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Shortage of housing and increasing expansion of squatter settlements are amongst the key challenges in the urban areas of developing countries. Through squatter upgrading programmes, the World Bank hopes to contribute to the millennium development goal of improving the lives of at least 100 million dwellers by 2020 (Cities Alliance, 2003). Due to the limitation of the market oriented approach to tackle inequalities and the housing problem in the developing world, the World Bank has recently redirected its concepts of development, moving away from one solely based on income generation to one influenced by Amartya Sen's concept of development as freedom. In this context squatter upgrading becomes the mechanism to tackle not just the lack of infrastructure but complex new dimensions of poverty such as powerlessness and vulnerability.
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