European Planning Studies Vol. 16, No.

7, August 2008

Globalization and Urban Governance in

Two Asian Cities: Pune (India) and
Cebu (The Philippines)

MARCEL VAN KAMPEN & TON VAN NAERSSEN

Department of Human Geography and Spatial Planning, Institute for Management Research, Radboud
University Nijmegen, Nijmegen, The Netherlands

(Received June 2007; accepted November 2007)

ABSTRACT This contribution examines the management of urban development in two Asian
metropolitan regions against the background of globalization. Although there are substantial
differences in context, recent developments in both Pune Metropolitan Region in India and Metro
Cebu in the Philippines can largely be explained by their integration into the financial and
commodity circuits of the global economy. Globalization, however, comprises more than economic
inclusion. At the level of policy ideas, we see the introduction of principles of governance
emphasizing greater participation of civil society groups in urban management. Operating within
existing patron–client frameworks, however, the involvement of non-governmental organizations
and community-based/peoples’ organizations has unintended, exclusionary effects. We trace these
here in the areas of participatory planning and access to basic needs, especially housing.

Introduction
This contribution examines the management of urban development in two Asian metropo-
litan regions against the background of globalization. Although there are substantial differ-
ences in context, urban developments in both the Pune Metropolitan Region in India and
Metro Cebu in the Philippines are to a large extent explained by their integration into the
global economy. Through international investment and trade, these cities have been drawn
into the new international division of labour. We thus witness dynamic processes of
inclusion into global society alongside exclusion of the urban poor.
More recently, governance principles as propagated by global institutions such as
the World Bank have tried to encourage grassroots participation in development
projects and in local decision-making. Operating within patron – client frameworks,

Correspondence Address: Marcel van Kampen, Department of Human Geography and Spatial Planning, Institute
for Management Research, Radboud University Nijmegen, PO Box 9108, NL-6500, Nijmegen, The Netherlands.
Email: t.vannaerssen@fm.ru.nl or mha_van_kampen@hotmail.com

ISSN 0965-4313 Print=ISSN 1469-5944 Online=08=070941–14 # 2008 Taylor & Francis

DOI: 10.1080/09654310802163736
942 M. van Kampen & T. van Naerssen

however, the increased involvement of non-governmental organizations (NGOs) and

community-based organizations/peoples’ organizations (CBO/POs) have had unintended,
exclusionary effects. This contribution traces these effects in the areas of participatory plan-
ning and access to basic needs, especially housing. The first section introduces the concepts
of globalizing cities and urban governance in low-income countries. The following sections
then focus on urban developments in the Pune Metropolitan Region and Metro Cebu.

Globalizing Cities of the South

Globalization is the on-going process of increased interaction between parts of the world
that differ in welfare and power. Today a new spatial division of labour exists with the
South as a major supplier of cheap labour to fulfil the needs of the North. Labour-intensive
manufacturing industries in particular have moved to countries in the South, while services
and information and communication technology (ICT)-related labour have more recently
relocated as well (Dicken, 2003). The new division of labour entails capital investment in
the South, particularly foreign direct investment in export-oriented industries and services;
portfolio investments in state enterprises, banking and buildings; as well as a supply of
cheap labour through international migration.
City managers who want their cities to share in global growth and development have to
position them within the global system to facilitate flows of capital, goods and people.
Cities have to be included in the “space of flows”, where they constitute crucial nodes
in a world-wide network and act as points of transmission that link the global with the
local and regional. Globalizing cities in the South have to meet the requirements of
global capital if they want to seize opportunities for economic growth. Towards this
end, infrastructure such as international airports, highways, export-processing zones and
five-star hotels must be built, which in turn become the signs and symbols of urban
globalization. In the same way as their Northern counterparts, the globalizing cities of
the South are forced to compete with other cities. They are thus involved in a perma-
nent process of restructuring their physical infrastructure, labour markets and social
institutions.
Many Southern countries have over the past decades abandoned their earlier protectionist
and state-led import-substitution policies by liberalizing, privatizing and decentralizing
their economies—in short, by implementing a neo-liberal agenda that follows the
“Washington consensus”. Due to the position of the South in the international division of
labour, there is high demand for unskilled labour. This has meant women have entered
the labour market in great numbers, in manufacturing, tourism, and entertainment indus-
tries. Low wages and political stability—including a low level of trade union activity—
are part of the requirements of global capital. Globalization changes the function of national
states; by stressing the development of sub-national regions, it creates opportunities for sec-
ondary city regions such as the Pune Metropolitan Region and Metro Cebu.
In average per capita income, global cities are better off than cities that are not or only
weakly integrated into the world economy. Problems such as social polarization and urban
violence, however, are also apparent. The key concepts for understanding these processes
are inclusion and exclusion. Who gains and who loses from processes of globalization? In
both Pune and Cebu, a new urban elite and a middle class of businessmen, land speculators
and professionals benefiting from globalization have grown up alongside the old elite
groups. However, the majority of the population still lives from irregular work in informal
 Globalization and Urban Governance in Two Asian Cities 943

sectors of the economy. Symbols of this polarization include the gated communities of the
better-off where lifestyles meet the requirements for global interactions, alongside slums
and squatter areas where the urban poor live without proper facilities near polluted rivers
and waste dumps.
How can these dynamic city regions be managed? A new policy paradigm to manage
cities has emerged over the past decades, one that stresses urban governance, decentralized
decision-making and the participation of civil society. The United Nations Development
Programme (UNDP) defines governance as the exercise of political, economic and admin-
istrative authority to manage a society’s affairs where decision-making is shared between
local state structures, the private sector and actors in civil society. The latter defends, not
exclusively but most significantly, the interests of non-partisan groups and marginalized
sections of the population. Thus there are three major groups of actors in the development
process: the state with its agencies; the private business sector; and civil society
represented by NGOs and CBOs/POs.
The emergence of the new global paradigm of urban governance is closely related to the
spread of Western notions of democracy, and fits the tendency towards the global homo-
genization of urban management. According to Jessop, cited by Nuyten (2004, p. 105),
“The literature on governance rejects the rigid polarisation between the anarchy of the
market and the hierarchy of imperative coordination, in favour of the concept of heterar-
chy, i.e. horizontal self-organisation among mutually interdependent actors.” This concep-
tualization assumes an ideal situation where there is an equal division of power among
participants, and betrays its origin in societies with long democratic traditions. For most
developing countries where authoritarian traditions and strong patron – client relationships
dominate, authors are less inclined to refer to “flat societies”. Diana Mitlin states that the
term governance refers to “. . . the institutions and processes, both formal and informal,
which provide for the interaction of the state with a range of other agents or stakeholders
affected by the activities of government” (2004, p. 3), while Cornwall and Schatten
P. Coelho warn us that we have to depart from success stories. They argue that the inter-
face of state and society is a space of “. . . contestation as well as collaboration, into which
heterogeneous participants bring diverse interpretations of participation and democracy
and divergent agendas” (2007, p. 2). Grindle (2004) also warns us not to overestimate
the impact of governance principles in developing countries as institutions cannot
change overnight and we live “in a world in which all good things cannot be pursued at
once” (p. 525). Nevertheless, none of these authors explicitly refer to the vertical
patron – client relations that dominate the social landscapes of many non-Western
societies.
It would be naive to overlook the reality of the struggle for scarce resources in the cities
of the South—including the struggle for limited government budgets at the disposal of
local political elites—and the continued existence of patron – client relations. However,
urban governance in global cities implies greater space for civil society organizations to
participate in and initiate interventions within urban development processes. But while
access to decision-making institutions and greater public participation are broadly
accepted notions within current urban policy-making, they are often limited in practice.
Genuine participation demands a political process to involve people, to mobilize their
resources (including social capital), to strengthen their capacity to participate, and the
transparency of urban policies (Abbott, 1996). As will be seen, the current situation in
Pune and Cebu City fall far short of this ideal.
944 M. van Kampen & T. van Naerssen

The Urban Development of the Pune Metropolitan Region

In an environment where the poor are exploited and ignored, there is a major role for
the State and its agencies [. . .] in the field of urban development and provision of
services. This is an immense challenge because of the known weaknesses of the
system like the lack of accountability, corruption, and the dominant role of elite
groups. (Planning Commission, 2002, p. 627)

The impact of globalization is clearly felt and visible in the western Indian State of
Maharashtra. Among the country’s most advanced regions, Maharashtra’s development
path is best seen against the background of independent India’s. Following independence,
industrialization and Soviet-inspired central planning were chosen as the surest means for
rapid economic growth. Initially the approach focussed on import-substitution as the basis
for self-reliance and to eliminate poverty. Near-bankruptcy, however, forced the central
government to accept an international monetary fund (IMF) structural adjustment package
in 1991. The subsequent New Economic Policy was a radical shift towards liberalization,
privatization and globalization; export-oriented industrialization now became the favoured
growth strategy (Datt & Sundharam, 2006). Between 1961 and 1970, Maharashtra’s
economy grew at an average rate of 2.5% per annum, which increased steadily to an
average of 6.4% in the period 1991–2000 (Government of Maharashtra, 2002, p. 182).
The state capital Mumbai (Bombay) is the national financial centre and a global city par
excellence. This paper, however, focuses on the Pune Metropolitan Region located 160
kilometres south-east of Mumbai. Pune is an industrialized secondary city: the second
largest in the state and the eighth largest in India. At the time of the 2001 census, the
Pune Metropolitan Region had a population of 3.8 million, of which 2.5 million lived
in Pune City (Roy & Katoti, 2006, pp. 38– 39). The capital of the Maratha Kingdom in
the eighteenth century, Pune during British rule (1817– 1947) was the summer residence
of the “Bombay Presidency”. Pre-independence Pune gained importance as an educational,
cultural, administrative and military centre. Following independence, development
focussed on rapid economic growth.
The Maharashtra Industrial Development Corporation (MIDC) was established in 1962 to
promote growth more evenly throughout the state by acquiring, developing and leasing out
industrial land. One of the MIDC’s major initiatives was the development of a 1224 hectare
industrial complex north-west of Pune, near the villages of Pimpri and Chinchwad (see
www.midcindia.org). In the following decades the region developed rapidly and became
part of the global economy. The Pimpri-Chinchwad area urbanized quickly while continued
growth resulted in the establishment of a separate municipality in 1982 (van Kampen, 2000,
pp. 83–84). But while Pune became Maharashtra’s second industrial area, economic growth
remained concentrated near Mumbai. In 1980, the Mumbai-Pune region together accounted
for 25% of Maharashtra’s population and 70% of its industry (Dastane, 1992, p. 91).
The automobile and automobile components branch is now the leading industry in Pune.
According to a local industrialist, it is worth $3.5 billion (i.e. 30% of the Indian automobile
industry) and has the potential to attract investments of up to $10 billion (Nair & Kasabe,
2006). The industry gained momentum in 1998 with the introduction of an Indian family
car for the international market, while the arrival of foreign companies like Daimler
Chrysler enabled the city to promote itself as an international automobile hub—“a
Detroit of the East” (Nair & Kasabe, 2006). While Pune’s success in automobiles is
 Globalization and Urban Governance in Two Asian Cities 945

obviously related to the New Economic Policies, it is also banking on its long-standing
tradition in engineering. Pune has excellent facilities for higher education—a veritable
“Oxford of the East”.
In 2000 the Indian government introduced the concept of Special Economic Zones
(SEZs), “hassle-free” export-production areas that offer investors world-class infra-
structure, exemption from taxes and relaxation of existing labour laws. SEZs are now
being implemented around Pune, with the MIDC agreeing to participate in two large
joint venture SEZs with Indian car manufacturers (Economic Times, 24 August 2006
and 21 September 2006). In January 2007, Pune City witnessed the inauguration of its
first information technology (IT)-specific SEZ, fully financed by foreign direct investment
(The Times of India, 9 January 2007).
There are further examples of the economic development of the Pune Metropolitan Region
which connect it to the global economy. The ICT sector is probably India’s best known global
sector. The state government promotes the “Mumbai-Pune Knowledge Corridor” as a
leading IT hub; the MIDC is further developing four IT parks in and around Pune (see
www.maharashtraitparks.com). The real estate sector is also indicative, with foreign inves-
tors pouring money into real estate projects for the Indian middle class in secondary cities like
Pune. This has led to real estate prices soaring beyond the reach of the average person.
Finally, major infrastructure projects underscore the scale of current developments.
Besides the above-mentioned SEZs, communication and transportation channels have
been greatly improved. The six-lane Pune-Mumbai expressway opened in 2000 while
an international airport is planned near Pune (in addition to its national airport). Multi-
storey concrete constructions are rapidly replacing traditional buildings in the inner
city, while the usual global status buildings now mark the urban landscape: five-star
hotels, super-deluxe shopping malls, multi-storey parking garages, junk-food restaurants,
gated communities, international banks and offices.

The Other Side of the Coin: Non-development and Exclusion

While these urban developments proceed, the rural areas—home to two-thirds of the
population—seem to have been forgotten. Rural non-development (Desarda, 1994,
p. 1566) has fuelled a “rural refuge migration” into the cities. Most of these rural migrants
have come to depend on the “informal sector” for employment. Given their lack of
education, skills, contacts and assets, it is—for many—a life of chronically low income
and exploitation, a daily struggle for survival.
There is an obvious relationship between (informal sector) employment and urban
poverty. Bapat found in 1976 that two-thirds of the people in her sample of slum dwellers
were poor (Bapat, 1981, p. 194), while van Kampen found similar poverty levels 20 years
later (van Kampen, 2000). Both studies found people doing similar kinds of work. Dom-
estic service was by far the most important for women. Men showed more diversity in
occupational patterns, working as street vendors, construction labourers, rickshaw
drivers, petty shopkeepers, porters and lowly-skilled industrial labourers. All of these
occupations score badly in terms of income generating capacity and working conditions
(van Kampen, 2000, pp. 166– 176).
While the diverse informal economy may appear to contain opportunities for advance-
ment, poor households improve their income not so much through occupational mobility
but through their members taking on more jobs and through more household members
946 M. van Kampen & T. van Naerssen

working (usually women and sometimes children as well). While some slum residents
were found to have formal sector occupations such as computer operator, nurse, teacher
and garage-owner (van Kampen, 2000, p. 175), their presence bears witness to a worrying
reality—the eroding relation between occupation, income and basic needs like housing.
Downward pressure on shelter may spur gentrification in consolidated slum areas, with
the poor having to make way for the comparatively better-off.
The New Economic Policies have had important implications for the informal sector.
First, between 1990 and 1998, the share of informal sector employment in Maharashtra’s
urban areas increased from 52% to 59% (Government of Maharashtra, 2002, p. 33). Roy
(2003) argues that the New Economic Policies were accompanied by a growing symbiosis
of manufacturing’s organized and unorganized sectors; the informal sector has grown
since the mid-1990s by absorbing employment from the formal sector. Second, the infor-
mal sector has witnessed a shift from established enterprises towards home-employment
(Government of Maharashtra, 2002, p. 33), showing further erosion of the already weak
position of informal sector workers. Third, while a growing part of the Indian labour
force works in the informal sector, its share of net domestic product is decreasing
(Dutta, 2002, p. 13). This suggests the gap between the rich and poor is growing. The Plan-
ning Commission shares this concern, stating that “rapid economic growth has not led to a
corresponding decline in poverty” in urban areas (Planning Commission, 2002, p. 626).
Are the poor facing a situation of “urban non-development” as well?
Meeting the demands of the new international division of labour is one of Pune’s unique
selling points. Globalization capitalizes on the abundance of cheap labour and the absence
of the rule of law in the informal sector. Because exploitative labour conditions keep
people poor, urban poverty creates a continued need for “informal” housing solutions.
The proliferation of squatter settlements is a logical consequence of urbanization under
the conditions of exploitative globalization.

Slum Proliferation, Urban Governance and Exclusion of the Poor

While Pune’s slums pre-date independence, the arrival of rural refugees (including many
victims of recurring drought) swelled the number and size of the city’s informal settle-
ments from the 1960s (Sawant, 1978; Bapat, 1981). In 1989 there were more than 415
slum areas with an estimated total population of 800,000 (41% of Pune’s population)
(van Kampen, 2000, p. 90). The proliferation of slums seems to have stabilized thereafter,
with 2001 data showing 503 informal settlements housing about a third of Pune’s popu-
lation.1 Compared to the city average and in view of the under-provision or complete
absence of basic services like sanitation, drainage and waste removal, population
density in the informal settlements is alarming. Given the obvious health risks, the
proliferation of slums has become a public health issue.
How have the authorities responded? The Pune Municipal Corporation’s (PMC’s)
efforts since the 1950s to stop the spread of “hutment areas” with costly resettlement
schemes and in situ improvements have had little effect. The “slum problem” was
officially recognized in 1971 with the enactment of the Maharashtra Slum Areas Act,
which aimed “to make better provision for the improvement and clearance of slum
areas in the State and their redevelopment and for the protection of occupiers from eviction
and distress warrants” (van Kampen, 2000, p. 225). Under the Act, local authorities could
declare a squatter settlement a “declared slum” or a “clearance area”. People living in a
 Globalization and Urban Governance in Two Asian Cities 947

“declared slum” were protected from eviction; their settlements would be upgraded
through the provision of basic amenities such as drinking water and sanitation. Though
the aim was to have one public drinking water tap for every 15 households, only one
for every 53 households was in place by 1991. Provisions, moreover, were often of
poor quality and did not function as planned (van Kampen, 2000, pp. 223 – 247).
Settlements in “dangerous locations” or within “essential reservations” could be deemed
“illegal encroachments”—“clearance areas” authorized for demolition (van Kampen,
2000, p. 225). Occupants then faced the nightmare of their homes and livelihoods being
bulldozed. In areas that were not “declared”, people lived between hope and fear, and
without essential facilities. Drainage, roads and waste removal were either absent or
very poor, and while drinking water was available, occupants often remained outside
any social welfare schemes. This uncertainty remained as long as the area remained
non-declared. The status of squatter areas often becoming the object of political games,
with basic amenities provided via informal political patronage.
Local authorities have largely shown themselves incapable of alleviating poverty.
Despite the obvious need and the many promises, relatively little has been accomplished.
Sawant summarized the problem 30 years ago: “It is so much institutionalized not by
wilful promotion but by helpless indifference that these slums persist and seem to defy
all remedies. They are not welcome but they persist” (1978, p. 64). He could have
written this today as “there appears to be no change in the basic level or improvement
in the features of slum settlements despite several decades of programmes for the environ-
mental improvement and upgradation of slums [. . .]. Certainly the degree of effort to
upgrade slums to a more habitable level, does not indicate a serious effort in this direction”
(Planning Commission, 2002, p. 628). In practice, it usually requires powerful mediation
to get things done, which is why local leaders and political parties are often involved in the
provision of basic facilities and welfare schemes in return for votes, services or money.
Access to development is being exploited through systems of political patronage
(de Wit, 1993; also see Bapat & Agarwal, 2003; van Kampen, 2000).
Civil society organizations are not a new phenomenon in India (think for instance of
Mahatma Gandhi’s freedom movement). What is new is the manner of their involvement
in urban poverty alleviation, their professionalism, global networking, and responsiveness
to trends in international development cooperation. The government accepted the involve-
ment of development NGOs in the 1980s when national and international funding
transformed what were previously voluntary agencies. Some NGOs moved onto the
territory of traditional activists, while others became substitutes for government. Never-
theless, the strength of the NGO sector, in our view, lies in its flexibility, grass-roots
connections, and ability to fill niches left by the public and private sectors. Pune has a
large and diverse NGO community. As only some of them work with the poor, many of
these organizations are of little or no relevance to the problems discussed here. The
NGOs that work with the poor are diverse too, both in their activities and methods.
Below are but two examples.
As we have seen, the provision of basic amenities in slum areas has long been an
objective, though implementation has left much to be desired. By 1991 the PMC had
only provided 4837 public latrines, or about one-third of its minimum target, leaving
many non-declared settlements without even a single unit. Other units had stopped
functioning due to poor construction and maintenance, forcing people to use open-air
locations. Fortunately the problem was alleviated in 2000– 2001 when the PMC in
948 M. van Kampen & T. van Naerssen

partnership with local NGOs constructed over 200 sanitary blocks in declared slum areas.
Local communities were actively involved in this initiative through the “BOO approach”
(build, own, operate).2
The second example is based on the work of the people’s support organization Janadhar
Pratishthan (JP), which has been active in mobilizing and empowering squatters since
1998.3 Poverty is not always tangible in the form of poor housing or the absence of basic
facilities; it is also the “invisible” lack of access to opportunities that result from ignorance,
non-participation and exclusion. To create access to essential services and opportunities, JP
established partnerships between squatters in non-declared areas and local NGOs, govern-
ment agencies, and the private sector. For instance, JP accompanies the poor in getting
access to development agencies. It also renders existing government schemes such as
literacy classes and self-help saving groups more accessible for their target groups. JP
has further started a learn-on-the-job project for young women in the squatter settlements
who wish to become social workers. School dropouts are now continuing their formal
education towards a social work diploma while working for JP and earning an income.
While the work of NGOs is applauded and the government calls for public involvement,
securing adequate funding is always a challenge. Access to government funding is
hampered by an enormous bureaucracy, which makes the system prone to corruption
and political patronage. Access to foreign funding is an alternative—and in line with
the path of liberalization, privatization and globalization. But despite the euphoria
witnessed in other sectors, civil society groups have difficulty obtaining the mandatory
government permission to receive foreign support.
The New Economic Policies of 1991 promoted decentralization of government respon-
sibilities to enhance local self-governance, partnership building and popular participation.
However, 10 years later, the Planning Commission (2002) was critical of the role of the
public sector in urban poverty alleviation. Fortunately, the state is not monolithic, as
can be seen in the PMC’s Urban Community Development (UCD) wing introduced in
1984. The UCD began its activities in 10 settlements, but within a decade its work
covered nearly all declared slum areas. Its social-welfare activities address the urban
poor in general, while its habitat-oriented activities target informal settlements. The
UCD implements central government programmes as well as its own initiatives, including
vocational training, micro-credit, integrated slum development and a clean slum compe-
tition. Significantly, the work of the department has been participatory and inclusive
(van Kampen, 2000, pp. 271 – 302). The UCD shows that some state agencies and civil ser-
vants are concerned and pro-poor. They provide openings to participation, partnership
building and, who knows, inclusive urban governance.

The Urban Development of Metro Cebu

While the rest of the Philippines is troubled by corruption, terrorism and bouts
of political upheaval, the palm-fringed island of Cebu has prospered, attracting
multinationals with its investor-friendly initiatives. It offers a model for independent
cities elsewhere in Asia. (Far Eastern Economic Review, 16 October 2003)

Cebu City is the commercial, industrial, and educational centre of the central
Philippines. Cebu City is the heart of Metro Cebu, an agglomeration of the five cities of
Cebu, Mandaue, Lapu-Lapu, Danao, Talisay and eight municipalities. The Metro Cebu
 Globalization and Urban Governance in Two Asian Cities 949

population is about 1.9 million: 700,000 live in Cebu City, the same number in the other
four cities, and the rest in the municipalities. Cebu City comprises about half the land area
of Metro Cebu (370 square kilometres), of which 30% is coastal area and 70% mountai-
nous hinterland.
Cebu began to be incorporated into the world economy in the second half of the
eighteenth century with the expansion of sugar production on the island and the rise of
international trade. Some decades later, Cebu City became a collection point for copra
from the southern Philippines (Fenner, 1985). Thereafter Cebu City continued its history
of inclusion into the world economy. Its integration into the new (global) spatial division
of labour began after the fall of President Marcos in 1986, when the Third World regional
commercial centre transformed into a global city with export-oriented manufacturing and
tourism as its engines of its growth (Law, 1993; Blijleven & van Naerssen, 2001).
In 1979 the Philippine government established the Mactan Export Processing Zone
(MEPZ) on Mactan Island near Cebu City. The proximity of both a port and an airport
were its main assets. Due to political reasons it took time to get off the ground, but when
it did, the number of establishments (most of them from Japan) rose from 34 in 1990 to
100 in 2001. In 1997 a second Export Processing Zone (EPZ) housing 30 companies—
MEPZ II—was set up, adding 40 hectares to the original 120. All in all, the MEPZ provides
work for 35,000 people (Beerepoot & van Westen, 2001). More recently, Metro Cebu has
succeeded in attracting call centres, which currently employ some 5000 mostly young people.
Infrastructure facilities (international airport, port, six-lane roads, etc.) and tourist
accommodation and services (five-star hotels, beach resorts, golf courses, nightlife enter-
tainment places, etc.) have been established, expanded and improved. The latest has been
the construction of an international convention centre located near the Cebu North Recla-
mation Project (NRP), an area reclaimed in the late 1960s by private Cebuan entrepre-
neurs. Due to speculation and the boom in land prices (Sajor, 2003), much of the area
lies idle; in the words of the current mayor of Cebu City, “the owners just sit and are
happy to wait for the prices of their land to go high” (Sun Star Daily, 6 February 2006).
This, however, did not prevent the mayor from initiating a new reclamation project—
the South Road Properties, better known by its old name the South Reclamation Project
(SRP)—during the first period of his mayorship (1988– 1995) (Katahira & Engineers
International, 1995).
The re-casting of Metro Cebu as a global city has had social consequences. While Cebu
is ahead of many other cities in the Philippines in per capita income, it also faces severe
problems including growing social polarization, widespread poverty and urban violence.
The minimum wage in Cebu is around 240 pesos (E4) a day; over 20% of children attend-
ing public elementary schools are underweight (Sun Star Daily, 24 January 2006). While
Metro Cebu boasts its gated communities, the inhabitants of its many squatter areas suffer
from high unemployment, poor safety and health, and lack housing tenure and safe
drinking water (Berner, 2001; Heikoop, 2001).

Urban Governance and the Urban Poor in Cebu City

We now turn to the question of urban governance. Thanks to Etemadi’s work (2000, 2004),
we are relatively well-informed about the relationship between the city government and
the major NGOs involved in urban poor policies. While it may be true—as Etemadi con-
cludes—that the NGO coalition Kaabag sa Sugbo has delivered substantial results, its
950 M. van Kampen & T. van Naerssen

achievements should not be over-estimated. Kaabag’s accomplishments also need to be

seen through the perspective of participatory urban planning in Cebu.
The foundation of the NGO coalition was laid during local elections in 1988. NGOs and
people’s organizations [POs as community-based organizations (CBOs) are called in the
Philippines] held several rallies and presented a seven-point urban poor agenda to the can-
didates for mayor, called the People’s Alternative. They then decided to support Tomas
Osmeña, a candidate from a well-known business and political family (Mojares, 1994)
who promised to implement the urban poor agenda. Both in 1988 and 2001, Osmeña’s
election depended on the active support of key leaders of organized urban poor groups.
Personal relations between NGO leaders and Osmeña were instrumental in obtaining
their support (Clamor, 1993). Kaabag was thus drawn into the traditional politics of
patron – client relations, where the patron delivers services in exchange for votes.
The NGO coalition Kaabag sa Sugbo, which in 2004 had 14 members and seven associ-
ates, focuses on five key concerns: housing, livelihood, governance, children and women.
These reflect the diversity in aims and professional skills of the member NGOs. The
Pagtambayong Foundation, for example, has long-standing experience in social housing
while Lihok-Pilipina is engaged in women’s issues in the areas of organizing and
advocacy. FORGE combines advocacy with social housing.
Kaabag’s strategy is to organize the poor and to use their voting power as a lever to enter
city hall. This allows it to represent the urban poor in local institutions, to lobby for insti-
tutional reforms, and to obtain contracts for working on social issues such as organizing
the urban poor and social housing. The coalition’s efforts have thus far led to the creation
of a special Department of Welfare for the Urban Poor (DWP), relocation and social
housing programmes, a policy of “maximum tolerance” towards street vendors, and the
representation of NGO leaders and development workers in city frontline offices as well as
in Cebu’s City Development Council (Etemadi, 2004). In other words, civil society
became effectively involved in urban governance through mechanisms of political patronage.
This was possible because certain conditions had been fulfilled. The constitution of
1986 explicitly recognizes the role of NGOs and POs and their participation at all
levels of policy-making. A national institutional base allowing NGO participation in
local government was thus already in place. Local autonomy had further been established
in the 1991 Local Government Code, which encouraged popular participation in municipal
and neighbourhood governance. Moreover, a large part of Philippine civil society after the
fall of the dictator Marcos had changed its attitude towards the city authorities, which
Etemadi characterizes as a paradigm shift in strategy from “expose-oppose” to “expose-
oppose-propose” (Etemadi 2004: 80). “Critical collaboration”—the slogan of some of
the NGOs participating in Kaabag—represents the attitude of the coalition, although
this has eroded over the years, not least due to the appointment of a NGO leader as
City Administrator in 2004.
Processes of inclusion and exclusion are crucial to take into account in any evaluation of
urban management. In the case of Kaabag, there are several exclusionary processes at
work. First, exclusion occurs because of the limited capacity of civil society actors. It
has been estimated that Kaabag reaches about 20% of the urban poor population of
Cebu City, meaning 80% remain excluded. The figures vary by sector. For street children,
Kaabag claims its activities include nearly all of them. Several NGOs work with street
children and they apparently have sufficient capacity to cover the whole of Cebu City
(Etemadi, 2004). However, the training of barangay (neighbourhood) councils and
 Globalization and Urban Governance in Two Asian Cities 951

captains (neighbourhood chairpersons) was a specific activity of one NGO with limited
capacities. Thus the exclusion of the majority of barangays in Cebu City could not be
avoided.
Second, exclusion is inherent to Kaabag sa Sugbo’s discourse. The “expose-oppose-
propose” strategy by definition implies that radical NGOs and POs, inclined to “expose-
oppose”, will be excluded from local governance. The relevant questions then become:
How broad is the strategy? Which POs and NGOs that work for and with the urban
poor are included and excluded, and why? What are the consequences of their exclusion?
Third, there is the question of whether we can speak of urban governance when civil
society consultation and participation takes place within the framework of patron –
client relations. For example, the elected mayor generally does not support urban poor
initiatives in neighbourhoods that did not support him in the elections. In this way, particu-
lar neighbourhoods are deliberately excluded. In the long run, the results of the NGO
coalition’s work have to outweigh the risks of being excessively associated with one
personality and his party.
Against this background of inclusion, exclusion, and political patronage, we refer to a
violent demolition that occurred in the Cebu City neighbourhood of Carreta in 1999.4 It
concerned 52,100 square metres of land over which one of the longest battles involving
land ownership in the country had taken place. The case was filed in October 1965
when, against the claims of private landowners, the resident’s organization claimed the
land to be public property. It took the Supreme Court nearly 20 years (in 1984) to
decide in favour of the private landowners, meaning some 200 households had to leave.
The demolition order of the Regional Court was only issued in 1998, and was carried
out in March 1999. The case is of interest as it shows how influential personalities
(mayor, bishop, president) intervened on behalf of the residents but failed, while formal
government institutions and established NGOs were unable or unwilling to cope with
the situation. If one considers governance as an institution for negotiation to prevent con-
flicts, the only conclusion is that it failed.
Numerous personalities and organizations intervened before the final demolition
occurred. The then-acting mayor Garcia offered alternatives including buying the land,
relocation, and transferring residents to a City Hall condominium (Sun Star Daily, 15
December 1998 and 6 January 1999). The Cebu City DWP drafted a relocation plan
that people refused (Sun Star Daily, 27 January 1999). The commissioner of the national
Presidential Commission for the Urban Poor offered his assistance, but the residents’
organization declined. Even the president of the Philippines intervened, ordering the
National Housing Authority to expropriate lots to allow families ownership of land.
Amidst this confusion and after some failed attempts, demolition took place leading to
several deaths and many injuries.
The case raises questions, especially concerning the current situation of urban poor
areas near the SRP, one of Mayor Osmeña’s pet projects. The SRP has two components,
a 300 hectare land reclamation project and a six-lane coastal road connecting the central
business district to areas south of Cebu City. The reclamation was paid for by a 12.3 billion
yen loan (2.8 billion Philippine pesos or more than US$100 million at the time of signing
in 1995) by the Japanese Bank of International Cooperation to the Cebu City Government.
While the project began in 1998, delays pushed back completion until May 2004.
One aspect that deserves public discussion is the project’s cost. Paying the debt for the
SRP is a burden on Cebu City, and comes at the expense of social services. It now appears
952 M. van Kampen & T. van Naerssen

that the projected sale value of the land (10,000 Philippine pesos or some US$200 per
square metre) was exaggerated. While plots remain unsold and interest payments
mount, the City keeps betting on the future; it is a case of land speculation and not
losing face. But will the land be sold within a foreseeable period? Can the city bear the
costs of the SRP? And if so, who will pay for it?
Civil society’s inability to deal with urban development at large—and what is more, its
association with the mayor—can be seen in its silence over land use within the SRP.5 How
the land is used deserves public discussion. Are Cebu City citizens in favour of privatiza-
tion and large-scale speculation? Do they want commercial and industrial land for foreign
investors? Originally SRP was launched to become Cebu’s major industrial estate, a huge
export-processing zone eventually employing 40,000 or even 80,000 people (Mayor
Osmeña in Sun Star Daily, 24 January 1999). But circumstances have changed with
China’s emergence as Asia’s favourite location for labour-intensive industries. More
recently SRP has been declared an “integrated commercial and entertainment complex”
for which the city wants a 2.5 billion Philippine pesos loan from the Japan Bank for Inter-
national Cooperation (The Freeman, 19 May 2004). The director of the Cebu Investment
and Promotion Centre has announced that some 50 hectares would become a Tourism
Economic Zone, and that at least 10 companies are considering buying land. Regardless
of the outcome, there are no signs that citizens are being consulted—let alone participating
in decision-making.
The SRP project has also affected thousands of families dependent on fishing along the
former coastline. Their relocation has now been on the urban agenda for many years. A
smooth relocation is also in the interests of the Japanese project donor, which, pushed
by “leftist Japanese groups”, is urging the Cebu City government to take action. Neverthe-
less, a comprehensive plan has not materialized: it has yet to be decided how many
families will be relocated, to where, and the compensation families can expect. With
many difficult issues at stake and pitfalls to avoid, it is no easy matter. Nonetheless,
here lies an excellent opportunity for governance action. The city government, POs,
development NGOs and private businesses could develop joint initiatives at a fraction
of the cost of the total project.
The city government’s foreign debt, land use in the SRP, and the relocation of poor
families justify civil society’s involvement and participation in decision-making.
Adequate mechanisms for governance of the SRP, however, do not exist; nor are
there signs that they will exist in the near future. In fact, the case shows that civil
society participation is limited to social issues and that civil society groups are excluded
when major economic interests in urban development are at stake.

Conclusion
Major Asian cities are joining the “space of flows” and emerging as nodes in a global
network of circulating capital, commodities and policy ideas. To ensure economic
growth, many are involved in a continual process of updating their infrastructure and
labour markets. While rapid economic growth in the City of Pune and Cebu City has
generated resources for more equitable development, inclusion of the poor in the main-
stream of society also requires changes in attitudes, knowledge, skills and assets. The
pro-poor sections of local governments and civil society thus have their work cut out for
them, not only among the urban poor, but among their established counterparts. In the
 Globalization and Urban Governance in Two Asian Cities 953

social aspects of city planning, urban governance has made headway, though it is too early to
speak of “good enough governance” [following Grindle’s (2004) suggestion]. The change
of heart within the establishment, however, is proving more difficult—in the interface of
state and society, negotiations take place within a context of unequal power relations.
Both Pune and Cebu show that political patronage plays a dominant role in urban poli-
tics. In both cities, practices of political patronage grease the relatively good relationships
between city governments and parts of civil society. While this brings opportunities, there
are dangers as well: NGOs and CBO/Pos tend to neglect groups and issues that have the
potential to endanger personal relationships with power holders. Apparently there are
limits to governance as the World Bank conceives it. This is readily seen in city planning
in general, as well as in economically significant sectors and in large infrastructure
projects. Civil society—and the urban poor—are thus excluded from crucial aspects of
urban development and decision-making.

Notes
1. The PMC estimated that “there are 503 slums in the city, out of which 322 have been declared official”
(The Times of India, 16 April 2002). According to the Government of Maharashtra (2002), the squatter
population of these declared areas was 530,000. It follows that the total squatter population was about
830,000, or about a third of the total population of Pune City.
2. See http://www.shelter-associates.org for details.
3. Marcel van Kampen is initiator and coordinator of JP. All information on this organization’s work and on
interaction with other stakeholders is based on his personal observation and communications with the
social workers and governors of JP.
4. In 1999 Ton van Naerssen learned about this case and visited the area. During later visits he went through
the files of the library of the newspaper Sun Star Daily in 1999/2000, and had the opportunity to interview
one of the people directly involved in the 2000 demolition. The 1999 Carreta demolition belongs to the
collective memory of Cebu City’s civil society.
5. Ton van Naerssen had the opportunity to visit the affected fisher-folk communities in 1999, 2004 and
2006. In 1999 he talked with one of the barangay captains concerned and in 2000 had the opportunity
to interview the SRP Project Manager. The files of the library of the Sun Star Daily proved useful in
1999, 2000 and 2004 as well.

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