Revitalizing the rural economy – Policy Forum

Rural areas are home to many people who live in poverty. The problem is compounded by power – access to energy can unlock a brighter future for rural residents, write Shenggen Fan and Channing Arndt.

In the effort to eradicate global poverty, policies that address rural poverty must play a central role. The global rural poverty rate is higher than the urban poverty rate, and rural residents make up 80 percent extremely poor people. Revitalizing rural areas so that they are productive, sustainable and healthy places to learn, work and live can have a significant impact on global poverty.

Revitalizing rural areas to strengthen the link between rural and urban economies can stimulate growth and diversify the agricultural and non-agricultural sectors to contribute to poverty reduction. Rural areas have the potential to become hubs of innovation and drive the transformation of food systems and broader livelihoods.

Self-sustaining rural economies can not only serve as engines of food security, but also as springboards for national, regional and global value chains and providers of quality environmental services. Policies that encourage investment in rural infrastructure, such as transport networks, telecommunications and energy, should be priority areas in this regard.

Countries that have successfully implemented rural revitalization can provide important lessons for the rest of the world. For example, South Korea New village movement presents a key example of community-based rural development, while China Taobao towns show that using e-commerce to foster entrepreneurship can help create flexible and inclusive employment opportunities.

Likewise, the European Union Smart villages used bottom-up strategies to harness digital connectivity for renewable energy, mobility and online service delivery in health and education. It is essential to create dynamic opportunities and reduce poverty in rural areas, especially in rural areas of Africa and South Asia, where poverty is high and youth populations large.

The 2019 World Food Policy Report from the International Food Policy Research Institute (IFPRI) highlights that investment in agriculture – especially in the non-farm sector, already a booming segment of the economy rural – can make rural areas hubs of innovation, boost job creation and slow the wave of youth migration. For many years, however, a major challenge to development in most of these rural areas has been the lack of reliable energy sources.

Energy is crucial for ensuring sustainable rural growth and development. Nearly one billion people, mostly living in rural areas of Africa and South Asia, do not have access to electricity. Ensuring access to reliable energy sources is a necessary condition for fostering a vibrant rural economy.

It is hard to imagine rapid and sustained reductions in rural poverty without it. Providing electricity to remote rural areas using fossil fuels is often difficult and expensive, leaving many rural areas without constant electricity.

But, dramatic declines the cost of generating electricity from renewable energy sources such as solar and wind power are creating new opportunities to provide cheap and reliable sources of energy and electricity to rural areas.

Between 2010 and 2017, the levelized cost of electricity from solar and wind decreases by around 80% and 67%, respectively, making them competitive in many circumstances with traditional energy sources such as coal, oil and gas.

As renewable technologies improve and their production increases, their prices will continue to fall, enabling the installation of energy sources in rural areas that are cheap, clean and reliable.

Solar and wind energy are distributed energy sources, so they produce electricity where they are installed and eliminate the need to supply fossil fuels to rural areas or to build an infrastructure network of rural transmission that provide centrally generated electricity.

Sun and wind are also frequently abundant in the developing world, meaning there is great potential for small and medium-sized projects to harness this energy where it is needed.

Such energy can provide electricity to power machinery that will power more productive agriculture or industries, provide cold storage for medicines en route to rural areas or produce on its way from farms to markets, and keep lights on. lit after dark for more time to study, cook or socialize.

Experience and common sense dictate that access to reliable electricity underpins improvements across a range of human development indicators, including productivity, health and education. Together, all of these improvements can help reduce poverty and lift the rural poor out of deprivation. They must be pursued if we are to solve the problem of poverty.

About Keneth T. Graves

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