World Bank report addresses rural-urban divide:
Reshaping Economic Geography

By Jon Fernquest

All roads lead to Bangkok.

Bangkok has better jobs with higher incomes.

Even so, most rural people would probably rather live with their families in the provinces.

At least the rural people I have known, many of whom lived in Bangkok for a short time but, not liking it much, eventually moved back home.

Bangkok is dirty, crowded and difficult to live in for pretty much everyone except the very well-off.

Will smaller cities located in rural agricultural areas one day become thriving commercial centers providing rural folk with good jobs?

A recent World Bank report, Reshaping Economic Geography provides some answers to this question (Read freely downloadable report).


Saturday's Bangkok Post reviewed this report.

Here is the review in full:

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Development can be inclusive despite disparities

By: PARISTA YUTHAMANOP
17/01/2009

Reducing income disparity between city and country is an objective for many countries. But now a World Bank report entitled "Reshaping Economic Geography" challenges the assumption that economic growth can be spread to benefit the poor - although it concludes that development can be inclusive.

The report cites three locations that have been economically successful through being densely populated: Tokyo, which has 35 million inhabitants packed into 4% of Japan's land area; the United States, where 35 million changed residence in 2006; and Western Europe, in which two-thirds of trade is done within the region.


Urbanisation is being repeated in regions across the world, whether India, Southeast Asia or China, which has seen 150 million people migrate to the coastal region since 1990.

The growing economy of South Asia has reflected a higher density in urban areas, more efficient transportation and an increase in integration, said Chorching Goh, a senior World Bank economist.


Indermit Gill, the World Bank chief economist for Europe and Central Asia, said the urbanisation process was unavoidable as economies progress from agricultural, which depends on vast areas, to industry and services.

"Growth does not come to every place at once. Markets favour some places over others. To fight this concentration is tantamount to fighting prosperity," he said.

Governments should encourage mobility by improving infrastructure and reducing transportation costs. Good institutions are also necessary to oversee urbanisation and deal with issues like zoning and traffic.

He suggested that governments reduce the disparity in living standards in lagging areas. "We should reap benefit from economically dense areas and distribute fiscal resources to rural areas to create a uniform social service across the country," Mr Gill said.

"We sum up from our study that growth will be unbalanced, but development can be inclusive."


Yukon Huang, former director for China and Russia, said the study found that South Korea had been successful in its urbanisation process with a lower disparity of income.

He said the Thai economy would benefit from greater openness to world trade and the development of economically dense areas, but concerns about rural-urban disparity had affected social development and policy making.

The report said that location could become less of a factor in economic development. The difference in consumer purchasing power stands at around 75% between the wealthier urban residents and rural residents in developing economies, compared with a gap of only 25% in developed countries.


(Source: Bangkok Post, business, 17-01-09, Development can be inclusive despite disparities, PARISTA YUTHAMANOP link)

Posted by Jon Fernquest at 03:09 PM | Permalink | Comments (0)