20 percent of the world's population live in substandard housing, according to The United Nations Centre for Human Settlements (Habitat).

This week Habitat launched its first reports on urban conditions and trends, which revealed that more than 1.2 billion of the world's population of 6 billion live in inadequate housing.

The 'State of the World's Cities Report 2001' and its sister publication 'Cities in a Globalizing World: Report on Human Settlements monitor the realities faced by urban populations.

According to the reports, around half of the world's population now live in urban areas and Mr Annan echoed the sentiments of the current Labour government in outlining the importance of sustainable urban development as "one of the most pressing challenges facing the human community in the 21st century." The central challenge faced by the global community is how to make both globalisation and urbanisation work for all the world's people, instead of benefiting only a few, added Jay Moore, a principal contributor to the State of World Cities report.

Anna Kajumulo Tibaijuka, Habitat's executive director, said, "Homeless people are living in cardboard boxes on sidewalks of gleaming corporate skyscrapers, whose budgets exceed those of many countries."

The reports cite studies showing that while some world regions have improved their urban housing conditions, a disproportionately large share of the world's population - particularly in poor countries - has seen its housing situation deteriorate. In Bangladesh, Nigeria, and Rwanda, for example, real incomes have fallen, the cost of living has gone up, and the number of poor households in urban areas has grown rapidly.

However, it is not just in the poor countries that problems prevail, as all areas of the world have their own specific urban issues. According to Habitat:

• In Africa only one-third of all urban households are connected to drinkable water.
• In Asia and the Pacific, a mere 38 percent of urban households are connected to a sewerage system.
• In Europe, the processes of social exclusion marginalise many low income and minority households.
• In North America, problems of residential segregation, discrimination in housing markets and affordability persist, particularly in larger cities, despite recent economic growth.