Faster rural transformation can be a game-changer for Bangladesh

The rural population in developing nations across Asia has significantly improved over the past two or three decades, gaining access to better infrastructure such as roads, electricity, internet, and improved health and education services. 

In comparison to previous years, rural areas have played a more significant role in contributing to the nation's growth. However, it is believed that these rural areas have even greater potential to contribute further to national growth.

In light of this perspective, countries globally, especially in Asia, have initiated deliberate plans and programs for what is termed as 'Rural Transformation.' In Bangladesh, this effort is known as 'My Village-My Town,' forming a crucial part of the country's strategy for transformation leading up to 2041. 

The next step after rural poverty reduction 

Rural transformation, also known as restructuring or rural structural change, has become a key focus in both developing and developed nations. This shift typically involves transitioning from agriculture to industry and services. 

While Western Europe, North America, and the Middle East have experienced rural restructuring, developing countries like China, Malaysia, Taiwan, Vietnam, India, the Philippines, Zimbabwe, and Ecuador have also undergone transformative development in their rural areas.

Seen as the next-level strategy after successful rural poverty reduction efforts, rural transformation addresses persistent structural inequalities and the rural-urban gap. Since the 1970s, Asian countries such as South Korea, Vietnam, Malaysia, the Philippines, India, and Bangladesh, in tandem with China's Deng Xiaoping, launched initiatives for rural poverty reduction. 

Although substantial progress has been made, income inequalities between rural and urban areas have widened, prompting the need for rural structural change.

Strategies for rural poverty reduction included increasing agricultural production, developing rural infrastructure, enhancing access to education and health facilities, and fostering cooperatives. China and Vietnam took additional steps by transitioning from socialist to market-oriented economies, with Vietnam's Ho Chi Minh terming the strategies 'Doi Moi,' meaning 'innovate or renovate.'

Rural development is now seen as a multilevel, multi-actor and multifaceted process that requires an understanding of the regional socioeconomic structure and rural economic status, agricultural developmental model, the relationship between agriculture and society, individual farm households and their behaviours, and local policies and institutions. 

The rationale behind advocating for rural structural change lies in the pursuit of increased GDP growth rates. Agriculture alone cannot provide year-round employment or boost per capita income. 

Strategies for rural transformation in developing countries involve altering agricultural intensity, shifting crop patterns, increasing land and farm income productivity, improving off-farm income, developing contemporary employment skills, establishing small and medium enterprises (SMEs), adding value to agricultural products, promoting rural tourism, creating outsourced employment for IT industries, and enhancing rural housing and economic and social conditions. Beyond economic growth, rural transformation aims to enhance the quality of life for rural residents and reduce the disparity in income between rural and urban areas.

Despite numerous challenges, Bangladesh, like other progressive nations, is committed to rural transformation as it progresses toward its vision of becoming a 'developed and smart Bangladesh by 2041.' 

Rural transformation had another momentum in developing nations after declaration of Millennium Development Goals by the UN in 2000. The eight goals of MDG predominantly involved the rural areas and achieving the goals focused on rural transformation, creation of rural employment, access to education and health facilities, etc. 

The aspiring nations, which also includes Bangladesh, focused on rural transformation to achieve MDGs. Sustainable Development Goals (SDGs) set in 2016 were more pragmatic for the rural areas as they declared 'leaving no one behind'. Achieving most of the SDG goals and targets depends on rural transformations in a sustainable and efficient way. 

Bangladesh's rural transformation

Rooted in its constitution, Bangladesh envisioned rural transformation as early as 1972 when Bangabandhu Sheikh Mujibur Rahaman included Article 16. This article emphasised effective measures for a radical transformation in rural areas, covering aspects like agricultural revolution, rural electrification, industrial development, and improvements in education, communications, and public health. Few nations globally had such a clear vision for rural transformation in the 1970s.

Post-independence, Bangladesh prioritised rural poverty reduction in its development focus. With successive programs over the past decades, rural living conditions have improved significantly, witnessing enhanced access to infrastructure, including roads, electricity, internet, health, and education. Despite these advancements, the belief persists that rural areas hold untapped potential for contributing even more to national growth.

In line with this perspective, Bangladesh unveiled programs for rural transformation under the 2018 election manifesto, termed 'My Village-My Town.' This initiative aims to extend modern civic amenities to every village, positioning it as a prime strategy to transform the country into a developed nation by 2041. Twenty-four ministries and divisions aligned their projects with this vision.

Despite geographical challenges such as flood plains, haor, hills, coastal zones, chars, and beel regions, Bangladesh has achieved notable progress. Thousands of long bridges connect riverine hinterlands, submarine cables bring modern electrification to remote islands, and rural water supply with electricity-operated pumps addresses water scarcity. The country has also established rural health facilities, modern primary and high school buildings, and provided high-speed internet access to almost seventy percent of Union Parishads nationwide.

This significant improvement in rural infrastructure has translated into enhanced service delivery, intensified economic activities, and increased entrepreneurship and community empowerment at the rural level. 

Approximately 50% of rural employment now depends on non-farm activities, a stark contrast to the negligible figures two or three decades ago.

Lessons from China: Building a new countryside 

In the two decades of its reform, China has witnessed significant agricultural and rural-industrial growth, effective poverty reduction, and successful mitigation of environmental degradation. The transformation began with three key strategies: implementing a household responsibility system, fostering township and village enterprises (TVEs), and pursuing the goal of 'building a new countryside.' These initiatives aimed at advancing production, improving livelihoods, fostering cultural progress, maintaining clean villages, and efficiently managing cooperatives and local government institutions. As a result, rural China experienced substantial changes in population, lifestyles, employment and industrial structures, community organisation, culture, and transportation accessibility.

A pivotal element in China's shift to a more prosperous, modern industrial economy was the substantial increase in incomes and the movement of a significant portion of the population from agriculture to non-farm employment. Mechanization of farming facilitated this shift, with around 140 million of China's 450 million rural labour force engaged in nonfarm jobs by 2011. Various strategies, including raising commodity prices, implementing farmer subsidy programs, increasing productivity, diversifying production, and investing in infrastructure, were employed to enhance farmers' incomes. The revival of the rural financial sector played a crucial role in the success of these strategies.

Comparing China and Bangladesh, both nations have experienced substantial agricultural production growth, improved rural infrastructure, and increased rural incomes. However, China's faster progress in entrepreneurship, particularly the development of Township and Village Enterprises (TVEs), and its effective method for ensuring better commodity prices at the farm level stand out. Bangladesh could accelerate its rural growth by focusing on these aspects, learning from China's experiences. Attention to entrepreneurship development and devising strategies for commodity price stability can contribute to faster rural transformation in Bangladesh and other countries seeking similar progress.

Learning from the 11th Malaysia Plan 2016-2020 

Malaysia embarked on deliberate rural transformation in 2011 with the 10th Malaysia Plan, focusing on Rural Basic Infrastructure, Improved Service Delivery, Economic Intensification, Entrepreneurship Promotion, and Community Empowerment. Despite progress in rural roads, water supply, and electricity coverage during this period, Malaysia faced challenges like low human capital, limited off-farm employment, inadequate infrastructure, lack of synergy, low productivity, and agency integration issues.

To address these challenges, the 11th Malaysia Plan (2016-2020) introduced strategies such as Reenergizing Rural Economic Activities, Enhancing Human Capital, and Extending Quality Rural Infrastructure and Services. These initiatives aimed to encourage private investment, improve rural-urban linkages, implement 21st Century Village programs, promote technology adoption, and empower rural entrepreneurs. The strategies were seen as vital to filling gaps and developing a cohesive society.

The 11th Malaysia Plan shared similarities with Bangladesh, especially in the emphasis on improving service delivery. Malaysia established Rural Transformation Centers (RTCs) for training, information dissemination, and initiatives like high-value agriculture, food processing, and supply chain management. In Bangladesh, Union Parishads offered similar services, albeit on a smaller scale. Bangladesh's government established Joy Digital Centers in Upazilas to energise rural youth for digital entrepreneurship, alongside plans to set up 360 technical schools for rural youth skill development.

Both countries recognized the power of youth in driving rural development. While Bangladesh adopted programs aligned with Malaysia's approach, success hinged on factors like cohesion, purpose fit, and innovation, recognizing the unique dynamics in each country. As the buzzword "Power of Youths" resonated in both nations, their respective governments sought to leverage these programs, acknowledging the nuanced nature of success in diverse contexts.

In Vietnam, rural transformation was led by agricultural transformation 

Vietnam, with a per capita income of $4,316 in 2023, nearly 1.65 times that of Bangladesh ($2,621), underwent significant rural transformation. Emerging from war devastation in 1975, Vietnam prioritised food security and self-reliance, initiating the 'Doi-Moi' program in 1986. This program, led by Ho-Chi-Minh, shifted production responsibility from communities to households, marking a crucial agricultural transformation.

Vietnam serves as an exemplary case where agricultural transformation played a pivotal role, driving both economic change and substantial poverty reduction. Headcount poverty dropped from 53% in 1992 to 2% in 2016, while income inequality, measured by the Gini coefficient, hovered around 35 during this period. 

The structural transformation saw agriculture's GDP share decline from 40% in 1990 to 16.3% in 2016, accompanied by overall economic growth fueled by SMEs, industries, and services. 

Notably, Vietnam emerged as a major exporter of rice, coffee, aquaculture products, and starch, showcasing the sector's vital role. The success story underscores that innovation in agriculture, coupled with robust rural infrastructure and services, can effectively lift a country out of rural poverty.

In the last two decades, Bangladesh experienced significant agricultural growth and transformation, marked by the rise of fruits, vegetables, and fisheries in the rural economy. However, compared to Vietnam, Bangladesh faces challenges in exporting agricultural products due to quality and farming practices. Consequently, the shift to cash crops in agriculture has not yielded the expected revenue, highlighting the need for addressing these impediments to fully capitalise on the sector's potential.

Facing the challenges by connecting the dots 

Today's rural economy and its social system are much more sophisticated, complex, diverse and global compared to those of the last century. 

Rural development is now seen as a multilevel, multi-actor and multifaceted process that requires an understanding of the regional socioeconomic structure and rural economic status, agricultural developmental model, the relationship between agriculture and society, individual farm households and their behaviours, and local policies and institutions. 

Every country has its own challenges. Learning and sharing experiences from other countries can only demonstrate the options but selection of the best option will depend on 'connecting the dots' based on one's own experience. 

The author is the Project Director of My Village-My Town: Pilot Village Development Project under the Local Government Engineering Department (LGED).