Municipal finance plays an important role in local service delivery, par�cularly in the context of globaliza�on, decentraliza�on, and a focus on sustainable development. With the urgency to pursue Sustainable Development Goals (SDGs), such goals can only be achieved together with the reform and enhancement of municipal governments across the world. Well-func�oning municipal governments are especially Developing more effec�ve municipal finance is essen�al for several reasons (Figure 1). Without reliable revenue flows, it is not possible to develop sustainable towns and ci�es. One implica�on of this is that municipali�es will lack the resources that they need to effec�vely plan for the impact of urbaniza�on. This is likely to have a nega�ve effect both on the livelihoods of ci�zens but also on the way in which high levels of immigra�on impact the
necessary for SDG 11, which seeks to make ci�es and human se�lements inclusive, safe, resilient, and sustainable. Municipal governments are uniquely suited to respond to challenges of poverty, educa�on, water, and the environment; an over-reliance on central government and interna�onal ins�tu�ons may mean that responses are out of touch with local people.
environment. In turn, this can have long-term implica�ons for residents’ quality of life and for the ability of the area to a�ract investment in the longer term. management and accountability. Therefore, it is crucial to implement effec�ve municipal finance management which can assist municipali�es to transform their local areas into a be�er place to live and work.
Developing local finacial accountability
Ensuring environmental protection and continuity
Harmonizing the local economy with local living
Why does municipal finance matter?
Managing urbanization and changing demographics
Providing sustainable towns and cities
Figure 1
76 | Malaysia Smart City Outlook 2021 - 2022
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