Integrating Rural Urban Linkages for Regional Development in the

Province of Sind:A Cluster Based Approach

byNoman Saeed

Applied Economics Research Centre, University of Karachi

Outline of the presentation

• Objectives of the study• Redefinition of scope of work• Conclusions from a Review of the literature and

lessons learnt• Methodology• Sample Selection• Design of Quantitative survey• List of Expert interviews for the Qualitative analysis• Questions for the Qualitative interviews

Rationale

It has been recognized that rural urban linkages can play an important role in the economic development of countries and regions. Many countries are now following different development policies. The dichotomous rural vs urban approach has been replaced by an integrated development approach which is based on development of secondary cities small cities and towns and rural areas. The focus of such policies has been to reinforce the backward and forward linkages between agricultural production, industry and services to strengthen local and regional economies.

Objectives of the Study

• Undertake a review of the literature and identify best practice and policies for development of regions in other countries and explore their relevance to Pakistan and Sindh;

• Identify the reasons for growth of the cluster in terms of its economic structure and of competitiveness;

• Identify the types of rural urban linkages that exist in the cluster and suggest ways these can be integrated;

• Assess how the public sector can contribute to the overall growth of the clusters and Identify areas of public policy interventions for growth and development of the cluster;

Redefined scope of work

The study was to be originally undertaken in 3 different clusters of the province but after the revision of the budget the Northern cluster is selected for analysis.

Scope of Work

Growth Centres Sukkur Larkana

Small Cities Pano Aqil Kamber

Rural Areas Chungha Village Khairpur Juso

Village Hussain Kalwar Bahir Sharif

• Develop a secondary database for the cluster • Survey of 110 units for Quantitative data

collection• Conduct 64 Qualitative interviews

Scope of Work

Economic Activities in Cluster- main crops grown

S. No. Larkana Sukkur

1. Rice Rice

2. Wheat Wheat

3. Sugarcane Rape Seed and Mustard

4. Line Seed Barley

5. Safflower Masoor

6. Barley Safflower

7. Rape and Mustard Cotton

8. Masoor

9. Mattar

10. Onion

Economic Activities in Cluster-industry

S. No.

Industry S. No.

Industry

1. Cotton Textiles 7. Hand Pumps

2. Tobacco 8. Lock Making

3. Cigarettes 9. Rice Husking

4. Paint & Varnish .10 Biscuit Factories

5. Pharmaceuticals 11. Confectionery

6. Agricultural Implements 12. Oil Mills

Literature- definition of rural- urban linkages

“Rural-Urban linkages” refers to the flow of (public and private) capital, people (migration, commuting) and goods (trade) between rural and urban areas- added to these economic flows are ideas, innovation and information.

Review of LiteratureLiterature covers demographic, economic, and political aspects of rural- urban linkages

• Many studies analyze the migration of people from the rural areas to the urban areas (and back) and the flow of goods, ideas and money that occurs in the opposite direction as result of the migration.

• A second category of studies deals with economic links between rural and urban areas, the extent to which economicdevelopment in the one area benefits or obstructs economic development in the other area, and the policy measures necessary to develop a mutually beneficial relationship.

• A third category of studies deals with the political aspect of rural-urban linkages and the imbalance of power between the two areas.

Some conclusions from the Literature

• Rural areas that are poorly connected to urban areas lack the capacity to compete in the regional, national, and international markets and are less developed. They lack proper information and signals to produce, invest, raise productivity, diversify production, and engage in new activities.

Conclusions from literature

• Small towns also suffer from weak financial base for physical, economic and social development. Without specific industrial linkages to agriculture, they tend to have limited production and manufacturing activities, which constrain employment and income generation options.

Lessons Learnt from literature

• Develop public infrastructure and services in the rural and urban areas since this will impact on the movements of goods and people.

• Strengthen institutional framework and capacities of local Governments

• Improve financial and information flows• Create business networks for local and regional economic

development

Methodology• Ideally rural urban linkages can be analyzed using more

sophisticated approaches e.g input output models or value chain analysis for goods flow that determine the direct and indirect effects of such relationships

• Here a case study approach will be used with the target population in the selected cluster

• A sample will be drawn from the large cities secondary cities and rural areas to determine the nature of such linkages in Sindh

• Fact finding instruments used in the study will include secondary data, questionnaires, and expert interviews

Sources of Secondary DataS.

No.

Data Source Latest Issue

Information Available Shortcoming

1. Census of Manufacturing Industries (CMI)

2005 – 06 CMI measures production and structural changes of large-scale manufacturing industries (LSMI). It provides data on values of inputs and outputs, census value added, contribution to GDP, fixed assets, stocks, employment and employment cost and industrial taxes.

Information related to Small and Medium Enterprises (SMEs) not covered.

(Using micro level data district level industries and employment status will be extracted)

2. Labor Force Statistics (LFS) 2010 - 11 LFS provides information on Literacy, Level of Education, Employment Status by industry and occupation, Employment Status of informal Sector, Age specific Labor force Participation Rate, Employed Migrants with employment Status, Reasons for Migration, Occupational Safety and Health, Wages, Hours worked in a week

Aggregate Data is available. Disaggregated data is available for provincial governments only. Micro data is available on request and on Payment but took procedural delays.

(Using micro level data district level employment status by industry and by type of activity will be extracted)

Sources of Secondary DataS.

No.Data Source Latest

IssueInformation Available Shortcoming

3. Agriculture Statistics of Pakistan

2008 – 09 Provides information on Area, Production, Yield of Important Major and Minor Crops, Land use and Area Irrigated by sources, Agriculture Inputs, Agriculture Credit, Mechanization of Agriculture, Live stock, Fisheries, Forestry, Trade, Prices and support procurement prices of Agricultural Commodities.

Aggregate Data is available. Disaggregated data is available for provincial governments only

(Using micro level data district level information and employment status will be extracted)

4. Pakistan Statistical Year Book 2011 Provides details on Agriculture, Balance of Payments, Climate, Development & Planning, Education, Energy and Mining, Foreign Economic Assistance, Foreign Trade, Health Insurance & Capital Markets, Labor, Manufacturing, Money and Credit, National Accounts, Population, Prices, Public Finance, Social and Culture and Transport & Communication

Aggregate Data is available. Disaggregated data is available for provincial governments only

5. Economic Survey 2010 - 2011

Provide information on Growth & Investment, Agriculture, Manufacturing, Fiscal Development, Money & Credit, Capital Markets, Inflation, Trade and Payments, External and Domestic Debts, Education, Health, Population, Labor Force & Employment, Poverty, Transport & Communication, Energy and Environment

Aggregate Data is available. Disaggregated data is available for provincial governments only

Sources of Secondary Data

Clusters Sukkur Larkana North

Secondary cities growth centres 1 1 2

Small cities 1 1 2

Rural areas 2 2 4

Quantitative Sample

Industrial Units large/medium/small 29 16 45

Textile 4 1 5

Rice Husking 6 3 9

Cotton Ginning 6 3 9

Flour Mills 5 3 9

Edible Oil Mills 4 2 6

Food & Food Products 4 2 7

Agriculture 26 14 40

Small Farms (Less than 5 Acres) 8 4 12

Medium Farms (5 Acres to 12 Acres) 16 8 24

Large Farms (More than 12 Acres) 2 2 4

Service Sector 16 9 25

Transport 6 4 10

Technical & Vocational Centers 4 2 6

Professional Degree Awarding Institute 2 1 3

Hotels 2 1 3

Travel Agents 2 1 3

Qualitative Sample

Key Informant Interviews – In-depth 21 12 33

Private sector 16 9 25

Public sector 5 3 08

Sample for Quantitative Data Collection

Questionnaire DesignQuestionnaire will cover the following modules:

• Module A: GeneralThis module will consist of general information and will include unit identification, size, sector, type and date of commencement of operation.

• Module B: Endowment of Natural ResourcesThe module will gather information on the existing sources of raw material and other inputs, proximity to raw material, cost of local raw material compared to import of raw material

• Module C: Endowment of Human ResourcesThe module will include questions on the availability of skilled labor, education and training facilities, industry knowledge development, and support for Research and Development.

• Module D: InfrastructureThis module collects information on quality of infrastructure services, transport, telecommunication, utilities, Public development Projects

• Module E: Dynamics of Local EconomyThe module will gather information on potential to add value to products and services, cost of doing business, responsiveness to change and innovations business awareness of potential, public private partnerships

• Module F: Responsiveness and support of GovernmentThe module will gather information on responsiveness and support of government to business needs in expanding domestic and local markets, expanding export markets, enforcement of business regulations.

• Module G: Quality of lifeThe module will gather information on quality of life of the workforce, proximity to markets and other utility services presence of networks, public development projects

• Module H: Competitive AdvantageThis module will collect information on the competitive advantage

• Module I: Presence of Backward and Forward LinkagesThis module include questions on the backward and forward linkages

Questionnaire Design

Expert Interviews

Data will also be collected by conducting in depth interviews with expets such as:

• Head of Industrial Association• SMEs Associations and Trade Bodies• Representative of Chamber of Commerce• Representative of SITE• Investors• EDO Education• EDO Revenue• EDO Finance & Planning• EDO Works and Services• EDO Community Development

Questions for Qualitative Interview• What are the comparative advantages of the region and why the industry

is located here• Who are the suppliers of the industry and where are they located what

are the advantages of proximity to them; • Who are the consumers of the products and where are they located and

how they have changed over time;• Access to diverse pool of resources of skilled labour;• Alignment of skill base production base;• Ways in which the business interact with regional firms, partners, trade

associations universities and what can be the points of collaboration between them;

• What important regional issues are important to be addressed for the development of the sector and cluster

• How the cluster is impacted by technology international economy;• How can the government facilitate the private sector

Time line for the StudyACTIVITIES

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Pre-Testing of Questionnaire and Printing

Recruitment of Enumerator and Training

Survey Logistical Arrangement

Survey Scheduling

Fieldwork/Data Collection

Coding and Back-Checking

Data Entry and Processing

Data Analysis

Report Writing and Submission

Thank you for your attention