Recovery, Renewal, Resilience

A recent event organised by Geneva Cities Hub (GHC) and UN-Habitat examined the measures that cities across the world took to tackle economic and financial impacts of the COVID-19 pandemic. The session discussed lessons learned and how these might inform and accelerate the development of strategies which effectively prepare for and mitigate the effects of future crisis in cities. One core response lesson identified was that “cities which have best managed the crisis are those who have been flexible in the allocation of resources and capacities to support their citizens”. A further key takeaway was the potential for tools developed by international organisations to support and drive city recovery and renewal. The tools discussed include:

1. The Urban Economic Resilience Performance Diagnostic and Planning Tool which can support cities to:

• Identify the “strengths and weaknesses of institutional and operating” mechanisms with a focus on economic recovery, renewal, and resilience building
• Analyse the “structure and functioning” of cities and effectively measure economic performance. This tool can specifically help cities to understand how these factors impact vulnerability to shocks and stressors, and broader local resilience
• Inform the design and implementation of comprehensive Recovery Strategies and Renewal Initiatives that restore and enhance preparedness, and tackle systemic socio-economic conditions to reduce vulnerabilities

1. The Municipal Financial Self-Assessment Tool which aims to support cities to:

• Analyse city financial health and identify strategies that will improve the “mobilization of local resources, financial management, public spending, assets management (public), investment programming and access to external funding”
• Evaluate local budgets, finance management practices, city savings capacity, investment history and future opportunities, and review financial forecasts
• Benchmark according to a set of comparable key indicators and ratios
• Define strategies for a ‘Municipal Finance Improvement Plan’ aiming for “greater accountability, visibility and efficiency in the use of public funds”
• The local government of Kisela Voda, Macedonia, detailed how this tool supported them to mobilize local resources such as increasing land development fees and selling municipal assets

1. The City Resilience Profiling Tool, designed to:

• Assess and understand unique urban systems by engaging local governments, the private sector and civil society stakeholders to build city resilience
• Support the establishment of strategies that consider five core and interdependent components: “spatial attributes; organisational attributes; physical attributes; functional attributes; and time”

Cities’ have been in the forefront of the fight against the pandemic, by providing emergency services, containing the spread of disease, mitigating the resulting social and economic impact, and coordinating efforts for recovery. In addition, cities have delivered financial aid to companies and families in need, and reduced or suspended municipal taxes (see European Committee of the Regions). Naturally, this has impacted their public finances and there have been various calls to change how cities are funded, in order to increase fiscal resilience. The current funding model for most cities, around the world, is primarily based in transfers from national governments. Own revenues, such as taxes, comprise the second most important source of revenue to cities, followed by external financing. The UN proposes reversing the current model, by decreasing the dependency on national transfers and increasing revenues from own revenues and external financing. The UN recommends the following:

• Provide funding to cities to support economic recovery, for example:
  • National governments could provide emergency funding to cities earmarked for service provision, infrastructure, and special relief programs for populations
• Improve the accessibility of finance and credit for local governments, by allowing them direct access to grant/loan applications and enabling them to develop public private partnerships
• “Strengthen multilateral financing and cooperation” to allow cities to fund recovery and renewal programs. For example:
  • International organizations, development banks, and national governments could establish dedicated global funds to finance urban responses to COVID-19, to help cities and their local economic and financial recoveries
  • The European Union Solidarity Fund will cover 100% of costs incurred by Portuguese cities, associated with the fight against COVID-19
• Channel financial support to productive sectors most at need. City authorities could facilitate coordinated action across urban areas to provide “loan programmes, grants, tax incentives, and temporary rent deferrals” to businesses in need
• Introduce incentives for “sustainable production and consumption through new policies, subsidies and knowledge transfers”. E.g. grants for new clean energy strategies such as green roofs
• “Address dysfunctional and exploitative development practices such as land speculation and unserviceable sprawl”, by, for example, implementing and enforcing clear regulations and introducing taxes to increase own revenues

Research shows that young people experience more long-lasting labour market impacts due to economic crises than adults, including being the first to lose jobs, working fewer hours, taking more time to secure quality income, and wage scarring where earning losses recover slowly. The International Labour Organisation reported that 17% of young people employed before the pandemic had stopped working entirely, and 42% reported reduced incomes. Additionally, it is widely reported that it is becoming increasingly difficult to source workers with the right skills in sectors where job opportunities exist. Consider developing youth employment initiatives, aimed at promoting domestic employment, skills development, capacity building and enabling equal access opportunities for vulnerable youth:

• Assess your own organisation’s operations and capacity to understand where youth employment opportunities may be protected or enhanced:
  • Recognise the contribution of people who joined your organisation as young people in entry-level roles and try to ensure that restructures do not remove roles that provide a talent pipeline into your organisation.
  • Monitor for age in any furlough and redundancy plans to ensure young people in your existing workforce are not disproportionately affected
• Map labour market information of unemployed young people such as knowledge, skills and abilities, with potential sectors of employment, including consideration for the supply and demand aspects of the labour market
  • Establish a working plan with employment services centres to support registration, profiling, referral, temporary work placements and on-the-job training
• Collaborate with local government and private and public organisations to establish sectors in which temporary employment opportunities for young people could be created e.g. public works and infrastructure maintenance (Nepal)
• Align vocational education and training aimed at up-skilling young people with employment initiatives such as apprenticeships and work experience programmes
• Provide youth-targeted wage subsidy programmes to help young people enter, re-enter or remain in the labour market by reducing costs of recruitment, retention and training
• Continue to provide careers advice in schools, colleges and universities to help young people navigate their employment options during COVID. Ensure careers advisors understand the current labour market and options open to young people so that they can provide timely advice

The SDGs, represent the world's agreed economic, social, and environmental targets for 2030, and can act as a common scorecard to ensure there are objective standards for assessing progress. Localising the ambition of the SDGs to develop local economic development strategies can help integrate social and environmental standards within local economic agendas, reduce disparities between regions, generate local business opportunities and jobs, and aim to include all marginalized communities. Consider how the SDG framework can support inclusive and diversified economic growth:

• Integrate SDG targets into on-going budget reviews process, thereby improving resource allocation and performance evaluation
• Examine the link between ongoing public policies, the SDG targets and budget expenditures
• Analyse the official indicators related to budget-planning instruments
• Partner with the private sector to launch impact investment initiatives that address the SDGs, recovery and renewal from COVID-19 and sustainable economic renewal

Alongside the health and environmental risks, COVID-19 has exposed the vulnerability of current economic models. Circular economies are those that produce significantly reduced waste with the aim of producing zero through sharing, reusing and recycling products and byproducts - and the circular economy is becoming increasingly relevant during COVID-19. Consider:

• Developing more 'pay for service' models that do not require people to own goods in times of financial uncertainty e.g. using launderettes rather than having the burden of owning a washing machine provides alternatives to manage consumption, either by reducing expenditure, or opting for the basic alternative. These can be designed to support social distancing and COVID-19 measures
• Redefining and classifying what is considered essential if resources are limited or strained in order to prioritise needs. The circular economy may require redefining and rethinking the importance of certain roles, tasks, products and services e.g. the shift in perceptions of those in retail or waste management have been classified as essential workers
• Focus on local supply chains. Local supply chains can be more environmentally friendly and can also be more secure. De-globalization is a clear post COVID-19 trend. World trade is expected to contract between 13% and 32% in 2020, which indicates reliance on international supply chains may be seen as riskier than sourcing products and components locally
• Incentivize businesses, big and small, to become part of the circular economy e.g. encouraging businesses to take more responsibility for providing reusable facemasks to their staff, or supporting projects which aim to clean up and protect ecosystems from plastic waste such as disposable gloves and masks

In the USA, Black Communities are amongst some of the hardest finically hit communities as a result of the economic fallout from COVID-19. Recovery to date has shown to neglect women, Latino and Black Americans. Similar patterns are seen globally, with marginalised and already vulnerable groups being hit the hardest economically. Like many countries, this is a result of pervasive existing inequalities in access to income, assets, health, education, formal employment, equal opportunity, social protection, internet and public services. Consider:

• Explicitly acknowledging the heightened economic vulnerabilities of specific socioeconomic groups - and address these with targeted measures
• How to encourage broad public participation and collective action in government planning and response to effectively address existing inequalities and the needs of vulnerable populations as well as minimise elite capture and urban bias
• How policies should account for constraints faced by specific marginalized groups in terms of economic recovery such as job precarity, lack of education, low wages
• That economic recovery programmes that do not address these inequalities run the risk of reinforcing and deepening inequalities into the future which can burden economies and health systems
• Assessing funding proposals for their impact on different societal groups

The local context is extremely important. The economic impacts of COVID-19 will play out locally in different ways. Consider:

• Engaging with local businesses and stakeholders regularly to understand the needs and concerns particular to the area and to inform local government's funding agenda
• Identifying projects which can be fast tracked, or are of particular concern to the local economy and need immediate funding
• Mapping of specific local industries that have been hit hard by impacts of COVID-19 such as tourism, or certain types of manufacturing as these will need attention to avoid long-term, potentially generational impacts of economic decline
• Capacity mapping of skills to develop programmes to upskill and train people in priority employment sectors - this may be industries such as construction
• How to support Small and medium-sized enterprises (SMEs). SMEs represent around 80-90% of business in many national economies and are deeply integrated in local communities economically and socially. They provide spaces for innovation, competition and are an essential source of employment

TMB Issue 10 brings together the reflections of our learning ffrom the first 10 weeks of gathering lessons on recovery and renewal from COVID-19. Follow the source link below to read all of the reflections from our team (p.9-15)