Slums: Studying Urban Poverty
By Suprabath Reddy
UN-Habitat 2020 defines slums as “Any specific place, whether a whole city, or a neighbourhood, is a slum area if half or more of all households lack improved water, improved sanitation, sufficient living area, durable housing, secure tenure, or combinations thereof”. While most educated citizens are aware of the presence of large “slums” at the peripheries of cities all over the world, and the visible poverty that prevails in these settlements, the sheer magnitude of the numbers and the implications these have on the spirit of equality in economic growth are absent in popular public perception.
Globally, about 990 million human beings now live in abject urban slums, often well below global poverty definitions, which by definition, account only for miserly subsistence-level costs. One also notices how this population is now concentrated in the so-called “Global South”.
The initial slums of the past were often on the outskirts of economic growth, which attracted migrants and offered them some access to economic opportunities. During the industrial revolution, factories in London and railroad/dock cities in New York attracted millions, creating unexpected public failures in managing the shabby physical consequences of development. It was there that the first housing reform measures, sanitation, adequate ventilation and fire protection were passed. Elsewhere, radical policies like Baron Haussman’s great revamping of Paris in the 1860s, building wide sewers, fancy boulevards and apartment complexes for rich clients, ripped apart slum hutments quite inhumanly. A reflection of this is often seen in present day states’ “bulldozer” approach to slum redevelopment - The controversial demolishment of Vila Autodromo in the heart of the Rio slums, to build roads and athletes’ housing for the 2016 Olympics is a classic example.
Today, large slums have broadly disappeared in most advanced economies, and the focus is on developing economies. While slums are an urban phenomenon, slum challenges are definitely not the same as urban challenges. Some economists argue that they are a “transitory” phenomenon of growth, representing only a temporary phase in the lives of rural migrants. In the long run, as the benefits of economic growth trickle down, formal housing and resources invariably expand with the aid of market forces and the slow welfare arm of the state, and benefits pass through future generations. How long is the “long run” though? Other social scientists argue that slum living could constitute an urban poverty trap, the kind development economists work so hard on, in rural areas.
Slums and poverty traps
A poverty trap is created when an economic system (severely lacking in a certain critical threshold requirement of capital - financial, human, knowledge, health, infrastructure etc, and unable to create them) is stuck in a self-reinforcing cycle of poverty. Such cycles, when identified, require targeted policy interventions, investing critical capital in the right areas and on the right stakeholders.
Wide macro and microeconomic literature documents the importance of health for income and of early health investments for longer-term outcomes. Sanitary access has direct implications on the health and quality of human capital.
Table: Absence of basic amenities across slums
A quick glance at the table above shows the glaring extent of hygiene deprivation in the slums, where such data is painstakingly collected. Health issues are further compounded by the lack of social safety nets in most cases. In Hyderabad, 70% of households self-assessed themselves as “poor” (not the technical definition of “poor”) and only 12% of them received any sort of government assistance (National Family Health Survey 2005-06). Finally, poor human capital and consequent inability to invest in human capital i.e themselves and their children, traps labourers in a low-skilled and hence low-income equilibrium. This hampers economic mobility up the ladder.
When one invests time, money and human capital, over many years, in quality education, it translates into income-earning potential when they enter the labour market. They are then ideally paid according to the demand and supply of the profession they engage in. This then spills over into succeeding generations. In slums and rural areas, that critical “threshold” of human capital investment is often impossible to procure, thus contributing to the poverty cycle.
Secondly, slums exhibit visibly low levels of physical capital. Neither government nor society has really managed to organize investment in a way that provides for widespread public good (in the broadest sense of the word) provision. Davis (2006) reported on the example of Mumbai slums, where it appears that only 91 individuals (including landlords, slumlords, gangsters and an array of other illegitimate actors) control all vacant land. Lack of self-owned land titles provides no incentive for dwellers to invest in upgrading their own homes. Investment inertia is then another leg to the poverty trap.
Thirdly, in addition to low-human capital and low-investment conditions, there is extreme policy neglect. Lack of political intent coupled with the fact that the informal nature of settlements excludes them from mainstream urban planning and redevelopment projects. Over the past decades, Egypt and Mexico, where there was a genuine political commitment to work on slums, successfully curbed expansions and recorded improved standard of living measures. These are some factors that set the poverty trap in urban slums, maintaining the status quo across generations. Figures from Kolkata showed that 70% of dwellers had stayed in slums for >15 years and 41% for >30 years (Peck 2017, p.7)
Is urban poverty preferable to rural poverty?
What drives the rural labourer and her/his family to leave the relative social familiarity of the country to settle in such inhuman conditions? Is the causal factor largely a “push” away from the village (such as low agricultural income, splintered land, escaping the oppressive caste hierarchy of the village etc) or a “pull” towards the city (possibly with illusive promises of higher wages, and access to better education, health and opportunities in general).
Multiple studies have shown that slum households exhibit poorer health outcomes than their rural counterparts. There is evidence that infant mortality is higher among the urban poor than their rural peers. Conditions, in general, are undesirable to the well-being of the self. However, it seems that even with all the shortcomings, the idea of a wage gap that exists between rural work and work found in the cities, however menial, is a driving force that overpowers other considerations. A 2011 study by Edward Glaeser, an American economist, provided evidence that the urban poor worldwide are on average richer and happier than their rural counterparts. Data from Bangladesh showed that seasonal urban migration generated actual welfare improvements for migrant families over time. The formal city wouldn't exist without an informal city! Cities are job hubs and slums themselves are bustling centres of economic activity. In the informal economy of Dharavi, India’s largest slum, resident owned small businesses are estimated to have an annual turnover of about $1 billion. As long as capital flows into cities and jobs are available, people move.
Policy and Problems
Worldwide, policy measures have ranged from brutal ones like Operation Clean-Up 2005 in Zimbabwe (700,000 people are estimated to have lost their homes) to Singapore’s compulsory savings scheme in the 1960s, getting slum residents to access formal housing at subsidized rates.
In the Indian context, some of the programmes initiated since Independence include:
Valmiki Ambedkar Malini Basti Awas Yojana (VAMBAY) 2001: Primary objective of facilitating the construction and up-gradation of slum dwelling units, with 20% of the total allocation for community toilets. The Central and State governments split 50% of the costs
National Slum Development Programme (NSDP) 1996: NSDP provides loans and subsidies to states for slum rehabilitation projects on the basis of their urban slum population. VAMBAY and NSDP were merged into an umbrella scheme called Integrated Housing and Slum Development Program.
Rajiv Awas Yojana (RAY) 2013: Launched with a focus on tackling the land and housing shortages that keep shelter out of reach of the urban poor, formalizing the system and providing basic amenities.
Multiple schemes and dedicated funding notwithstanding, general policy paralysis exists. Notice that while the RAY was launched in 2013, it was actually announced in 2009, with an ambitious aim of making India “slum-free” within 5 years i.e 2014. A few months later, the timeline was extended to 7 years. And by 2012, the scheme was still in its infancy - facing serious roadblocks with land selection, title records, and allocation. Since the scheme was available only for those with legal ownership status, proper land titling was essential. This ties into the next point - De Soto, a Peruvian economist argues that secure legal land titles should be the “Holy grail of slum policy”, the foremost priority. Giving the poor property titles over their land would provide collateral for millions of urban households across the developing world, unlock access to credit markets and increase general sense of security by reducing the risk of eviction. Of course, this wouldn’t overturn the complex economic and social dynamics that exist in such a setting overnight, but it could be a start.
A major issue in slum economics is data. Bad data often leads to bad policy and bad policy is often worse than no policy. Primary data collection in slums is notoriously difficult. Field workers face safety and health issues,high mobility, congestion, irregular housing, sometimes target households are not available at their homes and there is a general lack of interest from respondents. These surveys require an acceptable sample space of households whose data can be extrapolated over larger numbers.
In India, slum populations were comprehensively enumerated in 2001, but differences across states in definitions of slums and the refusal of some states to validate the slum statistics resulted in “gross under-estimation/under-coverage of slum populations in the country”. These have huge implications when it comes to budget allocation. The true population is never known. For example, the Kibera slums in Kenya are estimated to house anywhere between 170,000 to 900,000 residents! This makes policy intervention tough, to say the least.
Self-Development in Orangi Town, Karachi
An interesting case study - Pakistan’s Orangi Town with about 2.4 million residents (the last census was in 1998 and one can only guesstimate the current figures) is considered Asia’s largest slum. These local “katchi abadis” first emerged after the Indo-Pak war of 1947. After the 1971 Bangladesh War, the settlement’s population exploded further.
Unlike many slums, Orangi has a robust informal land trading system and housing is not a troublesome issue. Communities have built numerous 2/3 room concrete houses locally and micro-businesses flourish. Lack of services like sanitation and sewers however was the major issue for many decades. Tired of waiting, the now globally renowned Orangi Pilot Project (OPP) kicked off in the early 1980s, with the help of local NGOs. Residents designed, funded and built their own sewerage pipelines and latrines. Till date, 108,000 households have gained access to toilets, self-funded. The project now includes a family planning vertical and a supervised credit facility. A detailed analysis of the unique conditions that enabled such a movement could serve as an inspiration for other slums across the world.
A lot of research literature on slums presents staggering numbers and percentage figures. It’s important to remember that the humans behind the numbers are living and breathing. And that, in terrible conditions. Because of multiple policy failures, counting on the free market to catch up, acute coordination problems that hinder investment and the general apathy to the marginalized in these communities, slums around the world seem here to stay. Most UN-Habitat agendas contain no tangible targets in this regard and are technically non-binding on signatories.
Concentrated, deliberate, scientifically backed, lean policy to see tangible on-the-ground improvements in the welfare of people must be considered. Teams like the Abdul Latif Jameel Poverty Action Lab (J-PAL) co-founded among others, by Nobel Prize-winning development economists Abhijith Banerjee and Esther Duflo at Massachusetts are pioneers in this regard, establishing micro-level relations between cause and effect. A point Banerjee and Duflo try so hard to drive home in their book, Poor Economics, is that there is no single “THE” solution. Rather, we need to work on how each individual programme can be made most effective and take it one step at a time. Only then can nations claim that they are truly aligned with the spirit of leaving no one behind.
Marx, Stoker and Suri (2013). The Economics of Slums in the Developing World. Journal of Economic Perspectives - Volume 27, Number 4, pp.187–210
Peck. (2017). An Overview of the economics of Kolkata’s slums. Econ 509 - Ball State University
Status of Human Settlement Statistics - Special publication by the Global Urban Observatory Unit, Research and Capacity Development Branch, UN-Habitat 2020
Reuters Insight Slumscapes: “How the world’s five biggest slums are shaping their futures”
Oxford Research Encyclopedias: “What Has Emerged From 30 Years of the Orangi Pilot Project”