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Tuesday, 2 July 2013

Let urbanisation flourish!

A strange statement from Emeldah Chola (Lusaka Province PS) recently caught my attention. He said,  “the creation of new districts will also help curb the problem of rural-urban migration because development will be taken to the people even in remote areas of Zambia".   The statement expresses a fundamental ignorance on the issue of rural urban drift. Rural urban drift by itself is not bad. In fact, I would go as far as to agree with most urban economists that urbanisation and economic development are intimately related, and the concentration of resources – labour and capital – in our cities is a part of this process.

To the extent that people move from rural areas to urban areas in response to market signals, there is no reason for us to worry about the rural urban drift. However, the problem might be with respect to unpriced externalities e.g. pollution, road congestion and epidemics. The right economic policy response is therefore not to encourage people to stick to rural areas but to internalise the negative externalities (through appropriate urban taxes ), and allow the rural urban drift to flourish. The problem of course is how to set such a tax properly.

In fact, if anything recent empirical evidence shows that increased urbanisation is good for poverty reduction. For example, evidence from India shows that an increase of urban population by 20% decreases the rural poverty between 3 and 6 percentage points. These poverty reducing effects appear to apply mostly to rural poor relatively closer to the poverty line.

Such evidence has one critical implication. There's need to re-consider the role of public investment in urban areas for poverty reduction. In fact it is a popular tenet that investments in Zambia need to be concentrated in rural areas in order to reduce poverty, as our poorest people are mainly concentrated there. However, investments in rural areas are often very onerous as substantial resources are needed to reach a population which is scattered around vast territories. To the extent that urbanisation may have substantial poverty reducing effects on rural areas, urban investments may become an important complement to rural ones in poverty reduction strategies.

This evidence challenges the popular myth that rural-urban migration depletes rural areas causing them to fall further behind. The future is urban and that is good for poverty reduction. The sooner we bow to the evidence the better. At the very least, we need to end the bias against rural-urban migration.

ABOUT THE AUTHOR
Chola Mukanga | Economist | Writer
Copyright © Zambian Economist 2013

2 comments:

  1. chrispine sage chola4 December 2013 at 16:07

    Yeah its vital to let urbanisation flourish but we need to set up policies that will enable as overcome such effects as street vending, begging in streets by empowering those who need to be empowered through the provision of lifeskills!!

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  2. There is now, increasingly, a new form of urbanisation: one in which the middle class is 'encroaching' on rural land. Rural farmland, particularly on the margins of Lusaka and other major economic cities, is fast becoming built land, albeit with some smallholder agricultural activity. It would be interesting to assess the implications of this on our development.

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