SUSTAINABLE DEVELOPMENT AND RURAL POVERTY: A MEXICAN PERSPECTIVE

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1 SUSTAINABLE DEVELOPMENT AND RURAL POVERTY: A MEXICAN PERSPECTIVE Woodrow Wilson Center Washington, D.C. Thursday, May 24, 2001 ING. ANTONIO RUIZ GARCÍA, RURAL DEVELOPMENT UNDERSECRETARY 1

2 INTRODUCTION Rural Environment Situation Analysis Causes A Rural Development Model Conclusions 2

3 RURAL SECTOR SITUATION We have a stagnation the per capita gross domestic product associated to a greater concentration Income. Per capita gross domestic product, Inequality and Poverty in Latin America ( ) Gini Index Extreme Poverty Moderate Poverty 3 Source: Londoño, J.L.;Szekely, M.(1997)."Persistent Poverty and Excess Inequality:Latin America, IADB, working paper 357.p.7.

4 RURAL SECTOR SITUATION The agricultural sector has not been able to increase the employment rate and it is moving toward other sectors the economy. Employment growth by sector in Latin America and Caribbean (percents), Sector Employment Growth Total Contribution Agriculture Manufacturing Industry Building Trade, Hotels and Restaurants Electricity, gas, water and transport Storage and Communications Financial Services, Insurances and bussiness services Social and Community services Others Total Source: Stallings, B., Peres W. (2000)."Growth, Employment, and Equity: The impact the economic Reforms in Latin America and caribbean". Taken from Moorley (2000). 4

5 RURAL SECTOR SITUATION In Latin America, rural poverty is much higher than urban one. Percentage the total poverty that is rural Poverty Extreme Poverty México (1998) Costa Rica (1997) El Salvador (1997) Guatemala (1990) Panamá (1997)

6 RURAL SECTOR SITUATION In all countries Latin American region the absolute number poverty in the rural sector increased. Figure 1.6. Index the number rural poor Mexico Costa Rica El Salvador Guatemala Panama Honduras

7 RURAL SECTOR SITUATION Statistics show that the number rural poor decreased in relation to the number urban poor. Figure 1.3. Number rural poor/number urban poor Mexico Costa Rica El Salvador Guatemala Panama Honduras Equality line However: 63% this fall were due to the migration. Only 37% this change is due to the incidence reduction rural poverty. 7

8 RURAL SECTOR SITUATION Who are the rural poors? Two thirds the rural poor are small limited farmers with limited assets. Six each ten children smaller than 15 years old are poor. A quarter latin americans who live in extreme poverty are native people. They are located mainly in mountains and the tropical forests. Worker women tend to belong to 20% the poorest population. The rural poverty follows the economic cycle, nevertheless inequality increases with recession, but it does not decrease with growth. 8

9 PHYSICAL RESOURCES SITUATION Deterioration natural resources. To Mexico Between and and million million hectares in in erosion erosion conditions thousand hectares with with salty salty land land million million hectares lost lost forest forest in in years. years. Waste Waste in in water water management:about 70% 70% to to 76% 76% are are lost lost in in the the distribution process. Scarce equipment physical and services infrastructure. 9

10 Low education. HUMAN RESOURCES SITUATION To Mexico High High number functional illiteracy. 3 years years in in elementary against against in in the the urban urban sector sector 9 each each producers does does not not have have acces acces to to technological support. Low Nutritional Quality. High Morbidity. 10

11 THE SOCIAL CAPITAL SITUATION Scarce development the social capital. To México 8 each each producers are are not not organized for for work. work. 80% 80% families with with at at least least one one member living living outside outside the the community. Weakness the rural social actor. 11

12 CAUSES Lack a rural development strategy with investment and promotion to nonagricultural employments and income policies. Problematic in policies implementation. Market fails (high transactions costs, uncompleted, segmented...). State intervention fails (patrimonialist state). Cooperation fails. Incapacity agriculture to sustain the wellbeing rural population. In Latin America from 40 to 50% rural income is non-agricultural origin with an increasing tendency. 12

13 CAUSES The rural and agricultural development policies do not have capacity or ability to balance the unfavorable macroeconomic context, in particular: Change rate, interest rate and public investment rate. Lack positive discrimination policies to rural sector. As far as now, the bias in public and private investment (health education, infrastructure, services, etc) has been predominantly negative. The political clientelism, public paternalism and social assistance have debilitate the political power rural population. 13

14 CAUSES Discontinuity public policies. Descentralization in process. Institutions and instruments rural development crisis Institutional lacks. Misalignment between sector changes and the rest the economy Misalignment between intention and capacity to implement. Lack understanding on the paper social cohesion. Rural development in charge cross-sectional great political weight institutions. 14

15 CAUSES Instruments sectorial promotion, contributor, but differentiated properly from those rural development (example: credits and subsidies); Precariousness formal networks or aid programs for rural population Uprightness the Supply instruments and policies versus flexibility demand (example: sorted funds). 15

16 RURAL DEVELOPMENT MODEL PREVIOUS REQUIREMENTS Legal environment Definition property rights rights Incentives and and sanctions clarification Co-responsability mechanisms definition definition Consolidating: Federalizing Certainty Long Long term term policies Public Public scrutiny Participaction 16

17 RURAL DEVELOPMENT MODEL Four Directions Rural Development ECONOMIC DEVELOPMENT PHISYCAL RESOURCES DEVELOPMENT INTEGRAL RURAL DEVELOPMENT HUMAN RESOURCES DEVELOPMENT SOCIAL CAPITAL DEVELOPMENT 17

18 ECONOMIC DEVELOPMENT Enterprising. Enterprising. Local Local economy economy development development Familiar Familiar farming farming self self employment. employment. Decrease Decrease the the roll roll the the exit exit for for population population transference transference or or income income ( ( migration, migration, social social assistance). assistance). Emphasize Emphasize more more in in the the road road exit exit trough trough income-generation. income-generation. Agricultural Agricultural production production evolve evolve to to chains chains production production Economic Economic incorporation incorporation the the poor poor to to regional regional growth growth Organization Organization Added Added value. value. Self Self aid aid Self Self responsability responsability Self Self control. control. Participation Participation capital. capital. Local Local economy economy development development multi multi functionalityfunctionalitypluri pluri activity activity (manufacturing, (manufacturing, agrindustrial, agrindustrial, tourism, tourism, descentralization descentralization economic economic activity) activity) Fortification Fortification economy economy circuits. circuits. 18 Commercial Commercial System System Rural Rural Financial Financial System System

19 PHYSICAL CAPITAL DEVELOPMENT Natural Natural Resources: Rational Rational and and sustainable operation operation primary primary resources resources (recovery (recovery natural natural patrymony policy) policy) Degraded Degraded resources improvement (water, (water, land); land); Physical Physical Infrastructure: Equivalent access access to: to: Media Media Basic Basic services services Urban Urban equipment Housing Housing Incorporation poor poor to to regional regional development benefits benefits (access (access to to local local productive assets assets and and local local income income opportunities) Research and and technological transference Irrigation, Irrigation, microirrigation and and fertirrigation Health Health and and quality quality Promotion to to small small and and medium medium companies 19

20 HUMAN RESOURCES DEVELOPMENT Access to to productive assets assets program- Education Affect Affect improvement education quality quality Farmer family family Qualification, supporting it it with with nutrition programs, health health and and house house People People equipped with with values values and and knowledgements who who allow allow them them to to express their their potential development. Formation human human resources (education, health, health, housing, water, water, etc.) etc.) 20

21 SOCIAL CAPITAL DEVELOPMENT Regional integral integral and and coordinated development (generation local local income income opportunities) Organized rural rural actor, actor, represented democratically and and present at at public public decision instances who who take take decitions that that may may affect affect them. them. Development democratic and and participative exercise Social Social capital capital development programs Adapt Adapt the the capacity directing communities Associations to to improve access access to to markets. 21

22 SOCIAL CAPITAL DEVELOPMENT Duties Duties actors actors in in definition rural rural public public policies: Central Central government government Farming Farming commercial commercial negotiations negotiations Productive Productive linkings linkings Technology Technology and and innovation innovation Regional Regional development development and and poverty poverty Agricultural Agricultural development development policy. policy. Promotion Promotion to to partnership partnership non non segregated segregated small small and and medium medium companies companies ( ( third third technological technological revolution). revolution). Local Local governments governments Focal Focal point point public public promotion promotion to to rural rural development. development. Coordinating Coordinating efforts efforts and and local local resources. resources. Rural Rural micro micro financing: financing: local local saving, saving, remittances remittances effect effect Appropriate Appropriate technology technology for for marginalized marginalized areas areas Public Public entities entities non-governmental non-governmental Control Control public public cost cost Evaluation Evaluation programs programs application application Supervision Supervision international international cooperation cooperation 22

23 CONCLUSIONS Rural Rural Latin Latin American sector sector requires: A vision vision long long term term policy policy with with a conductive growing model model to to reduce reduce the the inequality. An An Integral Integral Rural Rural Development Model, Model, coordinated, sustainable, including. A development planning at at regional level level as as a basic basic task task for for public public management. Offer Offer alternative models models and and multifunctional models models to to rural rural environment, diferenciated by by its its needs. needs. 23

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