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1. Marginal resources and regional development

"Marginality" is a distinguishing characteristic of nearly all who live in poverty. In much of Asia the poorest groups inhabit sparsely populated and ecologically hostile environments-marginal and infertile areas subject to recurrent natural hazards such as droughts, floods, and insect plagues. The natural adversities are often exacerbated by man-made hazards of accelerating environmental destruction. These marginal zones are usually incapable of yielding large agricultural surpluses using traditional methods of cultivation, and the huge differentials in productivity between better-endowed and marginal zones within the same country often squeeze marginal people out of agricultural markets entirely, invariably leaving them more impoverished. The World Bank estimates that 40 per cent of the world's poorest people live in areas with seriously adverse climatic and ecological conditions-regions such as the arid and semi-arid uplands of Iran, most of the Himalayan chain from Afghanistan to Burma, vast drought-prone tracts of India, the swampy lowlands of Indonesia and East Malaysia, and the Philippine uplands and river basins.

But the majority of Asia's poor live in densely populated areas with relatively favourable climates and with vast and potentially productive resources. They remain poor because of their marginal access to the means of procuring, transforming and delivering those resources more productively. They inhabit areas where competition for existing resources, especially agricultural land, is intense; where the physical, social, and administrative infrastructure needed to transform and use resources is scarce; or where deliberate patterns of government investment have placed them at a locational disadvantage for competing with other regions in national and international markets.

In most of Asia the intense competition for arable land is a primary cause of poverty. "Within the rural sector," the World Bank has found, "at the very core of the poverty problem are families who either own and cultivate very small holdings or own no land at all.'' Severe pressures on land resources from high rates of rural population growth are expected to continue in south and southeast Asia for at least the rest of this century.

But problems also arise from the marginal use of existing resources: from the inability to identify productive uses for indigenous resources or from inefficient practices of resource transformation and delivery. The inefficient use of labour-its low productivity and sporadic employment- in rural areas is perhaps the most apparent example of under-used resources in Asia. The I LO has found, however, that "labor is not the only resource that is poorly utilized; in many countries land and other resources are not efficiently exploited." Inefficient farming practices reduce the overall productivity of land in many regions. Excessively long fallow periods, low intensity of cropping, large amounts of land left in natural pastures, and similar practices-especially on larger farms-reduce the possibility of raising yields from existing arable land. "At the same time," I LO analysts note, "many of the smallest farmers are forced to overexploit their land, with the result that useful land is destroyed through exhaustion of soil fertility."

Inefficient or inadequate use of existing resources is often caused by another form of marginality: the limited access of the poor to supplementary services and facilities needed to procure, transform, and deliver productive resources. In many regions of Asia the intense competition for available resources is exacerbated by lack of credit facilities for small farmers and entrepreneurs, the shortage of marketing centres, the inadequacy of co-operative organizations or other arrangements for transporting and selling goods, poor communications, insufficient physical infrastructure and poorly organized agricultural extension services. Most subsistence activities, moreover, depend entirely on manual labour or animal power, sometimes aided by handmade, simple implements. New forms of technology needed to transform resources and increase the productivity of labour are not available to the rural poor. In addition, the administrative and institutional arrangements needed to maintain supplementary resources are often inadequate or missing entirely. "Underutilization of labor and land often is-accompanied by underutilization of capital," ILO analysts found. "Large irrigation facilities are not used to capacity; irrigation canals and drainage ditches are allowed to fall into disrepair; fish ponds are permitted to become overgrown with weeds, mechanical equipment becomes inoperative because of poor maintenance and lack of spare parts."

Moreover, the rural poor generally lack access to town based facilities and the health, education, and social services that would allow them to increase their productivity. Nor can they easily learn of new ways of identifying potentially productive resources or of using them more effectively. The limited access of rural people to market towns and small cities, in which the services and facilities needed to support rural resource development are located, places them at a serious disadvantage.

Marginality and Development Policy

The marginality of poor regions in Asia is not due entirely to differences in natural resource endowments. Disparities among regions in income and wealth-and in the overall ability to exploit existing resources productively-are often created by public investment and development policies. "The unequal distribution of benefits among the population and the unbalanced pattern of sectoral development that characterize Philippine growth for much of the past three decades," the World Bank insists, "was closely linked to resource management policies and to patterns of resource allocation." In many of the developing nations of Asia, as in the Philippines, investments were heavily concentrated in largescale, capital-intensive industries, usually located in a primate city or a few metropolitan centres, and allocated to physical infrastructure development in a few favoured regions, usually in and around the metropolitan centre. The concentration of productive assets in the primate cities allowed these centres to exploit opportunities for development, create competitive advantages over other locations within the country, and drain peripheral rural areas of their resources.

These favoured locations now have concentrations of productive and social overhead assets vastly greater than their share of national population. They continue to attract human and capital resources from rural regions, thereby slowing or retarding rural development and maintaining subsistence populations in poverty. In the Philippines, for instance, although Manila has only about a quarter of the national population, it accounts for more than 72 per cent of the nation's manufacturing firms, 80 per cent of all manufacturing employment and production, and 61 per cent of the nation's hospital beds. It consumes 83 per cent of the nation's electrical power and generates more than 65 per cent of the country's total family income. Similarly, Bangkok absorbs about 65 per cent of the annual investment in construction in Thailand, has 72 per cent of all commercial bank deposits, consumes 82 per cent of the nation's electrical power and has 77 per cent of the nation's telephones.' 2 Jakarta's growth is due in large measure to the overwhelming share of foreign and domestic investment it receives compared to other areas of Indonesia and to its percentage of the national population. Between 1968 and 1972, more than 32 per cent of domestic investments and 20 per cent of foreign investments approved by the government were located in Jakarta, which during that time had about 4 per cent of Indonesia's population.

The relatively high levels of economic development in the Central Luzon and Southern Tagalog regions of the Philippines cannot be attributed solely to their natural advantages. They are the result of sustained concentrations of public and private investments in infrastructure, services, and productive activities in these regions over a long period of time. In every aspect of economic and social development, these regions now have advantages over all others in the country. Agricultural production in Central Luzon outpaces that of other regions because 50 per cent of its cultivated land has been irrigated, as opposed to 13 per cent of cultivated areas in the rest of the Philippines. The region reports the highest percentage of farmers obtaining credit from institutional sources and greater access to fertilizers and other farm inputs than other regions of the country. For over a quarter of a century these two regions have received preference in government resource allocations. In fiscal years 1959 to 1961, for example, nearly 57 per cent of infrastructure expenditures were made in these two regions, slightly more than 70 per cent of expenditures on ports and harbours, per cent on waterworks, 61 per cent on flood control and drainage, and almost 70 per cent on buildings, schools, and hospitals were made in and around metropolitan Manila. From 1971 to 1973, these two most urbanized regions received 56 per cent of all infrastructure investments, 64 per cent of port projects, 91 per cent of waterworks, 63 per cent of irrigation, 67 per cent of flood control and drainage projects, and 60 per cent of buildings, schools, and hospital investments.

Moreover, Central Luzon and Southern Tagalog were favoured with higher allocations for social services and economic development expenditures. Nearly two-fifths of all community development projects funded between 1956 and 1973 were concentrated in these two regions, and 43 per cent of the enterprises assisted by the National Cottage Industries Development Administration (NACIDA) were found there. Indeed, these two regions accounted for nearly 70 per cent of the total capitalization of all NACIDA projects by 1972. More than 43 per cent of the Board of Investment's (BOI) large scale industrial assistance, by 1973, was allocated to firms located in these regions.

It has become increasingly clear that the over-concentration of social and productive investments in a few favoured locations is not only detrimental to the marginal regions excluded from development, but to national economic progress as well. The inability to mobilize and use resources to develop marginal regions not only contributes to geographically unbalanced and socially inequitable growth, but leaves large numbers of the population on the fringes of, or excluded entirely from, the national system of production, exchange, and consumption, thereby constraining expansion of the domestic economy. Indeed, the only market economies in Asia that have been able to grow rapidly with relatively equitable distribution of benefits are those that have taken strong measures to develop resources widely and to increase the access of a large majority of the population to productive assets and skills.

Rao notes of Korea, for instance, that "the broad distribution of land contributed importantly to the fact that farmers gained equitably from the growth of farm incomes, and the early spread of education enabled a wide segment of the population to participate in the rapidly expanding modern manufacturing sector and was instrumental in the extensive modernization of agriculture." In Taiwan, strong emphasis was placed on developing agricultural resources throughout the country, equalizing wages and prices between urban and rural sectors, and decentralizing industry to peripheral areas. Moreover, in both Korea and Taiwan, physical infrastructure and basic social services were widely distributed in order to increase the productivity of labour and to enhance the capacity of rural villages to become economically viable. Taiwan extended rural roads to all parts of the island, expanded rail systems, created rural industrial estates, strengthened farmers' associations, and assisted raw materials-based industries in marginal areas. In Korea, primary and middle schools are well dispersed and are within easy access of most rural villages. Most villages are connected by roads and have access to telephone communications and electrical power. The government's Saemaul Undong programme continues to provide assistance for self-help projects in rural villages to increase their self-reliance, mobilize leadership and raise productivity.

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