March 8th, 2016

Unleashing rural economies

Published by The Economist Intelligence Unit,

This publication by the The Economist Intelligence Unit, highlights the overlooked value of rural economies for food security and poverty reduction. The authors state that rural economic development holds the key to ensuring that the nutritional needs of a growing global population are met, and poverty in rural areas is eased, narrowing the gaps between rural and urban populations. The focus of this research project is a better understanding of the macro- and microeconomic conditions that would enable rural economies to deliver a more significant contribution to economic growth. The research modelled how global GDP, rural GDP and rural populations could evolve up to 2030, according to various scenarios. This includes rural growth being unleashed as policymakers implement measures to stimulate development and overcome underlying barriers. Getting the right drivers in place could boost rural growth by over 13% above its current trajectory. Rather than from a mere poverty alleviation or food security perspective, rural economies have the potential to significantly improve the long-term economic growth of nations around the world. To achieve this growth, the report identifies several main obstacles: 1) Policy. Many of the world’s rural areas are not adequately supported by their own governments. A lack of focus on rural development could be addressed through increased attention from political leaders, stronger rule of law and enhanced enforcement of rural policies; 2) Operational infrastructure. Transportation, telecommunication, power and water infrastructure need significant investment. This would boost the productivity of rural supply chains and have positive spill over effects across sectors and 3) Social infrastructure. Improvements are needed in healthcare and education system to make rural areas more attractive as places to live, work and invest.

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