Rural-Urban Poverty Linkages

Urban poverty in Asia

Shanties in front of high-rise buildings

Asia is rapidly urbanizing. Already, 48% of the region’s population live in cities. It is estimated that by 2030 about 60% of Asia’s population will be urban mainly because of rural-to-urban migration. Thus, despite economic growth and increasing informal labor markets in the cities, urban poverty is increasing. This is further aggravated by the urban poor’s high vulnerability to climate change, congestion, and pollution, affecting their health and livelihood.

Developing Asia has achieved spectacular progress in reducing poverty. Between 1990 and 2010, Asia lifted 786 million people out of poverty, bringing down the poverty headcount ratio to 21% from a high of 55.2%. Despite this spectacular performance, 758 million people in Asia are still below the $1.25 poverty line, and more than 1.2 billion below the $2 international poverty line.

In the past, economic growth and urbanization benefited each other. Poverty, however, is now increasingly evident in urban areas, both in absolute numbers as well as in the share of urban poverty in the total poor population. Migration to dense metropolitan areas increases urban poverty, worsens living standards and access to social services of low-income people, and further aggravates congestion and environmental stress, affecting all urban residents.

It is estimated that about one-third of the urban population live in slums or unfavorable housing and social conditions. Cities in Asia become increasingly unlivable, especially for the poor, affecting health, quality of family and social life, and safety, and giving rise to psychological stress and crime. For more information, read ADB’s 2013 urban poverty study.

Rural-urban poverty linkages

Makeshift huts beside the railroad tracks

Migration is the major driver of urbanization in Asia. Migration and remittances are the most visible linkage between rural and urban areas. However, there are also other dimensions in which the rural and urban poor are connected. The urban poor often remain in their rural living context by living in urban villages, in peri-urban areas, and in small cities close to the rural "hinterland".

The impact of urbanization on growth and equality, and on urban and rural poverty are well documented. The general assumption is that urbanization reduces poverty and increases inequality. While the relationship between urbanization and growth (and poverty reduction in general) is often well established, less is known about the forms and causes of newly emerging urban poverty and exclusion, and how they differ for different city sizes.

ADB and the Beijing-based International Poverty Reduction Center (IPRCC) have a cooperation agreement to exchange knowledge on urban poverty. Under this cooperation agreement,

ADB and IPRCC have undertaken the following activities:

  • prepared an overview study on urban poverty,
  • organized an international conference on urban poverty (in Suqian, June 2013), promoted the 7th People's Republic of China (PRC)-ASEAN poverty forum (September 2013) on urbanization and poverty in Asia, and
  • organized a high-level forum on urban poverty worldwide (October 2013).

ADB and IPRCC will discuss rural-urban poverty linkages in an international workshop in the PRC in September 2014 and in Malaysia in 2015, and through a village leaders’ exchange program in spring 2015.

International Policy Workshop on Rural-Urban Poverty Linkages

From 2-4 September 2014, ADB and IPRCC will host an international workshop on rural-urban poverty linkages. The workshop - with about 70 participants from Asia, including 30 from the PRC - will promote the sharing of knowledge and experience among policymakers, researchers and development practitioners on three major areas, following a geographical approach.

  • Rural-urban poverty linkages in urban villages in the megacities
  • Rural-urban poverty linkages in peri-urban areas
  • Rural-urban poverty linkages in smaller towns

The workshop will come up with policy recommendations for the PRC's 13th Five-Year-Plan (2015-2019) and with suggestions to address inequalities in megacity development in Asia. Read more

Related forums in 2013

PRC-ASEAN Urban Poverty Forum (August 2013)

In the PRC, 53% of the population already live in cities, up from 20% in 1978, and it is estimated to reach 60% in 2018. Urbanization is caused by two major factors, namely expansion of cities to rural areas through significant land acquisition (accounting for 40% of the new urban population) and migration (accounting for 60%).

Migration and urbanization is seen as a major step for lifting the rural poor out of poverty and for maintaining the growth momentum of the economy. While the majority of the 261 million migrants are concentrated in medium and larger cities, migration to smaller towns (second- and third-tier cities) has significantly increased. The PRC’s 12th Five-Year Plan and the World Bank’s 2030 report of the PRC government emphasize addressing the new and the old dualisms, namely equalization of the quality of basic public services delivery (housing, education, health, and pension) to the migrant population in cities and a change in the people’s registration (hukou) system, in addition to further reducing rural-urban disparities. The government is currently developing its 13th Five-Year plan, where rural-urban transformation is a major topic. The PRC-ASEAN workshop could contribute to this discussion.

In August 2013, about 60 experts from the governments and think tanks of ASEAN countries discussed with 40 experts from the PRC how a more regional approach can be taken to address urban poverty.

Suqian Urban Poverty conference (June 2013)

Asia's economic growth and urbanization benefited each other. However, the growth did not benefit much the new urban poor (rural migrants), who often live in the slums of the megacities. Urban poverty, by having employment and income dimensions, has also other new features related to social entitlements, housing, the environments in which the urban poor live, geography of urban poverty, etc.

In Asia's emerging middle-income countries and in the PRC, poverty reduction was understood in the past mainly as a rural challenge, but it is has increasingly become an urban issue for policymakers.

The Suqian workshop addressed the following questions:

  • What are the implications of urbanization on poverty?
  • What are the new characteristics of urban poverty?
  • What city sizes would favor a more harmonious society?
  • What can be learned from other countries in avoiding and reducing urban poverty?
  • How to avoid lock-in effects and what is important for reaching sustainable and inclusive cities?
  • How do urban growth programs promote the inclusive growth agenda in the cities?

Conference participants were about 80 experts from central and local governments in Asia and Latin America, think tank institutions (including IPRCC), and development partners (ADB, Inter-American Development Bank, and United Nations Development Programme, and other international organizations).