Five challenges the sustainable development goals present to city leaders

The UN building in New York. Image: Getty.

Back in September, the UN ratified the Sustainable Development Goals (SDGS): 17 goals that are intended to provide a blueprint for the next 15 years of the world's development.

But while global leaders were signing the SDGs, less noticed was that more than 20 city and local leaders endorsed them, and committed to implementing them in their own cities. This is interesting and encouraging as many of the goals fall within city leaders’ responsibilities.

Here are some of the challenges that cities in the developing world – both those that endorsed the SDGs, and others that may decide to adopt them – will face.

1.  Lack of good data leaves us in the dark

It may not be the flashiest line of work, but gathering detailed data is the most useful tool for city policymakers to assess their residents’ needs – and target their policies accordingly.

However, many cities in developing countries lack essential up-to-date information on subjects like the location and characteristics of their slums, the state of their housing stock or transport network. It was only recently that a project like Digital Matatus made Nairobi’s semiformal transit system visible.

Without this data, how can officials say whether they are making progress on Goal 11 – that is, to make cities "inclusive, safe, resilient and sustainable"? How can they know if basic services are reaching their poorest populations, in line with the SDGs’ "Leave no-one behind" agenda? How are citizens supposed to hold their local governments to account?

There is growing awareness of the need for good disaggregated data, with a number of initiatives – from a Global Partnership for Sustainable Development Data to citizen-generated data and data collected by slum dwellers themselves – looking to fill the gaps.

2.  Leaders should pick their targets

With 17 goals and 169 targets, city officials need to prioritise. Trying to do too much may result in achieving too little.

While this is common sense from a practical perspective, it also leads to a real risk of short-term political calculations giving priority to targets that are easier to achieve, with leaders treating the SDGs as a sort of "à la carte menu".

There is only one way to avoid this: civil society groups must keep a close eye on SDG progress and hold city governments to account.

3. Ambition only works if you can finance it

The SDGs have raised the international community’s ambition. Estimates of their cost reach into the trillions of dollars.

While city governments’ responsibilities vary by nation, they are often the ones feeling the pressure of having to deliver basic services – from water and sanitation, to affordable housing – while urban populations rise. But the question of how local governments can access new sources of finance, both from domestic and external sources (particularly climate finance), has not yet received the attention it deserves.

4. Local governments face complex challenges – but often lack the capacity to cope

While reforms to devolve power to local governments are under way in many countries, funding and support to improve local government capacity have often trailed behind.

Many local governments, particularly in secondary cities, lack the technical capacity to plan and manage service delivery on the scale needed to manage increasing populations – or to negotiate complex contracts with private suppliers on an equal footing.

Unless urban planning capacities are strengthened, cities will struggle to meet the challenges posed by rapid urbanisation.

5. Leadership from cities often have a lasting impact beyond them

Change happens when there is political will. If mayors commit to the SDGs because they can see the benefits (including political ones) – or because civil society groups put pressure on them – then we might see results.

There are plenty of examples of ambitious or innovative mayoral initiatives setting a precedent for national policy. Bolsa Familia, the celebrated cash transfer programme in Brazil, actually had its origins in Bolsa Escola, an initiative from the government of Brasilia. That cash transfer programme was aimed at reducing poverty and inequality, but it was also a key element of the opposition’s political strategy.

How countries manage urbanisation over the next 15 years will be critical to reducing poverty and environmental sustainability. Ultimately, it will help define governments’ ability to achieve the SDGs. 

One way to maximise the role of city governments would be to build on the commitments already made by some city leaders and establish a group of cities that frequently monitor and exchange lessons on policies to achieve the SDGs – in essence, a "Cities for SDGs" network.

Throughout their design, the SDGs have received praise and criticism in equal measure. With the goals now agreed, efforts must focus on implementation – and for that, we need city leaders on board.

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High streets and shopping malls face a ‘domino effect’ from major store closures

Another one bites the dust: House of Fraser plans to close the majority of its stores. Image: Getty.

Traditional retail is in the centre of a storm – and British department store chain House of Fraser is the latest to succumb to the tempest. The company plans to close 31 of its 59 shops – including its flagship store in Oxford Street, London – by the beginning of 2019. The closures come as part of a company voluntary arrangement, which is an insolvency deal designed to keep the chain running while it renegotiates terms with landlords. The deal will be voted on by creditors within the month.

Meanwhile in the US, the world’s largest retail market, Sears has just announced that it will be closing more than 70 of its stores in the near future.

This trend of major retailers closing multiple outlets exists in several Western countries – and its magnitude seems to be unrelated to the fundamentals of the economy. The US, for example, has recently experienced a clear decoupling of store closures from overall economic growth. While the US economy grew a healthy 2.3 per cent in 2017, the year ended with a record number of store closings, nearly 9,000 while 50 major chains filed for bankruptcy.

Most analysts and industry experts agree that this is largely due to the growth of e-commerce – and this is not expected to diminish anytime soon. A further 12,000 stores are expected to close in the US before the end of 2018. Similar trends are being seen in markets such as the UK and Canada.

Pushing down profits

Perhaps the most obvious impact of store closures is on the revenues and profitability of established brick-and-mortar retailers, with bankruptcies in the US up by nearly a third in 2017. The cost to investors in the retail sector has been severe – stocks of firms such as Sears have lost upwards of 90 per cent of their market value in the last ten years. By contrast, Amazon’s stock price is up over 2,000 per cent in the same period – more than 49,000 per cent when considering the last 20 years. This is a trend that the market does not expect to change, as the ratio of price to earnings for Amazon stands at ten times that of the best brick-and-mortar retailers.

Although unemployment levels reached a 17-year low in 2017, the retail sector in the US shed a net 66,500 jobs. Landlords are losing longstanding tenants. The expectation is that roughly 25 per cent of shopping malls in the US are at high risk of closing one of their anchor tenants such as a Macy’s, which could set off a series of store closures and challenge the very viability of the mall. One out of every five malls is expected to close by 2022 – a prospect which has put downward pressure on retail real estate prices and on the finances of the firms that own and manage these venues.

In the UK, high streets are struggling through similar issues. And given that high streets have historically been the heart of any UK town or city, there appears to be a fundamental need for businesses and local councils to adapt to the radical changes affecting the retail sector to preserve their high streets’ vitality and financial viability.


The costs to society

While attention is focused on the direct impacts on company finances, employment and landlord rents, store closures can set off a “domino effect” on local governments and businesses, which come at a significant cost to society. For instance, closures can have a knock-on effect for nearby businesses – when large stores close, the foot traffic to neighbouring establishments is also reduced, which endangers the viability of other local businesses. For instance, Starbucks has recently announced plans to close all its 379 Teavana stores. Primarily located inside shopping malls, they have harshly suffered from declining mall traffic in recent years.

Store closures can also spell trouble for local authorities. When retailers and neighbouring businesses close, they reduce the taxable revenue base that many municipalities depend on in order to fund local services. Add to this the reduction in property taxes stemming from bankrupt landlords and the effect on municipal funding can be substantial. Unfortunately, until e-commerce tax laws are adapted, municipalities will continue to face financial challenges as more and more stores close.

It’s not just local councils, but local development which suffers when stores close. For decades, many cities in the US and the UK, for exmaple Detroit and Liverpool, have heavily invested in efforts to rejuvenate their urban cores after years of decay in the 1970s and 1980s. Bringing shops, bars and other businesses back to once derelict areas has been key to this redevelopment. But today, with businesses closing, cities could once again face the prospect of seeing their efforts unravel as their key urban areas become less attractive and populations move elsewhere.

Commercial ecosystems featuring everything from large chain stores to small independent businesses are fragile and sensitive to change. When a store closes it doesn’t just affect employees or shareholders – it can have widespread and lasting impacts on the local community, and beyond. Controlling this “domino effect” is going to be a major challenge for local governments and businesses for years to come.

Omar Toulan, Professor in Strategy and International Management, IMD Business School and Niccolò Pisani, Assistant Professor of International Management, University of Amsterdam.

This article was originally published on The Conversation. Read the original article.