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Finance & Development
A quarterly magazine of the IMF
September 2007, Volume 44, Number 3

Picture This

The March of the Cities

The coming year marks a dramatic milestone: the world's urban population will outstrip its rural population, albeit with big regional variations. The most urbanized region in the developing world is Latin America and the Caribbean, with 77 percent of the population, or 432 million people, living in cities. But Asia has the largest urban population—some 1.6 billion— although only 40 percent of its population is urbanized.

Within the next year, the world's urban population will surpass its rural population.

Until the mid-20th century, the mostly developed regions of North America and Europe hosted the majority share of the world's urban population. Since then, urban growth has shifted to developing regions. By 2030, Asia, Africa, and Latin America and the Caribbean are expected to account for more than 80 percent of the world's urban population.

Developing regions now account for nearly 75 percent of the world's population.

Not surprisingly, most of the countries with the fastest-growing urban populations have been located mainly in Africa and Asia. Urban growth in these countries is often spearheaded by their largest city. For example, Gaborone, Botswana, has grown from a population of 18,000 in 1971 to more than 186,000 people today.

Over the past 25 years, the countries with the fastest-growing urban populations have been low- and middle-income countries.

Overall, the world is no longer experiencing the rapid urban growth rates that were commonplace in the mid-20th century. In fact, the rate of urban growth has been declining over the past 50 years. Still, urbanization continues at a rapid pace in Africa and Asia—also the most populous regions of the world.

Growth rates of urban populations are epxected to slow, but to remain 1-2 percent in most regions.

Dramatic growth in megacities (those with 10 million people or more) has not panned out as once anticipated. Today, most of the world's urban population lives in small and intermediate-sized cities. Just 16 percent of urban residents live in cities with more than 5 million inhabitants.

Most city dwellers live in smaller citiies.

Demographic indicators of the quality of life—in health, education, and sanitation—are higher in urban areas than rural areas. For example, female literacy rates are much higher among urban dwellers than rural dwellers, because urbanization tends to boost girls' access to an education and promotes cultural acceptance of their right to education. But literacy levels are much higher for the urban rich than the urban poor.

Female literacy rates are on average 35 percent higher in urban populations that rural populations...

Health disadvantages experienced by the urban poor are most dramatic in slum areas, which lack piped water, sanitation facilities, garbage collection, and drainage. And urban outdoor air pollution is responsible for roughly 3 million deaths worldwide each year. One out of every three urban dwellers worldwide now lives in a slum—and in sub-Saharan Africa this fraction more than doubles.

...but, as of 2007 more than 30 percent of the world's population - 1 billion people - resides in slums, and 90 percent of slum dwellers live in the developing world.

Prepared by Patrick Salyer and David Bloom of Harvard University.