The progress in achieving the target set for the Millennium Development Goals (MDGs)  continues to be diverse across goals and regions. The goals aim at actualizing a universal standard of being free from grinding poverty, being educated and healthy and having ready access to clean water and sanitation. While progress has lagged for education and health related MDGs, the proportion of people living in extreme poverty has indeed fallen. To accelerate further progress in the latter, development strategies have to attempt to increase not only the rate of growth but also the share of income going to the poorest section of the population along the rural-urban continuum.
Economic projections for developing countries prepared by the World Bank  state that approximately 970 million people will continue in 2015 to live below $1.25 a day. This would be equivalent to 15.5% of the population in the developing world. Herein, the pertinent challenge of reducing extreme poverty through creation of new income opportunities and better delivery of basic services largely remains in rural areas. In addition, such poverty is concentrated more in Asia (East and South) and Sub Saharan Africa with 38% and 46% of their poor residing in rural areas respectively. Thus, the task of effective rural development remains daunting. But the latter has to be operationalized and implemented holistically, and more importantly, in context of the complexities posed by the rural -urban continuum.
In the past decade, developing countries have urbanized rapidly, with the number of people living in urban settlements (whether by natural increase or reclassification of rural boundaries) rising from about 1.5 billion in 1990 to 3.6 billion (more than half of the world’s population) in 2011. This process has taken place concurrently with improvements in agricultural productivity that has had positive synergies for farm incomes and non-farm employment in rural areas. In this backdrop, management of the forces of urbanization, speedily and effectively is a must, lest the MDG achievement in holistically eliminating extreme poverty is derailed.
The current public policy literature at the World Bank treats inhabitants in developing countries as located in settlements along a continuous rural -urban spectrum. Herein, smaller towns, small cities and peri-urban areas contiguous to rural areas rather than large cities, are central to the success of any poverty alleviation and service delivery strategy that is planned to tackle various regional disparities.
For instance in India , among urban areas, poverty rates in 2004-05 were highest in small towns (population less than 50,000) at 30 percent compared with 15 percent in large cities (population of 1 million). The urban spectrum is less pronounced in Sub-Saharan Africa where many countries are small and sparsely populated and where urbanization is still in its early stages. On the other hand, some poor want to migrate to cities to escape poverty but are reluctant to dispose of their rural assets. In Nepal , for example, where poverty is extreme, migrants prefer not to move too far from their rural residence but value proximity to paved roads and areas with higher housing premiums. Many want to maintain links with their farms, while others fear losing their land if they migrate too far.
It goes without saying that the effects of urban poverty can be as dehumanizing and limiting as those associated with rural poverty. Various MDG indicators show remarkable similarities between slum and rural areas. For instance, in low income countries such as Bangladesh, Ethiopia, Haiti and Niger - countries were poverty is primarily seen a rural phenomenon- 4 of every 10 slum children are malnourished, a rate comparable to that found in the rural areas of these countries.
The first challenge for governments, therefore, is to help reduce rural poverty by making migration more efficient. Equipping inhabitants and local communities with human capital assets while they are still in the rural area will increase the chance that their job search in the small town, small city, peri urban area and/or a big city is not only successful but sustainable too.
The second challenge, in context of scarce availability of resources to attain the MDGs in both urban and rural areas, is to take specific regional circumstances into account while allocating resources. For instance, if primary source of urbanization is domestic migrations then a focus on MDG related services in rural areas that are portable (health and education), can have a high payoff. Conversely, if prime source of urbanization is gradual thickening of population density then country wide equalization of MDG related services in both rural and urban areas is more suitable. The latter is extremely relevant in case of South Asian countries that have a low urbanization rate but a high level of agglomeration. In case people get stuck in small towns with little prospects of migrating, then policies should focus on improving physical connectivity to other urban centers.
The third challenge is strengthening basic infrastructure services. While integrated planning of land use is fundamental to agglomeration dynamics, basic services- water, energy, sanitation and solid waste management need to be provided for all inhabitants- urban, peri-urban and rural alike since natural market mechanisms are unlikely to provide those.
Thus along the rural-urban continuum, if connections with surrounding areas are well developed, urban densities can also have a positive impact on rural areas. For instance, following India’s economic liberalization in the 1990’s there has been a growing link between urban development and a reduction of rural poverty. This, in turn, has led to higher demand for rural products and more options for rural nonfarm diversification.
The broader challenge for the MDGs in the coming two years is to design poverty reducing and service delivery strategies that take into account the continuum along which extreme poverty is located. Improvement in service delivery and fostering of nonfarm job creation in small towns and peri -urban areas, could possibly offer inhabitants (including migrants) better livelihoods in developing countries, thus helping reduce both urban and rural poverty. Additionally, education (that imparts requisite skills), health (that enhances productivity) and removal of restrictions for labor mobility (that balances supply of and demand for labor) need to be factored in as critical components of such a country strategy.
Photo: A group of school children walk hand in hand after school in rural Nepal, by Aisha Faquir/World Bank .
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