Facilitating Inclusive Rural Transformation in the Asian Developing Countries

Abstract

Rural economy has experienced significant transformation in Asia, although the transformation differs largely among the countries. This paper examines the path, major driving forces and the likely consequences of rural transformation (RT) in China and other developing countries in Asia. We argue that: 1) There is a general path and trend of rural transformation in Asia; 2) In each stage of rural transformation, there are specific institutions, policies and investments (IPIs), which can stimulate and speed up the transformation; 3) Rural transformation and structural transformation (ST) are interconnected, successful RT can stimulate economic growth and ST, and ST can enhance rural transformation through labor‐intensive industrialization; 4) The speed of RT is positively associated with rural poverty reduction and therefore more inclusive RT. The paper concludes with several policy implications for inclusive rural transformation in Asia in general and in different categories of countries in particular.

Regional rural and structural transformations and farmer's income in the past four decades in China

“…Figure 1 presents the trends of provincial structural transformation in the past four decades in China, which is consistent with the findings advanced by Timmer (2009) and the recent studies (e.g. IFAD, 2016; FAO, 2017; Huang, 2018) of national or international comparison analysis. The shares of agriculture in both GDP and employment have been falling with the growth of per capita GDP, which indicates that with agricultural growth, non-agriculture has been growing faster and rural labor has been transferring from agriculture to non-agricultural sectors in the process of economic development.…”

“…But the current studies either focused on specific regions or a short time period. Although Huang (2018) examined China's rural transformation and its outcome, his analysis was at the national level and through an inter-country comparison between China and other Asian countries. Considering the facts that China is vast in territory with large variations in rural development, it will be more meaningful to conduct a rural transformation study at the regional or provincial level over a longer time period.…”

Using agriculture for development: Supply- and demand-side approaches

“…This is the purpose of the agricultural and rural transformations that are important in redefining how to use agriculture for development. Huang (2016), by BRAC on graduating the ultra-poor out of poverty (Banerjee et al, 2015a), for the Gates Foundation by Boettiger et al (2017), and for the ATAI project (ATAI, 2018), a strategy of using agriculture for development would involve the following five steps: Asset building, Green Revolution, Agricultural Transformation, Rural Transformation, and ultimately Structural Transformation as described in Table 1. We refer to this strategy as the Agriculture for Development sequence.…”

The Future of Work in Agriculture: Some Reflections

“…Third, the successful exit of labor out of agriculture is intimately tied to a successful agricultural transformation (Huang 2016;Charlton 2019). Food expenditure shares (and with them, agricultural employment shares) decline as incomes increase.…”

“…Asia's experience shows that the more successful countries develop their agri-food system as they pass through the structural transformation, and that this leads to a more rapid reduction in poverty (Huang 2016). Non-farm AFS jobs are often easily accessible for poor workers leaving the farm as well as for women, given their proximity and low entry requirements in terms of capital and skills.…”