Intermediate cities and development in Latin America

Intermediate cities are increasingly gaining prominence in Latin America’s economic and social development. They are home to 32% of Latin Americans; some estimates indicate that they may comprise up to 17% of GDP, and they play a decisive role in the logistics network for the transportation of raw materials and consumption of goods and services. 

These towns of between 100,000 and one million inhabitants have sometimes gone relatively unnoticed in the development plans of countries in the region, and in the shadow of larger thriving cities. But in recent years many studies have produced emphatic conclusions about their significance: on the one hand, they are crucial for increasing national and regional productivity and competitiveness; and on the other they significantly contribute to closing the gaps between rural and urban areas, thereby creating more prosperity for their residents. 

“Latin American intermediate cities are somewhat lagging in comparison to other more advanced regions. To bridge these gaps it is essential to promote equality and interaction with rural areas, plan an orderly growth of territories, anticipate the effects of climate change and have a greater citizen participation in political and social decisions,” explained Soraya Azan, urban development expert at CAF development bank of Latin America. 

In this vein, the multilateral agency is supporting initiatives in at least 30 intermediate cities in Latin America, in areas such as urban development, education, transportation, the environment and climate change. The efforts focus on enhancing growing capacities, planning and developing the territory and implementing projects that have a positive impact on their residents quality of life. 

Due to the opportunities these cities offer, it is important to promote entrepreneurship and innovation, strengthen their governance and institutions, while supporting projects and initiatives that bring about the development of comprehensive interventions, according to Azan. 

Here are some examples of CAF interventions in intermediate cities: 

• Colombia: Montería, Valledupar, Pasto and Pereira. CAF has financed and advised the SETP in Montería in recent years. Two master plans on active mobility and public spaces and two controlled urban expansion plans were developed for this city and for Valledupar. In the cities of Pasto and Pereira, tactical urban planning and advisory activities were carried out for local governments in the field of modal integration.  Capitalizing on this sustainable mobility work, a proposal was submitted to the Green Climate Fund, to secure funds for project preparation.
  
  Thanks to these studies, the construction of infrastructure, sustainable facilities and expansion of capacities is expected to continue in the 2019-2022 period. The expected benefits include the reduction of 500,000 tons of CO2 in the ten years following project implementation and the urban and cultural transformation in these cities. The beneficiaries total more than one million people. 

• Peru: Piura. The Sustainable Urban Mobility Master Plan, developed in 2018 and approved by a Municipal Ordinance, identified investment needs of some US$2 billion for more than a decade This prioritizes the most urgent issues in six comprehensive projects with urban transport as a backbone and proposing infrastructure designs under the criteria of “complete streets,” providing the city with more equitable, inclusive and sustainable spaces and services. The next step is the preparation of pre-investment studies for prioritized projects. First, CAF expects to develop the first phase of the integrated public transport system to be implemented during 2019. Second, the institution has nominated another project, the restoration of the historical city center, for Germany’s TUMI Fund. If the proposal is selected, pre-investment studies will be carried out.
  
  
• Peru: Trujillo. In 2018 CAF commissioned and supervised the pre-investment study for a mass transport corridor, running from north to south, which would be the backbone of the city’s public transport system. The project will be completed in the coming months. It calls for significant improvements in road design and accessibility, as well as an urban facade integration to regenerate and upgrade the historical city center’s potential in one of the most prominent colonial cities in Peru. In addition, CAF has encouraged coordination between national and provincial entities leading to an agreement to secure a CAF loan to finance the implementation of the corridor and improvements in the historical city center through 2020, as well as complementary investments to ensure mobility sustainability in the city.
  
  
• Panama: David. David and its outlying municipalities is the second largest city in Panama, with more than 300,000 inhabitants. A comprehensive Plan for Sustainable Urban Mobility will be developed in 2019, with funds from the European Union. This plan will produce a roadmap (with targets, strategies, lines of action, budgets and task owners for the short, medium and long term) in the area under study. This is intended to reduce distances and travel times, rationalize the use of motorized private transport, encourage the use of public transport, cycling and walking, optimize the transport of goods, reduce emissions of pollutants and greenhouse gases, and reduce the number of casualties in traffic incidents.
  
  
• Argentina: Rosario. Traffic is no longer just a problem in large cities. It is now also a reality for intermediate cities. This is the case for Rosario, the core of the main industrial corridor in Argentina. With a little over 1 million inhabitants and the third largest city in Argentina, Rosario is already experiencing economic losses relating to time and resources, which are caused by traffic congestion. In order to tackle this challenge, Rosario joined the group of cities participating in CAF’s Sustainable Urban Logistics (LOGUS) program, which aims to diagnose city logistics problems and thus identify improvement tools for logistics design, to better understand their expansion, while also reducing their negative effects. In line with this work, in 2018 the municipality presented the Greenhouse Gases Inventory, which aimed to calculate the gases emitted in the city within one year. It reports that the transport sector accounts for 24% of emissions in the city. Therefore, and considering that freight transport accounts for 40% of urban transport CO2 emissions, Rosario is one of three cities in Argentina participating in the EcoLogistics project: Low Carbon Freight for Sustainable Cities sponsored by ICLEI.
  
  
• Brazil: Jaraguá do Sul. CAF is developing a comprehensive operation in the city of Jaraguá do Sul, in the state of Santa Catarina. With a population of 170,000 people, mostly of German descent, and an industry-based economy, the municipality wants to boost its development and urban renewal by renovating the city center and designing new core areas, promoting sustainable accessibility and mobility. Solutions to the challenge of sustainable mobility do not always use the same formulas, since they are not based on the same locations. In some cases the geographical characteristics of the territory and its positioning determine the available options to meet the demands of the population efficiently and effectively. We can learn a great deal from these type of intermediate cities about the difficult process of finding practical and innovative solutions, as well as identifying the factors that lead to success, but which are not always replicable in similar contexts.