Disparities

BALANCED DEVELOPMENT
ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
REDUCING DISPARITIES: BALANCED DEVELOPMENT OF URBAN AND RURAL AREAS AND REGIONS WITHIN THE COUNTRIES OF ASIA AND THE PACIFIC
UNITED NATIONS New York, 2001

i
REDUCING DISPARITIES
ST/ESCAP/2110
UNITED NATIONS PUBLICATION Sales No. E.01.II.F.24 Copyright United Nations 2001 ISBN: 92-1-120037-7
The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The term country as used in the text and the tables also refers, as appropriate, to territories and areas. The designations developed and developing economies are intended for statistical convenience and do not, necessarily, express a judgement about the stage reached by a particular country or area in the development process. Mention of firm names and commerical products does not imply the endorsement of the United Nations On 1 July 1997, Hong Kong became Hong Kong, China. Mention of Hong Kong in the text refers to a date prior to 1 July 1997.
ii
Foreword
The Economic and Social Commission for Asia and the Pacific (ESCAP) selected the theme Balanced development of urban and rural areas and regions within the countries of Asia and the Pacific for its fifty-seventh session in April 2001. The choice of this theme is opportune. Despite a decline in poverty across the region, there are significant disparities between urban and rural areas and between regions within countries. Poverty in all its forms is more common in rural areas than in urban areas. The disparities are the main reason for the rapid urbanization of the Asian and Pacific region. Within the next two or three decades, a majority of the regions population is expected to live in urban areas. This urbanization could well mean an urbanization of poverty. This is of great concern to ESCAP because poverty alleviation is the focus of its activities. Faced with this trend, the region has to continue to invest in urban and rural development to reduce poverty and ensure an adequate standard of living for the population in both rural and urban areas. Similarly, disparities between areas need to be reduced as they can pose a threat to the stability of the nation. It is of critical importance for economically backward areas to develop transport and communication links with markets, seaports and other transport nodes. Improved links allow regions to exploit their comparative advantages. They reduce the cost of products and services from those regions and thereby make them more competitive. In an economically globalizing world with emerging trade blocs, the transport nodes and markets need not be located in the same country, but can be situated in adjacent countries. For many years, ESCAP has been promoting the development of such transport links across the Asian region. Investments in physical infrastructure are not sufficient to alleviate poverty and to bring about development that benefits all. Often the poor, whether in urban or in rural areas, remain excluded from development. They do not benefit because they do not participate in the decision-making that directly affect their lives. They do not receive recognition from society and the economy for the contributions they make to development. Balanced development, therefore, does not only mean balanced investments in urban and rural areas and in regions within countries. It also means an equal empowerment of urban and rural areas and regions within countries to decide their development path. This requires a new attitude among local government officials and the ability to forge partnerships with local urban and rural communities to set priorities, and design and implement policies and programmes. The practice of good governance is a concern of ESCAP.
iii
While rural-urban disparities and disparities between region within countries need our utmost attention, newly emerging global trends can cause new disparities. Globalization of the economy, the information revolution and the emergence of the knowledge society will profoundly alter social and economic conditions around the world and in the Asian and Pacific region. Knowledge will become the most important factor of production and in order to compete in the global economy, countries will have to improve their educational systems. Corporations will increasingly look at the quality of education of the workforce, the availability of qualified professionals and the level of research and development, before deciding on investments in a particular location. Employers may also be looking for employees who are not well-educated, but have the ability for continuous learning and who can apply available knowledge to new situations. Entrepreneurship, flexibility and mobility will become highly valued assets. Not everyone will be able to participate in this new economy and a new disparity will emerge. Many refer to this disparity as the digital divide, but it is more than a divide between those with access to information technology and those without such access. It is a divide between those with the appropriate knowledge, skills and attitudes and those without them. This new disparity is likely to pose an enormous challenge to the countries in the Asian and Pacific region and therefore to ESCAP. I hope that this study on balanced development between urban and rural areas and regions in countries of Asia and the Pacific will draw attention to these issues and that it will provide food for thought, debate and action among the members of the Commission.
Kim Hak-Su Executive Secretary
iv
CONTENTS
Page Foreword .................................................................................................... Introduction................................................................................................ Chapter I. Balanced development ............................................................ Poverty and disparities ................................................................... Distinguishing between urban and rural areas .............................. Causes of disparities ....................................................................... Balanced development.................................................................... Conclusion....................................................................................... Chapter II. Rural-urban and regional disparities..................................... Poverty trends ................................................................................. Access to infrastructure and services............................................. Social and political constraints ...................................................... Regional disparities ........................................................................ Conclusion....................................................................................... Chapter III. Past policies and trends ........................................................ Promoting economic growth .......................................................... An urban bias .................................................................................. Urban poverty ................................................................................. Reducing rural-urban migration..................................................... Conclusion....................................................................................... Chapter IV. Urban development............................................................... Free-market economic policies ...................................................... Industrialization and urbanization.................................................. Rural-urban migration .................................................................... Living in the city............................................................................. Conclusion....................................................................................... Chapter V. Rural and regional development............................................ Regional development .................................................................... Decentralization and empowerment............................................... Credit ............................................................................................... Gender ............................................................................................. Emerging regionalism..................................................................... Conclusion....................................................................................... iii 1 4 4 5 8 11 14 15 15 17 22 24 29 30 30 34 36 38 41 43 43 47 49 53 57 61 61 65 68 71 72 75
CONTENTS (continued)
Page Chapter VI. The future of agriculture ...................................................... Green Revolution............................................................................ Food security................................................................................... Modernizing agriculture ................................................................. Alternative agriculture.................................................................... The functions of agriculture ........................................................... Conclusion....................................................................................... Chapter VII. The knowledge society ....................................................... Information and telecommunications ............................................ Tele-education and telemedicine.................................................... The knowledge-based society ........................................................ Competitiveness.............................................................................. Conclusion....................................................................................... Chapter VIII. Conclusions........................................................................ Balanced development.................................................................... Urban bias ....................................................................................... Emerging trends .............................................................................. Promoting balanced development .................................................. Policies ............................................................................................ 77 77 80 84 85 88 91 92 92 98 100 104 107 108 108 109 110 113 114
BOXES
V.1 V.2 V.3 Decentralization in the Republic of Korea .................................... Regional disparities in India........................................................... Saemaul Undong............................................................................. 63 64 67 95 97 103
VII.1 Grameen village pay phones in Bangladesh.................................. VII.2 Korean farmers access the Internet ................................................ VII.3 Penang Skills Development Centre................................................
vi
Page
TABLES
2.1 2.2 Poverty in Asia and the Pacific, 1987-1998 .................................. Population below the poverty line in urban and rural areas, 1990s ............................................................................................... 2.3 Poverty levels in India, 1973-1994 ................................................ 2.4 Incidence of poverty in Malaysia, 1995, 1997, 2000.................... 2.5 Population with access to basic services, 1990-1996 ................... 2.6 Rural-urban disparities in India, 1991-1994.................................. 2.7 Adult illiteracy rates in urban and rural areas of China, 1995...... 2.8 Health conditions by state in India, 1990-1995............................. 2.9 Human Development Index by region in Nepal, 1998.................. 2.10 Per capita annual income by province in China, 1998.................. 2.11 Districts with the highest female illiteracy in India, 1991............ 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 4.1 4.2 4.3 4.4 4.5 4.6 Population growth rate for selected countries, 1950-2000 ........... Rural population below the poverty line, 1957-1974.................... Direct and indirect bias against agriculture, 1960-1986 ............... Population of selected urban agglomerations, 1950-2000............ World population by settlement size, 2000-2015 .......................... Urban population in slums and squatter settlements, 1980s......... Migration rates in China and the world, 1949-1979 ..................... Rural and urban population in China, 1949-1995 ......................... Foreign direct investment in Asia and the Pacific, 1987-1998..... Contributions (percentage) of economic sectors to gross domestic product, 1970-1995......................................................................... Urban and rural population growth rates, 1950-2030 ................... Asian cities by gross domestic product in 1990 ............................ Remittances from migrants to selected Chinese provinces, 1999 Total population, percentage urban (2000, 2030) and average annual growth rate (2000-2005) by economy in Asia and the Pacific........................................................................................ Single-city primacy indices for selected Asian countries ............. Indices of food production per head (1979-1982 = 100.0) ........... Undernourished population in Asia, 1990-1998............................ Cereal balances by region for all cereals, 1964-2030 ................... 16 16 17 18 19 20 20 25 26 27 29 32 33 34 36 37 38 40 41 45 49 50 50 53
58 62 77 78 80
5.1 6.1 6.2 6.3
vii
Page 6.4 6.5 6.6 7.1 7.2 7.3 7.4 7.5 Soil degradation by land use in Asia, 1990 ................................... Changes in irrigated arable land, 1961/63-2030 ........................... Sources of growth in crop production, 1961-2030........................ Main telephone lines in urban and rural areas, 1995 .................... Urbanization module of the United Nations CyberSchoolBus . Factors contributing to a positive business environment in a city Growth competitiveness for selected Asian economies, 2000...... R and D expenditures as a percentage of gross national product for selected Asian countries, 1992-1997........................................ 81 82 84 93 99 101 105 106
EXPLANATORY NOTES
Values are in United States dollars unless specified otherwise. In the tables, two does (..) indicate that data are not available or are not separately reported, a dash () indicates that the amount is nil or negligible and a blank indicates that the item is not applicable. In dates, a hyphen (-) is used to signify the full period involved, including the beginning and end years, and a stroke (/) indicates a crop year, a fiscal year or plan year.
viii
ABBREVIATIONS
ADB APCTT ESCAP FAO FDI GNP Habitat HDI ICT IDF ITU n.d. NTCA SDP UNDP UNEP UNESCO WRI WTO WWI Asian Development Bank Asian and Pacific Centre for Transfer of Technology Economic and Social Commission for Asia and the Pacific Food and Agriculture Organization of the United Nations foreign direct investment gross national product United Nations Centre for Human Settlements Human Development Index information and communication technology India Development Forum International Telecommunication Union no date National Telephone Cooperative Association state domestic product United Nations Development Programme United Nations Environment Programme United Nations Educational, Scientific and Cultural Organization World Resources Institute World Trade Organization World Watch Institute
ix
INTRODUCTION
Introduction
During its fifty-sixth session, in June 2000, the Economic and Social Commission for Asia and the Pacific decided that the theme for its fifty-seventh session, in April 2001, would be balanced development of urban and rural areas and regions within the countries of Asia and the Pacific. While it is not difficult to recognize unbalanced development (i.e., development that does not benefit all population groups more or less equally), it is much harder to define balanced development in a meaningful way because there will always be inequalities between urban and rural areas and between regions owing to inherent differences in natural resources, geographical location, economies of scale and agglomeration. This study defines balanced development as the development of equal opportunities for all segments of a population, irrespective of gender, ethnicity or region, to participate in, contribute to and benefit from social and economic development. The terms urban and rural also require some clarification. Governments in Asia and the Pacific define urban and rural in different ways, and this makes a comparison of conditions across the region difficult. Moreover, urban and rural areas are becoming increasingly integrated as a result of better transport and communications, rural-urban and return migration, the dissemination of urban norms and values in the rural areas, and the spread of urban economic activities in the rural areas (rural industrialization) and of rural economic activities in the urban areas (urban agriculture). This is blurring the distinction between urban and rural areas. The term region needs to be clarified for this study. Here, region is defined as a large area of land that is different from other areas of land because of some geographical, cultural or economic characteristics. The term region can be confusing because it can refer to different kinds of land area depending on the criteria used. In the terminology of the United Nations, a region coincides more or less with a continent (for example, the Asian and Pacific region) or part of a continent. Such a region is divided into subregions that cover several countries with some common characteristics, for example, South-East Asia. Furthermore, the United Nations and the specialized agencies do not have a uniform list of countries included in a specific region or subregion. This makes comparisons difficult. In this study, the term region is used to refer to a subnational unit, part of a country (for example, northeast Thailand), a state (Maharashtra in India) or a province (Yunnan in China), unless explicitly stated otherwise. Such a region
within a country may or may not have fixed and officially endorsed boundaries, but the term is a convenient way to refer to a contiguous land area with one or more common characteristics. These characteristics could be an administrative unit, level of economic development, culture, ethnic composition or geography. The problems addressed in this study are the imbalances or disparities in development between urban and rural areas and between regions within a country. These disparities are not new; much of the development research has focused on these imbalances and most national development policies aim at reducing the disparities. The central question in this study is how to address the problem of disparities in Asia and the Pacific within the context of a rapidly urbanizing and globalizing world, which is on the threshold of major economic changes (such as the adoption of free-market economic policies and the emergence of the knowledge society), technological innovations (such as the information revolution) and rapid environmental degradation (water shortages and land degradation). The Asian and Pacific region consists of more than 50 countries with a great variety of cultures, political and economic systems, levels of economic development and population sizes. This makes it difficult to describe and analyse the conditions in each of the countries and to formulate policy implications that apply to all countries of Asia and the Pacific in the same way and at the same time. Despite the differences, all countries in Asia and the Pacific appear to be moving towards the same, or at least a very similar, economic system (the market-based economy) and to be experiencing the impact of the information revolution. They are moving towards an integration of their national economy into one or another regional free-trade bloc and into the global economy. Many countries in the Asian and Pacific region are either highly urbanized or rapidly urbanizing. They face similar environmental problems in urban and rural areas. Given this apparent convergence of conditions and challenges, it is possible to draw general conclusions and make recommendations that apply to most countries in the region. Work on the study started in July 2000 and was completed by the end of the year. The time and resources available did not allow for any primary research or an analysis of primary data, or for a detailed study of in-country disparities. The study did not attempt to explain rural-urban and regional disparities within particular countries, but looked at broad trends and policies, and attempted to draw lessons from the experience gained. It relied heavily on available studies and obtained many of the data and publications from the Internet. As a result, the data presented in this study are not always consistent throughout the text because the sources of the information used different definitions.
INTRODUCTION
The study was prepared by Yap Kioe Sheng with advice from the staff of the Population and Rural and Urban Development Division and under the supervision of a working group composed of representatives of all secretariat divisions. Sunanda Kishore and Radhika Savant Mohit provided research assistance to the Population and Rural and Urban Development Division during the period of the study and Aman Mehta designed the cover. ESCAP convened an Expert Group Meeting on 11 and 12 January 2001 in Bangkok to review the draft text of the study and provide comments and suggestions. The contribution of the members of the expert panel, Reidar Dale, Han Sun Sheng, Om Prakash Mathur, Mohamed Zin Mohamed, Kirtee Shah, Johan Silas and Budhy Tjahjati S.Soegijoko, is gratefully acknowledged.
Chapter I. Balanced development

Poverty and disparities Human development is the process of enabling people to develop their full capabilities, thereby enlarging their choices as to what they can do in their lives and how they can participate in the development of their society. Here, participation means contributing to development, benefiting from development and taking part in decision-making about development. Participation is an essential element of peoples lives; by contributing people gain recognition, respect and dignity, by benefiting they increase their financial and social assets, by taking part in decision-making, they gain influence. Poverty prevents people from developing their full capabilities and from participating in development. The poor contribute little, they benefit little and they have no influence over decisions that affect their lives. They, therefore, receive little respect and recognition from society. Poverty is caused by a set of interrelated conditions that reinforce each other and trap people in poverty. Owing to a lack of resources, a lack of entitlement or a lack of information, or because the infrastructure and services are simply not available, the poor do not have access to all sorts of essential infrastructure and services. As a consequence, they usually have little or no education and are not in good health. This limits their ability to find work and earn an adequate income, which in turn limits their access to infrastructure and services. The poor rarely take part in decision-making that affects their lives, and as a consequence they cannot claim a share of development; development passes them by. The poor are vulnerable to societal or personal calamities, and to harassment and exploitation by more powerful groups in society. In short, the poor, and their children, are trapped in a vicious circle of poverty from which it is extremely difficult to escape. Poverty is called absolute poverty when people do not have the resources to meet even their most basic needs, such as their food, clothing and housing requirements. More widespread than absolute poverty is relative poverty. Relative poverty means that people lack the resources to live a life that their society considers adequate. This poverty is relative because it depends on a societys definition of an adequate standard of living. The definition differs from place to place and from time to time. What was adequate in the past may not suffice today; what is adequate today may no longer be adequate tomorrow. What is adequate in a village may not be adequate in a big city; what is adequate in a developing country may not be adequate in a developed country. These definitions
4
were discussed at the Habitat/ESCAP Regional High-level Meeting in Preparation for Istanbul+5 for Asia and the Pacific, held in China in October 2000. If there are major differences in the quality of life between different people or groups within a single society, one can speak of disparities. Disparities exist everywhere: between countries, between regions within a country, between urban and rural areas, between population groups, between people within a group, even between members of a single family. This study focuses on disparities between urban and rural areas, and between regions within a country. Distinguishing between urban and rural areas Determining the disparities between urban and rural areas is, however, more difficult than it might seem, since it is difficult to define what is urban and what is rural. Governments in Asia and the Pacific use different definitions for urban areas and do not define rural areas, treating them as the undefined residual. An area is designated as urban when it reaches a certain population size (for example, 5,000 inhabitants) or when its population density reaches a certain level (for example, 1,000 per square kilometre). Small changes in criteria can have a considerable impact on the urbanization level of a country. This was the case in China, where the urban population more than doubled between 1982 and 1989 because of a change in definition (ESCAP 1992: 20). The level at which a settlement is called urban is quite arbitrary, and this makes it difficult to make comparisons between countries. There is a trend across Asia and the Pacific to designate more areas as urban in order to grant them a level of administrative authority that makes it easier to govern a given area. This is a reaction to the increase in economic activity in rural areas, resulting in negative externalities and greater demand for infrastructure and regulations. Rather than defining rural and urban in geographical or demographic terms, it may be better to look at the character of the rural and urban society and economy. Economists define an area as urban when the economy is characterized by non-extractive occupations, for example, industry, commerce, that benefit particularly from a high population density and the accompanying infrastructure. Sociologically, urban may typify wider, but less personal social relations and a lifestyle characterized by individualism, anonymity and a segmentation of life. However, improved transport and the relative reduction in transport costs have made it easier to commute between an urban area and its surrounding rural areas or to migrate temporarily from rural to urban areas. As a result, an increasing number of people find temporary or permanent urban employment in the urban areas, while living or at least being registered to live in a rural area.
5
With the arrival of many rural migrants, cities are incorporating rural components, such as rural lifestyles, urban agriculture, in the urban society and economy. Rural areas are, on the other hand, culturally urbanizing with the spread of education, the penetration of the mass media and the permanent or temporary return of rural migrants who bring home elements of an urban culture (Rotg 2000: 203). The distinction between urban and rural areas is becoming blurred, and it is more appropriate to speak of a rural-urban continuum than of a rural-urban divide. This is evident in the rural areas surrounding the major Asian cities, what McGee (1995) called the extended metropolitan regions. In the extended metropolitan regions of Asia, McGee (1995: 10) observes a process of region-based rather than the conventional city-based urbanization. The extended metropolitan development produces an amorphous spatial form with no set boundaries or geographic extent and long regional peripheries, their radii sometimes stretching 75-100 km from the urban core. Region-based urbanization does not attract only migrants from rural areas to the city, but also people that live in the rural areas of the metropolitan region and work in the urban areas. McGee uses the name desakota (from the Malay words desa or field and kota or town) for these extended metropolitan areas to indicate that they have a mixed urban and rural character (McGee and Robinson 1995). The development of extensive road networks around major cities and cheap means of transport (buses, motorcycles, bicycles) allows people to live in the rural areas and to commute on a daily basis to the city for work. It is difficult to say whether the rural areas are still really rural. They may have the density and the character of a rural area, with agricultural land surrounding the villages, but the economic activities of the population are at least partly urban in nature. Colombo is an example where economic activities are concentrated in the city (with a population of around one million), while most people live in villages around the city in the extended metropolitan area. Rotg (2000) provides examples from Yogyakarta in Indonesia. The situation is further complicated with urban economic activities moving into the metropolitan rural areas. As land becomes more expensive in the urban areas and environmental regulations become more demanding, companies move their manufacturing plants out of the city and into the rural areas. For instance, factories of multinational corporations are to be found in the middle of the rice fields some 100 kilometres outside Bangkok. As long as the factory is not too far away from the highway, the inputs for the production process can be trucked in and finished products can be transported to the port or the airport. Since the factory is in the middle of the rice fields, the company may have to build a dormitory for its workers or use buses to bring the workers to the factory.
Township and village enterprises in China engage large numbers of people (123 million in 1993, including many temporary migrants) in non-agricultural activities. The enterprises are a major source of economic development in many places in China. They are primarily located in the small towns and townships and have prevented massmigration to the large cities. The nature of the activities of the township and village enterprises classifies them as urban enterprises and, according to Yu (1998), they should be seen as an important component of the urbanization process of China. The enterprises cause environmental problems typical of urban areas (Zhang 1996), and to address those problems the local administration has to assume municipal responsibilities that are again typically urban. This raises the question as to whether rural industrialization in China is really rural or, as Yu calls it, a form of informal urbanization. On the other hand, rural economic activities are increasing in the urban areas. More and more cities and towns in Asia and the Pacific are recognizing the importance of urban wetlands. These wetlands not only are home to many species, but also have critical urban functions relating to flood protection, wastewater treatment and groundwater recharge. In the past, wetlands in urban areas were seen merely as breeding grounds for insects and filled so that the land could be used for real estate. Now, there is a trend towards preserving urban wetlands and using them for aquaculture. Interest in urban agriculture has grown because of the positive impact of agriculture and forestry on the urban environment. Trees reduce the dust in urban air; fields with grass or crops absorb the heat and mitigate the urban heat-island effect. Some forms of urban agriculture are activities carried out by poor people to supplement their diet or income, but urban agriculture can also be a fully commercial activity to supply the city with fresh produce. Urban agriculture may even be a way for urban landowners to keep their land occupied. Whatever the motive for urban agriculture, rural characteristics can be found everywhere in the urban areas. Finally, it is important to understand that the urban population grows not only due from natural population increase and rural-urban migration, but also due from the reclassification of rural into urban areas. A rural district is often reclassified when the population of a city spills over into an adjacent rural area, but reclassification usually lags behind the actual urbanization process. In other words, the actual urban population in a country is larger than that shown in the statistics. Since the urban population in a rural district adjacent to a city is likely to be economically better off than the average rural population, the rural-urban disparity is probably also wider than that shown by the statistics. Dividing a country into urban and rural areas also means lumping together the capital city and small towns, on the one hand, and metropolitan hinterlands, prosperous agricultural areas and impoverished rural areas, on the other. The division can
hide the sometimes extreme disparities in income levels between population groups within the urban and rural areas. Causes of disparities Disparities are the result of three sets of factors: natural differences, sociocultural conditions and policy decisions. Natural factors, such as differences in agro-climatic conditions, endowment with natural resources or geographical location, such as distance to a seaport or a centre of commerce, determine the potential for economic development of an area or a region. Some conditions, such as climate and natural endowments, are largely invariable, while others can be improved through such infrastructure as roads to overcome isolation and irrigation to overcome arid conditions. Sociocultural factors, such as values and traditions that either encourage or discourage social and economic mobility, innovation and entrepreneurship, form a second set of factors. The third set of factors is made up of policy decisions. Although rural and urban areas are by nature different, they form one system; they are integrated in political and economic terms. Policy decisions that are positive for one part of a country or one sector of the economy can have positive and negative consequences for other parts or other sectors. Differences in political power between rural and urban areas or between regions can result in intended or unintended biases in government policies. Policy decisions to leave the allocation of resources to the market or to invest scarce resources in places with the best growth potential benefit some areas and regions over others. Inequalities between urban and rural areas are not new. They have always existed and may even have been more extreme in the past than they are today. However, in the past they were taken for granted, because that was the way society was organized, or they remained unnoticed owing to a lack of interaction between urban and rural areas. Historians have suggested that when agricultural development made surpluses possible, towns developed because of economies of scale in the storage of the surplus and the need for its protection. Once there was a production surplus, comparative advantage led to trade in agricultural products between different locations. Transfer nodes for agricultural products turned into trading posts which became trading towns. Others have pointed out that the development of towns coincided with the emergence of large-scale religion, possibly as a result of economies of scope in the provision of religion and storage in a single place. Religion and the storage of wealth could have caused armed conflicts, resulting in a larger role for the military to protect the storage and the religious places in the town (Sullivan 1990: 68-69). Whatever the exact sequence, urban areas developed as the seat of
8
accumulated power and wealth, supported by religion and living off the agricultural surplus. Towns could develop only if three conditions were met: The agricultural surplus was large enough to support the urban population Differences in productivity generated comparative advantages that offset transport costs Economies of scale in transport made large-scale trade and central market places efficient
The towns and later the cities became home to the elite, and the urban population formed a small, but powerful and influential, segment of the total population due through their links to the ruler, the religion and the military. A large majority of the population lived in the countryside, was involved in agriculture and supplied food and labour to the cities through the market towns. Urban areas (whether represented by the ruler or by traders) could acquire the agricultural surplus at a fair price from the farmers. More often, however, they would simply take it from the rural areas at any price or no price to the farmers. Because towns formed a real political-commercial-religious complex, it is likely that people in the rural areas saw it simply as their duty to supply the urban areas with food and other products from the land. Rulers could also tax the farmers for their land, their products and their income. Exploitation of the rural areas by the cities and towns is a historical fact. Being the centres of power, religion and wealth, the traditional cities and towns were very distinct from the countryside. The urban areas were the centres of civilization; the rural areas were the place where the simple, hard-working people lived and toiled, close to nature. Urban dwellers developed a sense of superiority over the peasants in the countryside. With the elite in the urban areas and the masses in the rural areas, the distinction between urban and rural society became a cultural one. Culture dictated that people should live on the land and off the land, and that farming was the natural way of life. On the other hand, there was a need for urban areas with rulers, traders and priests. The ruler ensured that law and order was maintained and that the rural population could farm. The traders were prepared to leave their urban homes to buy the agricultural surplus from the farmers to sell in far-away places. Religious leaders gave meaning to life; they prayed for the well-being of the ruler and his people so that all would prosper. Urbanites would confess that they preferred to live in the rural areas, but that this would only be possible once they were old and retired. In the meantime, it was up to the rural population to supply them with food in a mutually beneficial symbiosis.
9
Most rural families were engaged in agriculture, and their income was highly influenced by climatic conditions. They maintained large networks of extended families and patron-client relationships to reduce vulnerability and spread the economic risk. These social safety nets helped the weaker members of society, but at the same time acted as a disincentive for the more entrepreneurial because any accumulated wealth would have to be shared with many others. With its larger population size, urban society is characterized by more diversified but less personal relationships. In a 1938 article entitled Urbanism as a way of life, Wirth (2000) tried to formulate a meaningful and logically coherent sociological definition of urban life. He defined cities as relatively large, dense and permanent settlements of socially heterogeneous individuals. He saw differentiation and specialization as logical outcomes of the large number of people within a small area because this is the only way an area can support increased numbers. Urban life tends to be much more anonymous than rural life because urbanites have limited knowledge of the large number of people they meet. Such living and working together without sentimental and emotional ties fosters a spirit of competition and mutual exploitation. Rigid social hierarchies are difficult to maintain. So there is a need for formal control mechanisms (regulations) to counteract irresponsibility and potential disorder. Opportunities for social mobility increase, and instability and insecurity become the norm. Places of residence, places and character of employment, income and interests change constantly. There is specialization and innovation resulting in increases in productivity and the generation of wealth. That is why urban areas engender economic growth. The inherent advantages of urban settlements over rural ones are best reflected in the economies of scale and agglomeration of urban areas. The large size of the urban population creates a high demand for goods and services, and this promotes an increased supply of goods and services at lower costs of production per unit. Moreover, the availability of a wide range of different resources in a small area promotes specialization and innovation. Owing to the scattered pattern of rural settlements and the inadequate communication and transport networks, rural people are disadvantaged when it comes to organization and the articulation of needs, priorities and preferences through political processes. The fact that officials in urban areas often take decisions on behalf of the rural population about their future and the use of their natural resources is an expression of the imbalance in political power between urban and rural areas. Analysing regional disparities in South-East Asia, Hill (2000) noted that an endowment with natural resources should give an area an advantage over other areas. However, the level of social and economic welfare in many resource-rich areas is actually lower because the central government appropriates
10
a large proportion of the natural resource rents. Consumption patterns in mining enclaves tend to be highly import-intensive and major infrastructure projects tend to be awarded to more experienced companies from outside the area. As a result, even the limited local spin-offs may have little impact. Most of the resourcerich areas are distant from capital cities, which adds to the sense of deprivation. Hill observes that capital cities tend to be the richest part of each country. They are the seats of government, and an inevitable consequence of the concentration of political power is the accumulation of wealth. They are the places where major infrastructure projects are awarded, where business licences must be obtained, where major foreign and domestic firms are headquartered and where foreign aid flows enter the domestic economy. A capital region usually has a strong economy because of the absence of low-productivity agriculture and the presence of high-value manufacturing and service industries. If decision-making is centralized in the capital city, firms like to locate close to the decision makers to maximize their capacity to lobby for tariffs, quotas and other restraints on commerce. Finally, Hill stresses that many policies have unintended regional effects and that these unintended effects are often more important than the official regional policy. Import protection assists the areas where the protected factors are disproportionately located, and as a consequence it will tax other areas. Rigid national pricing policies may prevent regions from exploiting their comparative advantage. For instance, electric power should be cheaper in energy-abundant regions, but a nationally uniform pricing policy will inhibit specialization in energy-intensive activities in those regions. As a result of uniform minimum wage policy, poor regions may not be able to exploit their comparative advantage in labour-intensive activities. Production and trading regulations may influence the location of certain agricultural processing activities to the detriment of producing regions. Balanced development Policy makers have struggled with the challenge of how to bring about economic growth that leads to human development and benefits all equally. Over the years, two approaches to this challenge developed: the liberal approach and the interventionist approach. According to the interventionists, disparities will never disappear, but only grow with economic growth, because the market, if left alone, allocates resources unequally. The best and the strongest will receive the major share of the resources, and as a result the rich will become richer and the poor poorer. In order to achieve a more equitable distribution, the government must organize the economy (and
11
consequently society) in such a way that economic growth benefits all equally. This is usually done by suppressing the market as the dominant mechanism to allocate resources and replacing it with government planning. All should contribute to economic growth according to their capacity and benefit from economic growth according to their needs. This requires an enormous government organization with far-reaching powers to control economic activity. The experience of the past century has shown that it is difficult, if not impossible, to organize the economy and society in such a way that the benefits of economic growth are distributed equally over the population. By de-linking contribution and benefit, the incentive to make contributions to economic growth is removed. As a result, there may be equal distribution of the benefits of economic growth and a reduction in disparities, but there will be little to distribute because of a lack of economic growth. The result is equality in poverty. According to the liberal point of view, inequalities have to be taken for granted because they will always exist. The primary aim of government policy must be to create a level playing field so that all have at least equal opportunities to contribute to economic growth and draw benefit from it. Creating equal conditions is not possible, only equal opportunities. Proponents of this view agree that in this situation some will contribute more, and benefit more, than others because some are more apt to seize opportunities than others. Once a level playing field is created, inequalities may initially even increase, but this is expected to be only temporary. Ultimately, the benefits of economic growth should reach the less fortunate and the conditions of all will improve, although some will still benefit more than others. The problem with this approach is that the benefits of economic growth may initially become so unequally distributed and the inequalities may grow so wide that the level playing field as such disappears. Serious disparities may emerge. In that situation, it becomes morally and politically imperative for a government to intervene to support the less fortunate members of society. Moreover, there is a moral obligation to provide human beings in absolute poverty with at least the most basic necessities to survive. The question is at what point poverty and disparities become morally unacceptable and what balance to strike between freedom and equality. Most governments have tried to find a middle path, but a British Prime Minister once warned that the problem with standing in the middle of the road is that you get hit from both directions. The middle path often results in limited economic growth because of a lack of incentives and an increase in disparities resulting from an unequal distribution of its benefits. In order to promote economic growth, governments invest their scarce resources where the returns are the highest, thereby benefiting some over others.
12
They then redistribute some of these benefits of economic growth to those who did not benefit in order to increase equality. However, even the ability to benefit from this redistribution is unequally distributed, and redistribution, therefore, does not benefit the most disadvantaged, but those for whom the redistribution was not intended. Compared with other population groups, the poor are almost by definition in a disadvantaged position to benefit from government programmes, even if these are specifically intended for them. They lack information about and documentation for such programmes and, since there is always competition for access to programmes, additional informal payments often need to be made which the poor cannot afford. At best, subsidies tend to reach population groups that are slightly better off than the target groups. Vested interests in giving and receiving subsidies, irrespective of their effectiveness, tend to develop. In societies where patron-client relationships are still important, subsidies become tools for politicians to gain support from various population groups and economic sectors. During the two last decades of the twentieth century, governments almost everywhere turned towards the liberal point of view because that approach seemed at least to produce economic growth, although it might also widen disparities. The choice of policies that promote a free-market economy and integration of the national economy in the global economy is not, however, without its critics. Some critics argue that any policy that widens disparities is morally unacceptable in view of the already poor quality of life of many people and the primacy of human development over economic growth. Other critics argue that global economic growth already exceeds the earths carrying capacity, and that any further economic growth will cause irreversible damage to the global environment. In this view, the primary objective of the development strategy must be equitable distribution of wealth and people-centred development rather than further economic growth. There are also critics who oppose the idea of equality of opportunities because it only leads to competition between people for economic benefit, with winners and losers. They consider this unacceptable because, although the rules of the game are equal, the conditions in which people operate are not; the object of the game is precisely to produce inequality. They reject the idea that inequality in society is fair, if it takes place under fair rules, because equality of opportunities becomes a device to legitimize economic inequality. In their view, inequality is not an economic problem, but a political problem because it is the result of political decisions. The problem of the worlds poor turns out to be the problem of the worlds rich (Lummis 1999: 43-50).
13
Conclusion Disparities between people, between urban and rural areas, between areas within countries and between countries are the result of natural differences, sociocultural conditions and policy decisions. Because of natural, inherent differences, it is difficult, if not impossible, to remove all disparities completely. However, it is possible and necessary to remove at least all man-made obstacles, such as social constraints and policy decisions that stop people, areas and countries from developing their full capabilities. Balanced development can be defined as the creation of equal opportunities, a level playing field, for all people. The level playing field will enable people to participate in development by contributing to, benefiting from and influencing decision-making about development. Such participation will provide people with income and assets, good health, knowledge, respect and recognition.
14
RURAL-URBAN AND REGIONAL DISPARITIES
Chapter II. Rural-urban and regional disparities

This study will not try to analyse and explain existing disparities between urban and rural areas and between regions within specific countries, but only to highlight and explain the broader issues of rural-urban and regional disparities. This chapter will present empirical data on disparities between urban and rural areas and between regions in countries of Asia and the Pacific. Poverty and disparities have many aspects, but this chapter will focus in particular on disparities in terms of income and access to infrastructure. Poverty trends Out of a total population of over 3 billion people, 800 million people in Asia and the Pacific, excluding Central Asia, live on less than $1 per day, a global standard used by the World Bank to measure poverty (World Bank 2001: 65). Some 65.2 per cent of the poor in Asia live in South Asia and another 26.6 per cent live in China (World Bank 2001: 23). The number of people below this poverty line dropped from 947.5 million in 1990 to 796.8 million in 1996 in Asia and the Pacific. Poverty in Asia also declined as a percentage of global poverty from 75.4 per cent in 1987 to 66.8 per cent in 1998. Poverty levels in most countries of Asia and the Pacific for which comparative data are available. The most dramatic decline in poverty occurred in China where the number of poor people decreased from 360 million in 1990 to 210 million in 1998 (table 2.1). There was a relatively small increase of 3.5 million to 800 million poor in Asia and the Pacific between 1996 and 1998. It may have been the result of the Asian financial crisis that caused an increase in the number of poor in East Asia and the Pacific from 55.1 million to 65.1 million. One way of assessing the disparities between urban and rural areas is to look at the percentages of the urban and the rural population that are living below the poverty line. The data show that, despite the drop in poverty, wide disparities between urban and rural areas remain in terms of the percentage of people below the poverty line. This study estimates that around 240 million poor people lived in the urban areas of Asia and the Pacific and 560 million poor people lived in rural areas in 1998. This means that the urban poor formed 18.5 per cent of the urban population, while the rural poor formed 24.3 per cent of the rural population. In many countries, 30 to 55 per cent of the rural population and 20 to 30 per cent of the urban population live on less than one dollar a day (table 2.2).
15
Table 2.1 Poverty in Asia and the Pacific, 1987-1998

People living on less than $1 per day (millions) 1987 East Asia and Pacific (excl. China) China South Asia Asia and Pacific (excl. Central Asia) World Asia and Pacific as per cent of world
Source: Note:
1990 92.0 360.4 495.1 947.5 1 276.4 74.2
1993 83.5 348.4 505.1 937.0 1 304.3 71.8
1996 55.1 210.0 531.7 796.8 1 190.6 66.9
1998 65.1 213.2 522.0 800.3 1 198.9 66.8
114.1 303.4 474.4 891.9 1 183.2 75.4
World Bank 2001: 23. The poverty line is $1.08 a day at 1993 purchasing-power parity.
Table 2.2 Population below the poverty line in urban and rural areas, 1990s
National poverty line Country Population below the poverty line Survey year Bangladesh Cambodia China Indonesia Kazakhstan Kyrgyzstan Lao Peoples Democratic Republic Mongolia Nepal Pakistan Philippines Russian Federation Sri Lanka Thailand Viet Nam
Source:
Population below the poverty line Survey year 1995 1997 1998 1998 .. 1997 .. Rural % 39.8 40.1 4.6 22.0 .. 64.5 .. Urban National % % 14.3 21.1 <2.0 17.8 .. 28.5 .. 35.6 36.1 4.6 20.3 .. 51.0 ..
Rural % 46.0 43.1 7.9 12.3 39.0 48.1 53.0
Urban National % % 23.3 24.8 <2.0 9.7 30.0 28.7 24.0 42.7 39.0 6.0 11.3 34.6 40.0 46.1
1991-1992 1993-1994 1996 1996 1996 1993 1993
1995 1995-1996 1991 1994 1994 1985-1986 1990 1993
33.1 44.0 36.9 53.1 .. 45.5 .. 57.2
38.5 23.0 28.0 28.0 .. 26.8 .. 25.9
36.3 42.0 34.0 40.6 30.9 40.6 18.0 50.9
.. .. .. 1997 .. 1990-1991 1992 ..
.. .. .. 51.2 .. 38.1 15.5 ..
.. .. .. 22.5 .. 28.4 10.2 ..
.. .. .. 40.6 .. 35.3 13.1 ..
World Bank, 2000a.
16
While poverty levels are dropping, the absolute number of poor people in the urban areas may well be increasing. The absolute increase in the number of the urban poor is most likely the result of the migration of the rural poor to the urban areas. This is called the urbanization of poverty. It is visible in the poverty trends in India. From 1973 to 1994, the number of the urban poor declined as a percentage of the total urban population from 49 to 32.4 per cent. The absolute number of the urban poor increased over the same period from 60 million to 76 million (table 2.3). Table 2.3 Poverty levels in India, 1973-1994
Poverty ratio (%) Rural 1973-1974 1977-1978 1983 1987-1988 1993-1994
Source:
Number of poor people (millions) Total 54.9 51.3 44.5 38.9 36.0 Rural 261.3 264.3 252.0 231.9 244.0 Urban 60.0 64.6 70.9 75.2 76.3 Total 321.3 328.9 322.9 307.1 320.3
Urban 49.0 45.2 40.8 38.2 32.4
56.4 53.1 45.7 39.1 37.3
Government of India 2000: 17.
The number and percentage of poor people below the poverty line paints only a very crude and static picture of the trend in poverty. It is often assumed that even under the best circumstances the rich get richer and the poor also become better off, but much less than the rich. In other words, all see their conditions improve, but disparities between rich and poor increase. The increase in disparity may be higher in rural areas than in urban areas, thereby increasing the disparity between urban and rural areas. Furthermore, changes in economic conditions benefit some population groups and disadvantage other groups. That means that some poor people may be able to improve themselves and escape poverty, while other erstwhile better-off groups join the poor owing to, for instance, changing labour demand (Sawant and Mhatre 2000: 99-100). It is, however, difficult to gauge these trends owing to a lack of data. Further study is necessary. Access to infrastructure and services Besides experiencing a lack of financial resources (money and assets), the poor in developing countries have difficulties accessing services such as clean water supply, health care and education. These services are essential for a healthy life, the acquisition of knowledge, employment and an adequate income. The reason for this deprivation may be that a given service is simply not available
17
Table 2.4 Incidence of poverty in Malaysia, 1995, 1997, 2000

Incidence of Poverty Hard-core poverty
Source: Note:
1995 Total Urban Rural % % 8.9 2.1 3.7 0.8 15.3 3.7 6.1 1.4
1997 Total Urban Rural 2.1 0.4 10.9 2.5 5.5 0.5
2000 Total Urban Rural 1.9 0.1 10.0 1.0
Mid-Term Review of the Seventh Malaysia Plau 1996-2000 (Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 1999), p. 63. Malaysian citizens only.
or that the poor cannot afford the service where it is available. However, some urban and rural poor people cannot access the infrastructure or services because they are not entitled to them. They (or their house or their land) are not registered or they lack the necessary documents to do so. As a result, many poor people remain uneducated and in poor health and this limits their ability to improve themselves, even if they had the means and the opportunity. Some services, for example, water supply or health care, are so essential that the urban poor are prepared to buy them from private providers at much higher prices than the public sector charges the rest of society. By doing so, the poor increase their poverty relative to other population groups. Access to safe drinking water, adequate sanitation and health care is a problem for the poor in many countries in Asia and the Pacific, but there is a clear distinction between urban and rural areas, as shown in table 2.5. The urban population has generally much better access to such infrastructure and services than the rural population. What the table does not show is the quality of the services provided. Safe drinking water may be available to a large portion of the urban population, but there may be frequent interruptions of water supply resulting in a deterioration of the water quality. Access to appropriate health services was defined as available within one hour by local means of transport, but it is not always clear what appropriate means. It is also not possible to make comparisons between countries because governments have different definitions for safe drinking water and appropriate access to sanitation and health services. The consequences of a lack of education and access to health care are visible in the differences in life expectancy and literacy levels between urban and rural areas in various countries. Studies of rural-urban disparities in India (table 2.6) show that the literacy level in the age group 6 years and above in urban areas is 60 per cent higher than in the rural areas. On average, children attend school for almost six years in urban areas, but only for three years in the
18
Table 2.5 Population with access to basic services, 1990-19961

Percentage of population with access to 3: Safe drinking water Adequate sanitation Health services 29 2 45 65 2 53 2 88 85 93 88 .. .. 67 2 .. 95 2 60 .. 55 2 96 2 71 100 .. .. 90 2 .. Urban Rural Total Urban Rural Total Urban Rural Total Afghanistan Bangladesh Bhutan Cambodia China India Indonesia Iran (Islamic Republic of) Japan Kyrgyzstan Lao Peoples Democratic Republic Malaysia Mongolia Myanmar Nepal Pakistan Papua New Guinea Philippines Republic of Korea Sri Lanka Tajikistan Thailand Turkey
Source: Notes:
39 99 75 65 97 85 79 98 100 84 60 96 100 78 88 82 84 92 100 88 82 94 91
5 96 54 33 56 79 54 82 85 .. 51 66 58 50 60 69 17 80 76 52 49 88 59
12 97 58 36 67 81 62 90 97 .. 52 78 80 60 63 74 28 86 93 57 .. 89 80
13 79 90 81 74 70 73 86 85 60 98 .. 100 56 58 77 82 88 100 68 46 98 ..
.. 44 66 8 7 14 40 74 .. 10 16 .. 47 36 12 22 11 66 100 62 .. 95 ..
.. 48 70 14 24 29 51 81 .. 30 28 94 74 43 18 47 22 77 100 63 .. 96 ..
80 .. .. 80 100 100 99 100 .. .. .. .. .. 100 .. 99 .. .. 100 .. .. 90 ..
17 .. .. 50 83 80 91 75 .. .. .. .. .. 47 .. 35 .. .. 100 .. .. 90 ..
WRI 1998: 251. 1. Data are for the most recent year available, within the range given. 2. Data are for years other than noted, differ from the standard definition, or refer to only part of a country. 3. Definitions of safe drinking water and appropriate access to sanitation and health services vary depending on location and condition of local resources; thus, comparisons can be misleading. In addition, urban and rural populations were defined by each national government and may not be strictly comparable.
19
villages. Infant mortality rates and child mortality rates are also much higher in rural areas than in urban areas. Table 2.6 Rural-urban disparities in India, 1991-1994
Literacy (age 6+) Year Rural Urban
Source: Dutta 1998.
Mean years of schooling 1994 3.04 5.76
Infant mortality rate 1994 80 52
Child mortality rate 1994 26.1 15.7
Access to safe drinking water 1991 63.6 90.7
1991 44.5 73.1
A sample survey conducted in 1995 among 1 per cent of the population of China indicated that the adult literacy rates of people living in county capitals and rural towns was similar to that in the cities. However, adult illiteracy rates in rural areas were twice as high as those in cities, county capitals and towns (table 2.7). Table 2.7 Adult illiteracy rates in urban and rural areas of China, 1995
Population of 15 years Illiterate or semi-literate and over (in 10,000) population (in 10,000) Total Rural County capitals/ rural towns Urban Total
Source: Note:
Illiteracy rates (%) Men 11.09 4.06 Women 28.37 15.11
Men 31 730 3 766
Women 31 229 3 784
Total 12 379 725
Men 3 519 153
Women Total 8 860 572 19.66 9.60
62 959 7 550
20 099 90 608
10 016 45 512
10 083 45 096
1 826 14 930
414 4 086
1 412 10 844
9.09 16.48
4.14 8.98
14.01 24.05
UNESCO 2000. City population includes the rural population of the city, while county population is divided into those living in the county capitals and rural towns on the one hand and those living in the countryside on the other.
In countries with an economy in transition or undergoing structural adjustment, governments often allocate fewer public funds for education, health care and other social services, and introduce user fees. As a result of the lower budget for social services, the quantity and quality of service delivery declines.
20
This affects rural areas, in particular remote rural areas, more than the urban areas, and increases rural-urban disparities. The introduction of user fees creates more hurdles for the poor to overcome to access basic services, such as education and health care. In addition to such difficulties, the poor often lack access to resources such as credit. Three factors play a role in the lack of access to credit: the distance to the nearest bank branch, problems of procedure and requirements, and the size of the loan. The rural poor face a particular problem because there are usually few bank branches in the rural areas where the spread of the population over a large area is not attractive for commercial banks. Another aspect of service deprivation is the limited access of the poor to energy. In many rural areas, the most commonly used source of energy is still wood that is collected in the forest. However, forests are rapidly disappearing and are increasingly declared out of bounds for the collection of firewood because of fears of further deforestation. Lack of access to sources of energy has an impact on the living conditions of the poor (lighting, cooking etc.) as well as on their possibilities for economic development (both on- and off-farm). On the other hand, a reliance on wood as a source of energy has serious implications for the environment and thereby indirectly on the productivity of agriculture through erosion resulting from deforestation. The poor lack access to knowledge and information that are essential for participation in contemporary society. Because they are not educated or informed, and live on the margin of society, the poor are vulnerable and easily cheated out of any assets they may have, such as their land. They become victims of harassment and extortion by criminals or by officials because they are not well protected by the law and this increases their poverty. The lack of recognition and protection of the poor can at least partly be attributed to a lack of participation by the poor in the political decision-making processes that affect their lives and could draw attention to their problems. Lack of affordable transport in urban or rural areas deprives the poor of opportunities to take advantage of available employment and basic services, such as education and health care. In fact, lack of transport can have greater welfare implications for the poor than for the rich because basic social services and employment are critical for the livelihood of the poor. The effectiveness of direct targeted interventions, such as schools, health clinics and nutrition programmes, is substantially reduced without adequate transport infrastructure and services as complementary inputs. In addition, such infrastructure and services provide an opportunity to rural households to combine on-farm employment with employment in non-farm activities, improve their incomes and provide surpluses
21
for enhancing investment in agriculture (Gannon and Zhi 1997: 9-12; Sawant and Mhatre 2000: 102). Social and political constraints Some groups in society lack the possibility of improving themselves and developing their ability to participate in development because of social restrictions. These restrictions may limit their geographical mobility and, for instance, make it difficult for them to attend school or seek medical care. Restrictions may tie people to certain occupations and be an obstacle to any social and economic mobility. Labour bondage, the prohibitions against women going to school, working outside the home and owning property, and forced child labour are examples of restrictions experienced by the poor, particularly, though not exclusively, in the rural areas. Other examples include restrictions on certain population groups visiting places or taking up particular occupations, and on ethnic minorities accessing services because of a lack of citizenship. Rural migrants in the city are sometimes restricted in their rights by the fact that they are registered as residents of a rural district. Changing the registration may not be easy or worthwhile, but the lack of registration can make it difficult or even impossible for poor migrants to access certain services and to cast their vote. It also makes them more vulnerable to harassment by the authorities. The rural poor, and rural women in particular, do not have a strong political voice (World Bank 2001: 29). Participation by the poor in local decision-making may be more extensive and more direct in rural areas than in urban areas owing to the presence of customary forms of organization and decision-making. However, the procedures are embedded in the traditional distribution of powers that does not benefit the rural poor. There may be little opportunity for the rural poor to present and defend their particular interests. The rural population lives geographically dispersed. Rural communication networks and transport infrastructure are often inadequate. Rural people are, therefore, disadvantaged when it comes to organization and the articulation of their specific needs, priorities and preferences through political processes. Even with democratically elected representatives, the rural poor may not have an adequate say in the decision-making. Although elected by a rural electorate, the representatives are often living in urban areas and are more familiar with urban than rural problems. If they represent the rural areas, they are more likely to represent the rural rich and middle class than the rural poor. The electoral process in rural areas is often full of problems relating to vote buying, patron-client relationships and intimidation. Being short of money, lacking access to essential services and not being taken into account when policies are formulated, the poor are more likely to sell their vote for short-term benefits. The politician
22
who can help them individually and on the spot when they have a problem is more important to the poor than the one who can represent their long-term interests in a faraway parliament. Without proper representation of the interests of the rural population in decision-making by the central, state or provincial government, development policies may not benefit the rural poor. Because the rural poor lack political power, decisions about rural areas are made without the consequences for the rural areas and the rural poor being sufficiently taken into account. Central governments tend to take decisions about the construction of dams on rivers to generate electricity for the city and industry, with only limited consultation with the local population, if any. While the urban economy benefits from the increase in power supply, the rural communities near the dam suffer the environmental and economic consequences. Many have argued that as a result rural areas have paid a disproportionately high share of the costs of development and received a disproportionately small share of the benefits. Both urban and rural economies use natural resources such as land, water and air, and in the transformation process they both produce waste. However, being more dispersed and producing more organic waste, the rural population, by and large, has a smaller impact on the environment than the urban population does. Urban areas extract natural resources from the rural areas and after processing, return the waste to the rural areas in the form of solid waste, wastewater and air pollution. The ecological footprint of the city can stretch far beyond the immediate hinterland of the urban area and crosses national borders. The more developed the city, the greater its ecological footprint. Similarly, urban companies take away the forests and leave the land vulnerable to erosion and flooding. If the voice of the poor is not heard or not listened to, their interests are not included in policies or the policies will not match their specific needs or conditions. Perhaps what is even more important than not being heard is being considered not worth listening to. Because many poor people, and the rural poor in particular, are illiterate and lack education, they are not expected to know and understand. As Fukuyama (1992: 292) points out, the real injury that is done to the poor is not so much to their physical well-being as to their dignity. Because they have no wealth or property, they are not taken seriously by society. The urban poor usually have a stronger voice because they are more visible and play a more direct role in society. Cities would come to a standstill without their labour. Decision makers may choose not to risk antagonizing the urban poor in order to avoid problems, while politicians may look after their interests if they are entitled to vote. However, the influence of the urban poor should
23
not be overestimated. Many decisions that directly affect their housing and informal economic activities are taken without their involvement because they are part of the informal, unregistered sector and, therefore, considered illegal by the authorities. This situation has a serious impact on the security of their livelihood. Evictions from their land, demolition of their houses and confiscation of tools and wares are regular occurrences for the urban poor. Regional disparities Many of the disparities existing between urban and rural areas also exist between regions within a country. These disparities are caused by the same factors: natural differences, sociocultural conditions and policy decisions. A comparison of social and economic conditions in different regions of a country can reveal important inequalities. Table 2.8 shows life expectancy at birth, infant mortality and the per capita state domestic product for the 15 states of India during the 1990s. The table shows the wide disparity in female life expectancy between the states, ranging from 53.5 years in Madhya Pradesh to 74.4 years in Kerala. Male life expectancy follows the same pattern: 54.1 years in Madhya Pradesh and 68.8 years in Kerala. In almost all states, women had a higher life expectancy than men, but in the three states with the lowest life expectancy at birth (Orissa, Uttar Pradesh and Madhya Pradesh), the life expectancy of men was higher than that of women, indicating a particularly disadvantaged position for girls and women in those states. Infant mortality rates show a similar pattern. Orissa, Madhya Pradesh and Uttar Pradesh had high infant mortality rates and a life expectancy consistently well below the national average. The extent of this disparity within a single country is perhaps better understood if the levels are compared with those of other countries in Asia and the Pacific or Europe. Male and female life expectancy in Kerala are at levels similar to those of a middle-income country such as Malaysia, where in 1997 male life expectancy was 74.3 years and female life expectancy 69.9 years. Life expectancy in Madhya Pradesh, on the other hand, is amongst the lowest in Asia and the Pacific, and the state would fall in the category of least developed countries, such as the Cambodia and Lao Peoples Democratic Republic. The infant mortality rate of Kerala (12 per 1,000 live births) is not uncommon in Europe, while the infant mortality rates in Madhya Pradesh, Uttar Pradesh and Orissa are typical of least developed countries in Asia. Infant mortality rates in the rural areas of these states are even higher. With only 12 per cent of the population living in urban areas, Nepal is still very much a rural country, but there are serious disparities between the urban and the rural areas. Because public and private investments are concentrated in the urban areas and the urban population has much better access to social
24
infrastructure and a higher income per capita than the people in the countryside, the human development index (HDI) value for the rural areas is approximately two thirds of that of the urban areas. The disparities become even more evident when the country is divided into regions, as was done for the Nepal Human Development Report 1998 (UNDP 1998). Table 2.8 Health conditions by state in India, 1990-1995
States Life expectancy at birth in years (1990-1992) Female Punjab Haryana Maharashtra Gujarat Tamil Nadu Karnataka Andhra Pradesh Kerala West Bengal Rajasthan Madhya Pradesh Assam Orissa Uttar Pradesh Bihar
Sources: Note:
Infant mortality rate (per 1000 live births) 1990-1992 57.0 71.0 59.0 69.0 58.0 73.0 71.0 17.0 66.0 84.0 111.0 76.0 120.0 98.0 72.0 1997 51.0 68.0 47.0 62.0 53.0 53.0 63.0 12.0 55.0 85.0 94.0 76.0 96.0 85.0 71.0
Per capita SDP 1 (Rs) 1994-1995 14 534 12 283 13 368 11 810 9 353 8 504 8 415 7 578 7 436 6 951 6 034 6 017 5 369 5 339 3 737
Male 65.4 62.2 63.1 59.1 61.0 60.0 59.0 68.8 60.5 57.6 54.1 .. 55.9 56.8 ..
67.5 63.6 64.7 61.3 63.2 63.6 61.5 74.4 62.0 57.8 53.5 .. 54.8 54.6 58.3
UNDP-IDF 1998; Government of India 2000a. 1. SDP = state domestic product.
Nepal has three broad ecosystems with a high level of cultural variation: the mountains, the hills and the plains or tarai. The tarai has the highest levels of economic opportunities, while the mountain region is an area of hardship and inaccessibility. There are also five development regions (far-western, mid-western, western, central and eastern). Physical and social development attributes are unequally distributed across these five regions, with the mid-western and far-western development regions noted for their ruggedness, low levels of public and private investment and very low levels of human and social welfare. The combination of three ecosystems and five development regions creates fifteen regions that are internally more homogeneous in a physical, economic and cultural
25
sense than the three ecosystems or the five development regions. They are also larger than the districts, whose delineation is often primarily political and administrative. The people in the hills and the tarai consistently enjoy a higher level of human development than those in the mountains (table 2.9). The central hills region includes the highly urbanized Kathmandu Valley, whose development level raises the HDI score, which is 1.8 times higher than that of the lowest-scoring region, the mid-western hills. The eastern tarai and the eastern hills are other high-scoring regions. The mid-western mountains, far-western mountains and far-western hills have the lowest levels of human development. An analysis on the basis of the HDI Components indicated that the disparities are not due to extreme skews in any single component. They are due to an uneven distribution of all three HDI components life: expectancy, literacy and per capita income (UNDP 1998). Table 2.9 Human Development Index by region in Nepal, 1998
Farwestern Mountains Hills Tarai Total
Source: UNDP 1998.
Midwestern 0.24 0.31 0.31 0.29
Western 0.31 0.35 0.35 0.34
Central 0.27 0.44 0.31 0.34
Eastern 0.34 0.37 0.38 0.36
Total 0.28 0.37 0.34 0.33
0.26 0.36 0.33 0.32
One of the main challenges faced by the Chinese Government is the unequal development among the provinces and in particular between the eastern, coastal part of the country and the western landlocked part. As table 2.10 shows, there were serious disparities in annual income per capita between urban and rural areas and between the eastern, central and western part of the country in 1998. The causes of these disparities are well known: industrial development and foreign direct investment are taking place in the eastern part of the country with its major ports and greater proximity to markets. The western part is landlocked, lacks infrastructure and is far away from major population centres and transport nodes. The disparities between east and west have caused massive rural-urban migration and a considerable flow of remittances by migrant workers to the western part of the country. Education is one of the key components of human development, as it is a basic condition for human beings to develop their full capabilities. Reviewing
26
Table 2.10 Per capita annual income by province in China, 1998

Western region Province Yunnan Chongqing Xinjiang Sichuan Guizhou Shaanxi Qinghai Ningxia Gansu Tibet Rural
1
Central region
2
Eastern region
2
Urban
Province Hunan Hainan Hubei Anhui Liaoning Jilin Henan
Rural
Urban
Province
Rural 1 3 467.69 5 277.02 3 661.68 3 684.22 3 243.68 2 785.67 3 269.85 2 292.12 1 875.28 2 286.01
Urban 2 8 561.71 8 438.89 7 813.16 7 358.72 6 608.39 6 143.64 5 765.20 5 190.79 5 110.29 4 958.67
1 375.50 1 643.21 1 504.43 1 680.69 1 298.54 1 273.30 1 320.63 1 512.50 1 185.07 1 194.51
5 558.29 5 322.66 4 844.72 4 763.26 4 441.91 4 001.30 3 999.36 3 836.54 3 592.43 ..
2 037.06 1 916.90 2 102.23 1 808.75 2 301.48 2 186.29 1 733.89
5 209.74 Guangdong 4 849.93 Shanghai 4 673.15 Beijing 4 599.27 Zhejiang 4 518.10 Tianjin 4 190.58 Fujian 4 093.62 Jiangsu 4 090.72 Shandong 4 071.32 Guangxi 3 989.92 Hebei 3 944.67
Heilongjiang 2 308.29 Jiangxi Shanxi Inner Mongolia 2 107.28 1 738.26 1 780.19
Source: Notes:
China Statistical Yearbook (Beijing, Statistical Publishing House, 1998), pp. 332-347. Income in yuan renminbi; 1. Rural net income; 2. Urban disposable income.
the achievements in education in a study for Oxfam International, Watkins (1999) observed that uneven progress in providing access to education has resulted in deep regional disparities within countries of Asia and the Pacific: (a) The Philippines has achieved relatively high rates of net enrolment, but almost one million children were not in school and another three million children dropped out before completing grade 6 at the time of the study. Regional differences related to poverty and a lack of service provision accounted for much of this deficit. Four out of five students in central Luzon completed primary school compared to an average of one in three children in northern Mindanao, where poverty incidence was twice as high as in central Luzon; (b) Indonesias progress in education has been impressive. Gender differentials have narrowed at all levels and near-universal primary-school enrolment has been achieved, but regional disparities remain. At the time of the study, net enrolment rates varied from 100 per cent in Jakarta to 58 per cent in Irian Jaya. Drop-out rates were less than 5 per cent in Central Java, but 23 per cent in East Timor. The incidence of poverty on the Outer Islands was about 33 per cent, compared with 20 per cent in Java; (c) India has some of the widest regional disparities in education. In Kerala, almost all children in the 10 to 14-year-old age group were literate at the time of the study, while one third of the boys and two thirds of the girls in Uttar
27
Pradesh were illiterate. In the states of Bihar, Rajasthan and Uttar Pradesh, the gender gap in enrolment was 25 per cent or more, while it was less than 7 per cent in Kerala and Tamil Nadu. A focus on regions within countries also provides a better insight into the conditions of population groups that are small in number on a national rural-urban scale, but form a sizable group within a region (Watkins 1999): (a) The highland region of the Arakan Valley in the eastern part of Mindanao Island is the ancestral land of the Manobo. They value education for their children, not least because they learn skills which are useful in negotiations with traders. While the Philippines achieved near-universal enrolment in primary school, many schools in this region were inaccessible. In one settlement covered by an Oxfam research project in 1997, the nearest school was a four-hour walk away over rough and steep trails. As a result, more than two thirds of the children were not in school; (b) In China, enrolment and completion rates in the 25 provinces and 5 autonomous regions with the largest ethnic-minority population were below the national average. Similar problems existed in Viet Nam. The remote, mountainous and poorer areas with high concentrations of ethnic-minority groups, such as the northern uplands and central highlands, had lower rates of enrolment and completion than wealthier regions, such as the southeast. Although these groups accounted for only 13 per cent of the population, they accounted for half of the children who were not in school. Children of ethnic minorities made up less than 4 per cent of the school population; (c) Members of the 1,091 scheduled castes and 573 scheduled tribes in India have a serious educational disadvantage. Because of their physical and geographical isolation, they have lower enrolment rates, higher drop-out rates and wider gender gaps. The literacy rate for scheduled castes and tribes was more than 30 per cent lower than the national average. Disparities are narrowing, but at a slow pace. The enrolment gap between scheduled castes and tribes and the rest of the population was 15-17 per cent. The drop-out rate for scheduled tribes was 17 per cent higher than the national average. A district survey by Oxfam in Gujarat showed that enrolment rates for 5 to 10-year-old children in the Dangs district, where over 90 per cent of the population belong to scheduled tribes, were 8 per cent below the state average. More significantly, four out of every five children had dropped out of school by grade 5, even though the overall completion rate for Gujarat is 50 per cent. A UNDP report (UNDP-IDF 1998), reflecting on disparities in human development between states and districts in India, identified the 13 most backward
28
districts in terms of female literacy in the 7+ age group on the basis of the 1991 census data. The districts in question were all located in just five states: Bihar, Madhya Pradesh, Rajasthan, Orissa and Uttar Pradesh (table 2.11). Table 2.11 Districts with the highest female illiteracy in India, 1991
Districts Barmer Jalor Maharajganj Kishanganj Bahraich Jaisalmer Jhabua Siddharthnagar Gonda Budaun Koraput Nagaur Banswara
Source:
State Rajasthan Rajasthan Uttar Pradesh Bihar Uttar Pradesh Rajasthan Madhya Pradesh Uttar Pradesh Uttar Pradesh Uttar Pradesh Orissa Rajasthan Rajasthan
Female illiteracy (%) 1991 92.32 92.25 89.72 89.62 89.27 88.72 88.48 88.16 87.42 87.18 86.91 86.71 86.58
UNDP-IDF 1998.
Conclusion A comparison of conditions in urban and rural areas and regions within countries shows that after five decades of development efforts, wide disparities still exist. The available data provide only a limited and rather static view of these disparities and do not show the dynamics of poverty and the positive and negative impact of various approaches on the disparities. The data show the net result of economic growth, human development and poverty alleviation, but, as the next chapter will show, the results of policies and programmes are rarely straightforward. Usually, the better off and the more powerful benefit more from development interventions than the poor, resulting in increased disparities. Some poor people will probably gain more than others, and some may in fact lose ground. It is important to understand these dynamics better and to identify who benefits from development interventions and is able to escape the poverty trap and who suffers and falls into poverty, and why this is so.
29
Chapter III. Past policies and trends

This chapter looks at the disparities between urban and rural areas from a historical perspective. As explained in chapter I, these disparities are partly the result of natural differences and sociocultural conditions and partly of policy decisions. With a scarcity of resources to invest in human development and economic growth, the governments of the newly independent countries in Asia and the Pacific were constantly faced with the dilemma of investing either in urban-industrial development for economic growth or in human development in the rural areas where the majority of the population lived. Promoting economic growth While disparities between the urban and the rural areas have probably always existed, they became a major concern only some fifty years ago, when the region decolonized. At that time, most of the economies in the region were still agriculture-based and a large majority of the population lived in the rural areas. Living standards were low and the economies of the newly independent countries were dependent on the industrialized world. It was perhaps not so much a matter of the relative poverty of the rural poor because the urban population was still small. It was more a matter of the absolute poverty of the rural areas, where people lacked the most basic services. This meant that improving the living conditions of the rural population was a national priority. Food security was a concern for many countries because of the lack of infrastructure that made distribution, rather than the total quantity of food produced, a problem in times of localized shortages. However, agriculture was not expected to provide a livelihood for the entire rural population. It had not done so in the industrialized world, which still served as an example of what should be done in the developing world. The urban areas and industrial employment needed to be developed so that they could gradually absorb the surplus labour from the countryside. This was expected to improve the efficiency and the productivity of the agricultural sector and thereby the living conditions of the rural population as fewer people would be able to produce more. On the other hand, industrialization was a sign of modernization and economic independence, of the ability to produce non-agricultural goods domestically. The general feeling was that the country could emerge from underdevelopment only if the industrial sector was developed. Industrialization could save foreign currency through import substitution and earn foreign currency through the export of industrial products. The aim of the industrial policies was
30
PAST POLICIES AND TRENDS
to develop either of the two types of industry. On the one hand, there was a need for an import-substituting industry that produced light consumer goods, since there would not yet be a demand for most other industrial products. On the other hand, there was a need for heavy industry in order to reduce the dependence on industrialized countries for heavy machinery. During the 1950s and 1960s, most governments recognized that what was needed was the simultaneous development of agriculture and industry, of rural and urban areas, but this was impossible, given the scarcity of resources. As Richardson (1987: 210) noted, an exclusive focus on rural areas would result in under-investment in urban areas and this would limit the growth of the urban sector and its ability to absorb the rural labour surplus. An exclusive focus on urban development would produce similar results because it would accelerate rural-urban migration and reduce food production per capita. Besides developing agriculture in its own right, agriculture was also thought to be the only productive sector from which economic surplus could be extracted to finance industrial and urban development. This was done in various ways, all hardly beneficial to the rural economy (Martinussen 1999: 131-132): (a) There was an unequal exchange of industrial and agricultural goods: industrial goods were being sold at artificially high prices to support an often inefficient industry and agricultural goods were sold at artificially low prices to keep the cost of living in urban areas down. The relative prices or terms of trade were turned against agriculture and this led to a transfer of resources from agriculture and the rural areas to industry and the urban areas. The state played a role by imposing price controls to keep agricultural prices down; (b) A surplus was extracted from agriculture via foreign trade because a portion of the foreign exchange earned by exporting agricultural products was used for the import of goods needed in the industrial sector. The state played an active role by imposing a system of multiple exchange rates that discriminated against agriculture; (c) There was also a transfer of resources from rural to urban areas via the credit system or through taxation. The earnings from agriculture were taxed and the proceeds were used to finance industrial development. As the taxes were greater than the public investments and government services provided to agriculture, the rural areas were further burdened. Because of the socialist orientation of many countries and the lack of local entrepreneurship, most governments relied on the pubic sector to develop industry, with the result that the public sector expanded rapidly in the urban areas. This, in turn, brought about the need to develop the urban areas with infrastructure
31
and services. In support of industrial development, the urban areas needed physical and social infrastructure. This pleased the urban elite and kept the urban population satisfied. These policies produced rather different results from what had been planned. As a result of improved health care, the population in the rural areas grew much faster than had been expected (table 3.1). There was no way such a fast-growing population could be absorbed by the agricultural sector. With limited investments in agriculture, poverty increased (table 3.2) and this forced many rural poor people to seek employment elsewhere; conditions only improved after the introduction of the Green Revolution (see chapter VI). Without opportunities for an adequate livelihood in the rural areas, many people moved to the urban areas, many more than were expected. The emerging urban industrial sector could not absorb the new arrivals who ended up in the slums and squatter settlements, where they found employment in the informal sector. The result was poverty in both urban and rural areas. Table 3.1 Population growth rate for selected countries, 1950-2000
Average growth rate of total population (% per year) 1950-1955 Bangladesh China India Indonesia Mongolia Myanmar Papua New Guinea Philippines Thailand Viet Nam East Asia South Asia South-East Asia Asia
Source:
1965-1970 2.68 2.61 2.28 2.33 2.76 2.29 2.40 3.17 3.08 2.17 2.44 2.39 2.52 2.44
1995-2000 1.70 0.91 1.64 1.43 1.65 1.24 2.22 2.11 0.93 1.55 1.38 1.76 1.53 1.38
1.70 1.87 2.00 1.69 2.20 1.85 1.56 2.61 2.58 1.33 1.75 2.03 1.92 1.91
United Nations 2000: 69, 71.
32
In addition to having a much larger population to deal with than expected, governments were also largely unsuccessful with their industrialization policies. Import substitution did not produce the desired results because machinery and other capital-intensive industrial inputs still had to be imported from developed countries. The gains made by import substitution were nullified by the cost of importing capital goods. The young import-substituting industries also needed to be protected against similar imported goods through import tariffs, but the protective environment did not help to make the industries more efficient and competitive. In the end, consumers were often left with lower-quality local products at higher prices than necessary. This was particularly hard for the rural population, which faced ceilings on farm products to keep them affordable for the urban population while having to pay higher prices for industrial products. Table 3.2 Rural population below the poverty line, 1957-1974
Rural population below poverty line (%) 1957-1964 Bangladesh Malaysia Pakistan Philippines Bihar, India Punjab, India Tamil Nadu, India Uttar Pradesh, India
Source: Griffin and Khan 1978: 297.
Country/state
1969-1974 79 47 71 12 59 23 74 64
40 40 72 12 41 18 70 42
The winners in these policies were government (net revenue gain), urban consumers (lower food prices) and industry (cheap raw materials). It is possible to see the results in a positive light (ADB 2000: 13-14): agriculture was the engine of growth on the scale required to initiate the transformation of the national economy. All successfully transforming economies in Asia enjoyed successful agricultural revolutions prior to their industrialization. Schiff and Valds (1995: 44-47), however, speak in this respect about the plundering of agriculture in developing countries. The net effect of direct interventions (agricultural sector policies) and indirect interventions (industrial protection and macroeconomic policies) was an enormous income transfer out of agriculture that depressed private investment in agriculture (table 3.3). Input subsidies did not compensate for
33
the income outflows, and public investments in agriculture did not compensate for the negative effects of price interventions. Table 3.3 Direct and indirect bias against agriculture, 1960-1986
Depression of agricultures domestic terms of trade (period average in per cent) Due to indirect interventions Korea, Republic of Malaysia Pakistan Philippines Sri Lanka Thailand Turkey
Source:
Period
Due to direct interventions -39.0 9.4 6.4 4.1 9.0 25.1 -5.3
Total bias -13.2 17.6 39.5 27.4 40.1 40.1 31.8
1960-1984 1960-1983 1960-1986 1960-1986 1960-1985 1962-1984 1961-1983
25.8 8.2 33.1 23.3 31.1 15.0 37.1
Schiff and Valds 1995: 46.
An urban bias One of the most influential critics of these government policies was Lipton (1977), who studied the rural-urban relations in developing countries. Lipton blamed many governments for having an urban bias in their development policies. The expressed policies, he argued, were to invest in rural and agricultural development, but the realities were often quite different. The urban dwellers, even the urban poor, were in a much better position to make their demands known than the rural population. City dwellers were visible and had influence because of their numbers, their ability to organize and their proximity to the seats of government. Moreover, the administrative and the economic elite may not have liked the presence of many poor families in the city, but they needed the labour to clean the city and produce goods and services at low cost. In Liptons view, many governments paid lip service to rural development, the expressed aim of which was to improve conditions in rural areas and control rural-urban migration. The actual policies improved conditions in the urban areas and were aimed at placating the urban population and at promoting the development of the city. This ambiguity in the development policy continued for decades and the victims of the policy ambiguity were the rural population. The bulk of the investments by the public and the private sector ended up in the urban areas, more particularly in the cities and most particularly in the capital city, often a primate city and sometimes a mega-city. Through price controls on staple foods,
34
the cost of living of the urban population was kept low, while the income of the farmers was reduced. Such subsidies were said to be necessary to develop a competitive import-substituting industry, but they increased rural poverty and delayed rural development. Because public funds were scarce, investments in physical infrastructure, education and health care were made first in the urban areas, perhaps because the elite lived there, but also because of economies of scale: more people could be reached. In the rural areas, people are dispersed and reaching them is difficult and expensive; rural areas, therefore, always came last. Lipton argued that the most important conflict of interest in developing countries was not between capital and labour or between national and foreign interests, but between the city and the countryside. In Liptons view (Martinussen 1999: 136-137), the imbalances in the attention given to urban and rural areas were unacceptable because they widened rather than reduced the disparities between the urban and the rural population. The policies benefited a small portion of the population, the city dwellers, and ignored the majority of the population that lived in the rural areas. Because resources are scarce in developing countries, they must be used in the best possible way and where they have the most impact. According to Lipton, this was not achieved by policies that concentrated on urban development and neglected agriculture. Resources that could have promoted economic growth or benefited the poor or both, were in fact used to the detriment of economic growth and poverty alleviation. Lipton suggested that scarce capital should instead be invested in agriculture and in supporting small farmers so as to increase their productivity. Many have criticized Lipton for presenting the clash of interests in developing countries as arising primarily from where people live (i.e., urban and rural areas) rather than from their position in the economy. There is no doubt that public investments and subsidies went to the rural areas, but they did not improve the conditions of the rural poor. According to Gilbert and Gugler (1992: 224-225), the policies were less biased against rural areas than against the small and medium-sized farmers. These were unable to benefit from export credit, loans and subsidies in the same way as the large farmers. Large farmers may in fact have supported, or at least not opposed, urban-biased policies that kept the prices of agricultural products down because they benefited from other, rural-biased policies. Government policies aimed at economic development in urban and rural areas often favour the better-off population and discriminate against the poor, irrespective of where they live. With the majority of the population of developing countries living in rural areas and the majority of that rural population being poor, the failures of the policies to reduce rural poverty were simply more evident.
35
Urban poverty Liptons idea about an urban bias in government policies was not only based on the apparent neglect of the rural areas, but also on the apparent inability of the urban areas to absorb the surplus labour from the countryside. He argued that the policies not only did not achieve agricultural development and rural poverty alleviation, but did not even alleviate urban poverty. They improved conditions in the urban areas, but the improvements benefited only a small minority of the population: the urban rich. The poor migrants ended up in slums and squatter settlements where life was possibly even more miserable than in the rural areas. In other words, the policies were totally ineffective in all respects. Undoubtedly, the growth of the cities in Asia during the last 50 years and the development of mega-cities have been phenomenal and frightening (table 3.4). However, the total population of mega-cities should not be overestimated. The total population living in secondary cities and towns is still many times larger than the total population of mega-cities (table 3.5). According to the 1991 census in India, 10.8 per cent of the total urban population lived in urban agglomerations of 10 million and more. On the other hand, 6.3 per cent lived in urban agglomerations of 5 to 10 million inhabitants, 15.4 per cent in cities of 1 to 5 million inhabitants, and 67.5 per cent in cities and towns of less than 1 million inhabitants (ESCAP 1995: 21). Table 3.4 Population of selected urban agglomerations, 1950-2000
Population (millions) City Tokyo Mumbai Shanghai Calcutta Karachi Delhi Osaka Jakarta Manila Beijing
Source:
1950 6.9 2.9 5.3 4.4 1.0 1.4 4.1 1.5 1.5 3.9
1975 19.8 6.9 11.4 7.9 4.0 4.4 9.8 4.8 5.0 8.5
2000 26.4 18.1 12.9 12.9 11.8 11.7 11.0 11.0 10.9 10.8
United Nations 2000: 84-91.
36
Table 3.5 World population by settlement size, 2000-2015

Population distribution (%) Settlement size >10 million 5-10 million 1-5 million <1 million Rural Total
Source:
Urban population increment (%) 2000-2015 11.5 9.5 31.0 47.9 100.0
2000 4.3 2.6 11.6 28.5 53.0 100.0
2015 5.2 3.5 14.1 30.6 46.6 100.0
United Nations 2000a: 5-6.
Nevertheless, most governments saw rural-urban migration and rapid urbanization as serious obstacles to national development, because the creation of employment could not keep pace with the arrival of the rural masses in the city. In the view of most governments, rural-urban migration needed to be prevented and, if it nevertheless occurred, it needed to be stopped. If that was not possible, it needed to be reduced and, if even that was not possible, it needed at least to be diverted to smaller, rural towns. Looking at the example of industrialized countries, governments in developing countries wanted to control and portion rural-urban migration according to the needs of the urban-industrial economy. Rural-urban migration was not supposed to bring unemployment to the urban areas. The massive rural-urban migration in the 1950s and 1960s turned many pleasant colonial cities in Asia into large slums and squatter settlements. Rural poverty had come to town. Charles Abrams (1964: 13-14), one of the first United Nations experts on urban housing in developing countries wrote in 1964: Squatting in the cities of the underdeveloped world today is usually open and defiant, tempting more squatting by its success. It has affected not only government-owned land but private land as well, including tracts provided with costly facilities. When squatting is prevalent, orderly development and expansion are impeded, investment in greatly needed urban enterprises may be discouraged, and the political stability of government may be delayed. (..) Squatting is triggered by many factors enforced migration of refugees because of fear, hunger, or rural depression, the quest for subsistence in the burgeoning urban areas, and simple opportunism. (..) Surplus rural labour and the need for labour in the towns combine to speed migrations. By the 1980s, large sections of the urban population in many cities lived in slums and squatter settlements (table 3.6).
37
Table 3.6 Urban population in slums and squatter settlements, 1980s

Country Bangladesh India Indonesia Korea, Republic of Malaysia
Source:
% 47 36 54 1 15
Country Philippines Solomon Islands Sri Lanka Thailand
% 28 18 21 16
ESCAP 1993: 2-47.
The limited absorptive capacity of the urban areas was reflected in particular in the increase in urban unemployment and underemployment and the growth of what Hart (1973: 66) referred to as the urban informal sector. Hart drew a distinction between activities classified as formal, such as wage-earning employment, and informal, such as self-employment. It paralleled the distinction between the organized and the unorganized section of the urban labour force, the unorganized often being called the reserve army of unemployed and underemployed and those who are self-employed in small enterprises. The concept of an informal sector was based on the idea of a dual economy in the urban areas: a registered and enumerated, large-scale, capital-intensive, wage-earning sector and an un-enumerated, small-scale, labour-intensive, selfemployed sector. The latter sector absorbed the rural migrants and provided them with some employment and income, but was not supposed to contribute to urban economic development. In brief, failed or non-existing rural development policies pushed households out of the rural areas, while investment in urban areas created the city lights that pulled the rural households to the urban areas. Once in the urban areas, the migrants would discover that there was no housing or employment for them. They would end up in the informal sector in squatter settlements with inadequate housing and infrastructure and in the urban informal economic sector with inadequate income and poor working conditions. Reducing rural-urban migration As they denounced rural-urban migration and rapid urbanization as obstacles to development that generated poverty, unemployment, crime and social disorder, slums and squatter settlements in the urban areas, many Asian governments adopted policies that aimed at stopping the rural population from migrating to the city. The policies tried to reduce urbanization or redirect rural-urban migration
38
to secondary towns and rural areas through transmigration, migration controls, deurbanization and industrial dispersal policies, sometimes at the expense of human rights and the environment. Indonesias transmigration programme aimed at stopping people on the densely populated island of Java from moving to the urban areas by shifting them to less populated islands. An evaluation found that most transmigrants had benefited, but there had been inadequate protection of the interests of indigenous people and the environment (World Bank 1994). Transmigrants have faced hostility from a local population, with different cultures and religions, who saw their land taken away for the settlement of newcomers. Because of the difficulty of obtaining land suitable for agriculture, transmigrants were often given converted rain forest. In 1970, the Governor of Jakarta tried to limit migration to the city by decree. He issued an order that migrants could enter the city only if they had a Jakarta residence permit, guaranteed accommodation and regular employment. Most migrants could not meet those requirements. The short-lived policy increased corruption and the cost of living for the poor, but only partially interrupted the flow of migrants. The authorities also tried to reduce employment opportunities for poor migrants by limiting the number of rickshaws in the city, involving a quarter of a million people in 1972. Their employment was permanently lost, but urbanization continued (Castles 1989: 251; Gilbert and Gugler 1992: 251). After their victory in 1975, the Khmer Rouge evacuated the urban areas of Cambodia in order to eliminate rural-urban disparities and build a new egalitarian agrarian society. During the war, refugees from the countryside had increased the population of Phnom Penh from 0.4 to 2 million in a situation where United States aid formed the only economic basis. This situation was clearly unsustainable after 1975, but the main factor responsible for the deurbanization was probably the anti-urban ideology of the Khmer Rouge: cities were dangerous, immoral and full of inequality. Many people died during the evacuation and as a result of the harsh life in the rural areas. After the fall of the Khmer Rouge, rural migrants invaded Phnom Penh and other towns in search of security and employment. Since the 1950s, successive governments in Thailand have allowed the rural population to clear virgin forests for agriculture. This provided the growing rural population with subsistence and reduced the need to move to the urban areas to make a living. In the 1960s, this policy also aimed at denying territory to communist insurgents. Between 1961 and 1988, the area covered by forest declined from 171 million to 90 million rai (1 rai = 1,600 square metres). Because of a lack of organization, 10-12 million people or around a quarter of the rural
39
population are now rural squatters on untitled land in forest reserves (Phongpaichit and Baker 2000a: 48-67). Table 3.7 Migration rates in China and the world, 1949-1979
Year 1949-1959 1960-1969 1970-1979
Source: Zhao: n.d.
Net migration (x 000) 11 957.5 7 044.8 12 134.8
Rural population of base year (x 0,000) 48 402 53 134 68 568
Migration rate (%) 0.22 0.13 0.18
World (%) 1.54 (1950-1960) 2.16 (1960-1970) 2.24 (1970-1980)
In 1958, the Chinese Government introduced household registration (hukou), distinguishing between people with an urban or a rural household registration. It was possible, but difficult, for those with a rural hukou to move to the urban areas. In the early 1960s, the government tightened its control over migration and strictly forbade migration from rural to urban areas in order to secure sufficient agricultural production. As a result, the internal migration rate in China between 1949 and 1979 was significantly lower than the world average, as shown in table 3.7 (Asano 1998). However, labour movement restrictions hampered an optimal allocation of labour resources and widened disparities. After 1978, the Government started to loosen its migration policy, and after 1984 rural people were allowed to move to small towns. Although the Government did not deregulate its migration policy completely, it was now considered positive for economic growth if surplus labour worked in the non-agricultural sector (table 3.8). Under the slogan Leave the land, but not the village, it allowed rural people to engage in non-agricultural occupations, but did not allow them to change their hukou to an urban registration and to abandon farming completely (Asano 1998). The Government gave three reasons for the introduction of the household registration system and for the need to control migration. The first reason was that it feared that uncontrolled migration would overburden the infrastructure and services (housing, transport, education, employment) in the urban areas. The second reason was the labour shortage in the rural areas. The third reason was the fear that uncontrolled migration would lead to unemployment in the urban areas and threaten social stability in both urban and rural areas. In general, the policy of the Government of China was to assign different, clearly defined functions to the urban and the rural areas (Han and Wong 1998: 110; Asano 1998).
40
Table 3.8 Rural and urban population in China, 1949-1995 (millions)

Total population 1949 1953 1964 1982 1990 1995
Source:
City and town Total 57.7 77.3 94.6 206.3 296.1 351.7 % 10.6 13.3 13.7 20.5 26.2 29.0
County Total 484.0 505.3 596.7 797.6 834.4 859.5 % 89.4 86.7 86.3 79.5 73.8 71.0
541.7 582.6 691.2 1 003.9 1 130.5 1 211.2

Asano 1998.
Many governments not only tried to prevent people from moving to the urban areas, they also sent people back to the rural areas as part of urban slum clearance programmes. Until the 1970s, it was common policy to demolish squatter settlements and to resettle the squatters in the rural areas. However, because their basic problems had not been solved, those sent back often turned up again in the urban areas in no time, only now poorer than before. It was only in the 1970s and 1980s that governments began to realize that their policy of preventing rural-urban migration and sending rural-urban migrants back to the rural areas was ineffective and caused more problems for the migrants. Migrants who came to the city because of the lack of economic opportunities in the rural areas would lose whatever they had accomplished while living and working in the urban areas when they were sent back. Informal economic activities that keep a city functioning would no longer be performed and this increased the cost of living in the city, while employers faced a shortage of labour. By the 1980s, squatter settlements and the informal economic sector had become a more or less tolerated part of the urban landscape. Conclusion Most governments in Asia and the Pacific chose to develop their economies through industrial development in the urban areas, while gradually improving the quality of life in the rural areas through the provision of infrastructure and services, as resources allowed. The policies of protecting urban industries and using the income from the export of agricultural products to finance urban-industrial development caused widening disparities between urban and rural areas. These disparities, combined with rapid natural growth of the rural population, caused
41
massive rural-urban migration that the urban areas were unable to absorb. Urban poverty, squatter settlements and a growing urban informal sector were the most visible outcome. In response, the governments devised anti-urban policies aimed at halting or redirecting rural-urban migration. These policies proved to be largely ineffective because the core problems of rural poverty and rural-urban disparities remained unsolved.
42
URBAN DEVELOPMENT
Chapter IV. Urban development

This chapter and the next one analyse the impact on rural-urban disparities of two broad trends that emerged during the last two decades across most of the Asian and Pacific region: the adoption of free-market economic policies, and the decentralization of government responsibilities and community empowerment. The two trends are clearly related, both are reactions to the central planning approach that dominated past development policies and schemes of national governments. Free market policies, decentralization of government responsibilities to the lowest possible level and community empowerment can lead, in principle, to a more balanced relationship between urban and rural areas. Free-market economic policies In the 1970s and 1980s, many countries in Asia and the Pacific encountered serious economic problems, such as recurrent balance-of-payment crises, large fiscal deficits and high rates of inflation. The problems were identified as symptoms of a more fundamental economic problem rooted in the then prevailing development paradigm and its resulting strategies, which gave the state a key role in economic development (ESCAP 1998: 10). The crises cast doubt on the validity of the economic development paradigm to which most governments in Asia and the Pacific had adhered until then. The paradigm in question was based on, among other things, Keyness theories of the need for government to manage the economy. From the late 1970s onwards, one government in the region after another began to replace the old paradigm by a new one. This new paradigm has often been linked to the economist F.A. Hayek and his classic book The Road to Serfdom (Hayek 1994), but it has its roots in the thinking of the father of economic theory, Adam Smith (Yergin and Stanislaw 1998: 14-15). According to this paradigm, government interventions in the market result, over long periods of time, in suboptimal use of the available scarce resources. The paradigm places the mechanism of the free market, rather than centrally planned government interventions, at the centre of the economy. It changes the role of the government from that of a decider and a provider to that of a facilitator, responsible for the creation of an enabling environment for the private sector. According to this neoclassical economic paradigm, a healthy economy can be restored only if distortions in the market resulting from government intervention are removed and a level playing field for the domestic and international private sector is created. This is achieved by eliminating subsidies and regulations,
43
privatizating state-owned enterprises, reducting or abolishing import controls such as tariffs and quotas, and introducting market-based interest rates. The resulting increased competition will force the private sector to reach higher levels of efficiency in the use of scarce resources, resulting in economic development (Milward 2000: 33-34). Economic development is expected to create more economic opportunities, increase employment and reduce poverty through a trickle-down effect. On the basis of this paradigm, the countries initially responded to the economic crises with short-term measures, such as devaluating their currencies and cutting public expenditure to reduce fiscal deficits. These measures were followed by long-term measures, such as deregulation of trade and industry, and liberalization of international trade, investment and exchange rates. The policies aimed at a general reduction in the role of the state in economic activity by privatizating public enterprises and expanding the role of the private sector. The privatization of public utilities was made possible by advances in information technology, particularly in the telecommunications sector. The most far-reaching structural adjustments in the economy were not always initiated by the governments themselves, but were often a condition of financial support from international financial institutions, such as the International Monetary Fund and the World Bank. The removal of price controls affected, in particular, agricultural products, which often had a price ceiling or were otherwise subsidized to keep the cost of living in the urban areas under control. With the removal of government intervention and reliance on market mechanisms, farm product prices are free to find their own level and this improves the terms of trade between rural and urban areas in favour of the rural areas (World Bank 1995a: 107). This will lead to higher investments in the agricultural sector and to productivity gains in agriculture (Milward 2000: 34). The globalization of free trade that came about with the completion of the Uruguay Round of multilateral trade negotiations created opportunities for farmers to explore new export markets for agriculture and aquaculture products. The overall result of such developments was an improvement in the rural economy. On the other hand, higher food prices and the removal of subsidies increased the cost of living in urban areas and led to a deterioration in the living conditions of the urban poor. Free-market approaches, trade liberalization and the arrival of multinational companies resulted in real estate booms in many cities and led to rapid increases in land prices. The victims were the urban poor in slums and squatter settlements because many of their settlements were demolished and replaced by modern commercial buildings. The poor for whom formal housing was unaffordable were forced to find accommodation of even lower quality in
44
URBAN DEVELOPMENT
more remote locations. Other losers were population groups whose income did not increase with economic development and those who lost their employment and income owing to structural adjustment programmes (for example, state-enterprise employees in economies in transition). In theory, at least, trade liberalization changed the development balance between urban and rural areas in favour of the rural areas. One of the most important effects of the removal of restrictions on foreign investment in countries in Asia and the Pacific has been the inflow of foreign capital. The inflow took two forms: foreign direct investment (FDI) and portfolio capital. FDI contributed directly to the economic boom in South-East Asia during the second half of the 1980s and the first half of the 1990s (table 4.1). Through FDI, private companies from developed economies in Asia (such as Japan, the Republic of Korea, Singapore and Taiwan Province of China), the United States and Europe moved manufacturing operations to the developing economies in Asia. The reasons for the shift were the lower production costs in the recipient countries, interest in penetrating domestic markets and avoidance of import quotas. The beneficiaries were China, Indonesia, Malaysia, the Philippines and Thailand, but India, Pakistan, Sri Lanka and economies in transition, such as Cambodia and Viet Nam, also saw FDI increase. Table 4.1 Foreign direct investment in Asia and the Pacific, 1987-1998 (millions of US dollars)
1987-1992 a East & South-East Asia including: China Singapore Thailand North and Central Asia South and South-West Asia Pacific islands All developing countries Developed countries World
Source: ESCAP 2000: 32-33. a annual average
1995 64 118 35 849 7 206 2 068 1 474 3 836 561 106 223 208 372 328 862
1996 75 892 40 180 7 884 2 336 1 972 4 254 180 135 343 211 120 358 869
1997 83 169 44 236 9 710 3 733 2 921 5 852 146 172 533 273 276 464 341
1998 73 844 45 460 7 218 6 969 2 772 4 540 175 165 936 460 431 643 879
18 112 4 652 3 674 1 656 8 800 219 35 226 136 628 173 530
45
FDI and subsequent local investment created massive employment in urban and peri-urban areas. This employment creation occurred at two levels. At one level, there was the demand for labour, particularly for semi-skilled women, in the industrial sector (textiles, garments, footwear, electrical appliances and electronics). In addition, demand for workers in the construction industry and related industrial sectors increased rapidly because of the real estate boom. At another level, FDI, directly and indirectly, created demand for professionals and technicians in industry and the service sector to support industrial development. The result was tremendous growth of the urban middle class across Asia and the Pacific. The middle class, often consumerist, if not nouveau riche, created its own domestic demand for goods and services and this led to further investment by foreign and local companies aimed at the domestic market. Employment opportunities and improving living conditions enhanced the attractiveness of life in the cities, widened the rural-urban disparity, and resulted in more rural-urban migration. The removal of trade barriers and restrictions on foreign currency exchanges also helped to promote tourism in Asia and turned some parts of the region into primary destinations for foreign tourists. The relative reduction in transport costs, the expansion of transport networks and the free convertibility of foreign currencies made travel in Asian countries much easier. The availability of goods and services known in the home country and now available at the tourist destination helped to make Asia a more attractive destination for mass tourism. This was further facilitated by FDI in hotels and tourist resorts by multinational companies. The inflow of short-term portfolio capital (hot money) initially had a very positive effect on the local economy because it made large amounts of money available to the domestic public and private sectors through the stock market and bank credit. This capital made it possible for the government and private companies to make large investments in, for instance, urban infrastructure. Improved infrastructure in urban areas created an environment conducive to more FDI. Later, the excessive availability of portfolio capital resulted in many unproductive and unprofitable investments. This led eventually to the financial crisis of 1997, when capital was suddenly withdrawn owing to an economic downturn in several Asian countries. Because large amounts of money had been borrowed in foreign currencies and invested in real estate with revenues in local currencies, the devaluation of the local currencies led to numerous bankruptcies and an economic decline across most of East and South-East Asia.
46
URBAN DEVELOPMENT
Industrialization and urbanization Despite the financial crisis of 1997, the East Asian economic miracle has had a lasting impact on the Asian economies and economic policy. Export-oriented industrialization has become the dominant development policy for Asian economies and this industrialization is predominantly urban-based. Nowadays, cities are seen as the engines of economic growth and the result is competition between cities (rather than countries) for FDI. In order to attract foreign investment, central and local governments have to pay more attention to the investment climate in the locations where they want the investment to take place. The investment climate includes, for example the availability of skilled labour, the presence of adequate physical, social and economic infrastructure, a supportive regulatory framework for the economy, and stable economic and fiscal policies. In the past, companies in industrialized countries moved their manufacturing plants to developing countries in Asia to benefit from the low wages in those countries. The first wave of industries that were established in Asia, therefore, consisted mainly of textile, clothing and footwear factories. Such industries are still coming to Asia, but now in particular to least developed countries, such as Cambodia and Bangladesh, where labour costs are still very low. However, in todays global economy, multinational companies are moving into far more value added sectors, such as electrical appliances and electronics, and these sectors require a much more sophisticated environment. Moreover, modern information technology has made it possible to split the production process. Parts for the final product are produced in different locations around the world and assembled in yet another location. Much has been written about the comparative advantages of locations (initially countries, but increasingly cities) and why companies establish their plants or offices in one location rather than another. It is becoming clear that an important factor in attracting FDI is the availability of physical, economic and social infrastructure. Because the production process is split and takes place in different locations, the quality of the transport and communications infrastructure (roads, ports and airports, telephone lines and so forth) is critical. Outsourcing parts of the production process and subcontracting services have become common practice, and an attractive investment location, therefore, needs a developed urban economy with enterprises, often small and medium-sized, that allows for backward linkages. Such conditions are found in particular in the larger cities. Transnational corporations require a good local banking system and facilities to raise funds locally, such as a stock market, and with this comes the need for other services such as those provided by law and accountancy firms and by advertising and recruitment companies. Since many multinational corporations
47
rely at least partly on expatriate staff, the location has to have hotels, schools, luxury housing, cable or satellite television, and English- or Japanese-language newspapers. Export-oriented industrialization, therefore, takes place particularly in large cities because of what economists call economies of agglomeration. The export-oriented industries that came about through FDI are not alien bodies in a local economy. In many countries, the multinational corporation has to establish a joint venture with a local company and that links the corporation to the domestic economy and society. Despite the development of modern information and communication technology, doing business in Asia is still very much a matter of personal contacts with, for example, politicians, high-level government officials, corporate clients and bankers. Therefore, local headquarters of companies have to be situated in a main city, preferably the capital, although the manufacturing plant can be located in a suburban or extended metropolitan area where it can benefit from lower land prices. Moreover, many companies do not produce exclusively for export, but target the local market as well. They, therefore, do not want to move too far away from their major market, the urban areas. Economists note that as cities grow, economies of agglomeration can turn into diseconomies of agglomeration, although there is a lack of firm evidence that this is actually the case (Jones 1988: 142). The concentration of economic activities can cause congestion and this eventually results in loss of time and money. Examples of diseconomies of agglomeration have become apparent in many cities in Asia where high economic growth has resulted in traffic congestion, air and water pollution, and water and power shortages. This has, however, not stopped transnational corporations from moving plants and offices to those cities. It has, rather, forced local and central governments to make more investments in the citys infrastructure to overcome the deficiencies. It has also drawn attention to the need to improve the management of cities so that scarce urban resources are utilized more efficiently, and to the need to build up the capacity of local governments to deal with the problems that come with globalization. The new wave of export-oriented rather than import-substituting industrialization, made possible by the free flow of capital and the removal of global trade barriers, has fundamentally changed the economic structure of many countries in Asia and the Pacific. The production and export of agricultural products is still important, but the industrial and service sector, based predominantly in urban and semi-urban areas, now contributes the largest share of the gross domestic product. This has also had an enormous impact on the national employment situation and on rural-urban disparities.
48
URBAN DEVELOPMENT
Table 4.2 Contributions (percentage) of economic sectors to gross domestic product, 1970-1995
Primary 1970 East Asia and Pacific South Asia
Source:
Secondary 1970 35 21 1995 41 26
Tertiary 1970 31 34 1995 41 44
1995 17 30
34 44
Drakakis-Smith 2000: 117.
Rural-urban migration Industrialization, investment in urban infrastructure, the growth of the urban middle class and the development of the urban economy have increased demand for labour in urban areas. Improved transport and communications have, on the other hand, made it easier for people to move to places with a high demand for labour without losing contact with their relatives and friends in their place of origin. Industrialization and urban economic development have, therefore, increased outmigration from the rural areas. Whereas the natural population growth rate for Asia during the period 1990-2000 was 1.4 per cent a year, the urban population in all parts of Asia and the Pacific grew much faster and rural populations grew much more slowly. In fact, the rural population will hardly be growing in the coming decades (tables 4.3 and 4.6). The difference between the urban population growth rate and the natural population growth rate is attributed to rural-urban migration and the reclassification of rural areas as urban areas. Migration is not limited to rural-urban migration within a country but increasingly includes international migration between countries in Asia and the Pacific and beyond. With the new economic paradigm, ideas about rural-urban migration and urbanization are also changing and migration is now being seen in a much more positive light. Rural-urban migration is no longer considered an expulsion of the rural poor from impoverished rural areas and a desperate flight to bright city lights that only results in more poverty in the urban areas. Rural-urban migration is now seen in terms of the free flow of labour to areas where it can be more productive and earn a higher income. Rural-urban migration contributes to economic growth and reduces income disparities. People move from rural to urban areas because incomes are higher in urban areas, cities having greater output per capita and per worker than other areas. In fact, productivity increases with the size of the city, although it is not fully understood why this is so. One hypothesis states that mega-cities are more productive because they have large labour markets. The larger the labour market,
49
Table 4.3 Urban and rural population growth rates, 1950-2030

Urban population (%) 1950 Asia Eastern Asia South-Central Asia South-Eastern Asia Western Asia World total
Source:
Average annual rate of change (%) Urban Rural 20002005 -0.80 -0.79 -0.63 -1.18 -1.77 -0.86 20252030 -1.19 -1.20 -1.18 -1.20 -0.97 -1.12
1975 24.7 25.2 22.2 22.3 48.5 37.9
2000 36.7 38.5 30.6 37.2 70.2 47.0
2025 50.6 51.8 44.7 53.2 77.0 58.0
20002005 1.31 1.20 1.36 1.85 0.71 0.83
20252030 1.10 1.06 1.37 1.00 0.26 0.77
17.4 18.0 16.6 14.8 26.7 29.7
United Nations 2000: 28-31, 72-73, 76-77.
Table 4.4 Asian cities by gross domestic product in 1990

City Tokyo Osaka Seoul Hong Kong Singapore Bangkok Shanghai Manila Jakarta Calcutta
Source: Note:
National GDP City GDP (City GDP/capita)/ per capita ($) per capita ($) (National GDP/capita) 25 430 25 430 5 400 11 490 11 160 1 420 370 730 570 350 35 600 32 300 6 080 11 490 11 160 4 900 1 350 1 400 1 230 875 1.40 1.27 1.13 1.00 1.00 3.45 3.66 1.92 2.15 2.50
City GDP ($ billions) 890.1 339.1 66.9 59.1 34.6 34.8 18.0 12.5 11.3 9.4
Prudhomme 1996: 101-103. The figures are estimates that should be taken as gross orders of magnitude rather than as precise figures. City GDP is calculated by multiplying the per capita GDP of the country, the number of inhabitants of the city and the surproductivity ratio. Surproductivity is defined as the difference between the city productivity and the productivity of the rest of the country, divided by the productivity of the rest of the country.
50
URBAN DEVELOPMENT
the higher the probability that an enterprise can find the workers it wants and that the workers can find the jobs they want. A large labour market also facilitates specialization of workers and jobs, and this increases productivity (ADB 1999: 48). Much of the migration research supports the idea that rural migrants move to the city because there are more and better opportunities for social and economic mobility for themselves and for their children. Migration is not a blind move by desperate people into the unknown. Most migrants take a rational decision after careful deliberation of the costs and benefits of the move, based on available information about the place of origin and the place of destination (Breman 1996: 88, 223). Over the past decades, the rural population in most countries has acquired much more information about the situation in the urban areas, even if that information is not always reliable. This has been the consequence of an increase in travel between urban and rural areas, the presence of numerous relatives, friends and former neighbours in the urban areas, and the penetration of the mass media in the rural areas (Breman 1996: 34). They have lowered the threshold for rural-urban migration. What also becomes clear from migration studies is that migration is not a single, decisive move by the entire family that ruptures all ties with the place of origin. Many families develop a migration strategy and send their members to different places (a small regional town, the big city, a foreign country), depending on the comparative advantages of these locations. The ultimate purpose of this strategy is to spread the financial risks of the family over different economic sectors and types of employment. It is not uncommon for a family to have young children and the elderly in the rural areas where the cost of living is low, to send the older children to a small town where they have access to better education than in the rural areas, to allow the young, unmarried men or women to go to the capital city and to send some men to work abroad (Skeldon 1999). Those in the big city and abroad will try to save money to support their family members in the rural areas and elsewhere. The family will use the savings to invest in businesses, land and housing and to create an economic base in the rural areas for the migrant after his or her return. Migrants will provide information to the family back home about new employment opportunities and help relatives and friends settle in the urban area or abroad. For many, migration has the long-term objective of providing children with a good education so that they will have a better life than their parents. Facilitated by better transport and communications, internal and international migration have become more circular. It has been said, though it is difficult to prove, that some cities in Asia grow by around 10 per cent during the agriculturally slack season owing to temporary rural-urban migration.
51
There is also an increase in commuting between urban areas and surrounding rural areas. Farmers whose land is too small to make an adequate living may commute to the city or town for part of the day, and return to their village in the afternoon to tend their land and supplement their urban income. Living in the village and working in town helps the commuting migrants to keep their living costs down, to be able to live with their family and to earn income from two sources. Non-permanent migration is not a new phenomenon in Indonesia, but it has intensified in recent times. This is attributable to improvements in transport, the scarcity of non-agricultural employment in the rural areas and the desire to supplement household income and raise the standard of living (Rotg 2000: 187-203). In China, rural-urban migration of selected family members has risen rapidly since the economic reforms of the late 1970s. Some estimate that around 100 million farmers have left the countryside and migrated to the cities in search of work (Saywell 2000). A common arrangement for young men is to migrate to nearby cities or towns in search of employment; from there, they remit money to their wife and dependants. These remittances have contributed to a substantial reduction in the income disparity between urban and rural areas in China. Many rural households in China nowadays depend for much of their income on remittances. According to the Word Bank (1997), a typical migrant from Sichuan, a province with an average per capita income of 1,000 yuan a year, would earn 5,000 yuan a year and send 2,000 yuan home. Some households in Sichuan and Anhui provinces depended for 20 per cent of their total income and 50 per cent of their cash income on remittances. A study among farmers of 12 villages in Sichuan and Anhui provinces found that they relied for 52 to 75 per cent of their income on remittances from migrants (Asano 1998). There was a strong correlation in China between the presence of migrants in a household and increases in cash income, and this has led to increasing differentiation within villages between migrant and non-migrant households (Croll 1997). Migration by members of a family to the urban areas has both positive and negative impacts. Some villages in China do not have enough labour left to cultivate the land or land is not always cultivated to its full capacity and may be left idle or underutilized (Croll 1997). Migration can lead to the break up of the family or to men having two families, one in an urban area and one in a rural area. Research shows that migrants are on average young, better educated and more skilled, and more entrepreneurial than the rural population as a whole. They are the ones for whom there are likely to be more opportunities in the city. The outflow of the better educated and the more entrepreneurial may rob rural
52
URBAN DEVELOPMENT
Table 4.5 Remittances from migrants to selected Chinese provinces, 1999

Province Hunan Henan Guizhou Shaanxi
Source:
Amount (in yuan renminbi) 20.1 billion 26.0 billion 2.7 billion 2.5 billion
per cent of gross provincial product 5.9 5.7 3.0 1.7
Saywell 2000, based on data from the Ministry of Labour.
areas of the best and the brightest, and in fact can lead to an economic decline in some sectors of the rural economy (Skeldon 1999: 4). Circular migration may, on the other hand, result in productive investment in the places of origin (Saywell 2000) and also lead to the introduction of new skills, ideas and knowledge from the urban areas to the rural areas. However, migrants who acquired skills in the city may also find that they cannot use the skills in their village and move back to the city. Labour mobility may alter the forms of village consumption, savings and production inputs, thus making for more general changes in rural economies and cultures. Because migrants in China are usually men, the rural labour force increasingly consists of women. Even where rural-urban migration is more gender-balanced, it appears to contribute to an improvement in the position of women in rural society because they are forced to undertake tasks which traditionally were limited to men. Living in the city Many rural-urban migrants turn from rural poor into urban poor, and end up living in squatter settlements and working in the urban informal sector. However, not all those living in slums and squatter settlements and working in the informal sector are rural migrants. The population of many cities has grown to a level where natural urban population growth is substantial and there is not enough housing to accommodate the entire urban population. In fact, many of the urban poor are city-born and city-raised, and there is no question of making them return to the rural areas. This is important because rural-urban migrants are often blamed for urban problems, and the proposed solution to these problems, has often been their forced return to the rural areas. Over the past decades, ideas about the urban informal sector and informal settlements have changed radically. In the past, squatter settlements were often seen as the eyesores of the city that needed to be removed. Today, the values
53
and the positive dynamics of squatter settlements are increasingly being recognized. In 1979, Lloyd already described squatter settlements in the Third World as slums of hope rather than slums of despair, as is often the case with slums in the industrialized world. Residents of squatter settlements may be at the bottom of the economic ladder, but there is at least a ladder and many have started climbing it. It is important to understand that rural-urban migration has long-term objectives for many migrants. One of the principal attractions of the city is the availability of education for their children and the consequent opportunity for the children to move up in society (Lloyd 1979: 224; Saywell 2000). With this aim in mind, the urban poor may not be giving their housing conditions the highest priority and may prefer to spend their money on the education of their children and on investments in business. Like everyone else, they have to make a tradeoff and balance daily expenditure, investments in assets such as housing, and long-term investments in the future of their children. Because they are unable to pay for formal-sector housing, the poor in developing countries build their houses themselves and they in fact often build more houses than the public and the private sector combined. Since they are ineligible for housing mortgage loans, they need to build and improve their houses incrementally. As a result, houses of the urban poor in squatter settlements are permanently under construction, are almost always sub-standard, and never look finished. Many politicians and administrators are inclined to discard such housing and suggest that it be demolished, but that would destroy all the investment made by the urban poor. The efforts of the poor to house themselves need to be recognized rather than condemned. It makes no sense to prevent the poor from continuing to build their own houses because no one else will do it for them in sufficient quantities. While the poor quality of the housing structure is most visible and, therefore, the most offensive aspect of squatter settlements, the core problem of such settlements is, in fact, the insecurity of land tenure and the lack of basic infrastructure (water supply, sanitation, drainage). Insecurity of land tenure limits the willingness of the urban poor to invest in improving their dwellings whenever they have savings. The lack of basic infrastructure has more impact on the quality of life of the urban poor than the structure of the dwelling itself. It is, however, difficult, if not impossible, for the urban poor to gain access to affordable land in a suitable location and to connect to such municipal network infrastructure as water supply, drainage and sewerage. The approach most often recommended, but rarely followed by governments, is to provide squatters with either temporary or permanent security
54
URBAN DEVELOPMENT
of tenure and with basic infrastructure. Recognition of the squatter settlements by the authorities is often a sufficient incentive for residents of the settlements to accelerate the improvement of their houses using their own means. Because many governments have been reluctant to regularize squatter settlements and provide tenure security and basic infrastructure, some low-income communities in Asian cities have taken the initiative and started to improve their settlements. They develop the neighbourhood infrastructure either on their own or with the help of a non-governmental organization and shut the government out of their settlements. An example is the Orangi Pilot Project in Karachi (Hasan 1992). The potential of urban poor communities for improving their settlements and their willingness to do so either with or without the support of non-governmental organizations have attracted the attention of governments and international development agencies. These agencies are seeking to establish tripartite approaches to squatter-settlement improvement projects that include the local community, non-governmental organizations and the government so that each can do what it does best. Life in the city is undoubtedly much more competitive, individualistic and lonely than in the village, and city dwellers have to fend for themselves while villagers are much more inclined to look after each other. However, while migration is urbanizing the culture of the rural areas, it is also ruralizing the city. In countries where ethnic and linguistic differences are significant, migrants tend to cluster in squatter settlements. They recreate the village environment in the city and thereby provide a reception area for new arrivals from the rural areas. It is quite common to find large squatter settlements in an Asian city divided into neighbourhoods dominated by migrants from a particular region in the country. Rural customs are preserved in these neighbourhoods, which also serve as points of contact between the rural area of origin and the city. Migrants even bring their farming occupation to the urban areas, engaging in what is now commonly known as urban agriculture (UNDP 1996). They grow fruits and vegetables on small plots of land or keep chickens or goats in their houses. The increasing recognition of informal urban settlements as settlements of hope is mirrored in the growing recognition of the urban informal economic sector as an important part of the urban economy. In the past, the urban informal economic sector was often described as unproductive, full of underemployment and a sign of the inability of the city economy to absorb migrant labour. It is now clear that many migrants chose to work in the informal sector not so much as a last resort, but as a deliberate and rational choice, given the bureaucratic red tape and other factors that limit entry into the formal sector. Migrants are almost by definition risk-takers, and the city provides a productive outlet for their entrepreneurial drive. They often do better in the city than comparable locals. The net income of some informal-sector workers may in fact exceed
55
that of similar workers in the formal sector (Peterson, Kingsley and Telgarsky 1991: 12). The term informal sector, which dates from the 1970s, is therefore an unfortunate one. Rules and regulations divide the city, often arbitrarily, into a formal and an informal city. Whatever the urban poor achieve is classified as informal, and is often viewed as being of little value and given scant recognition. A more modern designation for this sector would have been the incubator economy, where new entrepreneurs learn to operate in the urban market economy and develop their micro-enterprises through trial and error. The growing attention paid to micro- and small-scale enterprises is an indication that governments and international aid organizations are starting to consider it worthwhile to support economic activities in this sector. For a large section of the urban population, the informal sector provides affordable goods and services, and for the urban poor it provides opportunities for upward mobility. The cost of living in cities can be kept low because the informal sector produces food at low prices. The urban informal sector extends into the manufacturing and service sectors where it blends with the formal sector, often making it rather difficult to distinguish between the two. Breman (1996: 157) and Shivakumar, Yap and Weber (1991) recount how industrialists and construction companies in the formal sector do not hire labour, but subcontract the work to an organizer of labour gangs who clearly operates in the informal sector. Manufacturing in Asia is relatively inexpensive because companies in the formal sector subcontract production to unlicensed small-and medium-sized enterprises where wages are low. Ensuring that the growing urban population will be able to find acceptable housing, have access to essential infrastructure and services, find gainful employment and earn an adequate income will be an enormous challenge for local governments. Local governments in charge of mega-cities will especially be pressured to find innovative ways of dealing efficiently with these challenges. To be able to develop, the urban informal sector, in particular, needs a level playing field. Governments need to remove any discriminatory regulations that obstruct the integration of informal sector activities into the mainstream urban economy, and enable small- and medium-sized enterprises to gain access to space, credit, market information and technology. Similarly, governments should support urban low-income communities that want to improve their living environment through the upgrading of their houses and the construction of neighbourhood infrastructure. Local governments will not only have to ensure that the urban population has adequate living and working conditions, but also that their city or town can compete in the global economy for private-sector investment. This means creating
56
URBAN DEVELOPMENT
and maintaining an investment environment that meets the needs and priorities of the private sector. In this endeavour, the government, civil society and the private sector have to search for ways to reconcile economic competitiveness with environmental protection through market-based incentives to internalize environmental costs. Meeting the needs of the population, those of the private sector and those of future generations will require efficient use of available resources and good urban governance. In this respect, the development of partnerships between urban stakeholders (government, local communities, civil society groups and the private sector) is critical, but this calls for a different attitude among government officials and considerable capacity-building. While governments will produce and provide less and intervene less, in line with the paradigm of the free-market economy, they will have to be more forceful in their remaining roles in order to be able to steer the economy, support the poor and other disadvantaged groups, and balance the interests of the various urban stakeholders (Yap and Mohit 1998: 90-91). Conclusion Rural-urban migration and urbanization can make a positive contribution to economic growth because they bring labour to locations where it is most productive. As a result of improved transport and communications, migration no longer represents a complete break with the place of origin. Migrants circulate between urban and rural areas and even foreign countries to earn an income and seize opportunities for economic improvement. The living and working conditions of the urban poor in the informal sector are often miserable. However, it is now recognized that the informal sector holds promise of upward social and economic mobility, if not for the migrants themselves, at least for their children. Government policies should, therefore, aim at creating opportunities for the informal sector to develop rather than suppressing the informal sector with regulations and prohibitions. Governments face two major urban challenges. Creating the conditions for the growing urban population to find adequate employment and income and gain access to acceptable accommodation and essential infrastructure and services will be one challenge. Governments will also have to maintain the competitiveness of the city or town in the global economy because the growth of the urban economy and of employment for the urban population will, to a large extent, depend on private-sector investment. This means creating an investment environment that meets the needs and priorities of the private sector, while at the same time safeguarding the urban environment. These challenges call for good urban management, good governance, the efficient utilization of available urban resources, and the development of partnerships between the government and other urban stakeholders, such as the private sector, civil society organizations and
57
local communities. A core element of good urban management and governance is the decentralization of government responsibilities to the local government. Table 4.6 Total population, percentage urban (2000, 2030) and average annual growth rate (2000-2005) by economy in Asia and the Pacific
Population (2000) Total Urban (million) (%) 1 277.6 6.9 126.7 24.0 46.8 0.5 2.9 32.1 100.0 78.8 60.2 81.9 98.8 63.5 Urban population 2030 (%) Average annual population growth rate (2000-2005) Total Urban Rural 0.75 1.11 0.12 1.13 0.71 0.61 1.50 2.34 1.11 0.32 1.62 1.38 0.62 2.28 -0.05 0.00 -0.67 0.38 -2.60 -0.57 0.06
Economy Eastern China Hong Kong, China Japan Korea DPR Korea, Republic of Macau, China Mongolia South-Central Afghanistan Bangladesh Bhutan India Iran, Islamic Rep. of Kazakhstan Kyrgyzstan Maldives Nepal Pakistan Sri Lanka Tajikistan Turkmenistan Uzbekistan South-Eastern Brunei Darussalam Cambodia
50.3 100.0 84.8 72.0 90.5 99.2 76.0
22.7 129.2 2.1 1 013.7 67.7 16.2 4.7 0.3 23.9 156.5 18.8 6.2 4.5 24.3
21.9 24.5 7.1 28.4 61.6 56.4 33.3 26.1 11.9 37.0 23.6 27.5 44.8 36.9
39.9 43.8 17.9 45.8 74.6 67.9 44.0 41.3 26.4 55.9 41.9 39.3 58.8 47.4
4.85 1.69 2.65 1.41 0.99 -0.10 0.89 2.70 2.23 2.50 1.03 1.28 1.62 1.56
6.90 3.98 5.95 2.81 1.80 0.16 0.89 3.52 5.07 4.08 2.84 1.28 2.05 1.56
4.24 0.89 2.37 0.82 -0.37 -0.45 0.89 2.41 1.82 1.51 0.43 1.28 1.26 1.56
0.3 11.1
72.2 15.9
82.6 31.9
1.74 1.77
2.43 4.16
-0.19 1.28
58
URBAN DEVELOPMENT
Table 4.6 (continued)

Population (2000) Total Urban (million) (%) 0.9 212.1 5.4 7.5 40.9 23.5 Urban population 2030 (%) 15.0 63.5 42.6 Average annual population growth rate (2000-2005) Total Urban Rural 1.41 1.22 2.51 2.21 3.57 4.87 1.35 -0.59 1.72
Economy East Timor Indonesia Lao Peoples Democratic Republic Malaysia Myanmar Philippines Singapore Thailand Viet Nam Western Asia Armenia Azerbaijan Turkey Oceania Australia New Zealand Fiji New Caledonia Papua New Guinea Solomon Islands Vanuatu Micronesia Guam Kiribati Marshall Islands Micronesia, Federated States of Nauru Northern Mariana Islands
22.2 45.6 76.0 3.6 61.4 79.8
57.4 27.7 58.6 100.0 21.6 19.7
72.7 46.6 73.8 100.0 39.1 33.7
1.69 1.13 1.88 1.02 0.83 1.32
2.83 2.86 3.14 1.02 2.67 2.19
0.04 0.42 -0.06 0.00 0.29 1.11
3.5 7.7 66.6
70.0 57.3 75.3
79.6 70.7 87.3
0.32 0.77 1.43
0.76 1.45 2.55
-0.73 -0.17 -2.46
8.2 1.9 0.3 0.0 1.6 0.1 0.9
84.7 85.8 49.4 76.9 17.4 19.7 20.0
88.5 89.8 67.5 90.3 33.0 38.3 36.7
0.91 0.88 1.40 1.53 2.14 2.93 2.25
0.94 1.01 2.87 2.80 4.01 5.64 3.97
0.69 0.08 -0.16 -3.41 1.72 2.21 1.92
0.0 0.0 0.0 0.0 0.0 0.0
39.2 39.2 71.9 28.3 100.0 52.7
55.9 56.5 81.9 45.0 100.0 63.7
1.60 1.43 3.05 1.98 1.82 5.34
2.46 2.71 3.71 3.15 1.82 5.56
1.03 0.56 1.27 1.49 0.00 5.09
59

Population (2000) Total Urban (million) (%) 0.0 72.4 Urban population 2030 (%) 81.1 Average annual population growth rate (2000-2005) Total Urban Rural 2.32 2.72 1.22
Economy Palau Polynesia American Samoa Cook Islands French Polynesia Niue Samoa Tonga Tuvalu
Source:
0.0 0.0 0.0 0.0 0.0 0.0 0.0
52.7 59.4 52.7 32.7 21.5 38.0 52.2
67.9 69.8 61.5 48.6 36.3 56.3 70.8
3.41 0.69 1.56 -1.60 1.88 0.27 2.55
4.36 1.00 1.56 0.56 2.84 1.77 4.30
2.30 0.23 1.56 -2.12 1.56 -0.70 0.46
United Nations 2000.
60
RURAL AND REGIONAL DEVELOPMENT
Chapter V. Rural and regional development

With unfettered urban development and the majority of the population living and working in rural areas, balanced development implied rural development for most governments in Asia and the Pacific. Views on the best approach to achieve rural development have, however, changed, radically over the years. Initially, urban and industrial development were seen as the engine of economic growth for the rural areas, as they were for national economic growth. The development of urban growth poles was an important example of this strategy; it aimed at regional development and thereby at rural development through the promotion of regional urban centres. It was gradually realized that the rural areas can be developed only if the economic and political imbalances in the relationship between urban and rural areas are corrected. A people-centred development approach, the empowerment of rural communities and the decentralization of government responsibilities can make an important contribution to reducing the imbalances. The process of bottom-up development also created new opportunities for regional development. Given the trends of globalization, regional trade blocs and decentralized decision-making, regions will soon be in a position to search for partners and markets on an international scale rather than only within a country. Regional development Over the years, many different policies have been designed and tested to develop the rural areas, including policies that somehow integrated urban and rural development and focused on regional development. The principle underlying these policies was the primacy of industrial development and the acceptance of rural-urban migration. Surplus labour in the rural areas had to be absorbed by the urban industrial sector, but industrial development would have to be promoted in urban centres other than the primate city, so that they could spread economic growth to their respective hinterlands and absorb rural-urban migration that would otherwise move to the capital (Tacoli 1998: 153). The more urban centres could be developed across the country, the greater the impact of the economic development generated in the centres on the surrounding rural areas. Urban development in the region would create demand for agricultural products from the surrounding areas and promote rural economic development. In a 1955 article, Perroux, the father of regional development, wrote that economic growth has to be brought about by growth poles, constellations of dynamic, innovating enterprises, often but not always in urban centres, that generate propulsive effects upstream and downstream, positive or negative (Higgins and
61
Savoie 1997: 91). Perroux did not make clear what a growth pole was, but over time it came to mean an urban-industrial growth centre. If a region has to be developed, it must have a leading economic sector or propulsive industry which will serve as the nucleus of economic growth and stimulate the emergence of ancillary companies. The sector may not develop without initial external support and governments must invest in the region to promote this leading industry or economic sector. The expectation was that development of the sector would have an impact on the regional centre by creating employment. Growth in employment would lead to higher income and a greater demand for goods and services, including agricultural products, and gradually the entire region would develop. Table 5.1 Single-city primacy indices for selected Asian countries
Country Bangladesh China India Indonesia Japan Pakistan Philippines Korea, Rep. of
Source: Note:
City 1970 Dhaka Shanghai Mumbai Jakarta Tokyo Karachi Manila Seoul 1.44 1.38 0.84 3.10 1.75 1.59 8.95 2.92
Primacy index 1980 2.39 1.30 0.89 3.37 2.18 1.74 9.70 2.65 1995 3.25 1.22 1.29 3.86 2.53 1.94 9.19 2.85
Mathur 1997: 73, 76. The primacy index is the ratio of the population of the largest city in a country to the population of the second largest city.
Because of the difficulty of identifying suitable growth poles, other related strategies were designed (Richardson 1987: 217). The counter-magnet is an urban centre that is created or developed elsewhere in the country to reduce the concentration in the primate city. It has to be a large city, distant from the primate city. Another strategy is the development corridor. This approach compensates for the limited viability of individual growth centres by developing two centres at the end points of a development axis so that they can reinforce each other. Regional development strategies through growth poles experienced two kinds of problems: problems related to implementation and problems related to impact (Gilbert and Gugler 1992: 228-243; Richardson 1987: 219-220).
62
As far as implementation was concerned, the policy instruments to promote population redistribution and regional development were often too weak to be effective. Incentives to locating capital-intensive industry in secondary towns were often too small to overcome the attraction of the capital city. The development of secondary towns through considerable public investment created political tensions at the national level over the selection of the towns. To ease the tension, governments selected too many towns as growth poles and raised expectations that could not be met. The sustainable development of secondary towns into growth poles could succeed only if the specific local conditions in the town and the rural hinterland were taken into account, but this required a level of decentralized decision-making that did not exist in many countries. Furthermore, spatial policies may take 20 years to produce the desired results, but such a long period of time was in conflict with the medium-term planning of the government and the short-term horizon of many politicians. Population redistribution and growth pole development required investments that were often beyond the means of the government. Given the scarce resources and the long-term horizon for such policies, investments were often insufficient to make a difference. Finally, other policies often had implicit spatial implications
Box V.1 Decentralization in the Republic of Korea The Republic of Korea has seriously attempted to redistribute urban population and economic activities from its primate city to other parts of the country. A combination of incentives and regulations was employed to control population growth and to disperse industries from Seoul. The government also used its investments in overhead capital, social services, physical facilities and directly productive activities to make secondary cities more attractive. However, despite the governments efforts to decentralize large metropolitan areas, specifically Seoul, agglomeration economies in Seoul and large metropolitan areas are still significant, favouring the industries located there. Of the 47 million Koreans, 82 per cent live in urban areas and approximately 12 million live in Seoul. The explanation for this is to be found in the weakness of the explicit regional policies and the countervailing implicit spatial policies and tendencies. Import-substitution policies were not explicitly spatial, but they had strong implicit spatial biases towards core urban areas because the markets for the goods produced were the core metropolitan regions. On the other hand, local incentives to attract investments to high technology and science parks outside Seoul proved too weak (Mathur 1997: 25; Douglas 2000: 13).
63
that were not consistent with the explicit population redistribution and regional development policies. This weakened, if not counteracted, their impact. Those responsible for spatial policies often had no control over other policies that were necessary to complement the spatial policies. In addition to the problems of implementation, there were also problems with the impact of growth pole development on rural-urban disparities and rural poverty. Some argue that attempts to disperse industrial development without strong incentives are a waste of scarce resources. They argue, if rapid economic growth is the objective, capital should go to where it can gain the highest returns. Economies of scale (increasing returns to the size of the plant) and economies of agglomeration (cost savings from the co-location of complementary economic activity) are positively associated with city size. Such economies generally discourage efforts to redirect industrial and economic activity away from large cities, unless certain conditions are met. The compatibility of industrial policies and regional policies depends on the sectors targeted and their requirements for scale and agglomeration economies. The greater the economies of scale and agglomeration in a centralized location, the less likely the industrial policy will further regional policy goals and the more costly imposed regional priorities may be to industrial goals (Markusen 1994: 280-281).
Box V.2 Regional disparities in India The correction of persisting regional imbalances in India has been an important concern in the context of the national planning process. However, the expectation that backward regions, aided by special incentives for industrial location and promotion of growth centres, would catch up with more advanced regions, has not been fulfilled. As a result of economic liberalization, market forces have acquired even greater prominence in determining investment flows. States and regions with better infrastructure and good human capital are able to attract more investment and further improve their growth prospects. At the same time, a decline in resource flows to states and regions less well endowed in terms of human development is exacerbating existing imbalances and deepening schisms (UNDP-IDF 1998).
Industries that produce for the domestic economy and replace manufactured imports may be able to support regional development objectives provided they are linked by adequate infrastructure to their domestic markets. Export-oriented industries with standardized mass production processes may also be located away
64
from major urban centres, particularly coastal areas, without much disadvantage. Innovative industries that demand skilled labour, business services and access to information will be less successful in remote locations. Even if inputs and information can be procured over distance, the uncertainty and risk introduced by rapid change in product and technology keeps such industries in major urban centres (Markusen 1994: 281). Regional economic development policies were often ineffective in relocating industries and developing growth poles. However, if they were effective in this respect, they often increased disparities and caused rural-urban migration. A developing urban area in a backward region may not draw its resources from its immediate hinterland, but from other, more developed regions of the country, and it may, therefore, not contribute to the development of new demand and new supply within the region. Improved transport links between the regional centre and the rest of the country reduce transport costs not only for goods produced in the region, but also for goods moving into the region from other parts of the country and for migrants moving out of the region to the national urban centres. A 1993 United Nations multi-country survey to assess the effectiveness of regional development approaches found that the policies had an impact only if a broad spectrum of mutually reinforcing economic, social and physical policies were pursued simultaneously over a long period (Mathur 1997: 92-93). Decentralization and empowerment As with regional development policies, rural development policies used to narrowly focus on the economic aspects of development and assume that creating more and better economic opportunities would help small farmers and the landless to improve their conditions. The policies did not take the particular needs, conditions and constraints of the rural population into account. What was needed was an approach that emphasized the integration of the social, economic and political aspects in development (Sen 1991: 86). Policy makers realized that rural policies and programmes could succeed only if they had the consent and active participation of the people concerned and if they aimed at improving the living conditions of the rural poor in many respects. People-centredness became a key characteristic of rural development. Because there was a need for a balanced and synergetic expansion of industry, agriculture and related sectors, rural development programmes had to encompass a wide range of activities, ranging from community development, the provision of basic infrastructure and services, the generation of employment, to regional development, in order to place rural development in a wider context (Demaine and Kammeier 1999: v).
65
The integrated rural development strategy aimed at the active involvement of the rural population in identifying problems, priorities and resources needed to solve the problems, in designing the action plan, and in implementing the projects. Rather than aiming at the development of agriculture, which benefited large rather than small farmers, the approach aimed at human development and the projects built on the resources of the rural population. A core component of integrated rural development was rural poverty alleviation, by assisting small farmers and the landless in gaining access to land, water and forest resources, to technologies and infrastructure, to credit and markets and to off-farm employment. Capacity-building and community empowerment were seen as critical (Martinussen 1999). Empowerment is more than participation by the poor in the design and implementation of government projects that are meant to benefit them and are easier to implement because of prior participation by the beneficiaries. Empowerment implies that the development initiatives of the rural poor are recognized, that the rural poor are accepted as stakeholders and partners in development, that their voice is heard in deliberations and that their opinions are taken into account. Development is not a matter of alleviating poverty or providing access to infrastructure and services. Development is giving people, and in particular the poor, the power to decide how they want to live their lives. Rural people were now regarded as independent agents of development who possess a tremendous potential to help both themselves and society. This was a clear shift in the perception of the rural poor by government officials. Initially, the rural poor had been largely invisible in government policies and programmes. Later, they became visible, but primarily as a passive group that needed the assistance of external organizations. Now, with their active participation in political decision-making, they started to emerge as important independent stakeholders and agents of change who were capable of finding solutions to their own problems with limited external support. Empowerment is a form of power sharing, and building the capacity of the rural poor to take charge of their own lives does not suffice. It is also necessary to reform the government and make it responsive to the needs and demands of the rural population. Integrated rural development has to be accompanied by decentralization of authority by the government, because local governments are able to respond more quickly and appropriately to initiatives by rural communities. Many governments in Asia are now in the process of decentralizing responsibilities to lower levels of government and are giving district organizations the power to take their own decisions. They often make use of existing forms of local government, such as the panchayat in India and the parishad in Bangladesh.
66
The revival of these institutions fits into the ongoing process of decentralization, but such local institutions also have their limitations. The problems are of two kinds: institutional problems and problems of governance. Central governments tend to decentralize problems without decentralizing the human, financial and legal resources needed to solve the problems. Often, the local institutions still depend on financial allocations from higher levels of government and there are serious restrictions on the power of the local institutions. In addition, the elected and appointed officials are not always up to the tasks to which they have been assigned. Many elected representatives in the panchayat raj come from the poorer sections of the rural society. They are illiterate and unaware of the political and economic dimensions of development and lack political and managerial skills. They are virtually directed and controlled by the former political strongmen of the area, who usually come from the rich and middle-level sections of society. This should not be used as an excuse for turning back decentralization, but has to be seen as a transitional problem to be solved through carefully designed transition development strategies (Sundaram 2000: 33-34).
Box V.3 Saemaul Undong In the early 1960s, the Republic of Korea shifted from an inward, agriculture-based development strategy to an outward, manufacturing-based and export-oriented one. While the policies in question were successful, they created disparities in living conditions between urban and rural areas, and between those employed in manufacturing and those in agriculture. People from the rural areas increasingly moved to the urban areas. This was most visible in the metropolitan area surrounding Seoul. By the late 1960s, urbanization had emerged as a major social issue. To tackle this problem, the government started the Saemaul Undong or New Village Movement in 1971. Its goal was to improve the quality of life in rural areas and to free the rural population from severe poverty. Poor living conditions represented by inferior housing, undeveloped roads and poor drinking water supply and sewage systems prevailed in the rural areas. Improving living conditions was vital in order to curb the exodus from the rural areas and to enhance the living conditions of those staying on, but this required enormous human, financial and other resources that the government did not have. The government and the rural population reached a consensus that improving living conditions was in their mutual
67
interest and that they should shoulder the effort jointly. Rural communities were eager to use whatever government assistance was available to modernize their production facilities and improve their living conditions, making the most of what they had and cooperating with one another. Saemaul Undong, thus, changed the agricultural base of the Republic of Korea by expanding rural roads, restructuring arable land, building bridges and developing rural water supply systems. It contributed to a continued increase in farming household income and expanded non-agricultural income sources. Village councils composed of village leaders and residents decided how best to use materials allotted for village development. The experience contributed to the development of opinion-sharing and grass-roots democracy that reached the smallest administrative unit of the country, the maul. The most significant result was a change in attitude on the part of people in rural areas, who developed self-confidence. Rural residents adopted new values of diligence, self-help and cooperation through their participation in the development of their communities (Saemaul Undong, n. d.).
Decentralization and empowerment are obviously not enough to bring about economic development in rural areas. The institutional infrastructure (organization, governance) needs to be combined with hard infrastructure (roads, power supply) and soft infrastructure (such as transport, credit and other services) to create development opportunities. Rural development requires a package of interventions to be effective (Wanmali 2000: 5-7). The development of transport and other types of infrastructure have a direct impact on the welfare of the poor. A study of 16 villages in Bangladesh showed that the development of infrastructure (roads, electricity, schools, health centres, banks and markets) had a significant impact on the income of rural households. Average household incomes increased by one third. Crop income rose by 24 per cent, wage income by 92 per cent, and income from livestock and fisheries by 78 per cent. These increases largely benefited poor households. Income from non-farm activities rose by 17 per cent and largely benefited non-poor households (World Bank 1990: 60). Credit Because of the seasonal nature of agriculture, the cash flows and cash needs of farmers are not synchronized. The income of the farmers is also highly influenced by climatic conditions, and credit is, therefore, essential for rural families. The unavailability of credit from formal institutions and the lack of money circulating within rural society are important reasons why poverty among
68
the rural poor is perpetuated (Remenyi 1991: 44-45). In the rural areas, lending often implies servicing a clientele that requires small loans at any given time and that lives dispersed over a large area without adequate infrastructure and information. These circumstances inevitably increase transaction costs and make lending institutions less interested in operating in rural areas. Commercial lending institutions, if present at all in rural areas, target large and medium-sized enterprises, higher-income households and bigger farmers (Tilakaratne 1996: 1). Community-based credit schemes are one example of using indigenous institutions and social mechanisms to bring about development. Governments have tried to channel funds to the rural population through cooperative societies to improve access to credit, but the success of governmentpromoted formal credit cooperatives has generally also been limited (Tilakaratne 1996: 1-2). Government-promoted cooperatives have often failed to develop into voluntary institutions with ownership by the community. They lacked a popular base, and their leadership often fell into the hands of the local elite. They also failed to address the interests of the landless, marginal farmers and women, who would not be readily admitted to such institutions. Lacking a local base, they were often troubled by high default rates, which meant that they needed constant government support to replenish their coffers. They were also characterized by low levels of participation, and by corruption and malpractice. The majority of the rural population, therefore, tends to rely on traditional community schemes that mobilize resources from within the community without any external support. Examples are the rotating saving schemes, where funds are collected from savings and loans are extended on the basis of common rules. Such informal schemes prove very important as sources of working capital for small enterprises and of emergency loans for families in times of distress, but the scale of such schemes is limited and the amounts saved and borrowed remain small. The only alternatives are professional moneylenders, traders, store owners and the like. Traders lend money to farmers in exchange for the right to purchase their harvest, but if the harvest falls short of expectations, the farmers will find it difficult, if not impossible, to repay the debt. Moneylenders also charge high interest rates owing to the high risks, the limited diversification and the monopoly rents (Tilakaratne 1996: 2; Braverman and Huppi 1991: 42-44). A breakthrough in credit provision in rural areas and rural development has been the Grameen Bank in Bangladesh. The Grameen Bank and similar savings and loan institutions have been successful owing to their micro-lending, targeting of women, and use of group responsibility to ensure loan repayment (ESCAP 1985). Muhammad Yunus initiated the Grameen Bank (Rural Bank) in August 1976, as a pilot project to serve as an alternative to the existing credit arrangements. The target groups were families with less than 0.5 acres of cultivable
69
land, and whose assets did not exceed the market value of one acre of medium quality land in the area. For a family to get a loan, a group had to be formed of five families with similar social status and economic interests. Loans were extended to individuals or groups for one year, and the loans had to be paid back in weekly instalments of 2 per cent of the principal. Today, the Grameen Bank has some 2.5 million members in 40,000 villages in Bangladesh. The Grameen Bank does not use conventional collateral such as land or other assets. The credit-holders (individual or as a group) are responsible for the use and repayment of the loan (ESCAP 1996). If credit is used for consumption or the loan is not repaid, the entire group is disqualified for further credit from the Grameen Bank, not just the borrower (ESCAP 1985). If an investment is beyond the purchasing power of any single rural family (tube-wells, rice-mills etc.), the group makes the investment for the welfare of the rural poor. The group mechanism instils among the poor a saving habit which covers risks and provides support in natural calamities, and financial support for health and other facilities. Extending credit to women improves the position of women in the rural areas considerably. It gives them more equal opportunities to participate in economic activities and enables them to contribute to their families, financial resources. The repayment record has an exceptional success rate, in particular for women borrowers. The success of the Grameen Bank can be attributed to the formation of groups of poor people and the introduction of collective responsibility for the credit facility. The formation of groups gives people a feeling of protection and security. It helps to reduce the effects of erratic behaviour and the possibility of bad investment by an individual farmer. Restricting the size of the group facilitates the inclusion of all members in decision-making and helps prevent the concentration of power in a single person. Peer pressure keeps members in line with the groups objectives and encourages inter- and intra-group competition that provides the necessary motivation to work efficiently and effectively (ESCAP 1985). It is also easier to keep track of the credit liability of borrowers through the group than to monitor each individual credit record separately. The example of the Grameen Bank was followed by other non-governmental organizations involved in rural development, based on the same principles, but with rules and regulations adapted to the local conditions. However, the Grameen Bank and similar microcredit programmes have also been criticized for being management-intensive and functional only on a small scale. It has also been argued that poverty cannot be alleviated by microcredit alone. Grameen-type lending schemes are blunt instruments to alleviate poverty in remote and agriculturally unproductive areas where the main constraint on poverty reduction is the absence of highly profitable investment opportunities (ESCAP 1996: 55).
70
The Grameen-Bank approach is nevertheless a good example of what can be achieved when the real needs and potential of the rural population are taken into account. It has also revealed the importance of involving women and relying on women for many critical functions in development activities. Gender For decades, rural policy makers turned a blind eye to women as wives of farmers and as farmers in their own right. Women largely remained invisible in programmes that aimed at improving conditions in rural areas. The increased interest in and attention for people-centred development brought the position of women in the rural society and economy better into focus. It became clear that their invisibility had been the result of a lack of data on their conditions and activities and, as a consequence, their role in agriculture and society had been neglected. Now, it was found that women not only played an important role in agriculture and in the rural society but they had great potential for improvement, if their lack of access to education, health care and adequate nutrition could be overcome and they gained control over their earned income. Women form the majority of all farmers in Asia, but for a long time they remained largely invisible because their work was not counted by economists and statisticians. Women play a role in agriculture; they have specialized knowledge that men do not have and they represent a pool of highly skilled labour in many areas of agricultural and rural development. They are increasingly heading rural households and becoming the chief economic provider for their family because small-farm production is no longer attractive to men who abandon agriculture in favour of better-paid work in other sectors. The productivity of women is, however, constrained by the fragmentation of their time, their many responsibilities and their lack of access to essential inputs. The working day of women is longer than that of men, and most women have reached the limits of their endurance in stretching their day. The disparity between rural men and rural women is steadily widening, and a growing percentage of rural women fall in the category of the absolutely poor and destitute (Stephens 1995). The economic poverty of women is directly related to their lack of access to services such as education and health care, and to the social and political deprivation which places them in an inferior position in rural society compared with men, despite their contributions to agriculture and the economy. In many countries of Asia and the Pacific, women in rural areas still do not have equal rights with men. There is often no provision for inheritance of property by women, and this leaves them dependent on male members of the household with respect to land ownership. There are deep-rooted gender biases in labour markets and social exclusions in rural areas, and these keep women locked into set roles in
71
the production processes and within the family. This makes it difficult for them to access employment opportunities to suit their needs. In many rural families, men have priority over women with regard to consumption and the distribution of benefits on account of perceptions of relative contributions and cash income attributes (ESCAP 1996: 84-97). So, in addition to policies that favour urban areas over rural areas, and that favour the rural rich over the rural poor, polices also favour the male rural poor over the female rural poor. Policy biases in favour of men reinforce the marginalization of women in rural development, and as a result the poorest of the poor are almost always women. Emerging regionalism Decentralization of responsibilities to lower levels of government and empowerment of rural communities has not occurred in a vacuum. At all levels in both urban and rural areas, communities are gaining influence. Regions are becoming a particularly important unit of development. Here, a region is defined as a large area of land within a country that is different from other areas of land because of some geographical, cultural or economic characteristic. Regionalism is a movement that emphasizes a regions identity or uniqueness. It emerges in particular if the population in a region feels that the disparity between its region and other regions in the country is becoming too wide or that its uniqueness is being threatened. In many countries of Asia and the Pacific, regionalism is not a new movement; it always existed, but it is emerging, or rather re-emerging, in many countries. Yusuf (2000) lists four causes for the rise of regionalism, or localization, as he calls it: Dissatisfaction with the ability of the state to deliver on promises of development The sharpening competition between regions, combined with the reluctance of richer regions to share resources with those less well off The strength of local and ethnic identity, reinforced by education, better communications and the rising concentration of people in urban areas The levelling of cultural differences by globalization, which deepens a sense of belonging to a place
The spread of globalization and the impact of information technology have given rise to concern among many people that cultural diversity (like biodiversity) is about to disappear. Here, the word culture is used in its broadest sense of
72
shared ideas, norms, values and behaviour. There is a particular fear among people that their own culture is about to be replaced by a lowest-commondenominator culture or by an alien, presumably Western or American culture. The clearest example of this loss of cultural diversity is the use of local languages and dialects. The spread of the language spoken in the major city or cities is threatening regional languages, while that language is itself contaminated by the inclusion of many foreign, mainly English, words. This threat is felt less in the major cities, where the prevailing culture is usually already more cosmopolitan (and often multilingual) than in the small towns and the countryside of the more peripheral regions. It is significant that city-dwellers look down on the cultures of those regions, calling them provincial, meaning backward in the sense that they have not yet become urban and cosmopolitan. Another factor contributing to the re-emergence of regionalism is a growing political awareness among the population. People everywhere have become more educated as a result of better schooling and more aware of their situation and of the situation of others through the mass media and the information revolution. There is a growing demand among the population for good governance and an effective and efficient government. They are demanding that the government should do its job and solve their problems. Globalization is supposed to bring gains to the economy as a whole, but it can create severe adjustment problems for regional economies. By loosening national ties and making international competition a necessity, globalization brings both development opportunities and threats previously unknown (von Meyer 1998: 5-8). The more effectively regions are integrated in the global economy, the more quickly they can grow. However, a range of natural and policy factors determine the extent of this integration. Coastal regions that are adjacent to major shipping and civil aviation routes have a natural advantage. The quality of physical infrastructure such as seaports, airports and utilities, the policy environment and the depth of cross-border commercial connections also shape international ties (Hill 2000). Transport can play a strategic role in the economic development of regions within countries because transport development reduces production costs as the cost of assembling inputs for production is lowered. This is particularly important as more and more industries are establishing plants for manufacturing components in different locations, depending on their comparative advantages, and assembling those components into a final product in yet another location. Underdeveloped regions with abundant labour could be attractive to some industries, provided good transport links exist with either transport nodes such as seaports or markets for their products.
73
Mineral resources assessment on a subregional scale, as promoted by ESCAP, can result in the identification of areas with a high development potential, particularly in hitherto neglected border areas. The exploitation of natural resources, in combination with the construction of a cross-border transport network of roads or railways, can turn a disadvantaged region into a developing region and bring about economic growth. It is important, however, that the benefits of the exploitation of resources accrue to the region. This would require some control by the regional authorities over the exploitation, on the basis of decentralized authority. Through the development of transport infrastructure between major inland locations and seaports, people living in more remote locations can benefit from economic globalization. The closest seaports do not have to be located in the same country. Regions such as north-east India, northern Myanmar and north-west China are economically disadvantaged because they are far away from their respective national outlets for trade. They are virtually landlocked at a national level, but close to the seaport of neighbouring Bangladesh. Transport infrastructure and regional cooperation can benefit the regions as well as the seaport. While economies are globalizing, central governments are decentralizing authority to lower levels of government, be it state, provincial or local government. More and more central governments realize they are unable to solve the wide range of problems at the local level given their already large number of responsibilities at the national level and their limited resources. The solution is to decentralize responsibilities to levels of government closer to those problems. Decentralization gives the local governments in both urban and rural areas responsibilities that used to be handled by central government, such as investment and trade promotion, as well as new responsibilities, such as environmental management. It also creates opportunities for the population in the regions to articulate their ideas and demands more effectively. The rise of regionalism is accompanied by an increasing number of references in recent literature to the emergence of the regions as more or less autonomous units in the advent of a global economy. Peirce and Johnson (2000) coined the term citistate to describe how metropolitan regions have begun to operate in the global economy. They define a citistate as a region consisting of one or more historic central cities surrounded by cities and towns with a shared identification and social, economic and environmental interdependence. A citistate does not have political boundaries, but it is a reality. It functions as a zone for trade, commerce and communication. It is a labour market, a commuteshed, a broadcast area and the circulation area of a newspaper. Citistates
74
made little sense under the old paradigm, federal, state, local, but they emerge as the centrepiece of a new paradigm, global, regional and neighbourhood. Economists have also looked at the two examples of Hong Kong, China and Singapore, city states that could draw on an almost unlimited international labour pool and invest in nearby countries for the labour-intensive parts of the production process. Hardjono (1987: 284) reported that a vision had been around for some years of Java in the year 2000 as an island-state, analogous to Singapore but on a much larger scale. Phongpaichit and Baker (2000: 48) mention that some urban pundits speculated that Bangkok would grow faster without its rural dead weight. Kunio (1999: 78) suggests the introduction of the Hong Kong model, an arrangement of one country and two systems. There used to be a minimum size for a country to be viable, but that is largely gone. Prosperous economies can be small, as Singapore and Hong Kong, China show. Regions need not even be part of a single country. The growth triangle of Singapore, Johore in Malaysia and the Riau Islands of Indonesia is a natural economic zone in a borderless world (Ohmae 1995: 100). There is no doubt that decentralization will bring the government closer to the population, achieve a better match between local needs and priorities and government interventions, and allow regions to exploit their comparative advantages as part of the global rather than the national economy. However, decentralization can also cause problems. In the chapter on rural development, it was already mentioned that many local and regional institutions lack, as yet, the capacity to manage a district or a region, and to practice good governance. Fiscal discipline on the part of local and regional governments has often been cited as a real problem of decentralization. This could, however, be seen as a transitional problem that will disappear with capacity-building. Regions may pursue their own interests without taking into account the interests of disadvantaged regions and the country as a whole. Decentralization can increase the occurrence of the Nimby (not in my back yard) syndrome. Conclusion In the past, rural development policies and programmes were often designed in government offices and approved in councils in urban areas without any involvement of the presumed beneficiaries. The arguments for such an approach may have been that technical expertise was scarce and, therefore, concentrated in the capital city and that the rural population lacked the capacity to participate in the decision-making about its future. If that was ever true, the advancement of education and the extension of the mass media into the rural areas have changed the situation. Today, rural communities are well aware of their own situation and that of others. They are demanding that the problem of rural-urban disparities
75
be urgently addressed. Rural development programmes can succeed only if they are based on local initiatives and if communities develop a sense of ownership. Decentralization of authority to lower levels of government, community empowerment and a responsive attitude among government officials are now critical for effective rural development programmes. Only this can ensure that development policies and programmes meet the specific needs of the community and match its priorities and conditions. It can also guarantee that the community develops a sense of ownership for the development programme or project, and that these make use of local knowledge and fit local institutions. However, rural development cannot be successful unless the rural economy grows and rural employment is generated. To a large extent, this will depend on the state of agriculture.
76
THE FUTURE OF AGRICULTURE
Chapter VI. The future of agriculture

The future of the urban and rural areas and their balanced development in Asia and the Pacific will depend to a large extent on developments in the agricultural and industrial sectors in the region. In the next chapter, the future of the urban economy will be discussed in light of the emergence of the knowledge society. This chapter looks at the future of agriculture. Agriculture in the region faces a number of new challenges. Owing to urbanization and economic growth, there will be an increasing, but changing demand for food and other agricultural products. In many countries, agriculture will encounter environmental constraints, such as a shortage of water and of fertile land. New technologies will become available, but they may be inaccessible for small-scale farmers. The question will be whether large sections of the rural population will be able to make a living in the rural areas or will have to migrate to the urban areas. Green Revolution Food security has been one of the priorities of governments in Asia and the Pacific. For several decades the Green Revolution provided that security. The term Green Revolution refers to many different combinations of agricultural techniques, but one of the most revolutionary technological innovations was the introduction of high yielding varieties of basic crops. These new varieties can increase the yield per unit area significantly and thereby expand output. However, the crops have to grow under the right conditions, such as a carefully controlled supply of water and fertilizers in exactly measured amounts and at the right times during the period of growth. Because the new varieties are more vulnerable to plant diseases and insect attacks than the traditional ones, they have to be sprayed or treated in other ways with pesticides and insecticides (Martinussen 1999: 140). Table 6.1 Indices of food production per head (1979-1982 = 100.0)
1974-1976 1979-1982 China India Asia World
Source:
1984-1986 120.7 110.7 111.6 104.4
1994-1996 177.7 128.7 138.7 108.4
1996-1997 192.3 130.5 144.3 111.0
90.1 96.5 94.7 97.4

Sen 1991: 206.
100.0 100.0 100.0 100.0
77
The Green Revolution was considered an agricultural strategy distinct from others because it allowed for the absorption of more labour by agriculture, and it utilized scarce fertile land and capital more effectively. The Green Revolution has been highly successful in stimulating agricultural production in Asia (table 6.1). The considerable growth in production made countries self-sufficient in food crops and allowed some to increase agricultural exports. Equally important, the Green Revolution was considered scale-neutral, in other words, equally suitable for small and large landholdings. The scale-neutrality was often highlighted because it meant that resource-weak groups in agriculture could also benefit (Martinussen 1999: 140-141). Critics have argued that the Green Revolution may have been scale-neutral, but it was definitely not resource-neutral. The new varieties of crops produced high yields only if the farmer was able to grow them under the right conditions, with irrigation, extensive use of fertilizers and plant protection. It was assumed that the farmer would have the resources to buy these inputs or have access to credit to do so. However, a considerable proportion of the small-scale farmers in Asia do not have the means to acquire the inputs. As a consequence, the Green Revolution benefited the small-scale farmers appreciably less than the large-scale farmers. Moreover, many large-scale farmers started to mechanize their farms as a result of the Green Revolution. This reduced the need for labour and may have brought about a net decline in employment in agriculture (Martinussen 1999: 141). Table 6.2 Undernourished population in Asia, 1990-1998
Number of population undernourished (millions) 1990-1992 East and South-East Asia South Asia
Source: FAO 2000a.
Percentage of population undernourished 1990-1992 17 27 1996-1998 12 23
1996-1998 220 294
283 302
Rosset, Collins and Lapp (2000) argue that new technologies such as the Green Revolution always favour the rich over the poor, if equitable access to the technology is not ensured. Poor farmers cannot afford to buy inputs in volume, while the rich farmers can obtain discounts for large purchases. Poor farmers cannot hold out for the best price for their crops, as can richer farmers. Water is the limiting factor in farming success, and irrigation is often out of the reach of the poor. Tube-wells favour the bigger operators, who can better afford
78
the initial investment and have lower costs per unit. Subsidized credit overwhelmingly benefits the big farmers. Small farmers depend on local moneylenders and pay interest rates several times higher than wealthier farmers. Most of all, the poor lack political clout. They cannot command the subsidies and other government favours accruing to the rich. East, South-East and South Asia have, nevertheless, made impressive gains in agricultural production since 1970 (FAO 1999). They have been able to more than double their cereal production and increase their share of global cereals output from 31 to 38 per cent. They increased the output of vegetable oils more than fivefold and raised their share of global production from 25 to 44 per cent. Production of livestock products more than trebled, and its share of global production rose from 25 to 45 per cent. Overall, however, production lagged behind consumption and the region has not been able to increase its share in the world export markets, with the exception of vegetable oils. Many countries increased production as well as imports to supply the rapidly growing domestic markets with food, but this has made the countries concerned dependent on other countries for the fulfilment of a basic human need. By 2025, Asia will be the home of about 4 billion people and rice production will have to increase considerably for each person to have enough food. Expected economic growth will not only increase total food demand, but also alter the eating habits of the predominantly urban population. Food consumption in the industrialized world today is around 3,400 kilocalories per head per day, and this will increase by 2 per cent to 3,470 kilocalories over the next 25 years. Over the same period, calorie consumption in Asia (including China) will rise from 2,400 kilocalories per head per day to 2,840 kilocalories, an increase of 18.3 per cent. In other words, about 50 per cent of the population of the world is moving from low calorie consumption to a more nutritious dietary level (Kern 2000). Farmers will have to react by diversifying towards high-value and high income-elastic crops and products. Sawant and Mhatre (2000: 114) conclude that the agricultural development strategy to be pursued should have three core components: (a) the promotion of diversification of agriculture, (b) a proactive emphasis on technological development for non-food-grain crops and livestock products besides food-grain crops, and (c) the provision of efficient infrastructure support covering credit and market-related services to the rural areas. In the twentieth century, the major sources of growth in food production were area expansion, the introduction of high-yield crop varieties, increased use of agrochemical inputs and increased intensification through irrigation. They were part of the Green Revolution. Without the Green Revolution, there would
79
have been large food deficits or adverse environmental impacts from bringing large areas of less suitable land under cultivation. A new question is now being asked (Rodale Institute 1999). Can future world food needs be met by more of the same kind of agricultural investments or is there a need for a different kind? Food security It seems that the techniques of the Green Revolution have largely done their work. Grain land productivity increased by 240 per cent between 1950 and 1995, but water use for irrigation also increased by 220 per cent as a result of subsidized rural electrification and the availability of small and cheap water pumps (Leslie 2000). In recent years, yields have started to stagnate or even decline and some scientists believe that soils become depleted when subjected to the two or three annual crops made possible by irrigation. The possibility of continuing the Green Revolution during the twenty-first century is limited, and the opinions on the ability of the world and of Asia to feed itself during the next decades vary widely. Farmers are thus facing some serious challenges (WRI 1996: 228-229). Table 6.3 Cereal balances by region for all cereals, 1964-2030
Year Demand Per capita (kgs) Total (million tons) Food All uses Food All uses South Asia 1964/66 1974/76 1984/86 1995/97 2015 2030 145 142 154 169 186 192 162 161 173 188 208 218 92 114 154 211 306 368 102 128 173 235 343 418 East Asia 1964/66 1974/76 1984/86 1995/97 2015 2030
Source:
Production (million tons)
Net trade (million tons)
SSRa (%)
88 125 173 227 327 392
-10 -10 -3 -1 -16 -26
86 98 100 97 95 94
146 161 200 194 194 187
181 210 263 292 320 341
150 211 308 348 413 432
186 275 405 526 683 787
183 266 391 493 624 708
-5 -10 -12 -37 -60 -79
98 97 97 94 91 90
FAO 2000. a SSR (self sufficiency rate): production/demand.
80
The Green Revolution has had negative consequences for the environment. In Central Luzon (Philippines) the rice yield increased by 13 per cent during the 1980s, but this came at the cost of a 21 per cent increase in fertilizer use. In the Central Plains, yields went up only 6.5 per cent, but fertilizer use rose 24 per cent and the use of pesticides jumped by 53 per cent. West Java (Indonesia) saw a 23 per cent increase in yields, but an increase in the use of fertilizers and pesticides of 65 and 69 per cent respectively. The increase in the use of insecticides, pesticides and chemical fertilizers has led to contamination and degradation of the soil. Pesticide use also resulted in the development of stronger pests which in turn had to be exterminated by harsher and more powerful chemicals. Where yields are not declining, the rate of growth is slowing or leveling off in the following countries, China, the Democratic Peoples Republic of Korea, Indonesia, Myanmar, Pakistan, the Philippines, Sri Lanka and Thailand (Rosset, Collins and Lapp 2000). Asia has no more land on which to expand rice production (Network 2000: 10). New lands are marginal and environmentally sensitive and may not make up for the land being removed from cultivation each year because of urbanization and environmental degradation. Agricultural activities have often suffered from and caused environmental degradation. The combination of rapid urban development and industrial growth, extensive deforestation and unsustainable agriculture, including inadequate soil conservation, cultivation of steep slopes and overgrazing has had a devastating impact on land resources. Table 6.4 Soil degradation by land use in Asia, 1990
Total (millions of ha.) Agricultural land Permanent pastures Forests and woodlands All used land
Source:
Degraded (millions of ha.) 206 197 344 747

a
Degraded (%) 38 20 27 27 a
536 978 1 273 2 787
Scherr 1999: 18. a Seriously degraded: 453 million hectares (ha) (16 per cent).
In South-East Asia, land conversion has been intensified by increased commercial logging and the introduction of commercial crops (UNEP/Earthscan 1999: 75-76). The introduction of the cash economy has induced some hill tribes to convert unsuitable upland areas for intensive commercial cropping. In Indonesia and Malaysia, rural people who relied on traditional shifting cultivation have been forced to move to marginal lands, with declining productivity as a result.
81
In China, the extent of arable land decreased, largely owing to land degradation. Overall, there is less land per person in Asia and the Pacific than in other parts of the world. Population density is the highest in South Asia. Water is rapidly becoming scarce. New irrigation projects are becoming expensive and subject to much stricter environmental standards than before. During the past century, the withdrawal of fresh water from surface water bodies, aquifers and other sources in Asia increased from 600 cubic kilometres in 1900 to 5,000 cubic kilometres by the mid-1980s. This is more than in any other part of the world. Agriculture, particularly irrigated agriculture, accounts for the major part of water withdrawals. In the more industrialized countries of the Asian and Pacific region, agriculture accounts for up to 50 per cent of the withdrawals; in South Asian countries, it accounts for more than 90 per cent. Water development programmes for hydropower and water supply to meet the growing domestic and industrial needs, and deforestation in important watersheds have reduced river levels and depleted wetlands. Mismanagement of water resources and increased irrigation (table 6.5) have used groundwater reserves faster than they can be replenished. The depletion of underground aquifers is one of the major problems now facing agriculture. During the last few decades, farmers in the rural areas (like factories in the urban areas) have been pumping groundwater faster than nature can replenish it, causing a steady drop in water tables. Many food-producing regions are, therefore, sustained by the hydrological equivalent of deficit financing. Contamination by pollutants has degraded water quality, reducing the amount of clean water available (UNEP/Earthscan 1999: 83). Table 6.5 Changes in irrigated arable land, 1961/63-2030
Irrigated land in use (million hectares) Period/year South Asia excl. India East Asia excl. China
Source:
Annual growth (% p.a.) 2030 95 25 85 25 1961/ 1997 2.2 1.9 1.5 2.0 1995/ 1997 0.6 0.2 0.6 0.8
Land in use as per cent of potential 1995/ 1997 55 82 62 40 2030 67 89 76 52
1961/ 1963 37 12 40 10
1979/ 1981 56 17 59 14
1995/ 1997 78 23 69 18
2015 85 24 78 22
FAO 2000: 110.
82
The State of the World 2000 report (WWI 2000: 41-42) recounts: (a) The situation in India is severe, and nine states are running major water deficits of just over 100 billion cubic metres a year in aggregate. Village surveys in Haryana and Punjab found that water tables dropped 0.5-0.7 metres a year. As the water table drops, farmers must drill deeper wells and buy larger pumps to lift the water to the surface. This is widening the gap between rich and poor farmers; (b) In Bangladesh, groundwater use is about half the level of natural replenishment on an annual basis. During the dry season, however, when irrigation is most needed, heavy pumping causes many wells to go dry and farmers run out of water. In about a third of the irrigated area in Bangladesh, water tables routinely drop below the suction level of shallow tube-wells during the dry season. Again, the poor farmers cannot afford to deepen their wells or buy bigger pumps; (c) Because of groundwater over-pumping amounting to some 30 billion cubic metres a year, northern China is running a chronic water deficit. The water table across much of this part of China has been dropping 1.0-1.5 metres a year, while water demand continues to rise. The projected 2025 water deficit for the Hai River and Yellow River basins is roughly equivalent to the volume of water needed to grow 55 million tons of grain or 14 per cent of the current annual grain consumption of the country. Just as urban areas have a negative environmental impact on the rural areas, rural areas have negative environmental impacts on the urban areas, where they affect the urban poor in particular. Dependence on agriculture by a growing rural population can lead to deforestation and soil erosion, which often results in excessive sedimentation in delta areas where many cities are located. The resulting obstruction of the river mouth causes water levels to rise and to inundate low-lying urban areas. Many of the urban poor tend live in the most hazardprone areas. Concerns over the environment also rule out greater use of chemical fertilizers and pesticides as a means of boosting rice production. Therefore, most of the future increases in agricultural production must come from biological yield increases alone. Production on existing land will have to double to provide a diversified, storable and transportable food supply to an expanding urban population (World Bank 2000b: 23). Despite the many obstacles to increases in food production, most studies forecast that production increases can accommodate the effective demand and rising world population, although the studies are less optimistic about the possibility of reducing under-nutrition. An important unknown in this equation is the use of genetically modified crops.
83
Crops could be genetically modified to increase yields, make them resistant to pests and adapt them to specific climatic and soil conditions. However, the long-term effects on human health and the natural environment are not yet clear, and this makes farmers and consumers hesitant. Table 6.6 Sources of growth in crop production, 1961-2030
Arable land expansion (%) 1961-1997 1997-2030 East Asia South Asia
Source: FAO 2000: 97.
Increase in cropping density (%) 1961-1997 14 -6 1997-2030 12 12
Yield increase (%) 1961-1997 1997-2030 79 80 83 83
7 26
5 5
Modernizing agriculture The conventional approach to enhancing agricultural production and productivity to meet the growing demand is to modernize agriculture through a process of land consolidation and mechanization. With this approach, production increases are only possible if farming systems employ significant amounts of capital and apply industrial products and production methods. Lockeretz (2000) calls this the industrialization of agriculture. Such modern agriculture may have the following characteristics: Few, but large and specialized farms The replacement of labour by machinery and other capital investments Use of inputs external to the farm Livestock production in confined, factory-style facilities using brought-in feeds, with reliance on antibiotics and growth hormones Concentration of production in regions with the lowest production costs Long marketing and distribution chains from producers to consumers Vertical integration of farms with processors and distributors through contracting or outright ownership of the former by the latter Emphasis on interchangeable commodities rather than regionally characteristic speciality foods
84
According to some (Rodale Institute 1999), this conception of agriculture ignores the fact that larger farms may be more profitable for their owners, but are seldom more productive in terms of returns to land. The reason is that larger holdings are farmed less intensively than smaller ones. When capital is substituted for labour, it lowers yields more often than it raises them. Kern (2000) sees the development of a second type of modern agriculture besides large-scale farming: precision farming using custom-designed agricultural strategies to fit, for example, the farming culture, environmental conditions, climate, hydrology, crop choices and water use patterns. Precision farming uses detailed and site-specific information to manage the production inputs with the precise application of herbicides, fungicides, pesticides and fertilizer, as well as finer adjustment of seeding rates. It increases productivity but uses fewer inputs, and is, therefore, environmentally more sustainable. According to Postel (2000: 48), drip irrigation ranks near the top of measures with substantial untapped potential. When combined with soil moisture monitoring or other ways of assessing the water needs of crops accurately, drip irrigation can achieve efficiencies as high as 95 per cent compared with 50-70 per cent for more conventional systems. Precision farming may also be linked to information and satellite technology. Microchip sensors attached to a wheat combiner and linked by a transmitter to a global positioning satellite (GPS) can measure exactly how much wheat is being harvested from each acre of a field. This enables the farmer to determine differences in yield between some acres and others, and to decide which varieties of crops grow best in which soils. It allows the farmer to decide on the water level and the most appropriate fertilizer to produce the highest yields, given the specific soil, moisture and slope of land. Linked to the satellite, the farmer can apply the correct amount of fertilizer for each part of the field (Friedman 2000: 89-91). While large-scale, capital-intensive farming and capital-intensive precision farming can improve productivity, increase the income of farmers and enhance food security, they also require knowledge and capital for investments. The problem with these new technologies is that they are, again, not affordable and accessible for small-scale farmers and the poor. In the process of the industrialization of agriculture, many rural households will have to leave the rural areas, because small- and medium-scale farming will not be able to compete with mechanized and capital-intensive large-scale farming. Alternative agriculture To protect the traditional farmers and the natural environment, some are calling for alternative forms of agriculture, such as agro-ecological or sustainable farming. Agro-ecological approaches seek to create optimum growing conditions
85
for plants and animals, not as individual specimens but as parts of larger ecosystems. In this form of agriculture, nutrients and other ecological services are provided and recycled in mutually supportive ways. The characteristics of agro-ecological farming are (Lockeretz 2000): Emphasis on the production of safe, wholesome, high-quality and authentic foods Integration of diverse enterprises into a balanced farming system striving for closed nutrient cycles Reliance on the farms own feeds, plant nutrient sources and other resources rather than those brought in from outside Less intensive production methods with lower yields, but also lower costs Preservation and enhancement of soil quality through livestock manures, green manures and appropriate crop rotations Enhancement of natural means of pest control, such as predators and parasites Adherence to environmental values Farms big enough to support a family, but not much bigger Emphasis on the craft of farming, with sophisticated management by committed, knowledgeable and ecologically aware farmers Close contact between consumers and producers Maintenance of farmers as the heart of the food production system, rather than subordinating them to processors, marketers and input suppliers Farming as a contribution to the social and economic vitality of rural communities
The proponents of alternative agriculture recognize that urban and non-agricultural development is inevitable and that it is unrealistic to expect that agriculture can employ indefinitely the same share of the labour force as it does today. They also acknowledge that agro-ecological or sustainable farming is not intended to keep rural residents down on the farm. Its aim is to enable farmers to improve their livelihoods and especially their human resources so that they can have more desirable choices (Rodale Institute 1999).
86
Lockeretz (2000) expects that agriculture will continue to become more industrialized because this will serve important interests: the interest of the consumers in cheap food, the interest of the farmers in making a profit and the interest of society in having a secure food supply. The industrialization of agriculture will also be given impetus by the liberalization of world trade in agricultural products. Liberalization favours production at the lowest possible cost over production that gives more weight to food quality and safety, environmental protection, and equitable treatment of workers. However, there is also a future for alternative agriculture, even if its products are more expensive. As affluence spreads in Asia and the Pacific and countries set tighter regulations on food safety and the environment, there may be a shift in consumption patterns. For the growing urban middle class, the price of food may become less important. Consumers may be prepared to pay more for food that they perceive as superior because it is fresher, safer or more interesting and varied. There may be an increase in demand for high-value products of superior quality, with health-promoting characteristics, naturalness and environmental compatibility, rather than for simple inexpensive food products. High value added agriculture offers farmers potential economic benefits in the international market. With increasing trade liberalization, countries that produce undifferentiated bulk commodities will have to compete on price alone. An alternative is to offer products with a distinctive identity and of a higher quality than the competition and to cultivate a green image for such products internationally. The expansion of markets for high-value, income-elastic agricultural products is a common trait behind agricultural diversification in several countries in Asia and the Pacific. The products in question include meat and dairy produce, fish and fish products, fruits and vegetables, sugar and sugar confectionery, vegetable oils and oil seeds, nuts and spices. The demand for these products tends to increase at a much faster rate than income, and the products command relatively better terms of trade than other primary commodities. Their production is highly labour-intensive and involves participation by small-scale farmers and small enterprises (ESCAP 2000: 37-38). A lesson learned from the Green Revolution is the need for a critical assessment of the application of new technical prescriptions in agriculture (HowardBorjas 2000). Technologies for sustainable agriculture differ from conventional ones in that they rely more on natural processes and local ecological conditions, as well as on human labour, knowledge and skills. In this sense, they represent a return to pre-industrial techniques that were subordinate to the local environment; to the knowledge and skills of the producer; and to values other than technical rationality and efficiency.
87
The shift from conventional farming to sustainable agriculture requires the substitution of chemical inputs with management techniques and labour processes that improve biophysical interactions in these systems. In this way, the quality of the soils can be maintained, pests and diseases can be controlled, soils and water can be conserved, and the use of energy and feed can be managed without the need for excessive external inputs. However, the recycling of plant nutrients, the fixation of biological nitrogen, hand weeding and husbandry methods to control pests require changes in labour inputs. Optimum timing is critical, and more labour may be required to manage it and carry out more small tasks. Other factors increasing labour requirements include specialization, management of greater genetic diversity, and an increase in tasks associated with on-farm processing and direct marketing, as well as more training and participation in organizations (Howard-Borjas 2000). The United Nations Development Programme compiled a series of case studies that examined experiences with organic farming and sustainable agriculture. In Indonesia, labour costs on a six-hectare organic farm ran twice as high for cabbage and four times as high for carrots in comparison with conventional farms. For farm families with a shortage of labour, the higher labour investment and the cash payment of hired labour, especially during labour peaks, can be a problem. On a tea plantation in Tamil Nadu, India, with 312 hectares of organic production, the total labour required for one field was approximately 84 days prior to conversion to organic production, whereas the total number of days after conversion was 414 days. The increase was due to labour for trenching (196 days), weeding (135 days) and shade (24 days). In other words, conversion to organic farming is a mid-term investment. It requires more labour that needs to be financed, and a financially successful conversion depends on getting a premium price in the market (UNDP 1992: 39, 52-53). The functions of agriculture Discussions on the future of agriculture have recently expanded from a narrow focus on agriculture as an economic activity that produces food and other crops and that provides income to a rural population, to a broad vision that agriculture has a number of important additional functions or positive externalities in addition to crop production. The observed multifunctionality of agriculture acquires a normative character when it is implied that any agricultural policy should aim not only at increasing production and the income of farmers, but also at promoting the additional functions and maximizing these positive externalities. The important positive externalities of agriculture are food security, environmental protection and the preservation of agriculture as a way of life (FAO 1999a):
88
(a) Food security means that all people have physical and economic access to the basic food they need to work and function normally (WRI 1996: 235). This objective or function of agriculture receives high priority in many countries, mainly for strategic reasons, even if food security as such is hardly in question in normal conditions. Owing to high food production costs, it would be most cost-efficient for some countries to rely entirely on world markets for their food supplies. However, because of the uncertainty associated with future international supplies, national production policies are a central element in food security policy. The 1997 financial crisis accentuated the importance of national food security. As currencies collapsed, the cost of (imported) food in Indonesia soared, resulting in food riots, while food prices in Thailand remained stable because most food was produced locally (Phongpaichit and Baker 2000a: 203); (b) Evironmental protection is an added value of agriculture. The perception of the potential for agriculture to yield environmental services is now widely accepted and the provision of environmental benefits and amenities is increasingly seen as an element of the multifunctionality of the agricultural sector. Agriculture can contribute to the protection of natural resources, including natural habitats and biodiversity, and thereby to the sustainability of food production systems, disaster prevention and the protection of rural landscapes. The argument for agriculture as a means of environmental protection highlights in particular the closeness to nature of the traditional farmer and the indigenous knowledge of the natural environment on the past of the farming community; (c) There are also social and cultural benefits in promoting agriculture. Many countries are concerned about rural-urban migration and the depopulation of the countryside. They prefer to maintain populated rural landscapes and viable rural communities. They may feel that an agrarian structure based on many relatively small, owner-occupied family farms is more conducive to social stability and cultural preservation than one dominated by relatively few large holdings. Agriculture is seen as a traditional way of life with cultural and societal connotations. The break up of rural society would result in a loss of cultural heritage and indigenous knowledge accumulated in rural communities over centuries. In this way, the future of the rural areas and the rural population is closely linked to the future of agriculture. Agriculture is not only an economic activity, but also a political, environmental and social activity. The similarities to and links with environmental protection and biodiversity are obvious. Just as the disappearance of species reduces the richness of nature and will have unpredictable consequences for the local and global biophysical system, the disappearance of rural communities will be a loss for humankind. Not only will the cultural diversity of the world be reduced, but valuable indigenous knowledge will also be lost
89
forever. This raises a fundamental question about the costs and benefits of development. Are countries better off with large sections of their population living in the rural areas, involved in small-scale agriculture, but at a lower level of economic development? Or are they better off with the vast majority of their population in urban areas, employed in the urban-industrial sector at a higher level of economic development? These questions are not new; they have been asked before. Policy makers in developing countries had to make this choice immediately after independence and most opted for an urban-industrial future. In his book The discovery of India, first published in 1946, Jawaharlal Nehru (1983: 403) addresses the question, symbolized in the choice between big industry and cottage industry. He stresses that the Congress Party had always been in favour of the industrialization of India and, at the same time, had emphasized the development of cottage industries as promoted by Mahatma Gandhi. Nehru agrees that there was, nevertheless, a fundamental difference between Gandhis outlook on life and what might be called the modern outlook. While he had an unrivalled knowledge of the Indian village and the conditions of life that prevailed there, Gandhi looked back with yearning to the days of the old autonomous and more or less self-contained village community where there had been an automatic balance between production, distribution and consumption; where political or economic power was spread out and not concentrated as it is today; where a kind of simple democracy prevailed; where the gulf between the rich and the poor was not so marked; where the evils of the great cities were absent and people lived in contact with life-giving soil and breathed the pure air of the open spaces. (Nehru 1983: 404). Nehrus choice is also clear. It can hardly be challenged, he argues that in the context of the modern world no country can be politically and economically independent, even within the framework of international interdependence, unless it is highly industrialized (1981: 407-408). A country cannot achieve or maintain high standards of living and liquidate poverty without the aid of modern technology in almost every sphere of life. Thus, in Nehrus view, any attempt to build up a countrys economy largely on the basis of cottage and small-scale industries is doomed to failure. The question has more recently come back to haunt policy makers, as the destructive impact of rapid economic development on the environment becomes clear and globalization threatens national identity and independence. In Thailand, the financial crisis of 1997 called into question the economic policies of the previous two decades. It revived interest in the local culture of rural communities where a majority of the population lives and works. In what Phongpaichit and Baker (2000a: 193-216) call the localism discourse, social critics questioned the urban-industrial development strategy followed by successive governments
90
at the expense of agriculture and rural society. Some critics called for the revival of agriculture to replace industry as the main economic activity in a country, and stressed the need to promote the traditional village culture as an alternative to a global urban-industrial culture. The most radical among the environmentalist groups are questioning, if not outright rejecting, all endeavours to master nature through science and technology. They suggest that humankind might be happier if nature were not manipulated, but returned to the pre-industrial state. Fukuyama (1992: 83) links these ideas to the eighteenth century French philosopher Jean-Jacques Rousseau, who believed that historical change had served to make men and women profoundly unhappy. In Rousseaus thinking, true human needs are actually very few in number: people need shelter from the elements and food to eat. All other human wants are not essential to happiness, but arise out of peoples ability to compare themselves with their neighbours and consider themselves deprived if they do not have what others have. In other words, except for some true human needs, all deprivations are social constructs resulting from unbalanced development. Conclusion Two opposite views on agriculture and the rural areas are emerging. On the one hand, there is the view that agriculture will need to provide the food to feed the growing population, and that increased agricultural production and productivity will require the application of new technologies. The lesson from the Green Revolution is clearly that the small-scale farmers and the poor will not be able to benefit directly from any new technology unless many other conditions are met simultaneously. That would mean that a large section of the rural population would have to make a living outside agriculture, either in rural industries and services or in the urban areas. On the other hand, there is the view that agriculture has functions other than providing food, and that farmers should turn to sustainable agriculture and grow high-quality, green products. In many respects, sustainable agriculture is like a new technology that requires new skills with all the implications of a new technology. Sustainable is also labour-intensive, and the resulting products may not be competitive. The ultimate question is how many people in the rural areas will have an adequate livelihood, while preserving the rural way of life.
91
Chapter VII. The knowledge society

Information technology will make it easier to provide certain services in remote areas, and create and improve economic opportunities for farmers and rural businesses. The introduction of new technologies can reduce imbalances between urban and rural areas, but it can also create new disparities between those who know how to use the technology and those who do not. This will apply in the rural areas, but it will apply even more in the urban areas, where more and more employment will be knowledge-based. To be ready for the emerging knowledge society, good, lifelong education will be a necessity. Information and telecommunications One of the most significant trends in the world today is the development of information and communication technology. It is predicted that the information and communication revolution will have an immense impact on economic and social conditions around the world, including rural-urban disparities. Rapid advances in telecommunication and computer technologies, together with lower costs for the equipment and related services, will give ever more people access to telephones, faxes and the Internet. These will make it possible to link people in remote locations to all sorts of essential information and services. However, the information revolution may also create disparities between those who know how to make use of the new technologies and those who do not. Poor rural areas that have never seen telephones are gaining access to digital and microwave telephone systems and payphones that are low-cost and efficient (Richardson 1999). Telecommunications creates a vital link between rural and urban areas and one that will reduce the rural-urban divide. The establishment of basic information infrastructure in rural areas will not only improve communication, it will also promote small business development, create jobs, generate income, improve agricultural production and marketing, and contribute to better health, education and social welfare. Studies in Colombia and the Philippines have shown that the ratio of productivity gains arising through the use of the telephone service exceeds the annual cost of providing service by at least 20: 1. Telecommunications will make it possible for people in rural areas to carry out a range of commercial functions quickly and easily (Ernberg 1999; Ernberg 1999a; Barr 1999 and Barr 1999a). The required factors of production, such as raw materials and production tools, following up on contracts and exploring business opportunities are arranged more easily. Entrepreneurs, cooperatives
92
THE KNOWLEDGE SOCIETY
and small enterprises need market information on current prices and expected demand for their products and services (Bayes, von Braun and Akhter 1999). Farmers are in a disadvantaged position when it comes to selling their crops because they do not have adequate market information to obtain the best price for their products. The Internet enables farmers to auction their products instead of selling them to middlemen. Telecommunications enables farmers and other entrepreneurs to carry out transactions such as making bank deposits, paying bills and obtaining credit electronically. It facilitates access to government services and timely information about taxes and subsidies that are required for competitive businesses to develop in rural areas. At the moment, disparities in access to telecommunication facilities between urban and rural areas in most countries are still wide (table 7.1). Rural telecommunication systems often provide telephone lines and equipment only to government offices, the local elite and the homes of the police and local officials. The widespread availability of telecommunications is of critical importance in order to develop the rural areas and improve the living conditions of the rural poor (Richardson 1999). Table 7.1 Main telephone lines in urban and rural areas, 1995
Urban 1995 Population % Armenia Azerbaijan Bangladesh Bhutan China Fiji Iran, Islamic Rep. of Kazakhstan Kiribati Korea, Rep. of Kyrgyzstan Maldives Micronesia Mongolia 68.7 52.7 18.3 6.4 29.0 73.1 60.0 59.7 35.5 81.3 38.9 25.7 42.4 51.9 Main lines per 100 % inhab b
a
Rural 1995 Population % 31.3 47.3 81.7 93.6 71.0 26.6 40.0 40.3 64.5 18.7 61.1 74.3 57.6 48.1 Main lines per 100 % inhab b
a
81.3 82.5 91.0 84.0 80.2 80.0 87.0 77.6 51.0 88.0 73.0 88.6 70.0 32.0
18.33 14.68 1.09 8.59 9.26 30.36 10.97 15.33 3.59 40.27 13.62 19.55 12.16 2.13
18.8 17.5 9.0 16.0 19.8 20.0 13.0 22.4 49.0 12.0 27.0 11.4 30.0 68.0
9.29 3.47 0.02 0.11 0.94 20.63 2.46 6.56 1.9 23.87 3.21 0.87 3.84 4.88
93

Urban 1995 Population % Myanmar Pakistan Papua New Guinea Philippines Russian Federation Samoa Sri Lanka Tajikistan Thailand Togo Tonga Turkey Turkmenistan Uzbekistan Viet Nam Asia World
Source:
Rural 1995 Population % 71.3 65.3 83.9 45.8 26.9 79.0 78.5 74.2 75.9 67.0 78.0 37.4 55.1 58.7 79.2 66.1 54.9 Main lines per 100 %a inhab b 37.5 5.0 14.0 23.8 13.5 40.0 65.0 17.8 38.4 2.0 48.0 14.7 15.0 19.6 50.0 21.2 16.3 0.14 0.11 0.16 0.86 8.49 1.95 0.92 1.08 3.03 0.02 4.15 8.29 1.83 2.25 0.22 0.88 1.24
Main lines per 100 %a inhab b 62.5 95.0 86.0 76.2 86.5 60.0 35.0 82.2 61.6 98.0 52.0 85.3 85.0 80.4 50.0 78.8 83.7 0.57 3.86 4.97 2.31 20.11 10.99 1.81 14.4 15.33 1.56 15.94 28.85 12.76 13.11 0.85 6.36 7.74
28.7 34.7 16.1 54.2 73.1 21.0 21.5 25.8 24.1 33.0 22.0 62.6 44.9 41.3 20.8 33.9 45.1
ITU 1998: A32-A35. a Urban main lines percentage refers to the percentage of main telephone lines in urban areas. b Main lines per 100 inhabitants is calculated by dividing the number of main lines by the population and multiplying by 100.
Most public and private telephone companies are, however, reluctant to develop a telecommunication system in rural areas owing to the anticipated limited demand. Experience in various countries has shown that community-based telecommunication systems in rural areas can be successful (NTCA 1998). Local, independent telephone systems can be owned by the community they serve and can be connected with the network of the national telephone company. An example of this type of system is a community-owned telephone cooperative. Such cooperatives are used successfully to serve rural areas in countries where governments lack the resources to do so, or where large private companies are not interested in serving rural areas because greater profits can be made in urban areas. If communities play a role in the planning and development of the service
94
and contribute equity and labour, community-based telephone systems can be quite affordable.
Box VII.1 Grameen village pay phones in Bangladesh Grameen Telecom is a company dedicated to bringing the information revolution to the rural people of Bangladesh. It provides cellular mobile phone service to 100 million rural inhabitants in 68,000 villages of Bangladesh. The Grameen Bank established a revolving loan fund to enable women to borrow micro-loans in order to purchase cellular phones. The women rent the cellular phones to other people in their villages to make and received calls. Grameen Telecom provides two kinds of products for rural people: Village pay phone: The aim of this initiative is to finance village pay phones through selected member borrowers of the Grameen Bank, and to bring modern telecommunication services to millions of the poorest people in the world. The members will purchase the telephone and make it available to all users in the village. They will undertake short message services and enable others to receive incoming calls. At a later stage, Grameen Telecom plans to introduce fax, email and other value-added services. Direct subscriber: There are many potential sources of demand for telephone service in the rural areas that are not directly related to activities of the Grameen Bank. Examples are local health centres, secondary schools and colleges, large farmers and local businesspeople. They can become direct sub-scribers of Grameen Telecom. The links to rural markets will promote trade through improved information, while students of rural schools will be introduced to the information age even before they have ever stepped out of the immediate neighbourhood of their village.
According to a study on the impact of the programme, the cost of a typical trip from a village to the capital city amounts to two to eight times the cost of a single telephone call. The telephone helps local residents reduce the risks involved in the transfer of remittances by family members working overseas. Thanks to the local telephone service, they know exactly how much money is arriving, when to expect it and how (or by whom) it will be delivered. The income of the village telephone operators now accounts
95
for an average of 24 per cent of total household income, and sometimes as much as 40 per cent, if the women had little or no income before. This added income has a profoundly positive effect on the well-being of the women and their families. At the same time, it benefits local entrepreneurs and businesspeople who are able to save significant amounts of time and money formerly spent travelling to sue a phone (GrameenTelecom 2001).
Richardson (1996) lists ten common elements of successful rural and agricultural Internet communication and information systems: Preliminary participatory communication and information needs assessments with intended users Awareness-building campaigns designed to sensitize decision-makers to the possible uses of Internet services Commitment by the executing agency to participatory rural and agricultural development A social service orientation on the part of the local private sector or not-for-profit internet service provider Open participation by the user community in the design, implementation and management of the communication and information services Institutional and user commitment to manage and sustain Internet services Ongoing provision of technical training, user support and outreach within the user community Combination of centralized and decentralized information production, analysis and distribution Ongoing provision of technical support and system maintenance/ upgrading A financial stake by the user community in the communication and information system (for example, ownership of hardware, user fees, salaries, infrastructure)
Telecentres can play an important role in poverty reduction, as they can integrate the poor into mainstream society and the economy. A telecentre is a
96
service that contributes to development by providing accelerated communitywide access to information, communication and education technologies and skills, creates self-sustaining community competence in the knowledge-based economy and builds markets and opportunities for the private sector. Telecentres develop human resources and create employment in an area where it is difficult to get work or where people lack the skills to obtain what work is available. A telecentre employs people, who are trained in business and information and communication technology (ICT) skills. An essential role of the staff of a telecentre is to provide training in the use of equipment in the telecentre (telephone, fax, computer and Internet) to members of the community. The greater the level of skill passed on by the telecentre staff, the more sophisticated a communitys use of information and communication technology will become. Telecentres provide rural communities with access to information on relevant educational and social programmes of the government, taxes, pensions and other areas of interest. Through long-distance learning programmes, they improve access to information, training, research and education resources. Telecentres facilitate the generation and exchange of community-based information. They can benefit women in particular, who are generally less mobile than men because of their reproductive responsibilities. Women can use telecentres for distance learning and networking. Through telecentres, young people can acquire advanced skills in information and communication technology without having to leave their villages. With the advancement of the knowledge-based society, workers increasingly need to be computer literate. Giving young people access to and training in this field increases their employability and builds a skilled workforce.
Box VII.2 Korean farmers access the Internet In the Republic of Korea, 51 per cent of urban households have a computer, but only 24 per cent of farm families do. It is the ambition of the Republic of Korea to be one of the most wired countries in the globe. As a relatively small country with good infrastructure, the Republic of Korea can more easily achieve that goal than vaster, poorer countries, and it has already had some successes. Some farmers who are able to check market prices of agricultural products on the Internet are now often able to sell at higher prices. Other farmers use the Internet to advertise the special qualities of their products and sell directly to the consumer (Spaeth 2000).
97
The success and impact of a telecentre depends on many factors, such as regulatory and legal policies, population density, income levels and the quality of the management and staff of the centre. A study by the National Telephone Cooperative Association (NTCA) draws the following conclusions about the sustainability of telecentres: (a) Telecentres that try to serve areas with sparse populations and few or no small and medium-sized enterprises generally have not been sustainable; (b) Small projects whose ownership and control is based within the community are more successful than large donor-driven telecentre projects, especially those with a significant geographical distance between the donor and the telecentre; (c) Consideration needs to be given to the location of the telecentre in gender-neutral institutions. Telecentres should be located in institutions that are accessible to both men and women are socially comfortable, such as libraries or schools; (d) Telecentres may work themselves out of existence. They may meet existing demand, but they also create new demand, in particular from small and medium-sized enterprises that can grow as a result of the presence of a telecentre. As the local economy grows, private-sector companies may become interested in investing in or providing telecommunications services to the area. Tele-education and telemedicine Telecommunications creates opportunities to provide basic services such as education and health care in an evenly distributed manner. Blurton (1999: 47) distinguishes five aspects of the educational use of information and communication technology: (a) accessing remote resources, (b) supporting new teaching methods, (c) facilitating collaboration, (d) extending educational programmes and (e) promoting information literacy. Information and communication technology can deliver educational programmes anywhere in the world and can help individuals learn throughout their lives. It makes it possible for people in widely dispersed locations to participate in virtual learning communities, learning groups based on a shared purpose rather than distinctions of location or age. Learners can be drawn together from almost anywhere in the world and can construct their own formal or informal learning group, crossing barriers of time, geography, age, ability, culture and status. Information and communication technology can turn teachers from information providers into learning facilitators and enable them to provide students with self-paced, self-directed problem-based learning experiences.
98
Once schools are connected, the students have access to a vast collection of learning resources. Digital libraries are being developed that include printed works, photographs, films and videotapes, paintings, 3D models, graphics, animations, software, reference material and audio files. An example of such resources is the CyberSchoolBus of the United Nations (www.un.org/Pubs/ CyberSchoolBus) which provides a complete curriculum for teaching and learning about global issues, such as human rights, the environment and infectious diseases. As an example, an overview of the module on urbanization is provided in table 7.2. Table 7.2 Urbanization module of the United Nations CyberSchoolBus
Component Project description How to use the curriculum Table of contents Animated information Cities fact game The ideal city Contents About this project, its subject matter and objectives. Some suggestions and a quick breakdown of the Cities curriculum. Six complete teaching units about cities, each with its own objectives, summary, text and activities. An interactive introduction to the Habitat conference. An interactive on-line quiz about cities around the world. What does your ideal city look like? Whats important? A classroom excercise to build understanding about urbanization. Plus activities for each teaching unit! Background information Nine complete Backgrounders, prepared by the United Nations Department of Public Information in preparation for the United Nations Conference on Human Settlements. One hundered and five of the best ways to deal with urbanization. Selected from over 600 submissions from 95 countries, national committees for Habitat II, and regional and international organizations. A collection of 21 profiles of some of the worlds largest cities. United Nations publications that were used as source material for the curriculum, and how to order copies.
Doing good
City profiles Bibliography

Source:
United Nations CyberSchoolBus, available at <www.un.org/Pubs/CyberSchoolBus/Special/habitat/ index.htm.
There is a growing consensus that all students must achieve information literacy so that they can function and be employable in the knowledge society. It is seen as the task of general education to provide every girl and boy with the basic skills for acquiring, managing and communicating information. All over the world, including Asia, initiatives are being taken to introduce new information and communication technology in education.
99
Telemedicine is the use of telecommunications for medical diagnosis and patient care. The primary objective of telemedicine is to upgrade the quality and minimize the costs of medical care by easing the communication of critical information (Plock n.d.). Although telemedicine could link a patient to a doctor, its main aim is to network medical staff or medical institutions regionally, nationally or even internationally. This reduces the need for fully fledged hospitals in many different locations, because specialized medical knowledge and expertise becomes available at any connected location. Telemedicine makes it easier for people in remote locations to access a wide range of medical services that are not available locally. Telemedicine also reduces the cost of health care for the provider of the service and the patient, who does not need to travel far to obtain specialized services. Telemedicine improves the quality of the medical service because it provides the local medical staff with access to more information, advice and continuing education. It reduces the isolation of remote communities and of medical staff in remote places (Williams and Moore 1997). The initial costs of telemedicine may be high, but they can be lowered with economies of scale. In this respect, telemedicine via satellite is more promising than telemedicine through cables and wires because of the high installation costs of infrastructure on the ground. Asias Pacific Rim is emerging as a pivotal region for the establishment of telemedicine ventures. China and Malaysia have launched plans for a telemedicine network, with Malaysia linking it to its Multimedia Super Corridor. The Republic of Korea and Singapore have also shown interest in serving as links in the region to receive and diagnose electronic images emanating from the remoter areas. The knowledge-based society A new economy is developing around the world and in Asia. While traditional factors of production land and natural resources, labour and capital are still important for economic activity, they are gradually becoming secondary. Even capital is no longer scarce; it is available as venture capital for good ideas, and sometimes for bad ones as well, as the prelude to the Asian financial crisis has shown. Knowledge is emerging as the new source of wealth creation and the most important factor of production. Schwartz, Kelly and Boyer (1999: 81) point out that the emergence of the knowledge-based economy is manifested in many aspects of economic life. Stock markets evaluate corporations increasingly on their knowledge and ideas, new technology, patents, copyright, brand names and human talent. The
100
fastest-growing sectors in terms of job creation are all knowledge-intensive industries, such as software development, biotechnology, consulting, health care and education. The availability of knowledge as an economic factor is also clear in what business executives see as a positive business environment: a city with locally available professionals and professionals attracted from elsewhere, with colleges and universities, and with research and innovation (table 7.3). Table 7.3 Factors contributing to a positive business environment in a city
Factors Pro-business attitude Local availability of professionals Entrepreneurial activity Technology/telecom infrastructure Government regulations Corporate taxes Colleges and universities
Source: Note:
per cent 19.9 12.1 10.0 7.7 7.2 6.4 6.1
Factors Affordable quality housing Research/innovation activities Attractive for professionals from within the country Transport/land use for easy commuting Public education Attractive for professionals from outside Personal taxes
per cent 5.8 5.4 5.3 4.4 3.8 3.1 2.7
Arthur Andersen 2000. Survey among 4,114 business executives.
Because information technology plays an important role in the development of the knowledge society, the gap between those who have knowledge and those who do not is often referred to as the digital divide. This is, however, too narrow a definition of the problem. As Haddad (2000: 5) points out, the most serious divide relates to the extent and quality of human knowledge and learning: the divide is not digital, but educational. It is necessary, but not sufficient, to provide access to information and knowledge. What is important is to give people the appropriate educational, cognitive and behavioural skills and tools to: Access the information avenues efficiently, effectively and wisely Acquire knowledge and internalize it Apply knowledge to better understand a changing world, develop their capabilities, live and work in dignity, participate in development, improve the quality of their lives and make informed decisions
101
Upgrade their knowledge continuously and systematically.
The growing importance of knowledge is already apparent in the recruitment of industrial workers. In the past, export-oriented industries prospered on cheap labour as an asset for transforming economies and reducing poverty, but cheap labour is no longer as much of an issue as labour that can add value (Global poverty report 2000: 7). Many factories are no longer recruiting unskilled workers, but are looking for workers with at least a basic education and the ability to learn new skills (Dev 2000: 62-63). A rapidly changing technology-based economy requires workers who have the ability to adjust to new demands and learn new skills in an autonomous manner. Primacy is given to such cognitive skills as creativity, collaborative learning, problem-solving, synthesis, working in teams, peer teaching, resourcefulness and above all the ability to apply acquired knowledge to new situations and acquire to new knowledge (Salmi 2000: 8; Haddad 2000a: 6; Haddad 2000b: 6). Modern information technology is creating many new job opportunities, but it is also introducing a new form of illiteracy for those without access to information technology or without the ability to use it. The skills and knowledge required to integrate in the new economy are often beyond the reach of the poor and older people and this makes it difficult for them to participate in economic growth. Experience in the industrialized countries shows that workers with no or limited skills and education will have increasing difficulty finding employment. This will give rise to new disparities. Rural migrants are in a disadvantaged position owing to the usually lower quality of education in rural areas, and the lower level of exposure of the rural population to new technologies. The emergence of the knowledge-based economy is also expected to have an impact on the relationship between employer and employee. In a knowledgebased economy, the knowledge workers own the means of production and can leave their job any given day, taking their knowledge with them (Schwartz, Kelly and Boyer 1999: 89). Some expect, therefore, that companies will no longer be able or willing to employ workers on a permanent basis, but will outsource all activities. In the new economy, jobs will be tasks to do, with people hired and brought together in teams on an ad hoc basis. Most tasks that were formerly captured within firms as an expedient to reduce information and transaction costs will return to the spot market. Employment will become temporary and situational; as a consequence, workers will have to be mobile and flexible (Davidson and Rees-Mogg 1997: 236-237).
102
Box VII.3 Penang Skills Development Centre The island of Penang in Malaysia boasts nearly 700 electronics plants, many of them owned and operated by multinational companies. Thousands of workers have benefited from managerial and technical training provided by the Penang Skills Development Centre, a training institute run by the local government with the help of multinational companies. The Centre was a key component of Penangs strategy to shift from simple assembly plants to more sophisticated higher-margin operations. Officials of the Centre asked the companies to help tailor training programmes to the needs of the companies. The companies donated equipment for laboratories and machine shops and helped design the curricula. Since 1989, the Centre has trained more than 60,000 workers and it continually revises its courses to keep pace with changes in technology. The availability of skilled workers has encouraged companies to continue investing in the industrial parks of Penang (Balfour 2000: 50-51).
While these changes will initially affect only the professionals and later the industrial workers, they will eventually have an impact on farmers. All workers will be faced with new and rapidly changing technologies that they will have to use in their daily lives and to add more value to their products in whatever sector they are working. Productivity growth in agriculture, which is necessary to feed more people on less land, will require a complex array of inputs and management practices, and farmers will need more and better knowledge, information and skills for successful technology adoption and adaptation. Moreover, farmers will increasingly become entrepreneurs who require information on markets and market prices and need to communicate with markets through modern technology. The knowledge of farmers will need to be upgraded constantly and the new technologies should reach not only medium- and large-scale farmers, but also small-scale, resource-poor farmers (van Crowder 1998). Education has to prepare people for a working life, and as society and the economy are changing faster and faster education will have to prepare for change rather than for stability. Speed, flexibility and nimbleness in seizing market opportunities will be critical (ESCAP 2000a: 19). The knowledge-based economy will require changes in the curriculum and the teaching strategy and changes in the attitude and the mindset of every member of the community: the learners, the educated, parents and society at large. Thinking schools and learning nations will be the paradigm of the twenty-first century: lifelong learning for lifelong employability. The Manpower 21 initiative of the Government of
103
Singapore has the objective of building a nationwide learning capacity and lifelong learning as its central strategy. Competitiveness The urban areas will not be able to continue absorbing rural-urban migrants unless they can generate sufficient employment in the new economy and income for the new arrivals. Countries and cities in East and South-East Asia have shown that rapid industrialization can create that employment and may even cause labour shortages. In many economies of Asia and the Pacific, the rapid industrialization of the last few decades was the result of FDI, made possible by trade liberalization and the resulting free flow of capital. The investments generated employment and income for workers and created demand for locally produced inputs into the production process. This helped to develop enterprises with employment and income through backward linkages. However, FDI has also made the countries dependent on foreign capital, foreign technology and foreign expertise. As economies grow because of FDI, wages will rise and production costs will increase, and countries will lose their initial attractiveness for FDI. A challenge faced by many countries is, therefore, to maintain the sustainability of economic growth. Foreign companies make FDI for the profits, not to help the country develop. Recipient countries have two options: to ensure that they remains attractive for FDI in ever higher value-added industries to compensate for higher production costs, or to develop their own domestic (high value-added) industry. In order to be competitive, countries need to create an enabling environment for companies to operate in. Such an enabling environment goes far beyond the availability of low-cost labour or good quality infrastructure. Porter, Sachs and Warner (2000) developed indices to measure the conditions that determine a countrys sustainable level of productivity and that contribute to a high rate of per capita growth in the gross domestic product. Among the various indices, the growth competitiveness index looks at the rate of economically effective innovation or transfer of technology, the efficiency of the financial system, and the level of economic integration of a country with the rest of the world. The economic creativity index, a component of the growth competitiveness index, measures economic creativity, the level of technological development (technology index) and the presence of institutions that facilitate innovation and diffusion (start-up index). Factors relating to economic creativity include the quality of scientific research institutions, of higher education, and mathematics and science education in schools. The technology index gauges the technological leadership of a country, the extent to which companies tend to develop their own products and processes,
104
and the extent of intellectual property protection and technology transfers. The start-up index measures the availability of financing for venture capital and the ease of starting businesses. Table 7.4 presents the growth competitiveness index and components of the economic creativity index for selected economies in Asia. The availability of technology and technology development are important factors in keeping industry competitive in a globalizing economy. Human resources development, transfer of technology and research and development are the determining factors for sustainable industrial development. A study of seven developing countries in Asia and the Pacific (APCTT 1995: 1) found a low level of expenditure on research and development, not only in absolute terms, but also as a percentage of gross domestic product (see table 7.5). Lack of research and development can cause a decline in economic growth, if foreign direct investors move to more attractive locations and local entrepreneurs do not have the technology to develop new products on their own. The transfer and local development of technology are the key to sustained economic growth. Table 7.4 Growth competitiveness for selected Asian economies, 2000
Economy Singapore Hong Kong, China Taiwan Province of China Australia New Zealand Japan Malaysia Korea, Rep. of Thailand Philippines Turkey China Indonesia India Viet Nam
Source: Note:
Global growth competitive ranking 2000 2 8 11 12 20 21 25 29 31 37 40 41 44 49 53
Economic creativity index Economic Technology Start-up creativity index index 1.63 1.10 0.97 0.97 0.64 0.69 0.59 0.50 -0.11 0.03 0.44 -0.56 -0.32 -0.03 -0.60 1.95 0.58 0.90 0.91 0.73 1.59 1.08 0.82 -0.07 0.54 0.65 -0.35 -0.66 0.32 -0.51 1.31 1.63 1.04 1.04 0.56 -0.21 0.11 0.19 -0.15 -0.48 0.23 -0.78 0.02 -0.38 -0.68
Porter, Sachs and Warner 2000. Ranking out of 59 countries worldwide.
105
Table 7.5 R and D expenditures as a percentage of gross national product for selected Asian countries, 1992-1997
Country Bangladesh China India Indonesia Iran, Islamic Rep. of Japan
Source: UNESCO 2000a.
Year 1995 1997 1994 1994 1994 1996
% of GNP 0.30 0.66 0.73 0.07 0.48 2.80
Country Korea, Rep. of Malaysia Philippines Singapore Sri Lanka Thailand
Year 1996 1996 1992 1995 1996 1996
% of GNP 2.82 0.24 0.22 1.13 0.19 0.13
Industrial development in Asia and the Pacific involves not only large-scale, multinational companies, but also, or in particular, small and medium-sized enterprises (SMEs). These enterprises provide employment and generate income for millions of people in the urban and rural areas, and without them poverty would be much more widespread. In the urban areas they operate mainly in the informal sector, producing inexpensive goods and services for the city and supplying inputs to the larger companies in the formal sector. In the rural areas, they provide the off-farm employment that gives the rural population the opportunity to supplement their basic income from agriculture (Sawant and Mhatre 2000: 102). Free markets and trade liberalization create new economic opportunities for those enterprises which can seize these opportunities, but trade liberalization will also increase competition for many small and medium-sized enterprises. Unless they are prepared for the competition, many people operating small and medium-sized enterprises or being employed there, could lose their work and their income. In many countries, small enterprises still use traditional methods of operation, and as a result do not use their resources to optimum levels (ESCAP 1999: 5-10). Transfer of technology and the training of small entrepreneurs in the use of the technology are important, and skills for managing an enterprise and understanding the market are critical. In order to be able to compete in the market, small and medium-sized enterprises also need a level playing field, but the regulatory environment often discriminates against them. They face problems of accessing infrastructure and services, either because of their status or because of the higher cost for small operations. In addition, entrepreneurs need to have market information about inputs and outputs, and that implies access to sources of information and the capacity to use them. In brief, the knowledge base of small and medium-sized entrepreneurs needs to be developed and enhanced.
106
Conclusion Competition and knowledge characterize the new economy that is emerging across the world and in the Asian and Pacific region. Education, and more particularly lifelong education, will be a basic requirement for all, in urban and rural areas, and in agriculture, industry and the service sectors. Education will no longer stand for teaching skills and knowledge, but it will stand for teaching the ability to acquire knowledge and skills on a continuous basis. With knowledge as the most important factor of production and integration of national economies on a global scale, competition will become the overriding mechanism for economic advancement. As Wirth pointed out, competition, instability and insecurity are the characteristics of an urban way of life and in this respect the world is urbanizing. Competition and insecurity are also the characteristics of a capitalist economy organized around the market. Schumpeter talked about creative destruction, the perpetual cycle of destroying the old and less efficient product or service and replacing it by new, more efficient ones (Friedman 2000: 11). Creative destruction is diametrically opposed to what is valued in a traditional rural society, where life is stable, predictable and settled and everyone has his or her place. There is confusion about the consequences of opting for an open, market-driven global economy and society where decisions must constantly be made. There is a longing for the past and a closed society. However, the question needs to be asked if millions of people can escape rural poverty and rural conditions can improve to a comparable level with the urban areas (balanced development), without the people concerned taking part in the global, urban-industrial, free-market economy. Some may feel that the price of such balanced development, the end of the rural way of life, is simply too high.
107
Chapter VIII. Conclusions

Balanced development This study has defined balanced development as the creation of equal opportunities for all people to participate in, contribute to and benefit from development, and has argued that the requirement for such balanced development is human development, which is the process of enlarging peoples choices as to what they do and can do in their lives. Poverty limits the opportunity of many people to develop their capabilities and thereby limits their choices as to what they can do in their lives and how they can participate in development. Poverty is not just a lack of financial resources, it has many dimensions. Without access to essential infrastructure and services, people will lack human and social capital to participate in development. Groups may be barred from developing their capabilities because of social or cultural restrictions. Such restrictions limit their geographical mobility and make it difficult for them to attend school or seek medical care. The restrictions may tie people to certain occupations and obstruct their social and economic mobility. Members of some population groups cannot actively participate in the process of decision-making that affects their lives. If their voices are not heard, their interests are not included in policies or the policies will not match their specific needs or conditions. What is even more important than not being heard, is being considered not worth listening to. People without wealth, property or education are often not respected and not taken seriously by society. Poverty in all its dimensions is declining in most countries of Asia and the Pacific, but despite the decline it remains widespread. Moreover, it is more widespread and more serious in rural areas than in urban areas and there are also wide disparities between regions within a country. Poverty affects certain groups in society more than others. In other words, there are disparities in levels of poverty between urban and rural areas and between regions within a country, just as there are disparities between population groups. Disparities between urban and rural areas and between regions are the result of three sets of factors. Natural factors, such as differences in agro-climatic conditions, endowment with natural resources or geographical location, such as distance to a sea outlet or centres of commerce, determine the potential for the economic development of an area or a region. Some of these conditions, such as climate and natural endowments, are largely invariable, while others can be improved, for instance through infrastructure such as roads to overcome isolation,
108
CONCLUSIONS
and irrigation to overcome arid conditions. In addition, urban areas have the advantage of economies of scale and agglomeration, while the terms of trade favour the urban areas as producers of industrial goods over the rural areas as producers of primary commodities. Sociocultural factors, such as values and traditions that either encourage or discourage innovation, entrepreneurship, and social and economic mobility, form a second set of factors. Since most rural families are engaged in agriculture, their income is highly influenced by climatic conditions. They maintain large family networks and patron-client relationships to reduce vulnerability and spread the economic risk. These safety nets help the weaker members of society, but also act as disincentives for the more entrepreneurial. With its larger population size, urban society is characterized by more diversified but less personal relationships. People in urban areas often live and work together without developing the level of sentimental and emotional ties characteristic of rural areas. There is a spirit of competition and mutual exploitation, and rigid social hierarchies are difficult to maintain. The potential for social mobility increases, and instability and insecurity become the norm. Specialization and innovation result in increases in productivity and the generation of wealth. Many of these urban norms and values are spreading to the rural areas through the media and education. Political factors form the third set of factors. While different in character, rural and urban areas are politically and economically integrated and form one system. Policy decisions for one part of a country can have consequences for other parts. Differences in political power between regions can result in intended or unintended biases in government policies. Policies that leave the allocation of resources to the market and that invest scarce resources in places with the best growth potential will benefit some areas and regions over others. Owing to the scattered settlement pattern and the inadequate communication and transport networks, rural people are disadvantaged when it comes to organization and the articulation of needs, priorities and preferences through political processes. This lack of political power is reflected in the extent to which decisions about rural areas and their natural resources are made in the national capital or in a provincial or state capital, and the profits of their exploitation accrue to the urban areas. Urban bias Many governments have also failed to recognize the linkages between urban and rural areas and the often unintended and unanticipated impact that decisions taken for one area have on other areas. They have tended to look at rural and urban development as separate rather than as closely related. This is reflected in the institutional structure of many governments with different ministries dealing with development in urban and rural areas. Governments have always
109
stressed the critical importance of agriculture and the improvement of living conditions in the rural areas because that was where the majority of the population lived. At the same time, they felt that the country could emerge from underdevelopment only if the industrial sector, based in the urban areas, was developed. The results were policies that protected the industrial sector, kept the cost of living low in urban areas and used the income from the export of agricultural products to finance urban-industrial development. The winners in these policies were government (net revenue gain), urban consumers (lower food prices) and industry (cheap raw materials). The net effect was an income transfer out of agriculture and this depressed private investment in agriculture. The result was massive rural-urban migration and the rapid growth of urban areas, including the development of mega-cities. Because of a lack of housing and employment, migrants had to resort to squatting and working in the urban informal sector. Attempts to develop the rural areas by developing urban centres encountered similar problems because of the unequal relationship. The penetration of the urban-industrial economy into the countryside often only increased the exploitation of natural resources in the rural society for the benefit of the urban economy. A developing urban area in a backward region may not draw its resources from its immediate hinterland, but from other more developed regions. Improved transport links between a regional centre and the rest of the country reduce transport costs not only for goods produced in the region, but also for goods from other areas moving into the region and for migrants moving out of the region to national urban centres. Emerging trends Emerging global trends are causing fundamental transformations in the urban and rural areas and in their relationships. As a result of the information revolution and the adoption of free-market economic policies, the economies in Asia and the Pacific are integrating rapidly into a global economy. This has facilitated the flow of capital to the region in the form of FDI. Such investment is critical for economic growth and employment generation, but it is made predominantly in industry in the urban areas. Cities compete for these investments by improving their economically essential infrastructure and services, and thereby widen the gap between urban and rural areas in terms of access to infrastructure and services. On the other hand, new information technology holds the promise of connecting remote and isolated areas to urban centres at a lower cost than through conventional infrastructure. Information technology can bring educational and
110
CONCLUSIONS
health services to the rural areas, and information about market conditions to farmers and other rural enterprises. It can improve communication between family members in rural and urban areas and abroad, and facilitate remittances. Free-market economic policies remove the favourable treatment of urban areas and industry by governments through subsidies and import tariffs. As a part of global trade liberalization, industrialized countries will eventually have to open their markets to agricultural products from developing countries and this could benefit Asian countries. Although population growth is generally declining, it is unlikely that the majority of the rural population will be able to find adequate income and employment in agriculture, in particular if education levels continue to rise. The natural environment is setting limits on further agricultural expansion, and in some areas agricultural productivity is declining. The development of a rural industrial and service sector will have only a limited impact. Some see the need for agriculture to industrialize in order to meet increasing and changing food demand, but many small-scale farmers may not be able to compete with capital-intensive, highly mechanized, if not computerized agriculture. Others promote an alternative sustainable agriculture, but such agriculture will be labour-intensive and suitable only for niche markets. Rural-urban migration is, therefore, expected to continue, and within the next few decades the majority of the population of Asia and the Pacific will live in urban areas. However, only a relatively small portion of the urban population will live in mega-cities of 8 million and more; most will live in smaller cities and towns. Improvements in communication and transport infrastructure have brought the urban and the rural areas closer together, facilitating rural-urban migration, but also return migration and communication between urban and rural areas. Migration is no longer a complete break with the place of origin and return migrants bring capital, skills and urban values to the rural areas. Migration is also no longer seen as an expulsion of the rural poor from impoverished rural areas and a desperate flight to the bright city lights. It is now seen in terms of a free flow of labour to areas where it can be more productive and earn a higher income. In this way, urbanization and migration can make a positive contribution to economic growth and development. The urban informal sector is being revalued. Rather than being unproductive, full of underemployment and a sign of the inability of the city to absorb its growing population, the sector is now considered a fertile ground for micro-enterprises and the development of entrepreneurial skills. It provides affordable goods and services to the urban population and opportunities to the urban poor for upward social and economic mobility. This does not mean that living conditions in urban areas are adequate, but it points to the need for better
111
urban management to make improved use of available resources and fully exploit the urban potential for development. Rather than speaking of over-urbanization, it would be more appropriate to speak of incomplete urbanization: the economic activities and the population are in place, but an urban institutional framework, the urban management capacity and a government culture of good urban governance still need to be built. Decentralization of responsibilities to lower levels of government is occurring all across the region and it can make an important contribution to more balanced development. The spread of education, the increased information flow and the growing political awareness of the population are forcing central governments to decentralize authority to lower levels of government in order to better meet the specific needs and demands of local communities. This will give local communities more control over the protection and exploitation of their natural resources, and thereby over the development of their area or region. The spread of the mass media is also making people concerned about the survival of their specific culture and language and has generated movements to preserve these regional cultures and languages. Because of their specific economic interests and sociocultural identity, regions within countries are emerging as important development units. Economic globalization has led to the emergence of regional trade blocs. These trade blocs create opportunities for backward and isolated regions within countries to explore economic collaboration with regions within other countries, on the basis of comparative advantage. To fully exploit such collaboration, for instance through growth triangles, transport and communication infrastructure is needed to link those regions. At present, regions are often linked only with the capital city or other major cities and ports. Experience shows that good transport links can make a substantial contribution to the economic development of an area or region. Within the framework of regional trade blocs, infrastructure can link an isolated region to transport nodes and markets in adjacent countries and lead to the economic development of that region. Modern information technology is creating new economic opportunities, but the fast-changing technology-based economy requires from workers and farmers the flexibility to adjust to new demands and to learn new skills in an autonomous manner. Modern information technology is introducing a new form of illiteracy for those without access to this technology or without the ability to use it. The skills and knowledge required to integrate into the new economy are often beyond the reach of the poor, and this makes it difficult, if not impossible, for them to participate in economic growth and globalization. As in the industrialized countries, workers with no or limited skills and education will
112
CONCLUSIONS
have more and more difficulties finding employment, while farmers will have difficulties competing in the market for agricultural products. In summary, the newly emerging trends can reduce certain disparities between urban and rural areas, but may increase other disparities and generate new ones. New disparities could emerge in particular between those who can benefit from the new technologies and those who cannot. These new disparities are generally referred to as the digital divide, but they cover more than merely information technology. Promoting balanced development Not all disparities can be removed because some are the result of inherent differences between people, between urban and rural areas and between regions. As free-market economic policies are todays prevailing trend, the scope for government interventions is also limited. The primary challenge for any government is to ensure that all (rich and poor, urban and rural) can participate in economic growth. Participation means that (a) people take part in the decision-making regarding policies and programmes that aim at bringing about development, (b) contribute to economic growth with labour, skills, knowledge and entrepreneurship according to their full capabilities, and (c) benefit from economic growth through income and asset accumulation, resulting in a good quality of life. To achieve balanced development, governments need to ensure the establishment and maintenance of a level playing field. This should be done by enabling all to develop to their full capabilities and by removing any social and regulatory obstacles. In order to enable people, areas and regions to develop to their full capabilities, governments must ensure access to infrastructure and services including information and credit, opportunities for social and economic mobility and participation in decision-making so that more people can seize such opportunities. However, past experiences show that the better-off can, almost by definition, seize new opportunities created by infrastructure development, the introduction of new technologies or decentralization, and that the poorest of the poor are, also by definition, unable to do so. It is important to ensure that interventions benefit at least those who are just below the poverty line and give them the opportunity to improve themselves. In addition, efforts should be made to maximize any trickle-down effect to reach the poorest of the poor. Because it is difficult for the poorest of the poor to seize new opportunities and because changes in the social and economic environment may cause new forms of poverty and disparity, the need remains to develop support mechanisms and safety nets for those who, for one reason or another, are unable to benefit
113
from development. These safety nets and support mechanisms should match the specific needs and conditions of the people concerned. Policies More specifically, governments need to adopt policies that increase the opportunities for people, areas and regions to improve their conditions: Investing in education Education will have to prepare for change rather than for stability. Thinking schools and learning nations will be the paradigm of the twenty-first century: lifelong learning for lifelong employability. Improving education will no longer be only a matter of providing education for all, but also of enhancing the quality of education, teaching students to learn and think, to be creative, and preparing them for lifelong learning. The knowledge-based economy will require changes in the curriculum and the teaching strategy and changes in the attitude and the mindset of every member of the community: the learners, the educated, parents and society at large. While the changes will first of all affect the professionals and later the industrial workers in the economy, they will eventually have an impact on farmers. All will face new and rapidly changing technologies that they will have to use in daily life and in whatever sector they are working in to add more value to their products. Investment in education will be necessary, but not sufficient, to enhance the competitiveness of the countries of Asia and the Pacific in the global knowledge economy. A well-educated work force, in combination with other factors, will attract the foreign and domestic private investments that generate income and employment for the population. However, investments are also necessary in local research and development to create the capacity for technological innovation. Research and development can succeed only in high-quality research institutes and in a legal environment that promotes research and recognizes intellectual property rights. Moreover, countries have to ensure that they are both physically and mentally connected to the global information networks and participate in the global knowledge generation on the one hand, and that their people become connected so that they can benefit from the newly created knowledge and technologies on the other hand. Connecting areas and regions The rural population will increasingly depend on a combination of agriculture and off-farm work in rural industries to make a living. For economic growth to occur, isolated and economically backward areas and regions will need to be linked to markets at the local, regional, national and global levels. The
114
CONCLUSIONS
provision of economically essential infrastructure, such as roads, railways, ports and airports, or the establishment of links to such infrastructure is critical in order to create economic opportunities. Such infrastructure will reduce the cost of agricultural and industrial goods produced in the region, and will make these more competitive in the world market. Transport and communication infrastructure form an indispensable part of the package of interventions necessary to stimulate the rural economy. With the development of regional trade blocs, roads and railways do not need to lead to the capital city and main port of the country, but could link a region to a port, an airport or a market in another country, if it is nearer. However, better transport and communication is a two-edged sword because it not only links an area to the outside world, but also links the outside world to a previously closed area and thereby intensifies competition. To enhance their participation in the economy, farmers and rural enterprises need capacity-building and information so that they can take better decisions about farm inputs, the farming process and the marketing of their products. Modern telecommunication technology can now provide them with the necessary information. Improving urban management As rural-urban migration and urbanization will continue, the urban areas will have to absorb an ever-growing population. Rural-urban migration should not result in an urbanization of poverty. Ensuring that the growing population will be able to find acceptable housing, have access to essential infrastructure and services, and find adequate employment and income will be an enormous challenge for local governments. Those in charge of mega-cities will be especially pressured to find new ways of dealing efficiently with these challenges. The urban informal sector in particular needs a level playing field. Governments should remove any discriminatory regulations that obstruct the development of informal sector activities into the mainstream urban economy, and enable small and medium-sized enterprises to gain access to space, credit, market information and technology. Similarly, they should support urban low-income communities that want to improve their living environment through the upgrading of their houses and the construction of neighbourhood infrastructure. Local governments will have to ensure not only that the urban population has adequate living and working conditions, but also that their city or town can compete in the global economy for private-sector investments. This means creating and maintaining an investment environment that meets the needs and priorities of the private sector. In this endeavour, the government, civil society and the private sector will have to search for ways to reconcile economic competitiveness in the global market and environmental protection through market-based incentives
115
to internalize environmental costs. Reconciling the needs of the population, those of the private sector and those of future generations will require an efficient use of available resources and good urban governance. The development of partnerships between urban stakeholders (government, local communities, civil society groups and the private sector) will be critical, but this will require a different attitude among government officials and considerable capacity-building. Decentralizing and ensuring good governance In order to be able to seize new economic opportunities, decentralization of decision-making power from the national to the regional and the local level is necessary. Decentralization of decision-making on local issues is critical to ensure that policies and programmes match the needs and conditions of the local population and that good and fair use is made of regional and local resources for development. This holds true for both the urban and the rural areas. Decentralization places a heavy burden on local governments and local communities, which have to assume many new responsibilities and undertake many new tasks. In the process, mistakes will be made, power will be misused for personal benefit, and traditional power structures will only gradually give way to a more representative system. Decentralization is a learning process that takes time and that requires a central government which supports and assists local institutions rather than reluctantly cedes power, ready to take it back as soon as it can. A prerequisite for decentralization is capacity-building of local governments and local communities, in particular in the area of good governance and the quality of the process of decision-making by the government. Good governance implies that all stakeholders are involved and can participate in any decision-making that directly affects them, that they are well informed so that they can take informed decisions, and that those taking the decisions are accountable for the decisions and their consequences. Empowering the poor To ensure that the poor and not only the better-off benefit from development, they need to be organized to increase their economic and political bargaining positions vis--vis those who are politically or economically stronger. In this respect, organizing the poor into rural and urban cooperatives and communitybased savings-and-credit schemes can strengthen their economic position. The experience of running an organization will build the capacity and confidence of the poor with respect to participation in political decision-making as well. This requires a responsive government, particularly at the local level, that is prepared to recognize local communities as partners in development and to listen to them.
116
CONCLUSIONS
Introducing social safety nets To ensure that the poor also draw some benefits from development and that their children are not locked into the vicious circle of poverty, social safety nets are necessary. Experience from past social safety nets in developing countries shows that government-administered social safety nets often miss their target groups and are open to abuse and corruption. On the other hand, the poor should not be completely dependent on the presence and the goodness of families and communities. New, possibly community-based, delivery mechanisms for delivering social services need to be explored and researched. As the Asian and Pacific region enters the twenty-first century, it can expect immense demographic, economic, social and technological changes that will turn the region from a predominantly rural continent into a predominantly urban and globally connected continent. Like all transitions, this transition will most likely be painful. However, it need not be traumatic, if governments enact policies that ensure globally connected level playing fields, with adequate security for the vulnerable in society.
117
References
Abrams, Charles, 1964. Mans Struggle for Shelter in an Urbanizing World (Cambridge, The MIT Press Cambridge). ADB, 1999. Urban sector strategy (Manila, ADB) available at <www.adb.org/ documents/policies/urban_sector/default.asp#contents> (15 October 2000). ADB, 2000. Rural Asia: Beyond the Green Revolution, (Manila). APCTT, 1995. Report on technology promotion: experiences of selected Asian countries, (New Delhi). Arthur Andersen and Fortune Magazine, 2000. Best cities survey, available at <www.arthurandersen.com/website.nsf/content/IndustriesRealEstate HospitalityBestCities?OpenDocument> (14 February 2001). Asano, Yuko, 1998. Effects of the Migration Policy after the Reform on Rural-Urban Income Disparity, Elliot School of International Affairs (Washington DC, George Washington University), available at <www. hfni.gsehd. gwu.edu/~econ270/Yuko.htm> (7 November 2000). Balfour, Frederik, 2000. Global capitalism: special report: Penangs secret, Business Week, Asian edition (6 November 2000), pp. 50-51. Barr, David R., 1999. Integrated rural development through telecommunications, in D. Richardson and L. Paisley, eds., The First Mile of Connectivity, (Rome, FAO), available at <www.fao.org/sd/cddirect/cdre0029.htm> (21 December 2000). Barr, David R., 1999a. Advancing telecommunications for rural development through participatory communication, in D. Richardson and L. Paisley, eds., The First Mile of Connectivity , (Rome, FAO), available at <www.fao.org/sd/cddirect/CDre0025.htm> (21 December 2000). Baum, W.C. and S.M. Tolbert, 1985. Investing in Development: Lessons of World Bank Experience (Washington DC, International Bank for Reconstruction and Development and World Bank). Bayes, A., J. von Braun and R. Akhter, 1999. Village pay phones and poverty reduction: insights from a Grameen Bank initiative in Bangladesh, ZEF Discussion Papers on Development Policy, No. 8 (Bonn, Centre for Development Research), available at <www.zef.de/zef_englisch/ f_publ.html> (21 December 2000).
118
REFERENCES
Bigman, David and Hippolyte Fofack, 2000. Geographical targeting for poverty alleviation: an introduction to the special issue, The World Bank Economic Review, vol. 14, No. 1 (January 2000), pp. 129-145. Blurton, Craig, 1999. New directions in education, in UNESCO World Communication and Information Report 1999-2000, (Paris, UNESCO), pp.46-61, available at <www.unesco.org/webworld/wcir/en/ contributors.html> (21 December 2000). Braverman, A. and M. Huppi, 1991. Improving rural finance in developing countries, Finance and Development, vol. 28, No. 1 (1991), pp. 42-44. Breman, Jan, 1996. Footloose Labour: Working in Indias Informal Economy (Cambridge, Cambridge University Press). Campos, J.E. and H.L. Root, 1996. The Key to the Asian Miracle: Making Shared Growth Credible (Washington DC, The Brookings Institution). Castles, L., 1989. Jakarta: the growing centre, in Hall Hill, ed., Unity and Diversity: Regional Economic Development in Indonesia since 1970 (Oxford and New York, Oxford University Press). Croll, Elisabeth, 1997. Chinas rural urban mobility (part 1), China Review, Issue 6 (Spring 1997), available at <www.gbcc.org.uk/chinarev.htm> (7 November 2000). Davidson, James, and William Rees-Mogg, 1997. The Sovereign Individual: The Coming Economic Revolution: How to Survive and Prosper in It (London, Pan Books). Demaine, Harvey and Hans Detlef Kammeier, 1999. Editorial introduction to planning and financing of rural development in Asia, Regional Development Dialogue, vol. 20, No. 2 (Autumn 1999), pp. v-xii. Dev, Mahendra, 2000. Economic liberalisation and employment in South Asia, ZEF Discussion Papers on Development Policy, No. 29, (Bonn, Centre for Development Research), available at <www.zef.de/zef_englisch/ f_publ.html> (21 December 2000). Douglas, M., 2000. Turning points in Korean Space-Economy: from the developmental state to intercity competition 1953-2000, Discussion Papers, The Asia/Pacific Research Center, Institute of International Studies, Stanford University.
119
Drakakis-Smith, D., 2000. Third World Cities, 2 nd edition (London and New York, Routledge). Draxler, Alexandra, 2000. From the information society to the knowledge society: questions for international cooperation, TechKnowLogia, vol. 2, No. 5 (September/October 2000), pp. 60-63, available at <www.techknowlogia. org/TKL_active_pages2/TableOfContents/main.asp? Issue Number=7> (21 December 2000). Dutta, B., 1998. Disparities in opportunities: the Indian experience, report from Rural Urban Division, UNDP, available at <www.undp.org.in/Report/ IDF98/idfrural.htm> (7 November 2000). Ernberg, J., 1999. Telecommunications for sustainable development, in D. Richardson and L. Paisley, eds., The First Mile of Connectivity, (Rome, FAO) available at <www.fao.org/sd/cddirect/cdre0028.htm> (15 November 2000). Ernberg, J., 1999a. Empowering communities in the information society: an international perspective, in D. Richarson and L. Paisley, eds., The First Mile of Connectivity (Rome, FAO), available at <www.fao.org/sd/cddirect/ cdre0042.htm> (15 November 2000). ESCAP, 1985. Bank credit for rural women, (ST/ESCAP/363). ESCAP, 1992. Migration and urbanization in Asia and the Pacific: interrelationship with socio-economic development and evolving policy issues, selected papers of the Pre-Conference Seminar, Fourth Asian and Pacific Population Conference, Seoul, 21-25 January 1992. Asian Population Studies Series No. 111, (ST/ESCAP/1153). ESCAP, 1993. State of Urbanization in Asia and the Pacific 1993 (ST/ESCAP/ 1300). ESCAP, 1995. Trends, patterns and implications of rural-urban migration in India, Nepal and Thailand, Asian Population Studies Series No. 138, (ST/ ESCAP/1572). ESCAP, 1996. Rural Poverty Alleviation and Sustainable Development in Asia and the Pacific (ST/ESCAP/1617). ESCAP, 1998. Economic Reforms and Rural Poverty Alleviation: An Enquiry into the Asian Experience (ST/ESCAP/1894).
120
REFERENCES
ESCAP, 1999. Rural industrialization as a means of poverty alleviation: government-NGO cooperation for poverty alleviation, report of the Regional Seminar of the Enhancement of Partnerships among Governmental, Non-governmental and Private Sector Entities for the Promotion of Rural Industrialization for Poverty Allevation, Goa, 3-6 November 1997, Government-NGO Cooperation Series No. 3, (ST/ ESCAP/1976). ESCAP, 2000. Development through Globalization and Partnership in the Twentyfirst Century: An Asia-Pacific Perspective for Integrating Developing Countries and Economies in Transition into the International Trading System on a Fair and Equitable Basis (ST/ESCAP/2054). ESCAP, 2000a. Information technology and development I: commercial and industrial dimensions, paper for the Regional Round Table on Information Technology and Development, 21-22 June 2000, New Delhi. FAO, 1999. Salient trends in world agricultural production, demand and trade and in food security, report and papers of an FAO Symposium on Agriculture, Trade and Food Security: Issues and Options in the WTO Negotiations from the Perspective of Developing Countries, Geneva, 23-24 September 1999, (Rome, FAO), available at <www.fao.org/ur/Escp/ BookVol1.htm> (21 December 2000). FAO, 1999a. Food security and the WTO trade negotiations: key issues raised by the World Food Summit, report and papers of a FAO Symposium on Agriculture, Trade and Food Security: Issues and Options in the WTO Negotiations from the Perspective of Developing Countries, Geneva, 2324 September 1999 (Rome, FAO), available at <www.fao.org/ur/Escp/ BookVol1.htm> (21 December 2000). FAO, 2000. Agriculture towards 2015/30, technical interim report, April 2000, (Rome, FAO), available at <www.fao.org/WAICENT/FAOINFO/ ECONOMIC/ESD/at2015/toc-e.htm> (12 January 2001). FAO, 2000a. The state of food insecurity in the world, 2000, report (Rome, FAO). Friedman, Thomas, 2000. The Lexus and the Olive Tree: Understanding Globalization (New York, Anchor Books). Fukuyama, Francis, 1992. The End of History and the Last Man (New York, Avon Books).
121
Gannon, Colin and Zhi Liu, 1997. Poverty and transport, TWU-30, (Washington DC, World Bank). Gilbert, Alan and Josef Gugler, 1992. Cities, Poverty and Development: Urbanization in the Third World (Oxford, Oxford University Press). Global poverty report, Group of Eight, Okinawa Summit, July 2000. Government of India, 2000. Socio-economic implications of demographic dynamics, India country paper, Third Session of the Committee on Socio-economic Measures to Alleviate Poverty in Rural and Urban Areas, Bangkok, 6-8 December 2000. Government of India, 2000a. Economic survey 1999-2000, Ministry of Finance, (New Delhi, Government of India), available at <www.indiabudget.nic. in> (7 November 2000). GrameenTelecom n.d., available at <www.grameen-info.org/grameen/gtelecom/ index.html> (14 February 2001). Griffin, Keith and Azizur Rahman Khan, 1978. Poverty in the third world: ugly facts and fancy models, World Development, vol. 6, No. 3, pp. 295304. Haddad, Wadi D., 2000. Is the divide digital?, TechKnowLogia, vol. 2, No. 2 (March/April 2000), pp. 5-6, available at <www.techknowlogia.org/ TKL_active_pages2/TableOfContents/main.asp? IssueNumber=4> (12 December 2000). Haddad, Wadi D., 2000a. Skills training: aiming at a moving target, TechKnowLogia, vol. 2, No. 4 (July/August 2000), pp. 6-7, available at <www.techknowlogia.org/TKL_active_pages2/TableOfContents/main.asp? IssueNumber=6> (21 December 2000). Haddad, Wadi D., 2000b. Teachers, training and technology, TechKnowLogia, vol. 2, No. 6 (November/December 2000), pp. 6-7, available at <www.techknowlogia.org/TKL_active_pages2/TableOfContents/main.asp? IssueNumber=8> (21 December 2000). Han, Sun Sheng and Shue Tuck Wong, 1998. Revolution, space and urbanization: the ideological foundations of Chinese urban development, Asian Profile, vol. 26, No. 2 (April, 1998). Hardjono, J., 1987. Land, Labour and Livelihood: in a West Java Village (Yogyakarta, Gadjah Mada University Press).
122
REFERENCES
Hart, K., 1973. Informal income opportunities and urban employment in Ghana, in Richard Jolly, Emanuel de Kadt, Hans Singer and Fiona Wilson, eds., Third World Employment: Problems and Strategy (Harmondsworth, Penguin). Hasan, Arif, 1992. Seven reports on housing: government policies and informal sector and community responses, Orangi Pilot Project Research and Training Institute for the Development of Katchi Abadis, Karachi, Pakistan. Hayek, F.A., 1994. The Road to Serfdom (Chicago, The University of Chicago Press). Henderson, J. V. and A. Kuncoro, 1996. Industrial centralization in Indonesia, The World Bank Economic Review, vol. 10, No. 3 (September 1996), pp. 513-540. Higgins, Benjamin and Donald Savoie, 1997. Regional Development Theories and their Application (New Brunswick, Transaction Publishers). Hill, Hal, 2000. Intra-country regional disparities, paper presented at the Second Asian Development Forum, 6-8 June 2000, Singapore, (Washington DC, The World Bank), available at <www.worldbank.org/wbi/wbiep/adf/ papers.html> (12 December 2000). Howard-Borjas, P., 2000. Ensuring the future for sustainable agriculture: what could this mean to jobs and livelihood in the 21st Century?, paper presented at the Global Dialogue Expo 2000: The role of the village in the 21 st century, 15-17 August 2000, Hanover, Germany, available at <community.expo2000.de/forum/exhibits/ex_406/program_day2.htm> (15 November 2000). ITU, 1998. World Telecommunications Development Report: Universal Access (Geneva, ITU). Jones, Gavin W., 1988. Urbanization trends in Southeast Asia: some issues for policy, Journal of Southeast Asian Studies, vol. XIX, No. 1 (March 1988), pp. 137-154. Kern, M., 2000. Future of agriculture, Global Dialogue Expo 2000, The role of the village in the 21 st century, 15-17 August 2000, Hanover, Germany, available at <community.expo2000.de/forum/exhibits/ex_406/ program_day2.htm> (15 November 2000). Kunio, Yoshihara, 1999. Building a Prosperous Southeast Asia: from Ersatz to Echt Capitalism (Richmond, Curzon Press).
123
Leslie, J., 2000. Running dry: what happens when the world no longer has enough freshwater? Harpers Magazine, vol. 301, No. 1802 (July 2000), pp. 37-52. Lipton, M., 1977. Why poor people stay poor: urban bias in world development, (London, Temple Smith). Lloyd, Peter, 1979. Slums of Hope? Shanty Towns of the Third World (Harmondsworth, Penguin Books). Lockeretz, William, 2000. The future of agriculture in the industrialized world, Global Dialogue Expo 2000, The village in the 21st century, 14-17 August 2000, Hanover, Germany, available at <community.expo2000.de/forum/ exhibits/ex_406/program_day2.htm> (15 November 2000). Lummis, C. Douglas, 1999. Equality, in Wolfgang Sachs, ed., The Development Dictionary: A Guide to Knowledge as Power (London, Zed Books), pp. 38-52. Markusen, Ann, 1994. Interaction between regional and industrial policies: evidence from four countries, Proceedings of the World Bank Annual Conference on Development Economics 1994, pp. 279-298. Martinussen, John, 1999. Society, State and Market: A Guide to Competing Theories of Development (London, Zed Books). Mathur, Om Prakash, 1997. Regional development planning and management in Asia, in Regional Development Planning and Management of Urbanization: Experiences in Developing Countries (Nairobi, United Nations Centre for Human Settlements (Habitat)) (HS/490/97E). McGee, T.G., 1995. Metrofitting the emerging mega-urban regions of ASEAN: an overview, in T.G. McGee and Ira M. Robinson, eds., The Mega-Urban Regions of Southeast Asia (Vancouver, UBC Press), pp. 3-26. McGee, T.G., and Ira M. Robinson, eds., 1995. The Mega-urban Regions of Southeast Asia (Vancouver, UBC Press). Milward, Bob, 2000. What is structural adjustment?, in G. Mohan, E. Brown, B. Milward and A.B. Zack-Williams, eds., Structural Adjustment: Theory, Practice and Impacts (London, Routledge), pp. 24-38. Mitton, Roger, 2000. For richer or poorer: who will care for the city-states deprived? Asiaweek, vol. 26, No. 44 (10 November 2000), pp. 32-36.
124
REFERENCES
Nehru, Jawaharlal, 1983. The Discovery of India (New Delhi, Oxford University Press). Network, 2000. Feeding the future, Network, vol. 8 (July 2000), pp. 10-11. NTCA, 1998. Initial lessons learnt about private sector participation in telecentre development: a guide for policy makers in developing appropriate regulatory frameworks, National Telephone Cooperative Association, Virginia, available at <www.ntca.org/intl/report.html> (21 December 2000). Ohmae, K., 1995. The End of the Nation State: The Rise of Regional Economies (London, HarperCollins Publishers). Peirce, Neal and Curtis Johnson, 2000. Tracking North American and global regionalization: whats a citistate?, available at <www.citistates.com/ whatis.htm> (7 November 2000). Peterson, George E., G. Thomas Kingsley and Jeffrey P. Telgarsky, 1991. Urban economies and national development, Policy and Research Series, (Washington DC, United States Agency for International Development). Phongpaichit, Pasuk and Chris Baker, 2000. Chao Sua, Chao Pho, Chao Thi: lords of Thailands transition, in Ruth McVey, ed., Money and Power in Provincial Thailand (Chiang Mai, Silkworm Books and Singapore, Institute of Southeast Asian Studies), pp. 30-52. Phongpaichit, Pasuk and Chris Baker, 2000a. Thailands Crisis (Chiang Mai, Silkworm Books). Plock, Ernest D., n.d. Telemedicine is emerging as a cost-effective healthcare alternative, available at <www.ecommerce.gov/30.htm> (15 November 2000). Porter, Michael E, Jeffrey D. Sachs and Andrew M. Warner, 2000. The global competitiveness report 2000 (Davis, World Economic Forum), available at <www.weforum.org/reports_pub.nsf/Documents/Home+Reports+ and+Publications+Competitiveness+Reports> (26 December 2000). Postel, Sandra, 2000. Redesigning irrigated agriculture, in State of the World 2000 (New York, WWI and W.W. Norton & Company), pp. 49-58. Prudhomme, Remy, 1996. Management of megacities: institutional dimensions, in Jeffrey Stubbs and Giles Clarke, eds., Megacity Management in the Asian and Pacific Region: Policy Issues and Innovative Approaches, Proceedings of the Asian Development Bank and the World Bank Regional
125
Seminar on Megacities Management in Asia and the Pacific, 24-30 October 1995, volume 1, (Manila, ADB), pp. 99-132. Remenyi, J., 1991. Where Credit is Due: Income Generating Programmes for the Poor in Developing Countries (London, Intermediate Technology Publications). Richardson, Don, 1996. The internet and rural development: recommendations for strategy and activity, Final Report and Executive Summary, (Rome, FAO), available at <www.fao.org/WAICENT/faoinfo/sustdev/CDdirect/ CDan0025.htm> (21 December 2000). Richardson, Don, 1999. Rural telecommunication services and stakeholder participation, in D. Richardson and L. Paisley, eds., The First Mile of Connectivity (Rome, FAO), available at <www.fao.org/sd/cddirect/ cdan0025.htm> (7 November 2000). Richardson, Harry W., 1987. Spatial strategies, the settlement pattern, and shelter and services policies, in Lloyd Rodwin, ed., Shelter, Settlement & Development (Winchester, Allen & Unwin), pp. 207-235. Rodale Institute, 1999. Alternatives to conventional modern agriculture for meeting world needs in the next century, report of a conference on sustainable agriculture: evaluation of new paradigms and old practices, 26-30 April 1999, Bellagio, available at <www.rodaleinstitute.org/global/ 6_00_99.html> (21 December 2000). Rosset, P., J. Collins and Francis M. Lapp, 2000. Lessons from the Green Revolution: do we need new technology to end hunger?, Tikkun Magazine, March-April 2000, pp. 52-56, available at <www.tikkun.org/0003/ 0003toc.html> (26 October 2000). Rotg, Vincent, with Ida Bagoes Mantra and Ryanto Rijanta, 2000. Rural-urban Integration in Java: Consequences for Regional Development and Employment (Aldershot, Ashgate Publishing). Saemaul Undong, n.d. Saemaul Undong in Korea, The National Council of Saemaul Undong Movement in Korea, available at <www.saemaul.or.kr> (15 November 2000). Salmi, Jamil, 2000. Higher education: facing the challenges of the 21st century, TechKnowLogia, vol. 2, No. 1 (January/February 2000), pp. 7-10, available at <www.techknowlogia.org/TKL_active_pages2/TableOfContents/ main.asp? IssueNumber=3> (21 December 2000).
126
REFERENCES
Sawant, S.D. and Sandhya Mhatre, 2000. Urban-rural levels of living in India: trends in disparity and policy implications, Indian Journal of Agricultural Economics, vol. 55, No. 2 (April-June 2000), pp. 99-115. Saywell, Trish, 2000. Hit the road, Far Eastern Economic Review (25 May 2000), pp. 78-81. Scherr, Sara J., 1999. Soil degradation: a threat to developing country food security by 2020?, Food, Agriculture and the Environment Discussion Paper No. 27 (Washington DC, International Food Policy Research Institute). Schiff, Maurice and Alberto Valds, 1995. The plundering of agriculture in developing countries, Finance and Development, vol. 32, No. 1 (March 1995), pp. 44-47. Schwartz, Peter, Eamonn Kelly and Nicole Boyer, 1999. The emerging global knowledge economy, in The Future of the Global Economy: Towards a Long Boom? (Paris, OECD), pp. 77-113. Sen, Amartya, 1991. Economic development: objectives and obstacles, in Kurt Martin, ed., Strategies of Economic Development: Readings in the Political Economy of Industrialization (The Hague, Institute of Social Sciences), pp. 79-96. Sen, Amartya, 2000. Development as Freedom (New York, Knopf). Shivakumar, M.S., Yap Kioe Sheng and Karl E. Weber, 1991. Recruitment and employment practices in construction industry: a case study of Bangalore, Economic and Political Weekly, 23 February 1991, pp. M27-M40. Skeldon, Ronald, 1999. Ageing of rural population in South-East and East Asia, Part 1 and 2 (Rome, FAO), available at <www.fao.org/sd/Wpdirect/ Wpan0028.htm and Wpan0029.htm> (7 November 2000). Spaeth, Anthony, 2000. Wired farmers, Time (21-28 August 2000), pp. 5758. State Statistical Bureau, China Statistical Yearbook 1998 (Beijing, China Statistical Publishing House). Stephens, A., 1995. Gender issues in agricultural and rural development policy in Asia and the Pacific, Regional Expert Consultation, 1-3 November 1993 (Bangkok, FAO), available at <www.fao.org/DOCREP/x0177e/ x0177e00.htm> (15 November 2000).
127
Sullivan, Arthur M., 1990. Urban Economics (Homewood, Illinois, Irwin). Sundaram, K.V., 2000. Decentralized planning and financing of rural development in India, in Harvey Demaine and Hans Detlef Kammeier, eds., Decentralization Local Governance and Rural Development, Proceedings of the International Workshop on Decentralized Planning and Financing of Rural Development in Asia, 19-21 January 1999, Bangkok (Bangkok, Asian Institute of Technology). Tacoli, Cecilia, 1998. Rural-urban interactions: a guide to the literature, Environment and Urbanization, vol. 10, No. 1 (April 1998), pp. 147-166. Tilakaratne, S., 1996. Credit schemes for the rural poor: some conclusions and lessons from practice, Issues in Development, Discussion Paper 9, (Geneva International Labour Office), available at <www.ilo.org/public/ english/employment/strat/poldev/publ/iddp9.htm> (22 December 2000). UNDP, 1992. Benefits of Diversity: An Incentive Towards Sustainable Agriculture, Environment and Natural Resources Group, (New York, UNDP), available at <www.undp.org/seed/food/pages/publications/index.html> (2 January 2001). UNDP, 1996. Urban Agriculture: Food, Jobs and Sustainable Cities, Publications Series for Habitat II, vol. One, (New York, UNDP). UNDP, 1998. Nepal Human Development Report, (Kathmandu, Oxford University Press), available at <www.undp.org.np/keydoc/nhdr98/contents.html> (21 December 2000). UNDP, 1999. Human Development Report 1999 (New York, Oxford University Press). UNDP-IDF, 1998. Reflection paper on diversities and disparities in human development, India Development Forum, (New Delhi), available at <www.undp.org.in/Report/IDF98/default.htm> (7 November 2000). UNEP, 1993. Environmental Data Report 1993-94 (Oxford, Blackwell Publishers). UNEP/Earthscan, 1999. Global Environment Outlook 2000 (London, Earthscan Publications). UNESCO, 2000. Education for all: the year 2000 assessment, Final country report of China, (Paris, UNESCO), available at <www2.unesco.org/wef/ countryreports/china/rapport_2_2_0.html> (12 January 2001).
128
REFERENCES
UNESCO, 2000a. Selected R&D indicators, Institute for Statistics, (Paris, UNESCO), available at <http//unescostat.unesco.org/statsen/statistics/ yearbook/sc.htm> (22 January 2001). United Nations, 1998. World Urbanization Prospects: The 1996 Revision, (United Nations Publication, Sales No. E.98.XIII.6). United Nations, 2000. World Urbanization Prospects: The 1999 Revision, Data Tables and Highlights, United Nations Population Division (New York, United Nations), (ESA/P/WP.161). United Nations, 2000a. World Urbanization Prospects: The 1999 Revision: Key Findings, United Nations Population Division, (New York, United Nations). van Crowder, L., 1998. Learning for the future: human resources development to reduce poverty and achieve food security, (Rome, FAO), available at <www.fao.org/sd/cddirect/cdan0011.htm> (12 December 2000). Von Meyer, Heino, 1998. The insights of territorial indicators, The OECD Observer, No. 210 (February/March 1998), pp. 5-8, available at <www.oecd.org/publications/observer/210/obs210e.htm> (21 December 2000). Wanmali, Sudhir, 2000. Urban-rural linkages: infrastructure and transport, paper presented at Science in dialogue: Global dialogue at EXPO 2000, August 15-17, 2000, Hanover. Watkins, Kevin, 1999. Education now: break the cycle of poverty, Oxfam, available at <www.caa.org.au/oxfam/advocacy/education/report/index.html> (12 January 2001). Williams, Frederick, and Mary Moore, 1997. Telemedicine: its place on the information highway, in W.W. Cooper, S. Thore, D. Gibson and F. Phillips, eds., How IC2 Research Affects Public Policy and Business Markets, available at <www.health.fgov.be/WHI3/periodical/months/ wwhv1n6tekst/975597B3.htm> (26 December 2000). Wirth, L., 2000. Urbanism as a way of life, in Richard T. LeGates and Frederic Stout, eds., The City Reader (London and New York, Routledge), pp. 98105. World Bank, 1990. Poverty: World Development Indicators (Oxford, Oxford University Press).
129
World Bank, 1994. Indonesia transmigration program: a review of five banksupported projects, Report No. 12988, (Washington DC, The World Bank), available at <http://wbln0018.worldbank.org/oed/oeddoclib.nsf/ 3b01efb621e6553785256885007d98b9/777331ddd0b6239c852567 f5005ce5e2?OpenDocument> (12 January 2001). World Bank, 1995. Development in Vietnam, (Viet Nam, World Bank), available at <www.worldbank.org.vn/econdev/navpd.htm> (7 November 2000). World Bank, 1995a. Workers in an Integrating World: World Development Report 1995 (Oxford, Oxford University Press). World Bank, 1997. Sharing rising incomes: disparities in China, (Washington DC, World Bank), available at <www.worldbank.org.cn/English/content/ 481k612916.shtml> (21 December 2000). World Bank, 2001. Attacking Poverty: World Development Report 2000/2001 (Oxford, Oxford University Press). World Bank, 2000a. World development indicators, (Washington DC, The World Bank), available at <www.worldbank.org/data/wdi2000/index.htm> (7 November 2000). World Bank, 2000b. Rural development: from vision to action, (Washington DC, The World Bank), available at <http://wbln0018.worldbank.org/essd/ essd.nsf/91176068c8671c74852567eb006538fd/49254fcb 42376756852567fc0058cc7c?OpenDocument#print> (21 December 2000). WRI, 1996. World Resources 1996-1997, joint publication by the World Resources Institute, UNEP, UNDP and the World Bank, (New York and Oxford, Oxford University Press). WRI, 1998. World Resources 1998-1999, joint publication by The World Resource Institute, UNEP, UNDP and The World Bank, (New York and Oxford, Oxford University Press). WWI, 2000. State of the World 2000: A World Watch Institute Report on Progress Toward a Sustainable Society (New York, W.W. Norton & Company). Yap, Kioe Sheng and Radhika Savant Mohit, 1998. Reinventing local government for sustainable cities in Asia: implementing the Habitat II Agenda in education and training, Regional Development Dialogue, vol. 19. No. 1 (Spring 1998), pp. 87-94.
130
REFERENCES
Yergin, D. and J. Stanislaw, 1998. The Commanding Heights: The Battle between Government and the Market Place that is Remaking the Modern World (New York, Touchstone and Simon and Schuster). Yu Zhu, 1998. Spatial effects of informal urbanization in China: the case of Fujian province, Asia-Pacific Population Journal, vol. 13, No. 1 (1998), pp. 25-44. Yusuf, Shahid, 2000. The changing development landscape, paper presented at the Second Asian Development Forum, Workshop on Benefits and Risks of Decentralization, 5-8 June 2000, Singapore, (Washington DC, The World Bank), available at <www.worldbank.org/wbi/wbiep/adf/papers.html> (12 January 2001). Zhang, Amei, 1996. Economic growth and human development in China, Occasional Paper, No. 28, Human Development Report Office (New York, UNDP), available at <www.rrojasdatabank.org/oc28a.htm> (21 December 2000). Zhao, Anna Yaohui (n.d.). Rural to urban migration in China: the past and the present, unpublished manuscript quoted in Yuko Asano, Effects of the Migration Policy after Reform on Rural-urban Income Disparity, Elliot School of International Affairs, George Washington University (Washington DC, 1998), available at <www.hfni.gsehd.gwu.edu/~econ270/Yuko.htm> (12 March 2001).
131

Disparities

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Disparities

Uploaded by

Copyright:

Available Formats

BALANCED DEVELOPMENT

ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC

UNITED NATIONS New York, 2001

Kim Hak-Su Executive Secretary

5.1 6.1 6.2 6.3

Chapter I. Balanced development

RURAL-URBAN AND REGIONAL DISPARITIES

Chapter II. Rural-urban and regional disparities

Table 2.1 Poverty in Asia and the Pacific, 1987-1998

1990 92.0 360.4 495.1 947.5 1 276.4 74.2

1993 83.5 348.4 505.1 937.0 1 304.3 71.8

1996 55.1 210.0 531.7 796.8 1 190.6 66.9

1998 65.1 213.2 522.0 800.3 1 198.9 66.8

114.1 303.4 474.4 891.9 1 183.2 75.4

Rural % 46.0 43.1 7.9 12.3 39.0 48.1 53.0

1991-1992 1993-1994 1996 1996 1996 1993 1993

1995 1995-1996 1991 1994 1994 1985-1986 1990 1993

33.1 44.0 36.9 53.1 .. 45.5 .. 57.2

38.5 23.0 28.0 28.0 .. 26.8 .. 25.9

36.3 42.0 34.0 40.6 30.9 40.6 18.0 50.9

.. .. .. 1997 .. 1990-1991 1992 ..

.. .. .. 51.2 .. 38.1 15.5 ..

.. .. .. 22.5 .. 28.4 10.2 ..

.. .. .. 40.6 .. 35.3 13.1 ..

World Bank, 2000a.

RURAL-URBAN AND REGIONAL DISPARITIES

Urban 49.0 45.2 40.8 38.2 32.4

56.4 53.1 45.7 39.1 37.3

Government of India 2000: 17.

Table 2.4 Incidence of poverty in Malaysia, 1995, 1997, 2000

2000 Total Urban Rural 1.9 0.1 10.0 1.0

RURAL-URBAN AND REGIONAL DISPARITIES

Table 2.5 Population with access to basic services, 1990-19961

39 99 75 65 97 85 79 98 100 84 60 96 100 78 88 82 84 92 100 88 82 94 91

80 .. .. 80 100 100 99 100 .. .. .. .. .. 100 .. 99 .. .. 100 .. .. 90 ..

Mean years of schooling 1994 3.04 5.76

Infant mortality rate 1994 80 52

Child mortality rate 1994 26.1 15.7

Access to safe drinking water 1991 63.6 90.7

1991 44.5 73.1

Illiteracy rates (%) Men 11.09 4.06 Women 28.37 15.11

Men 31 730 3 766

Women 31 229 3 784

Total 12 379 725

Men 3 519 153

Women Total 8 860 572 19.66 9.60

RURAL-URBAN AND REGIONAL DISPARITIES

RURAL-URBAN AND REGIONAL DISPARITIES

RURAL-URBAN AND REGIONAL DISPARITIES

UNDP-IDF 1998; Government of India 2000a. 1. SDP = state domestic product.

Midwestern 0.24 0.31 0.31 0.29

Western 0.31 0.35 0.35 0.34

Central 0.27 0.44 0.31 0.34

Eastern 0.34 0.37 0.38 0.36

Total 0.28 0.37 0.34 0.33

0.26 0.36 0.33 0.32

RURAL-URBAN AND REGIONAL DISPARITIES

Table 2.10 Per capita annual income by province in China, 1998

Province Hunan Hainan Hubei Anhui Liaoning Jilin Henan

5 558.29 5 322.66 4 844.72 4 763.26 4 441.91 4 001.30 3 999.36 3 836.54 3 592.43 ..

2 037.06 1 916.90 2 102.23 1 808.75 2 301.48 2 186.29 1 733.89

Heilongjiang 2 308.29 Jiangxi Shanxi Inner Mongolia 2 107.28 1 738.26 1 780.19

RURAL-URBAN AND REGIONAL DISPARITIES