Rural development in the digital age
Thursday, 8 November 2012
B K Mukhopadhyay from Guwahati, India
Poverty eradication is the foundation for global peace and security and quality of life for all. Vibrant rural economies are vital not only to eradicating poverty in rural communities, but also to economic growth in poor countries as a whole. The question is: how public, private and civil sectors would work together to translate their commitment to rural development into action and investments that improve the daily lives of the rural poor and at the same time enhance their power to chart and lead their own development into the future.
The most common definition applied by international organisations to separate rural and urban regions has been developed by the Organisation for Economic Co-Operation and Development (OECD). The definition distinguishes two hierarchical levels of territorial unit: local and regional. At local community level the OECD defines rural areas as communities with a population density below 150 inhabitants per square kilometre.
The time is ripe to show the real willingness and ability to devise and implement an integrated and sustainable development strategy, supported by a realistic region-oriented development plan.
There is no snap shot prescription simply because the process is quite complex where a number of variables are to be taken into account. Broad-based rural development in developing countries must be founded on higher productivity by small-scale farmers. Secure access to land, water, technology, financial and other institutions that support and reward efforts of poor farmers are a must. At the same time better transport and communication infrastructure and facilities for storage, crop processing and marketing are needed so that higher yields and good harvests are not followed by a collapse in prices.
Small-scale performers need to increasingly organise themselves so that they can access markets and gain a stronger voice in decision-making processes. It is definitely noteworthy that international agencies are getting increasingly involved in this process. Both the developing countries and donor countries are steadily recognising the very importance of rural and agricultural development in the fight to end hunger and poverty. In Indonesia, for example, a project of the International Fund for Agricultural Development (IFAD) has been giving a section of the poorest people in the country the opportunity to make real change in their lives, by giving them the necessary support they require to develop and strengthen their own organisations. A good number of self-help groups have been formed, with significant members in some of the poorest and most remote areas of Indonesia. Through these groups, rural poor people are managing their own savings and group resources, and at the same time are being empowered to take the lead in their own development. The challenge now is to ensure that plans and programmes must be translated into more resources for rural development and poverty eradication and more effective use of these investments, temporally, spatially, functionally and hierarchically.
The role of micro-credit: Micro-credit programmes in South Asia have fulfilled a crying need of the rural poor and have restored their self-confidence. Bangladesh has shown the way. India has been on the rise on this score. In Pakistan, the rural support programmes have also accumulated large savings by the rural poor which individual savers in the rural areas could never have done by themselves.
However, micro-credit programmes have only a limited role in poverty eradication. By its very nature, micro-credit only addresses one of the various factors which condition the lives of the rural poor and cannot be naturally expected to solve the very poverty problem in the larger sense. It is, therefore, not surprising that these Asian economies which have had perhaps the highest exposure to micro-credit, still remain encircled in poverty.
The reality is that, despite unprecedented and continuing economic growth over the past two decades, South and South-east Asia is still home for over 40 per cent of the world's poor, the majority of them in rural areas. World's two most populous countries, India and China, have more than two-thirds of food-insecure people in the region. According to FAO assessments, reduction in income-poverty has not necessarily translated into food security and an important reason for this is that hunger itself is a constraint to escaping poverty, indicating a policy priority for targeted hunger reduction. The average per capita rural income in Bangladesh, India, Lao PDR, Nepal, Philippines, Sri Lanka and Thailand, is less than half of urban income. Similar glaring rural-urban disparities exist in access to basic facilities in most countries. For example, in Pakistan, rural literacy levels are half of those in urban region. While the gigantic tasks loom large, some of them are more interested in military build-up.
It is to be taken into consideration that though higher productivity and output are prerequisites for sustained poverty reduction, yet the entire process would be little effective in the absence of access to efficient markets for small-scale farmers and entrepreneurs. In developing countries, small-scale farmers and entrepreneurs remain at an enormous disadvantage as most of markets are hostile or de facto inaccessible to the rural poor. Resultantly, the efforts of poor farmers in remote areas of the world can be nullified by international processes that remain far beyond their control.
Doha Development Round: The analysis would remain incomplete if the World Trade Organisation (WTO) is not referred to. The success of the latest round of WTO's negotiations on trade (Doha Development Round) is very important. Creating a level playing field for trade is an important step the international community could take to fight poverty. Yes, the Cancun ministerial meeting was a setback, but the Doha Round must be brought back on track. Subsidies and protectionist trade policies of the industrialised countries have already been damaging developing countries. Industrialised countries' export subsidies go on leading to distortions in the domestic markets of developing countries creating difficulties for local producers.
Obvious enough, agriculture would remain the largest employer, job creator and export earner. Agriculture has been the engine that has driven economic growth in many economies for centuries. It has rightly been viewed by Lennart Båge that 'for every dollar invested in agriculture, another two dollars is generated for a developing country's national economy. It has been the often dramatic progress in agricultural development, translated into increases in productivity, that has generated increased income, which leads to savings and investments, and finally to greater demand for goods and services'. Three quarters of the world's poor (about 900 million people) still continue to live in rural areas where they depend on agriculture and related activities for their livelihoods. The Millennium poverty target cannot be met unless the world effectively addresses rural poverty. International cooperation is a must.
Dr B K Mukhopadhyay is a management economist.
[email protected]
Poverty eradication is the foundation for global peace and security and quality of life for all. Vibrant rural economies are vital not only to eradicating poverty in rural communities, but also to economic growth in poor countries as a whole. The question is: how public, private and civil sectors would work together to translate their commitment to rural development into action and investments that improve the daily lives of the rural poor and at the same time enhance their power to chart and lead their own development into the future.
The most common definition applied by international organisations to separate rural and urban regions has been developed by the Organisation for Economic Co-Operation and Development (OECD). The definition distinguishes two hierarchical levels of territorial unit: local and regional. At local community level the OECD defines rural areas as communities with a population density below 150 inhabitants per square kilometre.
The time is ripe to show the real willingness and ability to devise and implement an integrated and sustainable development strategy, supported by a realistic region-oriented development plan.
There is no snap shot prescription simply because the process is quite complex where a number of variables are to be taken into account. Broad-based rural development in developing countries must be founded on higher productivity by small-scale farmers. Secure access to land, water, technology, financial and other institutions that support and reward efforts of poor farmers are a must. At the same time better transport and communication infrastructure and facilities for storage, crop processing and marketing are needed so that higher yields and good harvests are not followed by a collapse in prices.
Small-scale performers need to increasingly organise themselves so that they can access markets and gain a stronger voice in decision-making processes. It is definitely noteworthy that international agencies are getting increasingly involved in this process. Both the developing countries and donor countries are steadily recognising the very importance of rural and agricultural development in the fight to end hunger and poverty. In Indonesia, for example, a project of the International Fund for Agricultural Development (IFAD) has been giving a section of the poorest people in the country the opportunity to make real change in their lives, by giving them the necessary support they require to develop and strengthen their own organisations. A good number of self-help groups have been formed, with significant members in some of the poorest and most remote areas of Indonesia. Through these groups, rural poor people are managing their own savings and group resources, and at the same time are being empowered to take the lead in their own development. The challenge now is to ensure that plans and programmes must be translated into more resources for rural development and poverty eradication and more effective use of these investments, temporally, spatially, functionally and hierarchically.
The role of micro-credit: Micro-credit programmes in South Asia have fulfilled a crying need of the rural poor and have restored their self-confidence. Bangladesh has shown the way. India has been on the rise on this score. In Pakistan, the rural support programmes have also accumulated large savings by the rural poor which individual savers in the rural areas could never have done by themselves.
However, micro-credit programmes have only a limited role in poverty eradication. By its very nature, micro-credit only addresses one of the various factors which condition the lives of the rural poor and cannot be naturally expected to solve the very poverty problem in the larger sense. It is, therefore, not surprising that these Asian economies which have had perhaps the highest exposure to micro-credit, still remain encircled in poverty.
The reality is that, despite unprecedented and continuing economic growth over the past two decades, South and South-east Asia is still home for over 40 per cent of the world's poor, the majority of them in rural areas. World's two most populous countries, India and China, have more than two-thirds of food-insecure people in the region. According to FAO assessments, reduction in income-poverty has not necessarily translated into food security and an important reason for this is that hunger itself is a constraint to escaping poverty, indicating a policy priority for targeted hunger reduction. The average per capita rural income in Bangladesh, India, Lao PDR, Nepal, Philippines, Sri Lanka and Thailand, is less than half of urban income. Similar glaring rural-urban disparities exist in access to basic facilities in most countries. For example, in Pakistan, rural literacy levels are half of those in urban region. While the gigantic tasks loom large, some of them are more interested in military build-up.
It is to be taken into consideration that though higher productivity and output are prerequisites for sustained poverty reduction, yet the entire process would be little effective in the absence of access to efficient markets for small-scale farmers and entrepreneurs. In developing countries, small-scale farmers and entrepreneurs remain at an enormous disadvantage as most of markets are hostile or de facto inaccessible to the rural poor. Resultantly, the efforts of poor farmers in remote areas of the world can be nullified by international processes that remain far beyond their control.
Doha Development Round: The analysis would remain incomplete if the World Trade Organisation (WTO) is not referred to. The success of the latest round of WTO's negotiations on trade (Doha Development Round) is very important. Creating a level playing field for trade is an important step the international community could take to fight poverty. Yes, the Cancun ministerial meeting was a setback, but the Doha Round must be brought back on track. Subsidies and protectionist trade policies of the industrialised countries have already been damaging developing countries. Industrialised countries' export subsidies go on leading to distortions in the domestic markets of developing countries creating difficulties for local producers.
Obvious enough, agriculture would remain the largest employer, job creator and export earner. Agriculture has been the engine that has driven economic growth in many economies for centuries. It has rightly been viewed by Lennart Båge that 'for every dollar invested in agriculture, another two dollars is generated for a developing country's national economy. It has been the often dramatic progress in agricultural development, translated into increases in productivity, that has generated increased income, which leads to savings and investments, and finally to greater demand for goods and services'. Three quarters of the world's poor (about 900 million people) still continue to live in rural areas where they depend on agriculture and related activities for their livelihoods. The Millennium poverty target cannot be met unless the world effectively addresses rural poverty. International cooperation is a must.
Dr B K Mukhopadhyay is a management economist.
[email protected]