While rural development strategies need to be context specific, and include policy reforms, institutional innovations and investments, clearly they need to appropriately value the role of agriculture and the rural economy, and the great potential of rural people themselves as agents of inclusive transformation. Over the past quarter century, the reduction in poverty levels has been striking. By , that proportion had fallen to Most of the improvement was in Asia and the Pacific region.
The most limited progress has been achieved in sub-Saharan Africa. Despite this, poverty levels in rural areas of most regions remain well above those in urban areas. Rural development is one of the most effective ways to overcome rural poverty and to reduce the gap between rural and urban realities. Rural development has a direct impact on incomes and food and nutrition security. It also affects quality of life through improved education, healthcare and other critical services. The introduction looks at the driving forces. It explores the connection between national economic development and rural transformation, and the links between city and farm.
It also looks at the way in which governments and others can ensure that poor and marginalized rural dwellers are not left behind in the process. Historical legacies and policy and investment choices shape the pathways, speed and results of structural and rural transformation, leading to very different inclusion outcomes in different countries. Interventions must take many factors into account, from employment, access and rights, to land and resources, finance, agrifood markets and value chains, technology, innovation, empowerment, gender equality and social protection.
The introduction outlines the focus of the report, its analytical framework and the regional perspective. These chapters look at six critical areas for policy action and investment: employment, land and natural resources, rural finance, agricultural technology innovation, markets and value chains, and collective action.
Economic transformation: where are we heading, post-2015?
Latin America and the Caribbean. Structural and rural transformation in Latin America and the Caribbean. In some countries in the region, large estates have become corporate farms that are often big rural employers. They generate the majority of agricultural GDP, and control almost all agrifood processing.
UNU-WIDER : Working Paper : Structural transformation in the world economy
Rural economies have diversified, and rural roads and communications technologies have blurred the cultural distance between rural and urban youth. Rural-urban territories have sprung up, centred on small towns and villages, creating new types of rural societies in which agriculture is still important, but no longer dominates the economic landscape. Yet there are still an estimated 15 million family farms. Evidence from this region suggests that if a country wants to cut poverty fast, it needs to transform its national economy and prioritize smart rural development policies, investments and institutions.
Four countries managed to perform above the regional average on structural and rural transformation and inclusion. Why did they perform better? Over the period , Chile cut rural poverty by 56 per cent, Brazil by 42 per cent, while Peru and Bolivia each achieved reductions of 30 per cent.
Bolivia, Colombia, Ecuador, Mexico and Uruguay reduced rural income inequality, even as it increased in most Central American countries. Targeted government cash transfers are only part of the explanation of such outcome. Asia and the Pacific. Structural and rural transformation in Asia and the Pacific.
The remarkable structural transformation of leading economies in the Asia and Pacific region is well known. Production has moved from cereals and grains to higher value products such as livestock and fisheries.
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Consumption patterns have shifted at the same time, from starchy staples and rice to fruit and vegetables, livestock and dairy products, and fish, sugar and oils. Yet the countries with higher overall economic growth also have higher agricultural productivity and overall production growth. Countries that have achieved fast structural and rural transformation have also dramatically reduced poverty, which across the region fell from 71 per cent in to 15 per cent in But slow transformers have not witnessed the same reductions as did faster transformers in the region. Across this region of 3. Poverty here is largely a rural phenomenon.
The cases of China, India, the Philippines and Viet Nam show that policies, institutions and investments are key to determining the speed and inclusiveness of rural transformation. In each country, land reform, basic investments in rural areas and other sectoral policies have been decisive factors. Now a new set of challenges is emerging: fast transforming countries have to shift to sustainable rural development, overcoming stresses, including from land and water degradation, and economic, institutional and political constraints. Countries with slow rural transformation and slow poverty reduction, on the other hand, need to focus more on improving access for the rural poor to land and credit, and boosting investments in agricultural technology and rural infrastructure.
A late starter in the development race, Africa displays diverse patterns of growth across a vast continent. Schooling, health and infrastructure are improving, but still remain problematic in many countries.
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Yet most African countries continue to wrestle with a youth bulge, small and declining manufacturing sectors, and deeply entrenched development barriers. Alongside structural transformation, some rural areas are transforming deeply and rapidly. But while agricultural output and productivity are growing, crop diversification remains limited, i.
Insecure land tenure, a lack of basic infrastructure, inadequate credit and insurance, and ethnic and gender disparities are all brakes on inclusive rural transformation. Most countries that have achieved high structural and rural transformation have also cut poverty quickly, but few slow transformers have been able to do so. Projections indicate that Africa will remain predominantly rural until about Rural poverty remains deep and widespread, concentrated among young people and women.
About 65 per cent of youth work in agriculture: only 16 per cent have waged jobs in the public and private sectors. Agriculture accounts for 24 per cent of GDP across the region, and agribusinesses 20 per cent more, complemented by mining and services. Recent increases in farm output came not from technology change leading to increased productivity, but from bringing more land under cultivation.
In Kenya, land ownership is becoming more concentrated, even as the number of plots of less than one hectare has doubled to two million. Often reliant on natural resources, most are progressively swopping central-planning for market-driven economic policies. In NENA, a population growth rate of 3.
Population growth averaged only 1 per cent in the former CIS. But across both regions, increasingly harsh droughts and related losses in productivity and incomes, have hampered rural transformation. In some NENA countries conflict has impoverished rural dwellers, while ill-designed subsidies and agricultural schemes failed to meet expectations. In CIS countries, state ownership has been largely undone, creating agri-businesses but also a vital small farm sector in which farming skills and support mechanisms are weak.
NENA is often characterized by a lack of economic diversification, uncompetitive manufacturing and a bloated public sector. Yet in Tajikstan, the poorest former CIS country, the rural population is growing faster than the urban population, with two-thirds of the workforce mired in low-productivity, poorly-paid jobs and 2. Gender equality and women's empowerment. Environmental sustainability. Institutions and governance. Food and nutrition security. A bulging youth population is most evident in sub-Saharan Africa, and to a lesser extent Latin America and the Caribbean.
But today, movement to cities accounts for less than half their population growth; rather, many small and medium towns are growing. Migration, both rural-urban and international, is a common response to a lack of economic opportunities for young people. The further you go, the more you tend to earn. Unlike in many other fields of economics, approaches in development economics may incorporate social and political factors to devise particular plans. The earliest Western theory of development economics was mercantilism , which developed in the 17th century, paralleling the rise of the nation state.