Cash-strapped cities must look to private partners

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. Author: Omar Abuhanoud, Head, Communications, Mastercard

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For the first time in history, more people are living in cities than in rural areas, and this unprecedented shift, spurred by the prospect of jobs, education and a better life, is only picking up pace. In fact, according to the UN, 60% of the world population will live in urban environments by 2030. While this is transforming our cities into vibrant hubs of innovation and development, the massive growth in urban population also presents a number of challenges to local governments globally, as well as in the Middle East and North Africa (MENA).

For example, with tight budgets and an infrastructure in need of costly, complicated upgrades, it is a challenge for local governments to support their needs at all levels to improve people’s quality of life and enable easy and safe access to services.

Moreover, low rates of financial inclusion in the region are amplifying this problem even further, as high reliance on cash makes already stressed services even more inefficient and limits underserved communities from enjoying easy access to even the most basic services. In turn, this also impacts their ability to contribute to economic growth and hampers the development of a flourishing entrepreneurial ecosystem in a country.

In MENA, 86% of the population is still unbanked and lacks access to basic formal services. Mastercard believes that helping the unbanked create a digital identity is a critical first step towards helping governments build smart cities.

In Egypt, Mastercard teamed up with the government to create a digital ID program that has helped link citizens’ national ID to the existing national mobile money platform. As a result, Egyptian citizens – nearly 65% of the population – are now able to participate in the formal economy through a single, easy-to-use cashless program.

As a trusted partner to many governments around the world, Mastercard believes that cities can best accomplish acceleration and efficiency at scale by building on each other’s progress, in partnership with private sector and academia. With this understanding in mind, the company rolled out its City Possible initiative, which is a collaborative public-private partnership model aimed at harnessing the power of partnership.

The initiative is building the world’s largest network of cities (targeting 500) to help city leaders find efficiencies through shared learnings, invest in the right businesses to accelerate growth and design solutions that help all communities. Sixteen cities have become founding members of the global City Possible network, including Dubai.

These are only a couple of examples that highlight how governments can leverage “collaboration” as their untapped superpower to drive the future of our communities, as tackling challenges associated with urbanization will require plural efforts to achieve a singular goal.

By playing the role of a “market organizer”, companies such as Mastercard are enabling new opportunities for the public and private sector to come together for a common goal and effect meaningful change for our cities. But it is important to remember that the heart of any city is its people, and as cities get smarter, people’s lives must get easier too.