PRESS CONFERENCE BY HASSAN FATHY INSTITUTE

6 June 2001

PRESS CONFERENCE BY HASSAN FATHY INSTITUTE

06/06/2001
Press Briefing

PRESS CONFERENCE BY HASSAN FATHY INSTITUTE

Among the objectives of the Hassan Fathy Institute, a division of the International Construction Institute (ICI), was to mobilize trade union support around the world for the principles of the Second United Nations Conference on Human Settlements (Habitat II), held in Istanbul in 1996, ICI President

John T. Joyce said this afternoon at a Headquarters press conference.

Mr. Joyce was joined by Bob Coy, Vice-President, ICI; James Campbell, Somerset Development Company; and Martin Levine, President, Broad Branch Consulting.  The participants were introduced by Sharad Shankardass, Spokesperson, United Nations Centre for Human Settlements (Habitat).

The ICI, continued Mr. Joyce, was a trade union non-governmental organization created 10 years ago by construction union leaders from 16 countries.  It had submitted a report to the General Assembly on a project undertaken with Habitat to address several areas.  The first was to advance the utilization of the principles advocated by the late Egyptian architect Hassan Fathy.  While those principles were widely accepted around the world, they were not being implemented on any scale that addressed the magnitude of the housing problem. 

The second objective, he continued, was to find a way for pension funds around the world to invest in housing in developing countries, something that was not possible now due to a variety of legal and fiduciary reasons.  Essentially, the key to make that possible was for organizations such as the World Bank and the regional development banks to provide guarantees for the pension investments.

There were four essential parts to the report, he noted.  One was that Hassan Fathy's principles needed to be further implemented worldwide.  Those principles reflected the idea that high-tech solutions were not the solution for housing the poor of the world.  What was necessary was to rediscover how people used to build in an area with indigenous materials and then find or train people to work with those materials, as well as mobilize the people who would live in those houses to help build them. 

The first of the recommendations in the report, he said, was to pull together a Charter of Cairo Conference on Sustainable Housing to be held in

2002, around the time of the United Nations World Summit for Sustainable Development.  The second recommendation was to create a global housing investment trust, which would make it possible for pension funds around the world to invest in housing in developing countries with guarantees from organizations such as the World Bank and the regional development banks.  Pension fund assets were the largest source of assets for investment on the planet, amounting to some

$11 trillion. 

Mobilizing trade union support, which was the third item in the report, was to be done primarily by calling on the International Confederation of Free Trade Unions (ICFTU), the International Federation of Building and Wood Workers and the other global confederations to work through the International Labour Organization (ILO) to galvanize their own efforts and those of their partners.  The fourth item was to link all of the above to the emerging trend for micro-financing and micro-lending.

Mr. Campbell noted that it was crucial to find a mechanism to mobilize private capital, in particular pension capital, and be able to use that to facilitate housing in the developing world.  The proposed mechanism was to create a network of global and regional housing finance intermediaries, patterned after the very successful American Federation of Labor-Confederation of Industrial Organizations (AFL-CIO) Housing Investment Trust in the United States.  The mechanism was geared towards aggregating a diverse pool of financial assets at the local level.

The proposal, he added, was to create a global housing investment trust, the umbrella entity which would serve as the vehicle for channeling pension capital around the world.  The network of intermediaries would assemble the assets at the local level, develop the capacity to provide technical assistance and help create projects at the local level. 

The role of the proposed institutions, said Mr. Levine, would be to facilitate the partnership between the private capital being provided by the pension investment funds and the public guarantees and subsidy sources that would be available to the financing package from a private investment perspective.  The regional institutions would be sources of technical assistance to housing developers and housing finance institutions in the countries in which they operated. 

They would also be able to facilitate the development of the legal and institutional infrastructure for mortgage finance, which was very often lacking in developing countries, he added.  The intent of creating the regional housing finance institutions was to target the lowest income countries and the lowest income housing needs. 

Mr. Coy stated that when the regional trusts were established, there had to be some mechanism within the poor countries to make loans to the poor to build homes.  The cost of a home in sub-Saharan Africa amounted to about $500, while one in Latin America cost about $2-3,000, thus requiring very small loans.  Among the most effective mechanisms available were the micro-financing institutions in poor countries, which had been successful in the provision of small business loans and were now expanding into the housing sector.  The Grameen Bank in Bangladesh, for example, had financed close to 500,000 homes.

On Habitat's role in the context of the global housing finance trust,

Mr. Joyce said that Habitat could work with the World Bank and provide housing expertise in setting up the trust and then work with the ILO on the same basis.  In order to accomplish that, Habitat needed to establish a small office to be the link with the global trade union movement and with the ILO.  It would also have to build up staff in the area of housing finance.

With regard to the involvement of the regional and national trade unions, he said that the first step would be for the World Bank and Habitat to meet with the representatives of the major workers pension funds around the world.  The key to that process was the ICFTU, which had already begun the process of pulling together the representatives of pension funds to begin discussing the issue. 

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For information media. Not an official record.