World Food Policy WFP Volume 4, No. 2, Spring 2018 | Page 42

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3.1. Speeds of structural
transformation and rural
poverty reduction
and stages of rural transformation for
the countries in Asia (Table 1). In the
transformation process, RT often has to
pass the following four stages: 1) initial
stage of RT with agricultural produc-
tion primarily on cereal to meet staple
food demand; 2) agricultural diversifi-
cation stage with rising high-value and
labor intensive commodities; 3) rising
non-farm employment stage as agri-
cultural labor productivity increases;
and 4) integrated urban-rural and sus-
tainable development stage after the
economy reaches or exceeds the levels
off middle-income countries. The latter
stage is built on the early stage. There
is no clear-cutting point of graduating
from the lower stage to the higher stage
as the transformation is a smooth and
gradual process, the name of each stage
just represents major characteristics of
that stage.
The previous studies have demonstrat-
ed that economic growth is essential for
poverty reduction, but the impacts of
economic growth on rural poverty re-
duction differ among countries due to
the nature or inclusiveness of growth
(Balisacan and Fuwa, 2003; Huang et
al., 2008a; Timmer, 2009; World Bank,
2008). Because economic growth is also
outcome of structural and rural trans-
formations, here we address the role of
structural transformation on rural pov-
erty reduction. To do this, we calculate
average annual change in the share of
non-agricultural GDP (or non-agri-
cultural employment) as the speed of
structural change and average annu-
al change in rural poverty rate as the
speed of rural poverty reduction in the
studied period. The results are present-
ed in Figure 4.
3. Inclusiveness of structural
and rural transformations
O
The results show that there is a
general negative relationship between
the speed of structural transformation
and the speed of rural poverty reduc-
tion. In Figure 4, the coordinated point
(0.57, -1.90) is mean for nine countries
studied. The countries located in the
first quadrant (upper left quadrant) with
this coordinated point are those that
had both slow ST and slow rural pover-
ty reduction in recent two decades, they
include the Philippines, Pakistan, India
and Bangladesh; while Vietnam, Chi-
na, Laos and Cambodia located in the
fourth quadrant (lower right quadrant)
are the countries that had experienced
both fast ST and fast rural poverty re-
verall, Asia has experienced
substantial reduction in rural
poverty in the recent decades
though the progress differed among
countries. The decline of the rural pov-
erty rate was most impressive in China,
Indonesia and Vietnam, and then fol-
lowed by Cambodia and Laos (Figure
3). The fall in the rural poverty rate is
also considerable in Bangladesh and In-
dia. Compared with other countries in
the region, while the progress in rural
poverty reduction has been less impres-
sive in the Philippines and Pakistan,
large poverty reduction has occurred in
recent years (Figure 3).
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