MEIKTILA UNIVERSITY OF ECONOMICS

DEPARTMENT OF APPLIED ECONOMICS

MPA PROGRAMME

ECONOMIC DEVELOPMENT (MPA – 124)

ASSIGNMENT- IV

Mg Min Zar Ni Htut

MPA (I) –23 (MEUE)
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“The Key to solving the serious problem of excessive rural-urban migration and rising urban
unemployment and underemployment in developing countries is to restore a proper balance
between urban and rural economic and social opportunities.”

Discuss the reasoning behind this statement, and give a few specific examples of government
policies that would promote a better balance between urban and rural economic and social
opportunities.

Rural-Urban Migration: A Complex Demographic Shift

In many developing countries, the movement of people from rural to urban areas has
become a defining feature of economic and social change. This migration, driven largely by
disparities in opportunities and services, leads to overcrowded urban centers, overburdened
infrastructure, increased unemployment, and, conversely, a decline in the labor force and economic
vitality in rural areas. These challenges necessitate strategies that promote a balanced development
framework, addressing both the pull factors of urban areas and the push factors from rural regions.

Understanding the Root Causes of Rural-Urban Migration

The Todaro migration model provides a structured lens to understand why rural populations
are drawn to cities, despite the high risks of urban unemployment. This model suggests that
migration decisions are based on expected income rather than actual wages. Even when
unemployment is high, the possibility of securing a better-paying job in the city can outweigh the
certainty of lower wages in rural areas. Key factors contributing to this trend include:

1. Economic Disparities

Income Gaps: Large income differentials between rural and urban areas create a significant
economic incentive to migrate. Higher urban wages, even when balanced against the cost
of living, seem more attractive than rural income levels.

Employment Prospects: Urban centers often have diverse job markets, including formal
employment in industries, services, and informal jobs. Rural economies, on the other hand,
tend to be more narrowly based on agriculture, which can be seasonal and low-paying.

2. Limited Rural Opportunities

Agricultural Reliance: Rural economies are often heavily reliant on agriculture, which can
be subject to market fluctuations, climate change impacts, and low productivity. Limited
access to credit, technology, and market information exacerbates these vulnerabilities.

Youth Employment: Rural youth often face limited opportunities for employment that align
with their aspirations and skills, pushing them to seek opportunities elsewhere.
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3. Access to Services

Education and Healthcare: Urban areas usually have more educational institutions,
healthcare facilities, and other social amenities than rural areas. Migrants are often drawn
to cities where these services are more accessible and higher in quality.

Social and Cultural Factors: Many cities offer a more modern lifestyle and cultural
opportunities, which can be appealing, especially to young people.

Strategies for Mitigating Rural-Urban Migration through Balanced Development

To address the challenges and disparities driving rural-urban migration, governments can adopt a
comprehensive development strategy that invests in both rural and urban areas. This approach aims
to reduce migration pressure on cities while uplifting rural regions by fostering sustainable
economic growth and improving quality of life.

1. Integrated Rural Development

Developing rural infrastructure, boosting agricultural productivity, and diversifying the rural
economy can create more viable livelihoods and reduce migration pressures.

Infrastructure Investment

Roads and Transport: Building and upgrading roads and transport networks in rural areas
can reduce isolation, improve market access, and lower costs for rural businesses.

Irrigation and Water Supply: Developing irrigation infrastructure can help stabilize
agricultural productivity, while water supply improvements enhance overall living
conditions.

Electricity and Connectivity: Rural electrification and internet connectivity are vital for
enabling businesses, education, healthcare, and other services. Programs like Brazil’s “Luz
para Todos” (Light for All) show how electrification can catalyze local industry and
improve living standards.

Agricultural Development

Research and Extension Services: By investing in agricultural research and extension

programs, governments can improve access to modern farming techniques, pest control
methods, and crop diversification.

Credit Access: Offering subsidized loans or easier credit access can help small farmers
invest in machinery, seeds, and other essentials, boosting productivity and income.

Market Access: Establishing rural market centers or cooperatives can facilitate direct sales
to consumers, helping farmers earn fair prices for their produce.
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Non-Farm Sector Development

Agro-Processing and Handicrafts: Encouraging non-farm activities, such as agro-

processing and artisanal crafts, can help rural areas diversify beyond agriculture, offering
new employment avenues.

Rural Tourism: Rural tourism can create income opportunities in scenic or culturally
significant areas, as seen in countries like Thailand, where rural tourism programs boost
local economies and preserve cultural heritage.

2. Expansion of Rural Industries

Encouraging rural industries is essential for creating local employment, fostering self-sufficiency,
and building resilient rural economies.

Small-Scale and Labor-Intensive Industries

Encouraging Small Enterprises: Governments can promote small-scale manufacturing,

tailoring, food processing, and other labor-intensive industries in rural areas. India’s “Make
in India” initiative, for example, includes provisions to support rural-based small and
medium enterprises.

Microfinance and Financial Inclusion: By providing access to microfinance, rural

entrepreneurs can start small businesses, which supports local job creation.

Industrial Clusters

Rural Clusters: Establishing rural industrial clusters can centralize resources, foster
knowledge sharing, and improve access to markets. In China, clusters of small-scale
factories in rural areas have helped reduce migration to urban centers by providing
localized employment.

Linkages to Urban Markets: Building connections between rural clusters and urban markets
through transport links and supply chains can support rural industrial growth and stability.

Policy Support and Incentives

Tax Breaks and Subsidies: Governments can offer tax incentives, grants, or subsidies for
businesses setting up in rural areas, encouraging investment that would otherwise
concentrate in cities.

Public-Private Partnerships (PPPs): PPPs can bring investment, technology, and expertise
to rural areas, enhancing local industries’ productivity and competitiveness.
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3. Investment in Education and Health

Improving education and health facilities in rural areas directly enhances quality of life, retains
skilled labor, and reduces migration driven by service disparities.
Rural Education
Vocational and Technical Training: Developing vocational and technical education can
provide rural youth with employable skills. For instance, Kenya has implemented
vocational training programs that prepare youth for jobs in local industries, reducing the
need to migrate to cities.
Teacher Incentives: Offering scholarships, housing, or incentives for teachers working in
remote areas can help attract and retain qualified educators, raising educational standards
in rural regions.
Healthcare Infrastructure
Primary Healthcare Access: Expanding healthcare infrastructure, including primary health
centers and mobile clinics, can ensure rural populations have adequate healthcare without
needing to relocate to urban centers.
Telemedicine: Utilizing technology to provide telemedicine services can help rural areas
access specialists and critical health resources that might otherwise be unavailable.
Countries like India have piloted telemedicine services in rural areas to bridge the
healthcare access gap.
Skill Development
Skill Training Programs: Governments can establish skill training programs focused on in-
demand skills, particularly in agriculture, trades, and crafts. Programs that include business
and digital skills can further enhance employability and income-generation potential.
Youth Employment Programs: Targeting rural youth, these programs can create career
pathways aligned with local economic opportunities, reducing the need for migration.
Conclusion
Addressing rural-urban migration requires a balanced, multi-faceted approach that
improves rural economic and social opportunities. By investing in integrated rural development,
expanding rural industries, and enhancing access to quality education and healthcare, policymakers
can address the root causes of migration and foster sustainable, equitable development across
regions. Programs like India’s MGNREGA or Brazil’s rural electrification program demonstrate
the impact of targeted rural investments on reducing migration pressures. When rural areas offer
viable livelihood options and quality of life improvements, the allure of urban migration
diminishes, creating more resilient and balanced economies.