The Rural Poverty Trap: Examines the Reasons and Outlines the Steps to Remedy the Situation
Globalization, according to its proponents, was supposed to be thepanacea for the economic ills of the world. The results of 'opening up ofeconomies' and 'free trade' during the past two decades[1], however, haveat best been mixed. While the developed and rich countries have benefitedfrom lowering of tariffs and trade liberalization, a majority of thepoorest countries have suffered. Poverty levels among the rural populationof the developing and the least developed countries, in particular, haverisen in this period instead of going down. This paper, which is largelybased on the Oxfam briefing paper, The Rural Poverty Trap, examines thereasons behind the increasing rural poverty in the least developedcountries and outlines the steps that should be taken to remedy the What is Happening' Despite the fact that the Industrial Revolution started more than 200years ago, approximately half of the world's population still relies on therural economy for its livelihood[2]. A large majority of these peopleremain mired in appalling poverty. What is worse, in most of the leastdeveloped countries, particularly the Sub-Saharan Africa, the living
What Can be Done' Most of the solutions to the existing predicament of the poor ruralpopulation are evident in the reasons behind the problem discussed above. To makematters worse foreign aid for agricultural development in poor countrieshas fallen by half over the last 20 years that has severely affectedsupport services for farmers and the farm market structure. Most of all, UNCTAD should be strengthened so that it can play a moreeffective role in finding solutions to global economic problems. Rural laborers are oftenunprotected by a minimum wage policy enjoyed by industrial workers. [5] Since cotton is the maincash crop of a number of poor countries, particularly in Western Africa,low cotton prices hurts them most. According to UNCTAD[4] figures, prices of 41 of the leading 46leading commodities fell between 1997 and 2001. In order to tackle the problem of rural poverty in the developingcountries effectively, there is an urgent need for giving it internationalpriority. 3 billion people) live indeveloping countries[3] FAOSTAT 2000, quoted in the Oxfam Briefing paper # 59, The RuralPoverty Trap (2004)[4] The United Nations Conference on Trade and Development[5] A British government study quoted in The Rural Poverty Trap (2004). Not to be left behind, the EU gave 819million Euros worth of subsidies to 6 leading European sugar processingindustries in 2003 resulting in direct losses to poor African sugarproducers such as Malawi and Mozambique. The fall in prices oftropical agricultural crops, on which the poorest countries are dependant,is most acute. Intervention in such cases becomesnecessary to arrest and reverse the trend. 3 billion to its cotton sector in 2001-02 alone,which depressed the world cotton prices by 20%. Inappropriate agricultural policies in the developing countries alsocontribute to the worsening 'poverty trap. There is a need break out of the current doctrinal view that onlyfreely functioning markets are the cure-all for development. ' A marked 'urban bias' resultsin keeping food prices low to assist the urban population, while the ruralpopulace suffers due to low commodity prices.
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