WB urges urbanizing economies to boost infra

MANILA, Philippines - Rapidly urbanizing economies like the Philippines need to boost infrastructure and improve services to make cities work better especially for businesses that employ people.

A new World Bank East Asia and Pacific Regional report said urban transportation infrastructure and service provision ensure that growing cities with plenty of skilled people foster economies from agglomeration rather than incur burdensome costs from congestion.

The report said good urban planning is key to increasing the flexibility and efficiency of land use.

“Urban planning becomes the area of policy with the greatest impact on the incentives of firms in towns and cities to form, to grow, to move up the value chain, and thus to create and sustain demand for labor and human capital,” it noted.

The report found that in the last 20 years, East Asia Pacific saw rising productivity amid a brisk structural transformation, with large movements of people into cities and higher output in agriculture, manufacture and services.

“The unprecedented economic development in East Asia Pacific has provided jobs that lifted millions of people out of poverty and has been a triumph of working people,” it said.

Meanwhile, the WB noted that the region’s economic and demographic changes and relatively short labor history present an opportunity for countries to adopt a new lower cost social protection model.

“It is now time to consolidate growth by enacting social policies that protect people, rather than any particular sector, location or profession. When well-designed, those policies should make sure social protection and labor regulations reach the most vulnerable workers in the society,” it said.

The bank likewise urged policy makers to look beyond the labor market and focus on fundamentals, such as those that ensure price stability, encourage investment and innovation, and support a regulatory framework that enables small and medium-size enterprises (SMEs), which employ most people in the region.