As it has been mentioned by many previous speakers in this debate, about 3 billion people, that is half of the population of the world, live in urban areas today and the urban-based economies are now contributing substantially to GDP in most countries. Rapid urbanization, concentration of the urban population in large cities, and rapid growth of mega cities are among the most significant trends in human settlements.
Concentration of population in urban areas has its positive and negative aspects. Although cities are engines of growth and cross roads of ideas, places of great intellectual ferment and innovation, the same cities can also be places of exploitation, disease, violent crime, unemployment and extreme poverty. In addition, in many countries the situation is further aggravated by political and economic instability as well as by natural disasters resulting in large numbers of people becoming displaced and forced to live in inadequate shelters.
That is why the UN Conference on Human Settlements, held five years ago in Istanbul, concluded that, with proper guidance, the process of urbanization could promote development. Therefore, I believe that this special session on review of Habitat Agenda should not only focus on actions taken at the local and international levels during the past five years, but it should also address the ways and means of generating new and additional financial resources needed to implement many of its provisions. In this regard, my delegation attaches great importance to the preparation and holding of International Conference on Financing for Development next year in Mexico.
As it is seen from the report and this debate, many countries, including my own, have made progress towards fulfilling their commitments with respect to Habitat Agenda. However, it is also quite evident that there is a need to further develop the cooperation at the local, national and international levels, and to strengthen and make more effective the United Nations Centre for Human Settlements (Habitat) as the focal point for the implementation of the Agenda. In this regard, I would like to underline that the question of providing adequate and predictable funding for Habitat is one of the pressing issues of revitalizing, reforming and strengthening the Centre.
When drawing up the further measures, we should bear in mind that the population growth expected in the near future will be mainly in urban areas and most of it in the world's poorest countries.
Making cities sustainable will require integrated plans that link balanced development of rural and urban areas to poverty eradication. People living in rural areas will be increasingly affected by an urbanizing world. The growing links between urban and rural areas, like trade, migration, the exchange of people and the communication of ideas, will affect social and economic development in rural areas.
Now allow me to turn briefly to the situation in Mongolia. Today about 60 percent of the country's population live in urban areas. With democracy and open markets, the society is developing rapidly. One of the side effects of the reforms today is the widening gap between rural and urban areas, between people with the skills and knowledge to grasp opportunity and those who lack them. The nature and scope of poverty differ from urban to rural areas. While urban poverty is mostly characterized by low income as a result of production decline, increased unemployment and inflation, rural poverty is prevalent among cattle-breeders who lack access to productive assets, including livestock. Poverty is also related to underdeveloped infrastructure, lack of market relations skills and limited access to markets.
Poverty in Mongolia is magnified by the harsh climate, where on average a third of household or institutional budget is spent just on heating and shelter to so as to survive the cold or stay warm. Thus nearly 20 percent of Mongolia's population of 2,4 million were directly affected by the natural disaster "dzud" last two years in a row. Many were forced to migrate to the capital, every third person lives in search of work. As a result, the number of homeless is growing.
My delegation shares the view that future investments should be directed at cost effective development of infrastructure and services, especially for such land-lacked countries like Mongolia with vast territory and small population. The Millennium Road Project, which has been launched a few months ago in Mongolia, will promote socio-economic development of the country by linking all its five economic regions and enable the rural population to have more access to transportation and services. As a result of the Millennium Road, large settlements would be established along the existing and new roads as well as other infrastructure facilities. Road, transport and communication development will ease the constraints to regional development and allow to focus more on the increase in regional industry and services as well as the alleviation of poverty and unemployment.
It is rightly pointed out in the report that good governance is essential to addressing the challenges of urban poverty and environmental degradation and to making use of the opportunities offered by globalization. It is a pleasure for me to inform this Assembly that the Government of Mongolia is implementing Good Governance for Human Security Policy Programme, which covers all issues pertaining to human security.
We believe that this session provides us an opportunity to review our achievements, identify the challenges and develop forward-looking strategies for realizing the twin goals: Adequate shelter for All and Sustainable Human Settlements Development in our urbanizing world.
Finally, I would like to assure you, Mr. President, that the Government of Mongolia is fully committed to continue its work towards achieving the objectives of the Habitat Agenda as well as the Millennium Summit.