A NEW RURAL DEVELOPMENT

PARADIGM FOR DEVELOPING

COUNTRIES FOR THE 21RST CENTURY

Carl Dahlman
OECD Development Centre
Brussels
November 16, 2015
 Why a new rural development
paradigm?
• Three billion people live in rural areas in
developing countries and number will
continue to rise for the next 15 years
• More than 60% of rural population in
developing countries is below $2.00PPP/day
• Developing countries need better strategies
to deal with large and growing rural
populations
• Effective rural development strategies are
going to be necessary to achieve the
Sustainable Development Goals
 Total Rural Population continues to
increase until 2028

Less developed regions More developed regions

Rural Population (thousands)

4.000.000

3.500.000

3.000.000

2.500.000

2.000.000

1.500.000

1.000.000

500.000

0
 Population Growth Rates in the
Developing World (1950-2050)
Population Growth Rates

World Sub-Saharan Africa Southern Asia Southeast Asia

2,5

1,5

0,5

0
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
 Multidimensional Poverty Index, rural
substantially lag urban areas

Source: Oxford Poverty and Human Development Initiative (2015), Global MPI Data Tables for 2015, database
 Access to services, rural and urban areas (2012)

China Korea Thailand Vietnam Côte d`Ivoire Tanzania

Access to electricity (% of total population
100 100 100 99 55.8 15.3
with access)

% of urban population 100 100 100 100 88.1 46.4

% of rural population 100 100 99.8 97.7 29 3.6

Improved water source (% of total population

93.2 97.6 97.1 93.8 81.2 55.4
with access)

% of urban population 97.5 99.7 97.5 98 92.8 78.9

% of rural population 88.5 87.9 96.8 91.9 68.6 45.5

Improved sanitation facilities (% of total

73.1 100 93.2 73.1 21.6 14
population with access)

% of urban population 84.4 100 89.9 90.8 32.4 28.3

% of rural population 60.9 100 96.1 64.8 10 8.1

Source: World Bank, World Development Indicators, 2015

 Challenges and opportunities for
developing countries today
Challenges
• Demographic pressure, 370 million additional youth will join the
labour market in SSA within 15 yrs.
• More competitive global context limits many previous opportunities
• Climate change, higher vulnerability to droughts and water stress.
• Rural-to-urban migration with limited productive jobs.

Opportunities
• New links and lower costs to international trade and access to
global supply-chains.
• New technologies: Green Revolution, ICT-enabled services, better
access to and exchange of information for rural populations (must
be leveraged on other policy actions)
• Rural industry, education and health services, tourism
 Different trajectories: OECD, Korea,
developing countries

% Employment in agriculture vs rural population

90

: % rural population
80
---- : % employment in agriculture

70
Developing World
60

50

Korea
40

30 OECD Countries

20

10

0
 Rural population in selected countries, 1960-2014

China Cote d'Ivoire Thailand Tanzania Vietnam

% of total population

100

90

80

70

60

50

40

30

20

10

Source: World Bank, World Development Indicators, 2015

 Ten key lessons from the analysis and
country studies-(1)

1. Rural development strategies need to be country-specific

because rural areas are not all the same
2. Governance is a key factor in the success or failure of rural
development
3. Demographic dynamics play a vital role
4. Policies that build on rural-urban linkages can drive
development
5. Agriculture is still a growth engine in many developing
countries…
 Income per capital, urbanization and
total fertility per women 1960-2012
GDP per capita PPP$ inflation-adjusted

35,000

Korea
China
30,000 Côte d`Ivoire
Vietnam
Thailand
25,000 Tanzania

20,000 TFR = 7

TFR = 3.5
15,000

TFR = 1

10,000

CIV 1960
5,000
VNM 1960

0
THA 1960
KOR 1960
TZA 1960 CHN 1960

-5,000
0 10 20 30 40 50 60 70 80 90
Urban Population (% of total)
 Ten key lessons from the analysis and
country studies-(2)

6. … but there is more to rural areas than agriculture

7. Inclusive infrastructure is critical for rural economic
growth
8. Gender equality is fundamental for rural development
9. Inclusive policy approaches are necessary to reduce rural
poverty
10. Rural development and environmental sustainability go
hand in hand
Evolution towards a new rural development
paradigm
Old paradigm New context New paradigm
Principles  Focus on rural  Widening inequalities between rural and  Rural areas inextricably linked
areas only urban to cities, regions and national
 Growth will follow  Climate change context
agricultural and  Rapid population growth in many  Women critical for rural
industrial developing countries development
development  Information revolution  Governance capacity is key

Key target Agriculture, rural  Agriculture not able to provide  Multi-sectoral: all economic
sector communities sustainable livelihoods for growing sectors that can contribute to
populations productive growth: agriculture,
 Urban areas not able to productively rural industry, services,
absorb large inflows of rural migrants tourism, ICT, biofuels.
Main approach  Project-based  Sustainable Development Goals  Tailored to the specific context
 Agricultural  Multi-dimensional poverty assessment (natural, economic, social, and
technology and Multi-dimensional Country Review institutional)
 Green Revolution  Community-driven development  Prioritised and realistic
 Well-sequenced to maximise
synergies

Key actors Agricultural ministries,  Greater participation by non-state actors  Multi-agent: participation and
agricultural research including the private sector, rural collaboration of broad set of
and extension, donors, communities, NGOs, and foundations stakeholders across public and
local governments, private sectors and from
farmers national to local
 The new rural development paradigm for
developing countries

1. Is multi-sectoral: focusing not just on agriculture,

but also rural industry and services; and not just
rural focused, but also building on rural-urban
linkages
2. Is multi-agent and multi-level: involving not just
national government, but also local and regional
governments, the private sector, international
donors, NGOs, and rural communities
3. Contains 8 key components, and includes an
illustrative menu of 25 policy tools which offer
opportunities for rural development in the 21st
century.
Structure of the NRDP
 Components of the NRDP

• Governance. A consistent and robust strategy is not enough if

implementation capacity is weak. It is thus important for an effective
strategy to build governance capacity and integrity at all levels.
• Multiple sectors. Although agriculture remains a fundamental sector in
developing countries and should be targeted by rural policy, rural
development strategies should also promote off-farm activities and
employment generation in the industrial and service sectors.
• Infrastructure. Improving both soft and hard infrastructure to reduce
transaction costs, strengthen rural-urban linkages, and build capability is a
key part of any strategy in developing countries. It includes improvements
in connectivity across rural areas and with secondary cities, as well as in
access to education and health services.
• Urban-rural linkages. Rural livelihoods are highly dependent on the
performance of urban centres for their labour markets; access to goods,
services and new technologies; as well as the exposure to new ideas.
Successful rural development strategies do not treat rural areas as isolated
entities, but rather as part of a system made up of both rural and urban
areas.
 Components of the NRDP (cont.)

• Inclusiveness. Rural development strategies should not only aim

at tackling poverty and inequality, but also account for the
importance of facilitating the demographic transition.
• Gender. Improving rural livelihoods should take into account the
critical role of women in rural development, including their property
rights and their ability to control and deploy resources.
• Demography. High fertility rates and rapidly ageing populations
are two of the most relevant challenges faced by rural areas in
developing countries today. Although the policy implications of
these two issues are different, addressing these challenges will imply
good co-ordination across education, health and social protection
policies, as well as family planning.
• Sustainability. Taking into account environmental sustainability
in rural development strategies should not be limited to the high
dependence of rural populations on natural resources for livelihoods
and growth, but also their vulnerability to climate change and
threats from energy, food and water scarcity.
Operationalization of the NRDP
 Criteria for Country Classification
Countries have been classified according to the following criteria:
 Rural Population Share: rural population higher than 67%, between 34% and 67% and less than 34%
 Natural Resources: natural resources rents (excluding forestry) accounting for more or less than 10% of GDP
 Demography: Total Fertility Rates (TFR) divided into five categories from higher than 5 to lower than 2 births per
woman.
 State Fragility: countries are color-coded according to their level of fragility and classified as: Very High Alert,
High Alert, Alert, Very High Warning, High Warning, Warning, Less Stable, Stable and Very Stable.
Our Index is adapted from the existing Fragile States Index but includes only the following relevant six dimensions:

1. Group Grievance 4. Security Apparatus

2. Legitimacy of the State 5. Factionalised Elites
3. Human Rights 6. External Intervention

 Climate Change Vulnerability: the underlined countries are the ones with a high score in the vulnerability to
climate change index (higher than 0.50), as derived from the Notre Dame Global Adaptation Index.
Vulnerability is measured by considering six life-supporting sectors and three components within each of them.
Six life-supporting sectors
1. Food Three components within each sector
2. Water
a. Exposure of the sector to climate-related or climate-exacerbated hazards
3. Health
b. Sensitivity of that sector to the impacts of the hazard
4. Ecosystem Services
c. Adaptive capacity of the sector to cope with or adapt to these impacts
5. Human Habitat
6. Infrastructure

 Landlocked countries: the asterisk indicates when a country is landlocked.

 Classification Matrix
Rural population>67% 34%<Rural population<66%
National rents<10% of GDP National rents>10% of GDP National rents<10% of GDP National rents>10% of GDP
TFR>5
Burundi*
Angola
Malawi* Gambia
Burkina Faso* Congo, Dem. Rep.
Niger* Mali*
Chad* Nigeria
Timor-Leste Somalia
Zambia*
Uganda*
4<TFR<5 Benin
Cameroon
Afghanistan*
Côte d'Ivoire
Comoros
Guinea-Bissau Congo
Ethiopia*
Eritrea Liberia Equatorial Guinea
Kenya
South Sudan* Madagascar Guinea
Mozambique
Senegal Mauritania
Rwanda*
Sierra Leone
Tanzania
Sudan
Togo
3<TFR<4

Samoa
Central African Republic*
Swaziland* Ghana
Papua New Guinea Guatemala
Tajikistan* Yemen, Rep.
Sao Tome and Principe
Zimbabwe*

Note: here we focus only on countries with more than 34% of population living in rural areas.
 Classification Matrix (cont.)
Rural population>67% 34%<Rural population<66%
National rents<10% of GDP National rents>10% of GDP National rents<10% of GDP National rents>10% of GDP

2<TFR<3 Belize
Bhutan*
Botswana*
Cabo Verde
El Salvador
Grenada
Haiti
Bangladesh Honduras Ecuador
Cambodia Indonesia Egypt, Arab Rep.
Jamaica
India Kazakhstan*
Guyana Kyrgyz Republic*
Lesotho* Lao PDR*
Morocco
Nepal* Namibia Turkmenistan*
Sri Lanka Nicaragua Uzbekistan*
Pakistan
Panama
Paraguay*
Philippines
Seychelles
South Africa
Syrian Arab Republic
TFR<2 Albania
Armenia*
Bosnia and Herzegovina
China
Georgia
Macedonia, FYR*
Viet Nam Mauritius Azerbaijan*
Moldova*
Montenegro
Myanmar
Romania
Serbia*
Thailand
 Key points to keep in mind

• Strategies have to be tailored to specifics of each

countries situation
• This requires detailed assessment and knowledge
of the local context. It is not a process that can be
done from abroad.
• It requires deep local knowledge and consultations
and negotiations with relevant local agents
• Development and implementation of effective
strategies requires improving the capability of
government at all levels of other key actors, as
even the best strategies need to be adjusted over
time as circumstance change
 25 Policy Tools in 8 Components
Component Policy tools
Governance • Building government capacity
Multi-sector rural Agriculture
development • Improving productivity and resilience of subsistence agriculture
• Agricultural modernisation
• Integrating rural areas into global value chains
• Land policy
Industries
• Promoting rural industry
• Promoting handicrafts and cottage industries
Services
• Promoting private-sector rural service industries
• Promoting access to credit, finance, and markets
• Promoting sustainable tourism
Infrastructure • Promoting basic physical infrastructure investments
• Promoting access and use of ICTs
Urban-rural • Fostering urban-rural linkages
linkages • Developing intermediary cities
• Better harnessing internal and international migration
Inclusiveness • Providing education and training
• Ensuring basic health
• Transferring cash to promote development
• Improving food security
• Building social capital
• Promoting community driven development
Gender • Mainstreaming gender in development
Demography • Addressing high population growth
Sustainability • Ensuring environmental sustainability
• Building resilience
 SDGs and Rural Development

• SDGs and rural development are mutually reinforcing

• SDGs are not the end goals themselves: they indicate the need
to have a comprehensive rural development strategy.
• Promoting rural development will be crucial to achieving:
– poverty elimination (Goal 1),
– food security and sustainable agriculture (Goal 2),
– people’s well-being in rural areas (Goal 3), and
– sound economic growth at both local and national level (Goal
8).
• A new paradigm for rural development will be crucial for
achieving the new SDGs, which will strongly influence
development practices in the 21st century.
 Moving forward

• The new rural development paradigm for the 21st century can be used as a tool for
identifying some of the challenges and proposing some of the solutions to achieving
the Sustainable Development Goals (SDGs)
• In the process of developing it we have identified some major challenges beyond
climate change which will require concerted national and international action
– Addressing very high population growth in many countries, particularly in Sub-
Saharan Africa
– Need to create massive productive employment
– Need to improve governance, and government capability
– Need to improve donor coordination
– Need to develop greater resilience in developing country
• Addressing some of these challenges will require
– new innovative approaches including new technologies, organization and ways
of implementing strategies
– More efforts to build local capability in governments at all levels, but also in the
private and NGO sector
– Greater international coordination and more effective ways of engagement
•
 Working-age population, 2015-2030
Sub-Saharan Africa Europe

Millions
900

800

700

600

500

400

300

200

100

0
2015 2020 2025 2030

Source: UN, World Population Prospects, 2015 revision

2015 2020 2025 2030 2035 2040 2045 2050

Sub-Saharan Africa 519 601 696 803 918 1 042 1 172 1 308

Europe 492 479 466 453 442 431 418 405

Note: population is expressed in millions

 Desirable next steps: Pilot the implementation
of NRDP in 3 African countries.
• Objective: guide policymakers in the design and
implementation of rural development strategies that take
into account the wellbeing of between rural and urban
populations.
• Agents: OECD DEV will provide policy guidance in
partnership with other international organisations that have
the capacity to carry out field work for supporting the
implementation of the strategy.
• Expected outcome:
– Improve local capacity for designing and implementing rural development
strategies that address the most relevant challenges for such as job creation,
increasing rural population, access to markets and services, and
environmental degradation.
– Reduce urban and rural disparities by building on local assets, exploiting
policy complementarities, and strengthening urban-rural linkages
THANK YOU!
[email protected]