2. a Profile of Rural Poverty
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World Bank National Commission for Statistics Public Disclosure Authorized Public Disclosure Authorized From Rural Poverty to Rural Public Disclosure Authorized Development Public Disclosure Authorized Coordinated by Constantin Chircă, Vice-President, National Commission for Statistics and Emil Daniel Teşliuc, Economist, World Bank 1999 Report Coordinated by: Constantin Chircă Vice President, National Commission for Statistics, Romania Emil Daniel Teşliuc Economist, World Bank Field Office, Romania Authors: Mariana Câmpeanu National Commission for Statistics Doina Gheorghe National Commission for Statistics Radu Halus National Commission for Statistics Filofteia Panduru National Commission for Statistics Marius Augustin Pop National Commission for Statistics Dumitru Sandu Bucharest University Emil Daniel Teşliuc World Bank Field Office, Romania With the contribution of Ms. Marina Liana, National Commission for Statistics The authors would like to acknowledge their indebtedness to Mr. Henry Gordon (World Bank), team leader of the World Bank rural development project, for the suggestions made which substantially improved the content of the report, and for the financial support without which the printing of the report would have not been possible. The team is thanking Mr. Victor Dinculescu, President of the National Commission for Statistics, for the very useful recommendations and for the support given to the whole research team in the production of the report. The content of the paper was substantially improved thanks to the recommendations received from Messrs. Lucian Croitoru (National Bank of Romania), Farid Dhanji (World Bank), Valentin Lazea (National Bank of Romania), Lucian Luca (Research Institute for Agricultural Economics), Maria Molnar (National Institute for Economic Research), Gheorghe Oprescu (Competition Council), Lucian Pop (Bucharest University), Cornel Tarhoacă (Academy for Economic Studies) and Luiza Toma (Research Institute for Agricultural Economics). To all of them, the authors wish to express their warm thanks. The team of authors wants to thanks to all the participants at the seminars organized in July 7th and 9th, 1999, by the National Commission for Statistics and the World Bank in Bucharest and Vaslui. Through their comments, suggestions and questions, the participants at the seminars helped the authors to improve the content of the report. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or National Commission for Statistics. SUMMARY Introduction.......................................................................................................................... i 1. Rural Development Resources...........................................................................................1 1.1.The Rural Human Capital ...................................................................................................5 1.1.1. Population.....................................................................................................................5 1.1.2. Labor .........................................................................................................................10 1.2. Physical Resources of Rural Households ...........................................................................16 1.2.1. Land ..........................................................................................................................16 1.2.2. Livestock ....................................................................................................................17 1.2.3. Productive Equipment ..................................................................................................18 1.3. Infrastructure in Rural Communities ...................................................................................18 1.3.1. Physical Infrastructure in Rural Areas ..............................................................................24 1.3.2. Human Capital Improvement Infrastructure......................................................................24 2. A Profile of Rural Poverty ................................................................................................26 2.1. Poverty Measurement .....................................................................................................27 2.2. Rural Poverty and Demographic Characteristics of the Household.........................................28 2.3. Rural Poverty and Household Resources...........................................................................29 2.3.1. Rural Pensioners .........................................................................................................32 2.3.2. Rural Employees .........................................................................................................33 2.3.3. Farmers, Access to Land and the Role of Agriculture ........................................................36 2.4. Robustness of the “Consumption” Poverty Measure ............................................................42 2.5. Regional Dimensions of Rural Poverty...............................................................................43 2.6. Summary and Conclusions ..............................................................................................44 3. Living Standards And Development Resources................................................................47 3.1. Factors Influencing Households Consumption ....................................................................47 3.2. Key Predictors Of Household Consumption........................................................................52 3.3. Predicting The Development Level Of Rural Communes ......................................................54 3.4. Summary And Conclusions..............................................................................................59 4. Findings and Policy Recommendations............................................................................61 4.1. From Agricultural Policies To Rural Development Policies ....................................................61 4.2. Characteristics Of Rural Poverty .......................................................................................65 4.3. From Rural Poverty To Rural Development ........................................................................68 4.3.1. Restructuring The Small-Farmer Sector ..........................................................................69 4.3.2. Diversification Of The Rural Economy .............................................................................71 4.3.3. Development Of Human Capital In Rural Area .................................................................73 4.4. The Regional Dimension Of Rural Development .................................................................73 Annex 1. Thematic Maps .....................................................................................................74 Annex 2. Statistical Tables...................................................................................................85 Annex 3. Methodology Used in the Measurement of Poverty............................................... 102 Annex 4.Communes Belonging to the Poorest Quintile ...................................................... 116 Introduction And Executive Summary In 1999, four out of ten rural residents are poor. There are talks about rural development in Bucharest, Brussels and Washington. And yet, the fact is the widening gap between the Romania’s rural poor and the wishes of rulers, international donors or development agencies. How long is the way from rural poverty to rural development? What can we do to make it shorter? This is the major question that the authors of the paper have asked. While there are people who would do something, there are others who would rather step back and think. The authors of this paper belong to the latter category, but they wrote the paper hoping that the people belonging to the former category would read it. So that they may do something about it – and do it right. Doers, those who «do something because something must be done», are strong- willed persons who do not think twice before acting. When things are simple, this is a behavior that may yield results. Unfortunately, the state of underdevelopment of rural Romania is a fact that cannot be changed simply by a desire to do good. We have witnessed many well-intended actions to take the Romanian countryside out of poverty failing miserably. Without exception, they have all been cases of willful action. The authors of this paper do not think that «everybody knows what agriculture, or rural development is about». They tried to understand rural developments in recent years. They used rich sources of information on rural living standards, on the root causes of poverty and on what could take rural Romania out of poverty. They used rich micro datasets to give weight to their analysis. First they gave a description of rural area. Then, they asked themselves why things are the way they are: what disease does the Romanian rural area suffer from, what are the causes of rural poverty? Finally, they asked the question of what should be done to change poverty today for development tomorrow. And what should be done to bring that tomorrow nearer to us. The authors’ believe that Romanian countryside can be taken out from its current state of underdevelopment