contact the author of this story: Karl Lester M Yap in Makati at kyap5@bloomberg.net.

To contact the editor responsible for this story: Enda Curran at ecurran8@bloomberg.net.