---15 Mar, 1999---                                                    ISSN
Institute for Global Futures Research (IGFR).
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.       'Smart Growth'
.       Impact of the Net on urban planning/transport
.       Why is Aid decreasing ?
.       Debt relief
Ted Trainer [1]

I want to object to the term and the concept 'smart growth' used by
Peter Newman in GFB #79 [2].  These  give the impression that
growth needn't be a problem; all we have to do is make sure it takes
place in the right areas.

Of course it is sensible to think about less unsustainable ways of
approaching problems like the energy cost of the cities we have today,
but the sorts of developments Peter refers to are not just trivial.  They
give the impression that such technical fixes can get us out of the
catastrophic situation we are in without us having to face up to
radical reduction in per capita consumption and in the GDP.

The present per capita levels of resource consumption in Australia,
for example, are far beyond those that could be kept up for long, or
extended to all people.  Just to take one of many lines of argument -
our per capita 'footprint' seems to be about 4 - 5 ha of productive
land.  If all the world's people today were to live like Australians,
about 3.5 times the world's present total productive land area would
be needed, and for the population we will probably have later next
century the multiple is around 8.0.  Do we think that technical fixes
like increased urban density, renewable energy and better recycling
can cut these sorts of resource and environmental impacts to
sustainable levels, given that present rates are grossly unsustainable ?

Now lets add the absurdly impossible implications of any
commitment to growth.  If we average only 3%/an growth from now
to 2070 and all the people the world we will then have were to rise to
the living standards we would then have, total world economic output
would then be 110 times what it is today.

Just to add one other area of enormous problems - the festering mess
that is Third World 'development'.  One-third of the world's people
now get poorer each year according to the UN.  This is directly due to
the fact that development has been defined as economic growth; just
facilitate capital investment, increased business turnover and greater
GDP.  But what this does is deliver most of the world's wealth to the
rich; one-fifth get 86% of world income now while the poorest one-
fifth get about 1.5%.  This ratio will deteriorate under globalisation.

Is it not somewhat more important to focus on the idiocy of the
growth commitment, and on how to get societies like ours to start
recognising this, than to fiddle around with things like traffic
calming when they cannot hope to make any significant difference to
the accelerating problems that the mindless obsession with growth is
already bringing down upon us ?
[1] Ted Trainer is Professor at the University of NSW, Australia
[2] Newman, Peter 'Cities and Smart Growth' Global Futures
Bulletin #79    01 Mar 1999
Ted Trainer's point is valid in that the term 'Smart Growth' merely
perpetuates a futile, illusory, if not unjust, concept of the future.

On the otherhand, it could be argued that the term 'Smart Growth' is
a euphemism for 'sustainable development' and a policy sales pitch
directed primarily to an elite and conservative US audience.  A policy
labeled 'Smart Growth' may attract more interest and support than
one labeled 'Sustainable Development'.

It is unfair to describe Peter Newman's analysis as concerning
'traffic calming'.  Rather, Newman is looking at ways of reorganising
cities to reduce per capita consumption of resources, not only by
relieving us of auto-dependence, but by helping to recreate
communities, the loss of which is perhaps currently compensated for
by hyper-consumerism.  The car/4WD, afterall, is the archetypal
consumer status symbol.

Further, 'growth' does not necessarily mean 'economic growth'.  We
also have the concept of 'personal growth' with spiritual
connotations.  However, in the context of urban planning, 'growth' is
likely to be associated with both population growth and economic

But the point that remains - should we be attempting to placate a
conservative audience with expedient euphemisms, or should we be
calling a spade a 'spade' ?
{23. global parameters, scenarios, new dimensions}
John McLaughlin [1]

Peter Newman's assertions that 'rather than favoring scattered
development, the information-based city needs intensive areas where
people can meet to share their expertise, to plan and progress their
projects' and that 'electronic communication supplements face-to-
face contact, it does not replace it' (GFB #79) [2] are interesting but
require supporting evidence.

It is not self-evident that creativity in the electronic age needs smart
centers for face-to-face meetings.  In fact, it seems as if it is the
occasional face-to-face meeting (annual convention, retreat, airport
hotel meeting) which supplements electronic gatherings - the busy,
daily exchange of ideas and information in electronic space.

Car-based urban sprawl is being replaced in the lives of many e-
professionals, not by rapid transit or downtown loft living, but by
communication at their own leisure or time-design, from ex-urban
locations or across national and international boundaries.  Failure to
recognise this may lead to urban/transport misplanning.
[1] John McLaughlin, East Stroudsburg University, US
[2] Newman, Peter 'Cities and Smart Growth' Global Futures
Bulletin #79    01 Mar 1999
- we must acknowledge the difference in urban planning priorities for
cities in developing countries and developed.  In the former, they are
still mainly public transit based but likely to move to auto domination
with disastrous consequences (eg Bangkok) if public transit is not
upgraded, and the focus of urban planning not shifted.  In the latter,
it is often a question of city centre renewal and enticing people back
to public transit.

- while there is an emerging information sector in developing
countries (eg strong IT industry in India), in terms of the ratio to the
overall economy, it will possibly remain smaller than in developing
countries due to the continued strength of agriculture and
manufacturing (low wages in a global economy) and the domination
of the global financial sector and other information-based sectors by
the OECD countries (at least until the inception of a new, more just
economic order !).  However, even this assumption could be
challenged on the basis that much information processing is now
being done in developing countries, also due to lower wages and the

ease of transfer via telematics (computer communications).

- what % of people in developed countries are actually engaged in
highly information-based employment such that they can operate
through telematics alone ?  And what are the trends ?  There are
limits to the ratio of information-based (non-physical) employment to
material goods-based (physical) employment [1] (though we may be
some way from reaching those limits).

- urban versus suburban versus rural lifestyles is partly a question of
personal preference, and partly a tradeoff of practical concerns.
Many might ideally prefer to live in the city centre but do not because
urban real estate is too expensive, or the quality of life (congestion,
pollution, crime etc) is too low.  Or conversely, many would prefer to
live in the country if they could work via telematics.  Whatever the
fluctuating factors determining people's choice of human habitat, as a
highly social species, cities and megacities are likely to remain
prominent.  The advent of telematics-based employment may imply
some will shift away from the city, but a larger proportion may prefer
to stay (empirical studies required here).

With trends away from conventional family structures and lifestyles,
it is understandable that with help from regulators and innovative city
planners, many city centres in developed countries are undergoing a

The key issue is perhaps the relationship and balance between urban
and suburban.

Beyond the domains of the urban, suburban and rural, we could also
define other emerging categories of settlement:
- sylvan (ie where 'rural' implies agricultural),
- semi-rural (typically 0.5-1 ha plots),
- dual habitats (eg rural and urban, trans-Atlantic, northern and
     southern hemisphere) and
- mobile (mobile homes, short-term rental).

A second issue is that where there is a new migration to rural and
sylvan zones due to the new telecommuters, how will this impact on
traffic congestion (eg on narrow rural roads, on increased rural-city
auto traffic), and impact on established rural communities and new
development pressures on natural habitat ?  While the new rural and
sylvan dwellers might be able to work via their computer, they may
still have to drive 50-150kms/week for supplies.

The significance of telematics-based employment or telecommuting is
the potential to *reduce* commuting by reducing the number of days
one must be present 'at the office'.  It could be as much as 50% or

more for some sectors.

Telecommuting can undermine the economies of scale required for
effective public transit, but this can be compensated by medium-high
density development around public transit nodes.

An aspect of the emerging information economy is the irregularity of
(and increase in) travel patterns created, which gives stronger
incentive for private auto travel.  On the otherhand, the rise of
'telepayment' together with improved courier and 'mail order'
services offsets this trend somewhat.

With the diffusion of broadband computer communications around
2010 in OECD countries, affordable multimedia communications
(real-time computer video-link) will make virtual 'face-to-face'
meetings commonplace ('all but the phenomes').  Improved voice
recognition software will allow voice creation of messages in both
text and audio.

Another factor is the emergence of new auto technology (EVs and
hybrids), which could increase fuel efficiency by a factor of 3.5 - 10.
Air pollution/km may drop considerably more (factor 10 +) [2], but
the per capita kms traveled may increase (especially given automated
freeways allowing the 'driver' to work in comfort while driving).

However, there is little prospect for the dissection and fragmentation
of urban space and alienation and damage to urban communities to
diminish while cities remain auto-based, regardless of technology
[1] see Trainer, Ted in Global Futures Bulletin #49  01 Dec 1997
'The Limits to Growth Argument Now'   '...70% of a developed
economy is already in the service sector.  If the economy were to
grow at only 3%/an without any increase in the non-service sector,
then by 2060 the service sector would make up 96% of the total
[2] see Global Futures Bulletin #38/#39  01 July 1997  'Hypercars'
'Estimated efficiency gains would initially achieve factor 3.5-5 (70-
80%), and then factor 10 (90%) - ie 2.3litres/100 km - 1.6litres/100
km, and then 0.8litres/100km.  Emissions could be reduced by a
factor of 10-1000.'
{18. urban development; 32. cyberspace revolution; 20. transport}
Among commitments that have so far not been honored [1]:

- UNCTAD and the UN General Assembly recommended that 1 % of
GNP (of developed nations) be directed to Overseas Development
Assistance (ODA) in 1961, 1968 and 1970.

- A net ODA target of 0.7% of GNP was agreed at the 1970 UN
General Assembly [2] and reiterated at various summits such as the
UN Conference on Environment and Development (UNCED) in

- A net ODA target for least developed countries (LLDCs) of 0.15%
of GNP was agreed at the 1981 UN Conference on LLDCs.

- A commitment to have at least 86% of ODA as a grant element was
agreed by the Development Assistance Committee (DAC, OECD) in
1978.  Currently, ODA need only have 25% grant element.

- 2020 Initiative (also known as the 20:20 Compact) - agreed at the
1995 UN Social Development Summit states a minimum of 20% of
aid and 20% of developing country budgets would go to basic social
services.  Although in eight out of 18 of the recipient countries where
data was available, government spending in health and education
(two of the five areas listed in the Compact) had exceeded 20% of the
budget, this was not the case for any of the donor countries [3].

For donors who report (about half are not yet providing figures), a
mere average of 1.2% of ODA is spent on basic education (eg
primary schools and adult literacy) and 1.3% on basic health [4].

The Development Assistance Committee (DAC) defines ODA as
'Grants or loans or technical support to countries and territories on
Part 1 of the DAC List of Aid Recipients which are:
- undertaken by the official sector;
- with promotion of economic development and welfare as the main
- at concessional financial terms (if a loan, then having a grant
     element of at least 25%)'.

Overseas development finance and private finance.  US$billion [5]

        ODF     (ODA    OA      other)  private interest paid
1990    76.5    (50.6   2.3     23.7)     43.6    -73.1
1991    84.8    (57.4   6.6     20.8)     50.8    -68.8
1992    78.6    (58.6   6.1     14.0)     77.3    -70.4
1993    83.4    (56.0   6.0     21.5)     81.9    -62.2
1994    86.2    (60.3   6.9     19.0)   126.6     -83.1
1995    89.3    (59.8   8.4     21.1)   168.3     -94.2
1996    78.1    (57.9   5.6     14.5)   282.6     -98.4
1997    76.8    (49.8   5.3     21.7)   252.1   -104.0
ODF - Official development finance
ODA - Official development assistance
OA - Official aid
other - other ODF
ODF = ODA + OA + other ODF
private - private capital flows comprising (in 1997)
        US$b (DAC countries)
        107.8b  foreign direct investment (FDI)
          91.2b bond lending
          20.0b international bank lending
          28.5b other (including equities)
            4.6b        NGO grants
interest paid - annual interest paid by aid recipients

Breakdown of financial flows is important to ascertain where the
focus of pressure to change policy must be.  There is much focus on
the World Bank even though it manages only ~US$4b (~8%) of a
total ~$48b ODA.  The EC as a multilateral institution, managed
~US$4.7b in 1997.  Total net 'resource flows' (capital flows),
including ODF and private investment etc, from donor (DAC)
countries to aid recipients is between US$183b-US$325b (depending
whether bond and equity lending is included) [6].

The substantial increase in foreign direct investment (FDI) is still not
a substitute for ODA (given as an excuse by donor countries to reduce
their ODA levels) as it is highly selective in commercial sectors and
in the region.  Most FDI is going to China and other Asian growth
centres as well as Latin America.

% of multilateral ODA (as opposed to bilateral ODA) has increased
slightly from 26% in 1990 to 35% in 1997.

ODA  US$b 1997 [7]                      48.3
   1. Bilateral grants and grant-like flows             31.2
      of which: Technical co-operation                          12.9
                Developmental  food aid                           1.0
                Emergency & distress relief                               2.2
                Debt forgiveness                                          3.1
                Administrative costs                              2.7
                other                                             9.3
   2. Bilateral loans                                     1.1
   3. Contributions to multilateral institutions                16.0
      of which: UN                                                3.9
                     EC                                           4.7
                     IDA (World Bank)                             4.0
                     Regional development banks                   1.5
                     other                                                1.7

Official development assistance (ODA) from OECD (DAC countries) as % GNP in
1993; % bilateral aid tied to purchases from donor country 1997; as % GNP
in 1997 [8]:
%GNP            1993    % tied  1997

Denmark 0.97    23      1.03
Norway          0.89    21      0.85
Sweden          0.82    17      0.81
Netherlands     0.82    11      0.86

UN agreed target 0.70

France          0.61    35      0.52
Canada          0.41    23      0.34
Belgium         0.38    23      0.34
Finland         0.37    40      0.34
Germany 0.37    18      0.35
Luxembourg      0.35    ?       0.49
Portugal                0.32    ?       0.23
Australia       0.31    21      0.28
Switzerland     0.31    37      0.34
Austria         0.30    12      0.26
Japan           0.29    21      0.25
United Kingdom  0.28    15      0.28
Italy           0.27    63      0.17
Spain           0.23    86      0.23
New Zealand     0.22    ?       0.24
Ireland         0.18    ?       0.31
United States   0.15    50      0.12

Total av                                0.26

The only countries to increase levels of ODA were Denmark and the
Netherlands (already above recommended targets), Luxembourg
(significant increase but still well below target), Switzerland and New

An average of US$5b/an is being spent on poverty eradication
without a mechanism for assessing social impacts, clear policy
objectives and rigorous evaluation of performance [9].

Not enough aid is going to institutional capacity-building, making it
difficult for donor countries to coordinate development strategies,
which in turn undercuts local ownership.

Donors do not coordinate their bilateral aid to recipient countries,
meaning duplication, eg of recipient paperwork and coordination.

Human rights criteria are not being applied evenly, sometimes
distorted to serve political and economic interests.

Charles Mueller argues that the focus of aid to developing countries
should be to encourage the reform of corrupt regimes, land reform
and the elimination of monopolistic practices [10].  While these goals
are commendable, Mueller's advocation of a market-based strategy to
development has limitations in that grassroots entrepreneurial
initiatives (ie small business) are soon dominated and eliminated by
larger (eg foreign) players if there is not a degree appropriate of
market regulation.

Reductions in military spending should be a more important criteria.
Many of the aid donors are also major arms suppliers, particularly the
US, France, and the UK, but also Italy, Switzerland, Belgium etc.  A
global approach to disarmament is required instead of merely
restricting the poorest nations.

A Finance for Development Ad Hoc Working Group in the UN is
expected to present the UN General Assembly with a final report in
June 1999 [11].

Comment by an Australian government aid (AusAID) official, Jan
'A point to note that a colleague of mine made is the 0.7% GNP Aid
Guideline is not a commitment, but a target.  No country is obliged to
reach this level of Aid, but it is a recommended target.'

Australia's 1994 Budget Paper reiterated the target of 0.7% GNP to
ODA and pledged that in the meantime, Australia's ODA would not
fall below 0.34% GNP.  But the pledge has been broken and is now
down to 0.28% GNP (1997) [12].
[1] Luke, Garth  personal communication  Jan 1999.
[2] The 0.7% target was devised by the Pearson Commission in the
context of the International Strategy for the Second U.N.
Development Decade.
[3] 'The Reality of Aid 1996 - An Independent Review of
International Aid'  (1996)  page ix.
[4] 'The Reality of Aid 1996'  op cit   page ix.
[5] OECD  Table 1. Total Net Resource Flows from DAC Member
Countries and Multilateral Agencies to Aid Recipients
[6] OECD  Table 1  op cit and Table 2 op cit.
[7] Table 2.  The Total Net Flow of Financial Resources from DAC
Countries to Developing Countries and Multilateral Organisations by
Type of Flow
[8] Figures for 1993 and % tied aid: OECD Development
Cooperation 1994,  (1995).  Figures for 1997 Table 7 Burden Sharing
Indicators, OECD
[9] 'The Reality of Aid 1996'  op cit  page x.
[10] Mueller, Charles moderator of
[11] Finance for Development website
[12] 'The Reality if Aid 1996' op cit p223
{38. equity; 1. development issues, theory and paradigms}
Consider that while total Overseas Development Assistance (ODA)
(1997) is US$48.3b, total debt owed by developing countries is
US$2,200b (1997), with debt owed by the Highly Indebted Poor
Countries (HIPC) totalling US$245b (1996).  In many cases, the
servicing of debt - US$104b (1997) cancels the benefit of ODA.

The Highly Indebted Poor Countries initiative (HIPC) was conceived
by the World Bank in 1995 to forgive debt totaling ~US$30b in the
world's poorest countries (41 countries, mainly in Africa and Latin
America).  US President Clinton has suggested the amount of debt
that could qualify for forgiveness be increased to US$100b which
would increase the number of countries eligible (eg classified as
'HIPC') to 50.

However, debt relief would remain conditional on economic reforms,
including the dismantling of state enterprises and end to subsidies
such as food and energy etc. [1]

The HIPC initiative has been slow to implement, with only Bolivia
and Uganda receiving any significant debt reduction so far.

The Jubilee 2000 campaign advocates broader unconditional debt

HIPCs have a debt stock to exports ratio of over 300% and a debt
stock to GNP ratio of 125% (1996).

The World Bank has consistently argued against canceling debt in
developing countries on the basis that this would reduce its ability to
raise funds in the future.  However, its ability to raise funds depends
not on the credit-worthiness of borrowing nations but on the fact that
the loans are guaranteed by the wealthy nations. [2]

A coalition of 24 NGOs put pressure on the Swiss government to
cancel debt to the poorest countries.  Hans Speigel argues that it is
not only a question of forgiving foreign debt but to reassign part of
this forgiven debt to promote sustainable creative development and
people-oriented projects [3].  In the case of the Philippines, the
Philippine-Swiss Debt Conversion Operation made available 50% of
the face value of the debt to establish the Foundation for a
Sustainable Society, Inc. which is supporting local development
NGOs and cooperatives.

Denmark recently canceled US$635m in debt for countries including
Angola, Ghana, Cameroon, Senegal, Sierra Leone, Zimbabwe, Egypt,
Bolivia and Nicaragua.  In the case of Nicaragua, the debt was not
even owed to Denmark !  This decision was made *before* the
devastation of Hurricane Mitch.
[1] Blustein, Paul  Washington Post  16 Mar 1999, pE1
[2] Corea, Gamani, former Secretary-General of UNCTAD in Deen,
Thalin 'Denmark Cancels Debts of Poorer Countries' IPS 18 Dec
[3] Speigel, Hans  City University of New York, personal
communication, 8 Jan 1999.
{38. equity; 1. development issues, theory and paradigms}
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