Investments in infrastructure together with improved education can help break the cycle of rural poverty, writes Jan Greyling, doctoral student in Agricultural Economics at Stellenbosch University, in an opinion article published in Cape Argus on Monday (19 October 2015).
Read the complete article below or click here for the article as published.
Breaking the Cycle of Rural Poverty
Good news seems hard to find nowadays given the constant flow of reporting on war, refugees, presidential bloopers and corporate scandals. While I am not a proponent of calls for a positive news network, we are overlooking one of the most important events of our time.
This is to be found in a longer term perspective on the global incidence of extreme poverty, illiteracy and disease that has showed an incredible decline since the 1990's: Globally the number of people living in extreme poverty, defined as persons who survive on less than $1.25 a day by The Word Bank, has decreased from 43 to 17 percent during the period 1991 to 2011 (more recent unofficial data puts the current figure closer to 10%). During this twenty year period the number of children who die before the age of 5 decreased by 50% and the number of girls who complete elementary school in the developing world has risen to 80% of their age cohort. Much of this success can be attributed to East Asia (China, Indonesia, Vietnam etc.) where the portion of the population who live in extreme poverty has decreased from 54 to a mere 8 percent, thereby removing more than 700 million people from extreme poverty. This is staggering given a current regional population of just over 2 billion people, of whom 70% are Chinese.
At this point the good news start to wear thin since 17% of the global population still represents just over a billion people worldwide. A 50% reduction in the number of children who die before the age of five, still translates to 5.9 million annually, a frightening 11 every minute. Add to this the locality of persistent poverty in places like Sub-Saharan Africa (SSA) which, with a population of around 900 million, has shown limited progress during this period given that 46% still live in extreme poverty, down from 57% during the early '90s.
Before we digress to echoing the now debunked stereotype of Africa as the dismal continent, the change in SSA's extreme poverty has to be put in perspective: The reduction is substantial in light of the fact that the region's population doubled in this period as a result of an average growth rate of 2.5% per year. This reduction in poverty is partially the result of increased agricultural productivity since real agricultural output expanded by more than 3% annually since 2000. Currently more than a million small-scale Zambian farmers (most of whom farm on less than 5 hectares) are helping to shore up South Africa's food supply following a drought in our main white maize producing areas.
Total white maize imports from them is projected to exceed 60 thousand tons this year. While this is dwarfed by our annual domestic harvest of more than 6 million tons, it serves as evidence of the production of an exportable surplus. It also challenges South Africa's exceptionalism and serves as a precursor of how the region's food system will develop. The rising prosperity in SSA is also evidenced by the fact that 43% of South Africa's apple exports went to the rest of SSA last year, up from a mere 13% in 2005. In fact, the rest of Africa now acts as South Africa's main trading partner for agricultural exports.
Returning to the mega trends. For an even more complete view of the trends in SSA the average population growth rate has to be unpacked further given large disparity between the urban and rural rate. The latter is currently expanding at an average rate of 4.1% per year, thereby making SSA the only region in the world with an expanding rural population. This results in the emergence of a so-called "youth bulge" where 62% of the population is under 25 years. This phenomenon presents itself as a two-edged sword with a looming employment crisis on the one side or the potential opportunity of a "demographic dividend" on the other. The opportuning stems from a growing labour force relative to the number of dependents, which is the exception rather than the norm globally.
In order to capitalise on this potential SSA will have to echo the Chinese model that is driven by an increased output in manufacturing. This will require political stability and global competitiveness through increased spending on education and a substantial infrastructure development. To use infrastructure as an example: SSA has a normalised paved road density of 31 units versus the 134 of other developing regions, with total road density of 137 versus 211 and main rail line density of 10 versus 78. The impact of this deficit is illustrated by recent research on intra-African trade, showing that infrastructural challenges act as the major constraint, compared to other regions where tariffs and trade agreements take the top spot. In SSA tariff negotiations and other trade barriers are negligible given the infrastructural challenges.
There is cause for some celebration on World Food Day on the 16th of October given the long term global progress with the reduction of the incidence of extreme poverty, illiteracy and disease globally. However, in absolute and regional terms many challenges remain, especially in SSA. Given this year's theme of "Social Protection and Agriculture: Breaking the Cycle of Rural Poverty" some would argue for the need of helping people in SSA to increase their production. I would argue that the emphasis should fall on investments in infrastructure in order to improve the integration of farmers and manufacturers with regional and international markets. This, together with improved education, will enable the region's rising youth to excel and ultimately to break the cycle of rural poverty.
*Jan Greyling is a PhD student in Agricultural Economics at Stellenbosch University.
