Well-designed urbanization helps pull people out of poverty and advances progress towards the Millennium Development Goals (MDGs), said the World Bank and International Monetary Fund (IMF) on Wednesday.

The Global Monitoring Report (GMR) 2013, released jointly by the two global institutions, said that urbanization had been a major force behind poverty reduction and progress towards other MDGs.

More than 80 percent of global goods and services were produced in cities. Countries with relatively higher levels of urbanization, such as China, and many others in East Asia and Latin America, had played a major role in lowering extreme poverty worldwide, according to the report.

The GMR, which is also an annual report card on MDG attainment, found that progress continued to lag on reducing maternal and child mortality and providing sanitation facilities, targets which would not be met by the MDGs 2015 deadline.

Though extreme poverty had declined rapidly in many countries, the report estimated that by 2015 there would be 970 million people living below 1.25 dollars a day, about 15.5 percent of the population in the developing world.

As the report pointed out, the challenge of fighting poverty and improving the living conditions of the poor would lie in both urban and rural areas.

"The rural-urban divide is quite evident. Megacities and large cities are the richest and have far better access to basic public services; smaller towns, secondary cities, and areas on the perimeter of urban centers are less rich; and rural areas are the poorest," said Kaushik Basu, the World Bank's chief economist.

"But this does not mean unfettered urbanization is a cure-all the urban poor in many places urgently need better services as well as infrastructure that will keep them connected to schools, jobs and decent health care."

"Emerging market and developing countries are growing robustly notwithstanding slow growth in advanced economies. Sustaining this growth by continuing to maintain prudent macro policies and strengthening the capacity to manage risks, including through a rebuilding of depleted policy buffers - is key to continued progress in poverty reduction as we approach 2015," said Hugh Bredenkamp, deputy director of the IMF's Strategy, Policy and Review Department.

Although tackling rural development challenges would not be easy, it could be done with complementary rural-urban development policies and actions by governments to facilitate a healthy move toward cities without short-changing rural areas, said the report.

"Urbanization does matter. However, in order to harness the economic and social benefits of urbanization, policy-makers must plan for efficient land-use, match population densities with the required needs for transport, housing and other infrastructure, and arrange the financing needed for such urban development programs," said Jos Verbeek, lead author of the report. Endi

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