LITERATURE REVIEW
3.6.0. The Shelter Development Strategy and Its Linkages to the Construction Industry
The failure of the self-help housing programme to eliminate the urban housing crisis and to make a significant contribution to Third World economics, led to the World Bank and the United Nations Commission on Human Settlements
(UNCHS) making more radical policy changes to their urban development programmes. The major point of departure was the decision to move away from the sectoral housing programme to a more integrated development policy, in which housing would play a part. In a paper, entitled "Effects of Economic Conditions on Human Settlements", the Centre for Building and Planning of the Department of Economic and Social Affairs of the United Nations, argued that no significant process could be attained in the area of shelter without corresponding increase in the productivity levels. This was a realisation that improvements to shelter could only be brought about by a corresponding increase in people's income and general economic welfare. Itfurther argues that attaining high
production levels in the construction industry was a sure way of achieving this, as this would bring about variety and abundance in building materials It would also lead to reduced housing costs, increased housing provision and increased job opportunities (UNCHS, 1976; World Bank, 1993a).
Since the above strategy first caught the World's attention when it was presented at the Vancouver Conference in 1976, there has been much consolidation done to the theory by both UNCHS and the World Bank. The new global theory on housing is basically drawn from past experiences and mistakes, as admitted by the World Bank in the paper "Learning byDoing" (World Bank, 1983). The culmination for the search of a more practical shelter policy came with the declaration of 1987 as the International Year of Shelter for the Homeless (IYSH) and Habitat 11 in June 1996 in Istanbul, Turkey. In addition, a shelter policy document "Global Shelter Strategy (GSS) was produced outlining the
mechanisms and instruments required in fulfilling the global goal of shelter for all by the year 2000. The World Bank and UNCHS work very closely together on Third World housing because of their identical views on how best to solve Third World housing problems viz.: the Enabling Shelter Development Strategy.
For instance the Department of International Economic and Social Affairs of the United Nations summarises the main objectives of the Enabling Shelter
Development Strategy as follows:
To improve urban residential conditions and in so doing, generate higher levels of capital investment, expand labour-intensive employment opportunities, and
generally protect the position of vulnerable groups during periods of economic stabilisation and structural adjustment. Among the main advantages of the proposed approach is the fact that it can be implemented with little recourse to institutional support, public funds or foreign exchange. (The United Nations;
Anthony Woodfield, 1989)
The above quotation, together with the similarities and references to the economic structural adjustment conditionalities. is a testimony of the close collaboration between the two institutions in this area. It can be said therefore, that the signing of the economic structural adjustment lending inevitably leads to a policy of enabling shelter development by way of following its conditionalities.
It is also true that some countries follow the shelter development strategy without necessarily having economic structural adjustment lending agreements. Suffice to say that the enabling shelter development strategy would theoretically operate very well in an environment of structural adjustment where the socio-economic and political machinery has already been put in place.
In essence, the basic argument for this "new" approach is that private enterprise and the general public climate best suited to providing shelter efficiently and equitably [given the right environment (an enabling enVironment)] is created by the government. The role of the Government is therefore, restricted to the creation of a conducive environment and provision of public services. These services entice/facilitate the private sector to mobilise private finance and
resources for shelter and infrastructure provision. This calls for the redefinition of the Government's role in the shelter sector, from provider to enabler (facilitator).
This is what led to the global shelter strategy known as the Enabling Shelter Development Strategy. It is important to mention that the Enabling Shelter
Development Strategy does not only deal with housing per se. but includes other infrastructure facilities such as roads, water, electricity reticulation and sewerage.
The Enabling Shelter Development Strategy therefore, effectively involves both the building and civil engineering facets of the construction industry.
Mainly, the enabling shelter development strategy (UNCHS. 1996; World Bank.
1993; United Nations, 1989) calls for the host Government to:
1. Transfer the financial responsibility of shelter provision from the public sector to the private sector through market forces. This entails the abolition of the project-based approach and adoption of the programme approach, where the World Bank in conjunction with the host government would stop funding specific shelter projects and fund macro-economic programmes that would enable private investment in the housing market.
2. Raise government revenue by ensuring all collectable taxes and levies from the housing sector are collected and that full cost recovery of all infrastructure and utility services provided is attained.
3. Reduce public expenditure, through the elimination of housing subsidies and housing allowances.
4. Promote private investment in the housing market, through the
elimination of regulatory complexities, i.e. rent controls, and the privatisation of public enterprises. Public enterprises are accused of inefficiency, brought about by over protective governments whose rent controls are counter productive to the housing market (Malpezzi et aI, 1990).
5. Liberalise the land market so as to facilitate land supply. Shortage of land for housing has mostly been attributed to government bureaucracy. The removal of these bureaucratic practices is seen as a possible solution to the problem.
6. Enhance productivity and reduce the cost of shelter by encouraging small- scale contractors who are likely to use local building materials and labour intensive building techniques.
7. Facilitate employment creation in the housing sector by promoting labour intensive building techniques and supporting the creation of housing affiliated industries like bUilding materials, furniture etc.
Looking at the main aspects of the Economic Structural Adjustment Programme and the enabling Shelter Development Strategy above, the two bear a striking relationship. The main relationship between structural adjustment and the shelter enablement is in their emphasis on reduced government involvement in the local economy, reduced subsidies, and their support for a viable economy dominated by the private sector. Both strategies are strong advocates of increased domestic demand resulting in increased local production, and in our case increased
construction output. The advocacy for a viable private sector market in an effort to stimulate the local economy in both ESAP and the enabling Shelter
Development Strategy is because Neo-Liberalism is another common
denominator between them (United Nations, 1994). It is no wonder that most Sub-Saharan African countries that have applied the Economic Structural Adjustment Programme have also applied the Enabling Shelter Development Strategy in an effort to maximise their economic effects (UNCHS, 1996).
In Ghana, preliminary research on the impact of economic structural adjustment and the Urban Management Programme show substantial gains in economic growth, although housing investment per se has not contributed very much to that growth. This is because reduced government spending on current and capital expenditure has had the effect of slowing down economic activity as more people get retrenched from the public service and public enterprise resulting in reduced national income. Reduced income coupled with increased housing rent and price also meant reduced local and central government revenue as more and more tenants failed to pay their bills (rent and service bills). The anticipated large growth in the private sector has not taken place as expected therefore failing to absorb the large numbers of retrenched pUblic workers and unemployed youth (Hutchful, 1987; Ghana Rep. of, 1987: World Bank, 1994).
Studies carried out in Nigeria by the Centre For Settlement Studies And Development (CASSAD, 1991) found that the imposition of the Economic
Structural Adjustment Programme did not encourage investment in housing, but in short term businesses like taxis and trading. The study found that although substantial ground had been gained in import substitution for finished building materials, there was still a large component of imported raw materials. As a result, the cost of building materials was always increasing, between 100% and 800% within a decade (1977-1987). Tight monetary and fiscal control brought about by the economic structural adjustment were also found to be impediments to housing investment as interest rates went up by as much as 15%, making mortgage borrowing expensive and out of reach for most people. The study recommended that the private sector be given the "right climate to be able to deliver housing to all classes of people and for all tastes." The CASSAD study did not however, find this "right climate" but called for further studies both in scope and geographical coverage to generate findings.