Rapid urbanization, employment crisis and poverty in African LDCs:A new development strategy and aid policy

Herrmann, Michael and Khan, Haider (2008): Rapid urbanization, employment crisis and poverty in African LDCs:A new development strategy and aid policy.

Abstract

Rapid urbanization is a fact of live even in the least developed countries (LDCs) where the lion’s share of the population presently lives in rural areas and will continue to do so for decades to come. At the turn of the millennium 75% of the LDCs’ population still lived in rural areas and 71% of the LDCs’ labor force was involved in agriculture. But even though the largest share of their population lives in rural areas and directly or indirectly derives their livelihoods from agriculture, a rapidly increasing share of the population migrates to urban centers in search for employment opportunities outside agriculture in industrial enterprises or the services sector.

The main purpose of this paper is to examine the causes and consequences -- in particular, the policy implications -- of the ongoing urbanization in the African LDCs. It is found that the employment opportunities in either rural or the urban sector are not growing adequately. This paper attempts to analyze the emerging trends and patterns of urbanization in the African LDCs within a dynamic dual-dual framework with a strong emphasis on rural-urban migration and the informal sectors. The analysis pinpoints, among other things, the need to build up productive capacities in order to create adequate employment and incomes for the rapidly growing population---particularly in the urban areas. The development of productive capacities, which is a precondition for the creation of productive employment opportunities, is a central element of viable poverty reduction strategy for Bangladesh as well. Without significant poverty reduction it is impossible to think of viable urbanization on the basis of sustainable development criteria in this group of very African countries. The donors, especially the OECD/ DAC countries, should provide the necessary financial backing for such a sustainable and equitable development strategy for Africa. It is necessary to reverse the trends in aid, and to provide a much larger share of aid for productive sector development, including the development of rural and urban areas, and the development of agricultural and non-agricultural sectors in line with the perspective of the dual-dual model. Although urban centers mostly host non-agricultural industries, sustainable urbanization also strongly depends on what happens in the agricultural sectors. Productive employment opportunities in rural areas are important in order to combat an unsustainable migration from rural areas to urban centers, and productive employment opportunities in urban centers are essential to absorb the rapidly increasing labor force in the non-agricultural sector.

• Item Type: MPRA Paper
• Language: English
• Keywords: Urbanization, Africa, LDCs, Dual-Dual Model, Informal Sector, Poverty, Employment, Capabilities
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure; A - General Economics and Teaching > A1 - General Economics; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R58 - Regional Development Planning and Policy; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R0 - General; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; J - Labor and Demographic Economics > J0 - General; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J60 - General; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs; J - Labor and Demographic Economics > J4 - Particular Labor Markets; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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