Poor governance and inappropriate policy decisions do play a key role in development of slum settlements. As developing nations move from rural-agricultural to urban-manufacture economic structures governments 'commercialized, deregulated and privatized their economies for the global market' 13 . These global markets require commercial hubs within the host nation, causing the governments of developing nations to adopt a type of urban favouritism. Consequentially this 'urban bias’ ensures public expenditure is predominantly concentrated within the wealthier city districts. Infrastructure and services improve disproportionally in these areas relative to slum settlements. In less developed countries there is often a huge reliance on agriculture. However tariffs, subsidies and prices set through government policy are often only beneficial to the manufacturing sector. The ‘seasonally employed’ agriculture reliant demographic therefore flock to the cities, where the scarce capital these governments had was centralized within industrial production. Slums will continue to grow in size due to the lack of government support throughout rural regions. Governments throughout the third world should seek to take full advantage of cheap agricultural production, rather than wasting funds in the highly competitive global manufacturing industries, in which China and India already dominate. Agricultural subsidies would not only benefit the majority of the population (with up to 80% of the extremely poor reliant on income from agriculture 14 ), but also may decrease the incentives associated with urban-migration and therefore slow slum development. Formal employment is difficult to find where slum settlements are prominent. The demand for employment will reach levels that surpass the number of official jobs available, causing the formation of an informal economy that can provide jobs within the slums themselves. These economies grow incredibly fast, lack bureaucracy, are not taxed, have no labour laws and are not monitored by the state or federal government. This informal sector can contribute to as much as 60% of national GDP, making up near to 78% of non-agricultural employment in Sub-Saharan Africa 15 . FDI nearly always creates jobs in the formal economy, whereas these statistics show that huge numbers of migrants are driven by the incentive to work in the informal economies of slums. The primary reason that urban informal economies expand so rapidly is because slum populations grow equally fast. Slum growth creates a supply of work while at the same time creating demand for work. It is this vicious cycle that ensures migrants for rural regions decide to settle in slums. The informal economy offers dwellers the opportunity to earn reasonable wages. The fact that they will not be taxed or policed adds to the appeal. FDI has a major role in ensuring slums continue to grow. The beacons of capitalism it creates offers a way that rural workers can work their way out of poverty, causing unsustainable mass urbanization towards cities. In reality the vision of work FDI creates is for many artificial, therefore forcing the majority of slum populations to seek work in the informal sector. Wealthy trans-national corporations should be required to play a greater role in providing official housing for their potential workforces, while governments should act to increase the incentives of remaining in rural regions.
Bibliography
http://www.citylab.com/work/2014/01/amazingendurance-slums/8120/ 10/08/2014 htttp://realtruth.org/news/100326-002-international.html 11/08/2014 https://www.youtube.com/watch?v=trvLScaE0YE 21/08/2014 Frederick Van Der Ploeg, Steven Poelhekke - Globalization and the Rise of Mega-cities in the Developing World, 2008 http://prospectjournal.org/2012/05/21/neoliberal-policy-and-the-growth-of-slums/ 12/08/2014 http://www.investopedia.com/terms/f/financialization.asp 12/08/2014 David Harvey - A Brief History Of Neoliberalism, 2007
13 http://prospectjournal.org/2012/05/21/neoliberal-policy-and-the-growth-of-slums/ 28/08/2014 14 http://en.wikipedia.org/wiki/Slum 28/08/2014 15 http://en.wikipedia.org/wiki/Slum 28/08/2014
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