‘Transporting’ people out of poverty

from SIFY

Raghu Dayal

Home to 60 per cent of the world’s population, the Asia-Pacific region has 679 million people still living on less than a dollar per day.

Asia accounts for over two-thirds of world’s people living in rural areas without access to clean water and sanitation, of underweight children and of tuberculosis patients. Although between 1990 and 2001 the absolute number of poor people declined from 931 million to 679 million, poverty continues to be endemic in the region. About half of the children in Afghanistan, Bangladesh, India and Nepal are undernourished.

A vast majority of the Asian poor, in both urban and rural areas, face the basic access problem owing to deficiencies in transport. In recent years, ample empirical evidence of the positive impact of transport (rural roads, in particular) on poverty reduction has emerged from studies conducted, among others, by the Asian Development Bank, the Department for International Development of the UK, the International Food Policy Research Institute, the World Bank, the United Nations and other donor organisations in several countries in the region.

The benefits

A recent report, ‘Assessing the Impact of Transport and Energy Infrastructure on Poverty Reduction’ provides a synoptic analysis of these studies. It concludes that investment in rural roads/access improvement can have a positive impact in five major areas: (i) increases in total factor productivity in agriculture, (ii) shifts from subsistence farming to higher earning commercial farming, (iii) increases in rural wages, (iv) growth of non-agricultural employment, and (v) better social impact through improved access to basic services. Transport has been seen as central to economic growth and development.

Professors R. Sengupta and D. Condoo with B. Rout in the Asian Journal (Vol.12) of the Asian Institute of Transport Development trace the ample empirical evidence that transport has an important role in poverty reduction and improving the general welfare of the people. Deficiencies in access result in high transport and production costs, low profits, little social interaction, slow spread of new ideas and innovations, problems in networking and diffusion of new technology, difficulties in getting social services, rural-urban disparity and high out migration.

Shenggen Fan, Peter Hazel and Sukhdeo Thorat in ‘Linkages between Government Spending, Growth and Poverty in Rural India’ (published in Report 110 of International Food Policy Research Institute) show that improvement in transport infrastructure and services can have a significant impact on productivity and economic growth.

Food security is defined not only in terms of access to and availability of food, but also in terms of resource distribution to produce food and to generate the purchasing power to buy food. Improved market access through better transport conditions can lead to increased surpluses due to higher producer prices, lower production and transport costs and reduced spoilage in the marketing chain, higher value crop substitution and better market information.

Owing to deficiencies in transport and other logistics in most developing countries, a significant part of the agricultural output, including fruits and vegetables and dairy products, is lost on the journey from farms to consumers.

Employment generator

The transport sector is a major source of employment for the poor, particularly in the informal sector, involving low or intermediate technology. Labour-intensive public works of transport infrastructure many a time are, and can be, used as safety nets for the rural poor, especially in slack seasons and in post-disaster rehabilitation phases.

Employment in labour intensive rural road works can generate additional benefits through the multiplier effect, estimated to be between 1.5 and 2.8 of expenditures in the rural economy, according to ‘Assessing the Impact of Transport and Energy Infrastructure on Poverty Reduction, 2005’, by Asian Development Bank.

In the 1950s and 1960s, infrastructure development, particularly of rural roads, was taken as the starting point of economic development. Public works programmes for employment generation were introduced, for example, when Asia faced food shortages.

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In recent times, programmes to extend basic infrastructure such as roads, irrigation and water supply, soil conservation and social facilities, in remote and poverty-stricken areas employing landless or agricultural labour, have been introduced when no other work was available.

As aptly amplified by D. Booth, L. Hamner and E. Lovell in their ‘Poverty and Transport’, a growing body of evidence points to the pro-poor benefits of reduced transport costs — as R. H. Adams and J.J. He conclude in their ‘Sources of Income Inequality and Poverty in Rural Pakistan’ that the value of improving personal mobility has been underestimated as an important community benefit.

Social linkages

As found by S. R. Khandker, Victor Lavy and Deon Filmer, poor access to schools and the low quality of schools were the most important sources of rural/urban and gender differences in schooling attainments. Women’s participation in schools and also in work improves with better connectivity.

Improvement of roads and transport services has major implications for children’s school enrolment, particularly that of girls. The time constraint of poor households can be a major factor in school enrolment when elder children are needed to assist their parents in productive and household tasks, including the care of younger children.

Adequate transport helps reduce the dropout rates in the early years of schooling. The quality of education is affected where isolation of rural communities fails to attract teachers, and lack of adequate transport services causes their attendance to be irregular.

There is a clear link between levels of infant and child mortality and accessibility to health services. The success of national immunisation programmes, for which repeat visits are often required, depends on the availability of affordable transport services to the poor. National immunisation programmes require timely delivery of vaccines to health facilities, for which a dependable transport service is sine qua non. Transport is crucial for children’s survival in medical emergencies. Improved transport facilities and services make it possible to increase the use of (reproductive) healthcare facilities, antenatal care and professional child birth attendants.

The increased mobility of individuals and transport sector workers is often blamed for the aggravation of HIV/AIDS and other sexually transmitted diseases. Although transport itself may contribute to the spread of these diseases, interventions in the transport sector is instrumental in combating HIV/AIDS and other diseases.

The downside

No doubt, the transport sector generates externalities that can have serious welfare implications for the poor. Major transport development projects may have a substantial negative impact on the environment through pollution and congestion, health, safety and other related aspects.

Transport infrastructure that opens up mineral deposits and forest frontiers destroys the natural habitat, and reduced forests contribute to the degradation of the environment, although, in most cases, these negative effects are more due to failures of environmental policies, their absence or poor enforcement.

Greater integration

There is today a growing recognition that many landlocked countries and areas in the Asia-Pacific region have trade and transport transaction costs that are significantly higher than in countries with coastal access. By providing essential links, transport can transform these landlocked countries into “land-linked” countries and help integrate them with the global production and supply chain.

Adam Smith’s The Wealth of Nations makes the celebrated hypotheses that division of labour and specialisation is the source of economic growth, the level of labour division is determined by the size of the market, and the market size is determined by the efficiency of transport.

The link between a good transport system and economic and social development cannot be overemphasised. Better transportation can lead to better access to markets, both product and credit, for farmers besides improving their access to education and healthcare. Building of the transport system can also provide vital non-farm employment to people living in the countryside.