MPA 211 Management of Rural and & Urban Development Customized Program for DEPEd

1. Josefina B. Bitonio, DPA
MPA 211 Management of Rural and Urban
Development

2. Rural development
is a subset of the
broader term
“development”.
Development is a
universally cherished
goal of
individuals, families, c
ommunities and
nations all over the
world.

3. The term rural development connotes overall
development of rural areas with a view to improve
quality of life of rural people.
As a phenomenon: is It
is the end result of
interactions between
various physical
technological,
economic,
socio cultural and
institutional factors
As a strategy: it is
designed to improve the
economic and social well
being of a specific group
of people – the rural poor
Robert Chamber, 1983

4. As a discipline, it is multi-
disciplinary in
nature, representing an
intersection of
agricultural, social, behavio
ral, engineering and
management sciences.
Robert Chamber, 1983
Rural development is a process leading to sustainable
improvement in the quality of life of rural
people, especially the poor ( katar Singh, 2002)

5. Basic Elements of Rural
Development
1. Basic Necessities in Life –
food, shelter, clothes, basic literacy, primary
health care and security of life and property.
2. Self respect – Every person seeks some sort
of self respect, dignity, or honor. Absence or
denial of self respect indicates lack of
development
3. Freedom – freedom from political, ideological
freedom, economic freedom, and freedom
from social servitude.

6. Why Rural Development?
The seriousness of rural poverty in the
Philippines has long been recognized. From the
1960s to the ’90s, a succession of Philippine
presidents embarked on a number of rural
development programs to address this situation.
All of the programs met with little success.

7. One observer (Serrano 1999) describes these
past anti-poverty efforts in this way: “Every regime
promised to reduce poverty; the last two even
declared total war against it. Not one made good
on its promise in a real way. Poverty seems much
easier to create and reproduce than real
prosperity. Indeed, poverty has become the most
durable feature of Philippine reality.
http://www.socialwatch.org/sites/default/files/pdf/en/articleb2001_phi.pdf

8. • These are among the key findings of the report titled
Making Growth Work for the Poor : A Poverty
Assessment fur the Philippines released May
20, 2018 by the World Bank.
• From 2006 to 2015, the latest available data, the report
says that robust economic growth helped the poverty rate in
the Philippines to fall by 5 percentage points. Poverty
declined from 26.6 percent in 2006 to 21.6 percent in
2015, due to factors like the expansion of jobs outside
agriculture, government transfers, in particular to qualified
poor Filipinos through the Pantawid Pamilyang Pilipino
Program, and remittances.
https://www.worldbank.org/en/news/press-release/2018/05/30/philippines-
poverty-rate-declines-more-well-paying-jobs-and-opportunities-needed

9. In Muslim Mindanao, with 2,057,479 and 1,990,503 poor
Filipinos, respectively. The magnitude of poor population
is also high in Region 8, Region 6, Region 10 and
Region 12, with roughly around 1.7 million poor
individuals residing in each region. In contrast, the
National Capital Region and the Cordillera Administrative
Region have the least number of poor people.
https://businessmirror.com.ph/revisiting-our-poverty-statistics/
Official statistics in 2015 show that 21,927,009
individuals in the country are estimated to be living
below the national poverty line.

10. The poverty threshold, poverty limit
or poverty line is the minimum level of income
deemed adequate in a particular country. ... In
October 2015, the World Bank updated the
international poverty line to $1.90 a day.

11. According to the
PSA, the national
poverty threshold in
2015 stood at P10,969
per month (P131,628
per annum), meaning a
family of five needed to
earn that much to be
able to eat, have
shelter, travel, buy
medicine, or go to
school, among other
life necessities.

12. https://en.wikipedia.org/wiki/Poverty_threshold#/media/File:Percent_Poverty_World_Map.png

13. The report emphasizes the importance of
breaking the cycle of inequitable investment
in human capital and lack of well-paying job
opportunities that trap the poor in
poverty, generation after generation. Children
from poor households start life at a
disadvantage. Malnourished and stunted, with
poor access to quality health care, they are
less likely to learn the skills they need and
fulfill their potential.
Making Growth Work for the Poor : A Poverty
Assessment for the Philippines

14. As adults, therefore, they earn low incomes and
cannot afford to invest in their own children. They
have little to meet their basic needs and nothing
to save against emergencies. Frequent natural
disasters buffet the poor, whose limited means to
cope and disproportionate suffering push them
deeper into poverty. Poverty is a threat to peace.
In the parts of the country affected by
conflict, where physical assets have been
destroyed, families displaced, and human capital
eroded, people are trapped in a cycle of conflict
and poverty

15. In addition to the challenges
of addressing poverty, the
Philippines is hindered by the
limited expansion of its middle
class. In the East Asia region over
2002-2015, the share of
population that is economically
secure and middle class
increased from just over one
fifth to nearly two-thirds, but the
share in the Philippines
increased from 37 percent to just
44 percent.

16. The lack of well-paying
jobs limited the gains for labor
from structural transformation.
Every year, 1 percent of the
employment shifted out of
agriculture, but most of those
workers end up in low-end
services jobs. Such limited
gains for labor could
negatively affect the country’s
long-term competitiveness

17. The report concludes that making the pattern of
growth more inclusive and providing more well-paying
jobs will be crucial to helping people achieve higher
and more stable incomes. It claims that steps to
accelerate poverty reduction include
creating more well-paying jobs;
https://openknowledge.worldbank.org/handle/10986/29960?show=full

18. Improving productivity in all sectors, including agriculture;
reducing income and wealth inequality through more
investments in people and skills development, enhancing
the ability of the poor to participate in growth; rebuilding
conflict-affected areas; and better management of risks
and protection of the vulnerable
https://openknowledge.worldbank.org/handle/10986/29960?show=full

19. Rural Problems
• Low/little/lesser incomes
• Productivity is very low
• Absence of Economic and Social
infrastructure
• No Capital
• Lack of Cultural and Educational
activities

20. Rising Expectations and Development
Particular expectation differ from person to
person and from region to region, but the
expectation of marked improvement in
material conditions of life is general
throughout the world. People expect to have
better diet, clothes, houses, education, a
secure life, and freedom from serviture

21. Explanation for this expectation
• Demonstration of rural elite, urban rich and
foreign tourist engaging in ostentatious
consumption of exotic and luxurious goods has
distorted the consumption and utility functions
of the poor;
• Films, radios, TV and advertising have exposed
the masses to modern gadgets and lifestyles.
Common man has learned about new
products, services .

22. • Local and national politician have assured the
rural poor of the modern amenities of life if
they would vote for them
• The central government have declared time
and again the eradication of poverty is their
major policy goal;

23. • The economies of most developing
countries can not possibly fulfill
these expectations in the immediate
future and there is bound a collision
between rising expectations and
economic reality.
It is this that makes rapid agricultural
and economic development a national
imperative.

24. Development and Change
• In the context of rural development, a change
may be considered to be an instrument which
can be used to promote rural development.
The introduction of technological advances in
the mid 60’s , plus new high yielding varieties
of crops, fertilizers, improved farm machinery
and pesticides;

25. Modern milk processing and feed
processing plants, artificial insemination of
dairy materials and organizational innovations
like cooperatives in Asingan, Pangasinan and
NSCC, Caoayan, Ilocos Sur

26. In Taiwan and
People’s Republic in
China, agricultural
development was
largely a result of
institutional
reforms, esp. land
reforms and
technological
advances.

27. Autonomous or Induced Development
• Development planning is one of the forms of
interventions that has become a fad in many
developing countries of the world and is considered
a magic door to development. Even in advanced
countries have come to realize the need for some
sort of planning or government intervention in the
economic processes. It seems that there is a
growing consensus around the statement that any
planning is better than no planning at all and
decentralized planning is better than centralized
planning

28. It is now increasingly apparent that the
development effort can not be left to the
government alone; it must be shared by
private, cooperative, corporate and other NGOs
and agencies and above all by the people
themselves. Planning by the government should
complement and supplement the efforts of
individuals and NGOs.
Planning can make a positive contribution only if
it facilitate the achievement of development
objectives more rapidly and more efficiently than if
development followed natural forces

29. Growth versus Development
Economic growth is an essential component of
development, it must encompass more than the material and
financial sides of people’s lives. It is a multidimensional process
involving the reorganization and reorientation of both economic
and social systems;

30. The summation of
economic, environm
ental, political, and
social considerations
for the present and
especially for the
future
improvements in the level of distribution of
incomes and output; involves radical
changes in institutional, social and
administrative structures; and although
development is usually defined in a
national context, its widespread
realization may necessitate fundamental
modifications of the international
economic, social and political systems as
well

31. The Concept of
Development

32. 1. Traditional Society
This society signifies a primitive society having no
access to modern science and technology. It is a
society based on primi-tive technology and primitive
attitude towards the physical World. Thus, Rostow
defines a tradi­tional society “as one whose structure is
developed within the limited production function.
However, Rostow does not view this traditional society
as being completely static.

33. In this stage of a society output could be
increasing through the expansion of land area
under cultivation or through the discovery and
spread of a new crop. But the critical fact about
this type of society is that there is limit to
attainable output per head. This limit arises due
to the absence of access to modern science and
technology. This type of a society allocates a
large proportion of its resources to agriculture
and is characterized by a hierarchical social
structure in which there is little possibility for
vertical mobility.

34. Traditional society, dominated by
agriculture and barter exchange,
and where science and
technology are not understood or
exploited.

35. 2. Pre-Conditions or the
Preparatory Stage
These conditions mainly comprise fundamental changes in the
social, political and economic fields; for example:
(a) A change in society’s attitudes towards science, risk-
taking and profit-earning;
(b) The adaptability of the labor force;
(c) Political sovereignty;
(d) Development of a centralized tax system and financial
institutions; and
(e) The construction of certain economic and social
infrastructure like railways, ports, power generation and
educational institutions.

36. • Thus in the stage of precondition
for take-off Rostow views
agriculture as performing three
roles, first, agriculture must
produce sufficient food-grains to
meet the demand of growing
population and of the workers who
get employment in agriculture.
• Secondly, increase in agricultural
incomes would lead products and
stimulate industrial investment.
• Thirdly, expand-ing agriculture
must provide much of the savings
needed for the expansion of the
industrial sector.

37. Further, there is a change in the attitude of the
people who start viewing the world where there are
possibilities of future growth. A new class of
entrepreneurs emerges in the society who mobilize
savings and undertake investment in new enterprises
and bear risks and uncertainty. In the sphere of political
organization, it is during this stage that an effective
centralized nation state starts emerging.
It is evident from above that in
this second stage of growth
foundations for economic
transfor-mation are laid. The
people start using modern
science and technology
for increasing productivity
in both agriculture and
industry.

38. What is the take off stage?
Rostow's Take-Off Stage of Economic
Growth. The self-reliant growth is also
known as take off, an initial push, a big
push, a critical minimum effort, a great lead
forward. All the concepts mean that
economic growth starts with a bang, and
not with a whisper

39. 3. The “Take-off” Stage
• This is the crucial stage which covers a relatively
brief period of two to three decades in which the
economy transforms itself in such a way that
economic growth subsequently takes place more or
less automatically. “The take-off” is defined as “the
interval during which the rate of investment increases
in such a way that real output per capita rises and
this initial increase carries with it radical changes in
the techniques of production and the disposition of
income flows which perpetuate the new scale of
investment and perpetuate thereby the rising trend in
per capita output.”

40. • Thus, the term “take-off ”
implies three things : first the
proportion of investment to
national income must rise from
5% to 10% and more so as to
outstrip the likely population
growth;
• secondly, the period must be
relatively short so that it should
show the characteristics of an
economic revolution; and
thirdly, it must culminate in
self-sustaining and self-
generating economic growth

41. Take off
Great
Britain
1783-1802
Russia 1890-1914
USA 1843-1860
Germany 1850-1873
Canada 1896-1914
China 1952
India 1952

42. 4. Drive to Maturity: Period of Self-
sustained Growth
• This stage of economic growth occurs when the
economy becomes mature and is capable of
generating self-sustained growth. The rates of saving
and investment are of such a magnitude that
economic development becomes automatic. Overall
capital per head increases as the economy matures.
The structure of the economy changes increasingly.

43. The initial key
industries which sparked
the take-off decelerate as
diminishing returns set in.
But the average rate of
growth is maintained by a
succession of new rapidly-
growing sectors with a
new set of leading sectors.
The proportion of the
population engaged in
agriculture and other rural
pursuit’s declines, and the
structure of the country’s
foreign trade undergoes a
radical change.

44. Drive to Maturity
Great Britain 1850
Russia 1950
USA 1900
Germany 1910
Canada 1950
The modern industrial sector attracted workers from the rural areas

45. 5. Stage of Mass Consumption
In this stage of development per capita income of
country rises to such a high level that consumption
basket of the people increases beyond food, clothing
and shelters to articles of comforts and luxuries on a
mass scale. Further, with progressive industrialization
and urbanization of the economy values of people
change in favor of more consumption of luxuries and
high styles of living. New types of industries producing
durable consumer goods come into existence which
satisfies the wants for more consumption. These new
industries producing durable consumer goods become
the new leading sectors of economic growth.

46. GDP Per Capital PPP
2015 2016 2017 2018 2019
Bangladesh 3,555.5 3,849.10 4161.10 4549.6 4964.10
Cambodia 3887.7 3675 3928.4 4260.7 4583
China 12978.8 13572.6 14344.4 15614.3 16804.4
Hongkong 56408.9 57221.4 59849.2 62551.1 62496
India 5464.9 5839.9 6186 6655.1 6996.1
Indonesia 10247.2 10494.6 10935.1 11648.5 12334.9
Malaysia 24801.9 25546 26661.2 28229 29619
Philippines 7186.9 7703.8 8120.8 8723.5 9302.4
Singapore 86974.7 89386.1 94941 100126 101649.1
Source: WB

47. GDP
0.00
20,000.00
40,000.00
60,000.00
80,000.00
100,000.00
120,000.00
Bangladesh Cambodia China Hongkong India Indonesia Malaysia Philippines Singapore

48. • As a multi-dimensional
process involving changes in
structures, attitudes, and
institutions as well as the
acceleration of economic
growth, the reduction of
inequality, and the eradication
of absolute poverty
Michael Todaro 1977

50. Linear Growth Theory
• The Harrod Domar Model suggests that the
rate of economic growth depends on two
things:
• Level of Savings (higher savings enable
higher investment)
• Capital-Output Ratio. A lower capital-output
ratio means investment is more efficient and
the growth rate will be higher.

51. Assumptions:
Harrod Domar
Model
• Savings lead to
investment S=I
• Investment leads to
changes in capital
stocks
I= K
Constant capital-output-
ratio
k
r= ____
y

52. Importance of Harrod-Domar
• It is argued that in
developing
countries low
rates of economic
growth and
development are
linked to low
saving rates.
This creates a vicious
cycle of low
investment, low output
and low savings. To
boost economic growth
rates, it is necessary to
increase savings either
domestically or from
abroad. Higher savings
create a virtuous circle of
self-sustaining economic
growth.

54. World
Market

55. • Higher incomes generate savings
• Increase savings means more investments
• Increased investments means more capital
and increased productivity
• Higher wages means more incentive to move
from low productivity agriculture to high
productivity industry

57. Theories and Patters of Structural
Change
• Nobel laureate Lewis said that
underdeveloped economy consists of two
sectors. A traditional, over populated rural
subsistence sector with surplus labor and a
high productivity modern sector to which this
surplus labor is transferred.
Lewis’s Structural Change Model

58. The focus of the model is on the
process of surplus labor transfer
from the traditional sector which
leads to the growth of output and
employment in the modern sector.
Lewis calculated that with an
increase of 30% or more in the
urban wages, workers will migrate
from the rural areas to the urban
areas- which would lead to growth
in output and employment
through the modern sector.

59. Structural Change and Patterns of
Development
• In Structural Change and Pattern of Development, in
addition to the accumulation of capital, both physical and
human, a set of interrelated changes in the economic
structure of the country are required for the transition
from a traditional economic system to a modern one.
• These structural changes involve all economic functions –
including the transformation of production and changes
in the composition of consumer demand, international
trade and resource use as well as changes in
socioeconomic factors such as urbanization and the
growth and distribution of a country’s population.

60. Development shows certain
patterns – for instance, a shift
away from agriculture to
industrial production, the
steady accumulation of
physical and human capital,
the change in consumer
demands from emphasis on
food and basic necessities to
manufactured goods and
services. This leads to the
growth of cities and urban
industries as people migrate
from the rural to the urban
regions with a decline in
overall family size and rate of
population growth.

61. Development shows certain
patterns – for instance, a shift
away from agriculture to
industrial production, the steady
accumulation of physical and
human capital, the change in
consumer demands from
emphasis on food and basic
necessities to manufactured
goods and services. This leads to
the growth of cities and urban
industries as people migrate from
the rural to the urban regions with
a decline in overall family size
and rate of population growth.
Manufacturing
Manufacturing
Manufac
turing
Traditional
Agriculture

62. What is Poverty and How is it
Different to Inequality
• People in poverty are those who are
considerably worse-off than the
majority of the population. Their
level of deprivation means they are
unable to access goods and services
that most people consider
necessary to an acceptable standard
of living[8].
• It can be an absolute term, referring
to a level of deprivation that does
not change over time, or a relative
term in which the definition
fluctuates in line with changes in
the general living standard.

63. Types of Economic Inequality:
1. Income
Inequality
1. Income Inequality
• Income inequality is the extent to which income is
distributed unevenly in a group of people.
Income
• Income is not just the money received through pay,
but all the money received from employment (wages,
salaries, bonuses etc.), investments, such as interest
on savings accounts and dividends from shares of
stock, savings, state benefits, pensions (state,
personal, company) and rent.
• Measurement of income can be on an individual or
household basis – the incomes of all the people
sharing a particular household. Household income
before tax that includes money received from the
social security system is known as gross income.
Household income including all taxes and benefits is
known as net income[1].

64. 2. Pay Inequality
A person’s pay is different to their
income. Pay refers to payment from
employment only. This can be on an
hourly, monthly or annual basis, is
typically paid weekly or monthly and
may also include bonuses. Pay
inequality therefore describes the
difference between people’s pay and
this may be within one company or
across all pay received.

65. 3. Wealth Inequality
• Wealth refers to the total amount of assets of
an individual or household. This may include
financial assets, such as bonds and stocks,
property and private pension rights. Wealth
inequality therefore refers to the unequal
distribution of assets in a group of people.

66. No society can truly be flourishing and
happy of which by far the greater
part of numbers are poor and
miserable.
Adam Smith 1776

67. • Agrarian reform
program
• Cooperatives
development program
• Human settlement
program
• Community
development program
• Nutrition program
• Integrated area
development program
• Rural electrification
project
• Fishing resources
management
• Medium and small-
scale industries
• Family planning

68. Sustainable Development
• Defined as “development that meets the needs of
the present without compromising the ability of
future generations to meet their own needs” (World
Commission on Environment and
Development, 1987), sustainable development
has emerged as the guiding principle for long- term
global development. Consisting of three
pillars, sustainable development seeks to
achieve, in a balanced manner, economic
development, social development and
environmental protection.

69. Critique (Exercise)
1. Rostow's Take-Off Stage of Economic Growth.
2. Linear Growth Theory
3. Lewis’s Structural Change Model

70. Photo credits to:
Pinterest
Lino Tabangin
Josie Lee Villaver
Himaya B. Bitonio

71. Reference
Rostow’s Five Stages of Growth
• http://www.yourarticlelibrary.com/economics
/rostows-five-stages-of-growth-
explained/38235 (Accessed Aug 11, 2018)
• Katar Singh
Rural Development, 2nd Ed. Sage Publication
New Delhi, India