Mr Chairman, Host of the International Federation for Housing and Planning, Honourable participants.

(Slide nr. 1)

Introduction

I would first like to thank the City of Oslo and International Federation for Housing and Planning for the invitation, - it is a pleasure to be here. I will also take the opportunity to congratulate the City of Oslo for hosting a successful conference. I hope that the delegates have had a pleasant stay.

The theme of the world congress: “Governance for urban change” catches the essence of the challenges in our time: rapid urban growth and need for good governance. There is growing international consensus that the quality of urban governance is the single most important factor for the eradication of poverty and for prosperous cities. The need for good governance is an issue that has been discussed in many different organizations, for instance the European Union (EU), the Organisation of Economic Cooperation and Development (OECD) and the European Council. It is also a central issue in different part of the United Nations -system. It is a special focus for the United Nations - Program for Human Settlement - UN-Habitat, as Dinesh Meta presented earlier today, and for the United Nations - Commission of Sustainable development, as our Minister of the Environment Knut Arild Hareide reviewed in the opening session on Sunday.

Professionals and experts have earlier this week presented and discussed different aspects and perspectives of good governance. These issues are of great importance to me as minister, being responsible for policy for local governments, regional development, as well as housing- and building policy, and immigration and integration. These are all important aspects of good governance. My presentation will focus on the major challenges and prerequisites for good governance.

An urbanizing world – changing population and economy

(Slide nr. 2)

As many of the preceding speakers on this congress have emphasised, the world is urbanizing. And in many countries this development is rapid. We have to accept that this development will continue. Urbanization can be a positive creative force. But it can also be destructive, if we are not able to meet the challenges. We all know what may be the consequences if we do not succeed.

Changing population – growth in the cities

Concentration of the urban population in large cities, growth of mega-cities and urban sprawl are among the most significant transformation of human settlements in the coming decades.

The global situation has been thoroughly addressed earlier by several speakers, especially Dinesh Meta earlier today. I will therefore not repeat his points.

(Slide nr. 3)

In many European countries the situation is, in several aspects, very different form the situation on other continents. The population growth is low, - in some countries even negative. In the near future, the population of the European Union is expected to stagnate or even decline. The demographic structure in Europe also differs from the global level. Many European countries will face a dramatic growth of the older population in the next 20 years. This is also the case here in Norway, where the last estimates indicate that by the year 2050 about 20 % of the population will be above the age of 67. This development is a great challenge for authorities on all levels.

In Norway, we find that the demographic structure in our cities is very different from the rest of the country. The population especially in out largest cities mainly consists of young single people, many of them students, and of elderly people. Young families are still moving out to the suburbs or the neighbouring municipalities. This has been the trend for the last 30 years. More than 60 percent of households in Oslo are single person households. This obviously influences housing demands.

Sustainable economic growth

(Slide nr. 4)

Cities are the centres of urban areas, and they are engines of economic growth and regional development. Changes in the global economy, with the development of new technology, new financial institutions and a new international division of labour, are clearly reflected in the role of the cities. And this is an ongoing, accelerating process, creating new competitive situations between cities, between countries and between continents.

In most European countries the cities are flourishing. New technology is replacing old, and old industrial sites are developed into attractive urban areas. The cities attract capital and investments, and are becoming hubs of culture, innovation, new technology and knowledge. This in turn affects the social and economic mix of the population. In many cities the rapid growth, both in population and in economy creates pressure on land use (including cultural heritage), transportation system, social services and infrastructure. Production industries often find it more profitable to capitalise on land values in the central areas, and move out of town, and sometimes out of the country. Finding practical solutions, which, are financially, socially and environmentally sustainable, is a great challenge.

Cities have an important regional role

Urbanisation is followed by centralisation, and in most countries this results in a decrease in the rural population. This is the case also in Norway. Peripheral municipalities in Northern Norway have experienced a particularly sharp decline. We believe cities in different parts of the country have important roles in stemming the depopulation of our vulnerable regions. The cities have a central role to play as engines of development within their own regions. The will to fill this role must be found locally within the urban regions. The role of the central government is to providing and enabling framework, and to ensure that the regions can fully utilize their potentials. I believe that the current thinking in Europe also goes along these lines.

Growing urban poverty and homelessness

(Slide nr. 5)

Urban poverty is the most serious barrier to sustainable urban development. Each day, more than 180.000 people are added to the world’s urban population. There is a globally growing realisation that the human settlement field is a relevant setting for fighting poverty. Growing slums is a major challenge for local authorities all over the world. We believe that the right to adequate housing and secure tenure is an important key in fighting poverty, both at the international and at the national level.

Fighting poverty and homelessness internationally

My ministry is the focal point in Norway for human settlement issues. UN Habitat’s effort to promote the right to adequate housing, security of tenure, good governance and the focus on the gender issues, is of great importance to us. We believe the work of UN-Habitat is crucial, if we want to achieve the millennium goal of contributing to the improvement of the lives of more than 100 million slum-dwellers. We are therefore also one of the main financial contributors to UN Habitat.

This spring the Norwegian Government presented a white paper for the parliament on how we will fight poverty on the international level. A central aspect in our policy for development aid is the promotion of good governance.

Fighting poverty and homelessness nationally

(Slide nr. 6)

Norway has become a wealthy country, and we have succeeded in spreading the increased wealth and welfare to most of our citizens. Most Norwegians live comfortably, in modern, adequate, well-maintained housing. But we still have some small groups that can be considered poor. Poverty is also a relative term, so depending on the definition we use; the poor make up a few (5-10) percent of the population.

The Norwegian Government last year launched a Plan of Action for combating Poverty in Norway. Our main focus is on vulnerable groups and enabling-strategy - strengthening their individual resources and reducing obstacles. Vulnerable groups should be given the opportunity to take responsibility for their own life.

Adequate housing and secure tenure

(Slide nr. 7)

Adequate housing and secure tenure is one of the cornerstones of welfare, and a central element in the Plan of Action for Combating Poverty. The right to adequate housing and secure tenure for everyone is instrumental for improving access to basic services. It is an important key to poverty eradication. At present, about seventy-five percent (75%) of Norwegian households are owner-occupiers. Norwegian housing policy is aimed towards giving all households the opportunity to become owner-occupiers, individually or in the joint ownership of a housing cooperative.

We believe rented accommodation in most cases is mainly suitable for periods of life. We fear that it may develop into a poverty-trap for those staying there for long periods of time. About 25 per cent of the dwellings, are rentals, most of it privately owned. We have recently been reviewing the legislation concerning rentals, and concerning housing associations and cooperatives. One of the issues we have had to look at was to strengthen the legislation to prevent discrimination of minority groups, particularly non-Western immigrants. We are now monitoring the results to ensure a well-functioning, non-discriminatory market.

There are obviously some people who for different reasons fall outside the mould, through unemployment, health-problems or sheer bad luck. These are also our responsibility and in August we launched a strategy for preventing and fighting homelessness. We have high ambitions for this strategy. One is to reduce the number of evictions by half by the year 2007. In such a complex issue, both public and private organisations must cooperate to find adequate solutions. An important part of this strategy is the task of the local authorities to ensure that the necessary support is given to residents in terms of special services; to break the vicious circle some of these residents have fallen into.

The main focus of the Norwegian housing-policy, is a well functioning housing-marked, supporting vulnerable groups, and last but not least, to stimulate universal design and environmentally healthy buildings.

There are many challenges in terms of managing demographic changes, promoting inclusiveness, and fighting poverty and homelessness. Good urban governance is necessary in order to meet all these challenges, and to secure a sustainable development of our cities.

Sustainable cities are inclusive cities.

(Slide nr. 8)

A sustainable city also has to be an inclusive city. Cities are the primary meeting places for different cultural and ethnic groups. Several European countries are facing a large number of asylum seekers and economic migrants. Most of them gravitate towards the larger cities. The situation in Norway is similar. Our immigrant population has doubled since 1990, and now constitute almost eight percent (8 %) of the entire Norwegian population. Seventy percent (70 %) of the immigrant population have a non-Western background. More than eighty-five percent (85 %) of the non-western immigrants live in big city regions.

Cultural and ethnic diversity is one of the inspiring and enriching aspects of big city life. Diversity gives new impulses and contributes to innovation and creativity. Immigration gives important contributions to economic and cultural plurality. However, when the population becomes more diverse with regard to lifestyles, beliefs and values, new challenges also arise. If we do not give sufficient attention to inclusiveness and participation in society, immigration and diversity can cause exclusion and serious conflicts.

The Norwegian Government is now working to develop a policy to meet the new challenges we face as a result of increased diversity in our society as regards language, religious and cultural background. This policy, which is often labelled diversity policy, aims to ensure that everyone enjoys the same freedoms and opportunities – irrespective of religious, cultural and ethnic background. Acceptance for differences – different looks, choices and lives – is a central goal. At the same time, the government’s diversity policy aims to unify and secure support of some common values and goals for social development, which are basic features of a viable democracy. We can not take for granted that fundamental values like democracy, individual rights and gender equality, are shared by everyone. These values must be maintained and underlined continuously. We are all responsible for the promotion of these values.

UN-Habitat is arranging the second World Urban Forum next week together with the Municipality of Barcelona. The conference is titled “Cities: Crossroads of cultures, inclusiveness and integration?” I believe this is an important question to ask, and I do hope that I will see many of you in Barcelona.

Good governance is a prerequisite for sustainable development

(Slide nr. 9)

Urban quality of life depends on the capacity of states and municipalities to perform as public institutions. The state, in partnership with local government, must create an enabling legal and regulatory environment, capable of ensuring the broad provision of collective goods and services. Good governance depends on both communities and groups of citizens working together with governments to promote a common agenda. In order to strengthen the municipal council and local authorities it is important to utilise all local resources and facilitate Public-Private Partnerships between local authorities and Community-based organisations (CBO’s) and Non-governmental Organisations (NGO’s). The priority should be given to supporting initiatives and activities that particularly benefit vulnerable groups of the urban population.

Good governance must be based on democratic values, a transparent political system and an efficient and modern public sector. Striking the right balance between these principles is one of the truly great challenges of good governance. The answer to where that balancing point is - will be different depending on place, time and issue. But there must be some basic principles of governance that are inevitable and then some additional points that will ensure the transition from merely adequate to really good governance.

This has obviously been the theme of this conference, and I will not attempt to sum up all the different viewpoints and angles that have been presented. I will focus on three aspects; democracy and participation, strengthening local authorities and the need to have a modern and effective public sector.

Promoting active democracy and participation in local development

(Slide nr. 10)

We believe that an active democracy at all levels of government is important in order to create stability and encouraging participation in society. I am strongly convinced that, in order to for democratic values to be truly absorbed into society, the principles of democracy must be implemented right down to the level closest to the citizens. Democracy building must be based on the active participation of citizens, especially on the political arena, but also on the social arena, through participation in different organizations and ordinary social life.

All countries and regions in Europe are currently considering the development of local democracy, and are facing several problems: Low turnout rates in local elections indicate declining public interest in politics, and may be caused by weaknesses in the institutions of local representative democracy. This is also the case in Norway. This tendency decreases the effectiveness, openness and accountability of the system.

A study carried out in 1998 by The Steering Committee of Local and Regional Democracy concluded that citizen’s participation in local politics is not declining but rather changing its form, and this challenges the traditional political system. The trend is towards people becoming more interested in direct forms of participation,. They may for example form pressure groups to advance their viewpoint, rather than using ordinary political channels.. This shift in the pattern of politics has profound implications for the traditional institutions of local representative democracy. It implies that local government requires a more open-minded, transparent and flexible approach to engage the public.

Strengthening local authorities – decentralisation and modernisation

(Slide nr. 11)

The local level in Norway traditionally has a rather large degree of autonomy, and is responsible for large and demanding tasks in our welfare system. This includes childcare, education, various social and health services, and the care of the elderly, as well as planning and building regulation. Our policy is to maintain and strengthen the role of the local authority in its role as a provider of services and as a developer of a well-functioning local community.

The government’s control and directing role over the local level must achieve a balance between two considerations: On the one hand we need to secure an equal quality in service delivery for every citizen. On the other hand we must recognise the value of adapting the services to local needs and to develop their community. This policy is based on delegating responsibilities, decentralisation of tasks and local accountability. To achieve this, it is however necessary to make important changes at the local level.

Decentralization of responsibilities and authority will also contribute to a revitalization of the local democracy. When municipalities and county authorities are allowed a wider framework of conditions for carrying out their policies, there will also be an increase in the interest and participation of the local inhabitants.

My government’s aims is a simpler and more clearly defined society, a service supply that is adapted to the needs of the individual, a public sector that is efficient, a public sector that is productive and efficiency promoting, and a public sector that has a policy for personnel management that is including and stimulating. Towards the local level, our efforts run along two main lines.

The first line is to improve the regulatory legal and financial framework of the local authorities. That is, to make more room for local politics and local adaptations. We will be simplifying the funding system, utilising general purpose grants instead of earmarked funds, produce fewer and less rigid laws, reduce reporting requirements, and so on.

We are also concerned about the large number of municipalities in our country, and especially the large number of very small municipalities. We have 434 municipalities and 19 county authorities in our country with 4,6 million inhabitants. Our median municipality has 4.400 inhabitants. We think that a lot of these municipalities are too small and not robust enough to meet the challenges of tomorrow. We have therefore launched a program that enables the local authorities and their organisation to make studies outlining the consequences of mergers.

The second line is based on encouragement and support from the central level, supporting modernisation activities at the local level. This strategy includes funding of research and cutting-edge projects, bringing forth good examples and best practice, stimulating the spreading of valuable knowledge in various ways, making public benchmarking results, etc.

It is my belief that competition is a very strong incentive. We see now that local authorities take substantially more interest in opening up their service production for outside contractors. This involves adapting a whole new attitude towards measuring and benchmarking themselves. It is important that central government actively support and encourage this development and learning processes.

A more efficient public sector

(Slide nr. 12)

The main challenges facing the Norwegian public sector will be similar to most of the Western welfare societies. There is an increasing demand for public services. In addition there is a demand for, and expectation of, services that are better adapted to individual needs. The number of elderly people is increasing, and there is a sharp rise in the public expenditure for retirement and disability pensions. We needs a more efficient public sector.

These factors represent a high level of pressure on the expenditure side for the local authorities, at a time when the financial situation for the local authorities is already weak.

Many will believe that Norway, being a small and rather wealthy nation, due to our oil resources, should be able to finance an even higher level of public services for its inhabitants.

This is of course possible for a short period of time, but it would be very unwise in the long run. Therefore it is not the policy of my government. The main reason being that our oil reserves are limited, and we need to be competitive on the international markets, today and in the future. It is therefore of great importance to develop our exporting industries, which means that the public expenditure and the wages in the domestic industries cannot be allowed to rise freely. As in many other western countries, Norway will also face a great challenge concerning the supply of labour. This is also an important argument for not letting the public sector grow too large. We have to relay more and more on the private sector and NGO’s to provide the necessary services.

Cooperation and partnership

(Slide nr. 13)

It has been a growing awareness of the need for cooperation and partnership with all stakeholders to achieve good governance and sustainable development. Cooperation between nations and cities are more and more common. Sharing knowledge, technology and financial resources are necessary to achieve larger goals, also at the local level. Many countries cooperate closely with the private sector in the production of services, often out of necessity. Lacks of capacity, knowledge or financial recourses are major factors. Cooperation between all levels of authorities, organisations, private sector, CBO’s, NGO’s and individual stakeholders are necessary to achieve larger goals. As many of you know, the United Cities and Local Government Organization was founded this winter. I am sure the organization will be an active partner in the international debate on good urban governance in the years to come.

Cooperation and partnership in the housing and building sector

Cooperation and partnership between stakeholders has been a central part of the building and housing sector in Norway. The private sector has always had the responsibility of implementation housing- and building-policy. Housing and building cooperatives have played an important part in Norwegian housing policy over the years, and they still are.

There is however, a tendency toward a larger private involvement also in the planning process. Plans and public projects are often implemented through agreements between public and private sector, both as development agreements (more or less based on planning obligations), and PPS-contracts (public-private).

Over the years developers have taken a more active role in planning and in the development of building sites. This has also led to an extended use of so called planning agreements. These are agreements between the local government and developers on project development, implementation and progress. The agreements may also include financing of physical and social infrastructure that traditionally has been covered by public budgets, such as development of public spaces, schools and kindergartens. Currently there are very few legal limits on the use of these planning agreements. Some local governments have pushed forward agreements, which at the end have placed a heavy burden on future inhabitants of specific residential areas. The Norwegian government sees the need for regulations in this area and will present new legislation to the Parliament.

Empowerment is necessary to promote inclusiveness and participation

Many vulnerable groups do not participate in the development of their local community or the local democracy, regardless of formal rights. Lacks of access to the labour- and housing-marked are important factors. We know women, youth, old and poor represent untapped recourses. UN-Habitat has a large number of examples that can prove my point. It is important that these resources are used in a productive and positive way.

Immigrants are one of the most vulnerable groups. They often face discrimination in many areas. Those of non-western background are more exposed to discrimination in the labour marked, the housing marked, at school as well as in other public services. In Norway we find an overrepresentation of non-Western immigrants with bad living conditions, or with low income. Some are unemployed and is without a proper home. It is therefore particularly important to increase the participation of immigrants in the labour marked, so that they can be economically self-dependant. Multicultural competence has to be increased to address the growing cultural diversity within the population so that everyone can make use of public services on an equal footing. Persons with a minority background are to a larger extent dependant on being met with an open mind and a willingness to give individual adjustment.

Local authorities must cooperate with organisations, religious societies and local resource persons representing different groups. Dialogue with the concerned groups with developing and implementing measures will improve their effectiveness.

In order to increase the participation of immigrants in the labour marked, the Act on an introduction scheme for newly arrived immigrants was put into full effect in all Norwegian municipalities 1 September 2004. According to this Act, newly arrived immigrants must participate actively in a programme that gives them the necessary qualifications for living and working in Norway in order to be eligible for introduction benefits. The purpose is to shift the focus from passive social benefits to active qualification measures, and thus facilitate the transition to employment and/or education. The government will this year forward to the Parliament a Bill prohibiting ethnic and religious discrimination. We will also establish an Equality Authority combating both gender and ethnic discrimination.

Finally

(Slide nr. 14)

Challenges are different throughout the world. However, urban growth, demographic changes, urban poverty and cultural diversity are challenges we all are facing. This conference has presented many interesting approaches and perspectives. It is my responsibility as a politician to provide an enabling environment, and this conference have given us inspiration to continue our work. Finally, I would like to thank you all for your valuable contribution during the days we have spent together.

Thank you for your attention.