Development Roast Giving international development a proper roasting
Since entering the world of economics a short while ago I have repeatedly been surprised by some major development institutions’ lack of regard for the country-side and rural activities. In the 2009 the World Development Report the World Bank called on an increase in urbanization, and therefore a reduction in rural employment, as “essential for economic success.” This development policy was adopted by both the World Bank and a number of senior economists after seeing the positive effects that industrialization has had in North America, Western Europe and Northeastern Asia. One underlying view behind this popular urbanization theory is that the countryside is a breeding ground for poverty, which can only be relieved with mass migration to cities where “proper” economic activities in the service and business sectors can be undertaken.
At first I was puzzled by such disregard—by the very people who normally want to take advantage of every economic opportunity however minor it is—for an economic resource that makes up the majority of the world’s surface, is the second greatest source of employment worldwide and provides one of the only truly vital commodities to humans: food. What then puzzled me even further was the lack of acknowledgement that the countryside was a pleasurable place to live and that many people prefer the “country-life” and even choose it over city living despite the lesser economic opportunities in terms of income. But then it dawned on me that I am yet to meet a “country-bumpkin” economist—they are all city folk! This is an obvious exaggeration; there are a number of “pro-agro” economists doing wonderful research. However, they seem to be a minority, and this demographic factor of the economic research world is bound to have effect on the policies promoted, as anyone born and bred in the country will tell you that urbanites “just don’t get it!”
This latter lack of consideration by economists for the social joys of country life is not wholly surprising as, despite the recent shift in economics toward the social sciences, economists remain economists and prefer concrete growth in percentages to wishy washy concepts like life satisfaction. However, explanations for the formerly mentioned disregard for the economic resources that the countryside offers in abundance are not so obvious.
Anti-rural attitudes in economics are obviously not completely without foundation; there are statistics that support the role of urbanization in a country’s socio-economic development, and it´s no secret that the majority of the world’s poverty lies in rural regions and that third world countries, almost without exception, have larger agricultural sectors than developed ones. However, the cause and effect relationship is not so clear. It seems to me that economists gravitate to anti-rural development statistics to prove their point without considering all the underlying reasons. For example, in a recent symposium on employment held in Bolivia a senior economist cited that agriculture accounts for 4 percent of Australia’s Gross Domestic Product (GDP), 10 percent of Bolivia’s, and 33 percent of Rwanda’s. This is an extremely biased overview of rural practices in developed and developing countries as it does not take into account the suitability of each country for a developed rural sector. Australia would have been crazy to focus on agricultural activities in its economic development plan, as it has extreme weather patterns that can leave large sections of the country without rainfall for years at a time, whereas Rwanda has a tropical climate in many regions that is highly suitable for agriculture, as well as a strategic geographical position for supplying many African and European countries with food in the future. It would therefore be economically sensible for Rwanda to include agriculture in any future economic development policies, but less so for Australia. Furthermore, it is unlikely that Rwanda´s low GDP when compared to Australia, is due to its large agriculture sector, as an overriding factor would be its history of political and social instability.
A well developed rural sector can be equally vital for an economic success as the development of the urban sector. For instance, dairy farming alone accounts for 2.8 percent ($5 billion) of New Zealand´s GDP, which is 40 percent larger than the entire utilities sector and 60 percent larger than the construction sector. This rural employment sector has long reaching effects throughout New Zealand as each single United States Dollar (USD) increase in payout increases the annual spending of every man, woman and child in New Zealand by 270 USD. Moreover, its economic impacts are more geographically equal than the average urban economy, as not only does it positively affect a number of rural regions it also feeds urban business since the average dairy farmer spends well over half their income on goods and services to support on-farm operations.
Further evidence that agriculture is not a counterforce to economic development is that two of the major BRICS (Brazil, Russia, India, China, South Africa) countries continue to represent 60 percent of the world’s agricultural labor force, and that the fairly developed East Asian economies still hold 30 percent of their labor force in the agriculture sector.
Moreover, agriculture is not the only product that the countryside has to offer. Many European countries have healthy rural populations but not much farming. Even in England, which is considered to be an urbanized European economy, rural businesses account for 22 percent of the country’s overall employment and 19 percent of its Gross Value Added (GVA).
On the flip side of the coin, urbanization has not had the positive economic affects that were predicted in all continents by the 2009 World Development Report. Sub-Saharan Africa’s experience, where the increased urbanization of the last decade has had little effect on the economy and where many towns are even experiencing reverse migration, suggests that the urbanization phenomenon may be one that is only applicable to Asian and other similar economies and that it should not be considered a worldwide policy of development.
It therefore seems that many pro-city economists may very well be misguided in their focus on urbanization and their disregard for the rural sector. A more balanced view of urban-rural economic contributions will lead to successful socio-economic development and may also be vital in accommodating the employment needs of increased numbers of young people. In the Least Developed Countries (LDCs), where agricultural practices are most widespread, the percentage of the population between 15 and 24 years old is expected to double between now and 2050. In many of these countries urban settlements are already struggling to meet employment demands and are therefore in desperate need of more rural development policies that will increase both agricultural and non-agriculture based rural employment opportunities.
For these reasons economic think tanks should start thinking about constructing well rounded research teams in terms of geographical demographics. As things currently stand, there is and will continue to be a natural bias due to the fact that most economists come from developed countries, where the likelihood is that they will come from an urban setting, and have chosen a job that is difficult to do in the country side. But this natural bias does not have to be a determinant of future economic development. If some institutes find minimizing the gap between urban and rural born economists difficult, there are other measures that can be taken such as training in rural economics or, better still, moving the research centre away from a major city to improve researchers’ accessibility to the countryside.
Do you think that a country can develop and sustain a large rural population? Or do you think that urbanization is vital for economic development?
Mieke Dale-Harris is working as an intern at the Institute of Advanced Development Studies (INESAD), La Paz, Bolivia. She is a psychology graduate from Goldsmiths University of London.
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For your reference:
Schilling, C., Zuccollo, J. and Nixon, C. (2010) Dairy’s role in sustaining New Zealand – the sectors contribution to the economy. Report to Fonterra and Dairy NZ.
International Labour Office (ILO) (2008) Report IV: Promotion of rural employment for poverty reduction. Geneva, Switzerland.
Department for Environment, Food and Rural Affairs (2011), Rural Economy Growth Review. Link: http://www.defra.gov.uk/statistics/rural/the-rural-economy
Andersen, L. (2008) Reducing vulnerability to climate change: Mitigation, Development or Migration. Development from within, Plural editores.
Africa´s economic development has not been accelerated by urbanization. (2012) Guardian. Link: http://www.guardian.co.uk/global-development/poverty-matters/2012/oct/04/africa-economic-growth-not-accelerated-urbanisation
Mieke,
A thoughtful article, but not quite right. There are many economists who extol the virtues of rural life but empiricism seems to suggest that the tendency to urbanisation is a hallmark of development. It is true that Australian agriculture accounts for only a small share of GDP but for most of the country’s first 180 years, it was our most important export sector. Australian Agricultural success is built on continual productivity improvement, a factor that contributes to the depopulation of rural areas.
Much of innovation contributing to this change emanated from cities where the research institutes and engineering businesses were based. The agricultural surpluses contributed to growth in urban areas as as well as the lack of employment opportunities in regional areas drove people to the cities. This process does not just happen by legislative fiat, similarly developed countries have a long history of subsidising decentralisation to not avail. So if there are no country bumpkin economists, it is not necessarily due to inclination but a reflection of long run observations of human economic behaviour.
Bill,
Thank you comment. It presented an argument that I was expecting to recieve sooner or later.
Urbanisation does contribute to development, and my article was not suggesting they we discourage all types of urban migration. However, in my opinion, in this world one size rarely fits all. So although accelerated urbanisation worked in Asia a more parallel rural and urban development may be a suitable economic model in other countries or continents. As you point out, it was Australia’s long history of agriculture that was a driving force behind its development.
Furthermore, a country needs to feed itself and if possible neighbouring countries and a developed and productive agriculture sector is needed to do this. England, which imports 40% of its fruit and veg, is currently suffering from above average inflation on these products, which in turn is leeding to malnutrition and food insecurity among British lower and middleclass families. Developing countries should not therefore be encouraged to turn their rural territory over to agribusinesses or worse still abandon it all together. They should be encouraged to nuture it and the trickle-up style development that it has the potential to initiate.
With all the interest in “local economies” and “sustainable living” one would think economists would be more interested in understanding the rural world where sustainable living is actually happening in local economies. The vast corporatized food chain of global production and distribution is inherently energy intensive simply from having to transport equipment and products crisscross round the world. Especially in tropical countries with year round growing seasons rural life can be a very pleasant alternative to the concrete canyons of the city. Even within developed world cities, zoning laws that strictly divide residential and commercial land uses prevent people from working where they live and even from growing gardens (rather than grass) on the land they possess–their front yard. You cannot have a “local economy” if you build vast residential subdivisions, and forbid people to operate businesses out of their homes or to grow food in their yards, which forces people to commute by fossil fueled cars and buses to their places of work and to centralized supermarkets where they acquire their food that is imported from the countryside of their own and other nations. Food security is the most basic security of all, and city dwellers are utterly dependent on food imports delivered constantly by ship, rail and truck. Country folk who know how to fend for themselves by directly producing most of what they need may not be as rich as city folk who work in more abstract sectors of the economy, but self sufficient agriculture is certainly more “secure” than is city life.