As of 2015, 48 percent of Southeast Asia’s population live in urban areas, which is below the world average of 54 percent. Although starting from a low base, Southeast Asia is urbanizing rapidly. Its urban population will surpass the rural population in 2020 and by 2050 approximately 65 percent of the region’s population will live in urban areas. Urban population, urban land area, and urban population density in Southeast Asia are all increasing at a rapid rate and the levels of urban primacy are high in most countries in the region.
Urban growth in Southeast Asia contributes to economic development and more so at higher levels of urbanization. This implies that urbanization needs to be reemphasized as an engine for economic development, and that policies to stimulate urbanization needs greater support. Yet Southeast Asia is not effectively leveraging urbanization for economic development. Due to high levels of congestion, pollution, and rents, many Southeast Asian cities are growing outward, not upward; failing to take advantage of agglomeration economies.
A timely supply of land and urban infrastructure, both inner-city and intra-city, is critical to the development of productive cities. However, in many Southeast Asian countries, government regulations are not in place and bureaucratic capacity is insufficient to implement effective land acquisition. Similarly, the lack of development finance and poor regulation environment makes infrastructure investment difficult. Land and infrastructure issues need to be addressed more aggressively given the rapid urbanization and the increase in urban density in Southeast Asia.
Decentralization poses another challenge for effective management of urban policy and development. Many Southeast Asian countries have undertaken devolution over the years and now a significant part of national spatial and urban planning and implementation are under the responsibility of local governments.
The poor coordination between national and local governments, low capacity of local authorities, and resulting inefficiency of urban policy have undermined urbanization for productive cities. Since decentralization will likely continue and intensify in the future, urban management must be reformed and the capacity of local governments need to be strengthened.
Focusing on land and infrastructure development, this report offers the following policy recommendations for Korea-Southeast Asia cooperation in urban development. First, Korea can provide technical assistance to Southeast Asia for the creation of a modern land management system including a cadastral system, land registration, and land information system. One fundamental obstacle to land acquisition for urban development in many developing countries is the lack of working cadastral and land registration system to effectively protect property rights. Transforming the legal frameworks for land registration may be difficult to implement due to domestic political economy issues, yet instituting technical foundations for land registration and information system may be more conducive to reform and international cooperation.
Second, Korea can share its experience in land development with Southeast Asian countries. Korea is one of the countries which successfully utilized compulsory land purchase for urban and infrastructure development. Korea’s public land acquisition has been credited with effective infrastructure development and urban and industry zone expansion, yet it has been criticised for infringing on citizens’ property rights. Thus, if Korea offers any lessons regarding its acquisition policy, it should focus on the recent improvements. Land reconstitution, another major type of land development other than land acquisition, should receive greater attention for international cooperation. Land reconstitution is less prone to conflicts than land acquisition and can be utilized for revitalizing inner cities and building new urban areas, which Korea has utilized quite successfully.
Third, Korea can contribute to capacity building of Southeast Asian countries in managing public-private partnership (PPP) for infrastructure development at a time when new opportunities are emerging with new infrastructure funds being launched. The lack of financing has been the major constraint in infrastructure investment in Asia yet the launch of China-led One Belt One Road and Asian Infrastructure Investment Bank, in addition to preexisting ADB-led Greater Mekong Subregional Economic Cooperation Program and ASEAN-led Master Plan on ASEAN Connectivity, is likely to ease this constraint. Cities are poised to benefit disproportionately from the coming Infrastructure boom as they are integral to the transportation networks central to such infrastructure expansion. These infrastructure funds are encouraging private participation and will likely promote PPP investment. Yet even though the funds become available, developing countries are not equipped with regulatory frameworks for effective management for PPP. Strong institutional frameworks to clearly define the role of the government and guarantee investment protection will be needed.
Enhancing government capacity and transparency as well as instituting conflict-resolution mechanism need to be emphasized. Korea’s experience with PPP development and management could provide an insight to Southeast Asian countries.