3.5.1.One reason for the low proportion of rural non-farm households, is that historically rural economies have been subsistence-based due to an absence of markets for rural produce, which in turn has been due to poor infrastructural linkages between rural and urban areas (see below). This has limited the opportunity for non-farm rural employment. In Cambodia for example DFID (2000) notes that opportunities for non-farm employment in rural areas is extremely limited (DFID 2000).
3.5.2.Improving rural infrastructure can provide an opportunity for rural poor to commoditise and to diversify their livelihood strategies. Access to community-level infrastructure (roads, irrigation, transport, markets) and services (health and education) are important complements to household-level assets in generating incomes and enhancing livelihoods (see Datt and Wang 2001). Poor infrastructure restricts rural economic growth – particularly by denying farmers access to sources of input supplies, local urban markets and wider market information. Access by rural households to urban, regional and global markets for their commodities and labour is considerably eased through good infrastructure (road, rail, river, telecommunications). This can assist poverty elimination through enabling diversification of rural households into non-farm livelihood strategies and their incorporation into the formal economy. Thus, for example, the World Food Programme (1999) sees access to food security in Laos as ‘constrained by scarce off-farm opportunities, lack of access to services and markets and limited irrigation schemes.’
3.5.3.However, as countries have reformed their economies, and demand for rural products has grown, so too has the opportunity for non-farm employment. This has probably gone furthest in Bangladesh where there is a sizable, and landless, segment of the rural population which is
engaged in servicing the farming and fishing sector (e.g. rural transport) and/or is engaged in post-harvest activities (e.g. food preparation). In the three SE Asian countries economic reform and infrastructural development has occurred later, so that diversification of rural economies is at an earlier stage and rural livelihoods are still primarily based on farming. 3.5.4.Development of non-farm employment opportunities are important not just in offering
landless poor access to opportunity, but also in enabling poor farming households to diversify their livelihood strategies – which can reduce the vulnerability caused by the seasonality of farming practice and can offer a route out of poverty. For example, in Laos Datt and Wang (2001) note that poor and nonpoor differ notably in their economic activity status over the year. Thus in general poor households depend on farming as their main source of livelihood and have fewer non-farm opportunities as compared with non-poor households.
3.5.5.While Datt and Wang (2001) do not say so, the data indicate that the diversification of household livelihood strategies beyond the farm are likely to be of most significance in lifting Lao households out of poverty – particularly as the differences between poor and nonpoor in access to dry and irrigated land is not very large (reflecting the preponderance of small farm holdings and limited levels of irrigation in the country. However, increased investment in, and commercialisation of, the farming sector (and including enhanced rice- field fish production where it is suitable, see Haylor et al 1997, and discussion below) would make a significant difference to the living standards of a majority of the rural poor.
3.5.6.However, investment in rural infrastructure can also represent a threat poor rural livelihoods. The opening up of rural areas enables the exploitation of previously inaccessible natural resources by rent seeking external agents (including governments). As will be discussed below, while the process can lead to increased investment in agricultural production by households in response to market demand, in the absence of regulations and incentives it can also lead to the unsustainable exploitation of resources (for example, CPRs such as fisheries and forests). Indeed it can be argued that the demand by Thailand for timber from Laos and Cambodia preceded rural infrastructural improvements, and indeed led to their development. Only then did farmers take advantage of logging roads to access new land for the growing of commercial crops (see Rigg 1997).
Infrastructural status
3.5.7.Bangladesh is further ahead of the three SE Asian study countries in its improvement of rural infrastructure. There has been considerable investment in upgrading the road system and in improving road and rail links to its main ports and to India. This stimulating within and between country commodity flows.
3.5.8.In Cambodia much of the rural road infrastructure was destroyed through three decades of open conflict and neglect. An indication of the importance of rural infrastructure to poor people is the high priority it is given through local planning processes developed under the Seila programme (DFID 2001). However, despite considerable donor assistance the road network - and capacity to undertake basic maintenance - is very limited.
3.5.9.I provide an example from the Problem Census included in the Country PRA Report: Cambodia (2003) which brings home the importance of infrastructure to rural households.
‘Road infrastructure is very important for villagers to travel and transport the product to exchange with outsiders. Without roads, the village could not be developed and the livelihoods of the villagers could not be upgraded because the product being produced in the village is cheap, or if they need to transport to other places they need to spend a lot of money, while imported commodities from outside is expensive.…There are two main routes of the problem which can be described; firstly the villagers have no ability to build roads themselves and secondly they lack communication and contact with outsiders such as government institution and NGOs.
The respondents also stressed that they lacked other services such as electricity, a safe water supply and decent sanitation.
3.5.10.Infrastructure in Laos is underdeveloped, particularly in the upland and highland areas, with about half the population living in areas unreachable during the rainy season, while more than two-third are not linked to an electricity network and about half do not have access to a safe water supply. Additionally poor households are concentrated in areas where infrastructure is more underdeveloped. Anecdotal evidence from Haylor et al’s (1997) wealth ranking exercises suggest that Lao themselves rank as rich those who have proximity to an urban centre and have the opportunity for salaried work there. Yet, as Haylor et al (1997) note, in Laos rural communities may move closer to improved roads in order to take advantage of the new opportunities.
3.5.11.In Vietnam, the causes of poverty are diverse depending on geographical location. For example, the northern mountain population has a high poverty incidence as a result of geographical isolation, limitations in land area for rice cultivation, poor communications and transport infrastructure, poor public and extension services (including health and education), and difficult access to markets and credit services.