Progress in the Region East Asia’s widespread adoption of Green Revolution techniques in agriculture during the last three decades has increased both food production and the income of many millions of farmers. Today, most countries in East Asia have a much greater degree of food availability, and the consequent freeing of workers from agriculture to more rapidly expanding sectors has been one of the chief reasons for the region’s vibrant economic growth. Rural Development Indicators and Measures of Progress The share of population living in rural areas is about 59 percent (1.1 billion) of the total.
Population density in rural areas is 559 people per square kilometer (2003), compared to the world average of 492. While 300 million people in EAP region still lack access to safe water, of which three-quarters live in rural areas, rural access has increased from about 61 percent to 70 percent over the past decade. Thirty-six percent of the rural population has access to improved sanitation, more than a doubling over the past decade. Thirty-eight percent of cropland is irrigated. Cereal yield has increased by 11 percent (to 4.5 mt/ha) over the past decade.
Food production (volume index) has expanded by nearly 50 percent over the past decade. But nearly 228 million (12 percent) of East Asia's population remain undernourished.
Sources: Development Data Platform |
 There have been some improvements in rural areas in terms of access to education, health care, transportation, and other public services. But much more effort is needed to narrow the service gap with the better levels achieved in urban areas.
Back to top Challenges and Opportunities Despite improving efficiency in agricultural production and slowing population growth, rural regions are still the setting for most of East Asia’s poverty and underemployment. As noted above, overall economic growth has not been matched by improved public services, such as health, education, and physical infrastructure in rural areas, or by a sufficient increase in nonagricultural rural jobs to absorb the growing rural work force.  Despite substantial rural-to-urban migration, the vast majority of East Asia's rural population continues to depend on agriculture, forestry, or fishing for livelihoods. These activities place great stress on natural resources and result in degradation that diminishes the income-generating capacity of those resources.
Agricultural growth in the nine largest countries of East Asia lagged well behind growth in GDP during the 1990s. Nonetheless, the agricultural sector still employs about 70 percent of the working populations of these countries, and 80 percent of the region’s poor dwell in the countryside and the mountains. Meanwhile, overall economic growth has not led to improved services, such as health, education, and infrastructure in rural areas or to a significant increase in non-agricultural rural jobs. More rapid economic growth in urban areas has resulted in most of the poor, and virtually all of the “poorest of the poor,” being found in rural areas.  The irony is that while rural East Asia provides the dominant share of employment and income, it is also the area with the most unemployment, underemployment, and poverty.
The rural-to-urban transition in East Asia is incomplete. The number of excess workers remaining in rural areas is in the millions in almost all the countries of East Asia. Rural areas need the benefit of policies, institutions, and infrastructure which encourage economic development and provide nonfarm employment while urban areas must not be overwhelmed by rural migrants seeking job opportunities. Over 500 million people living in rural East Asia and Pacific countries subsist on incomes of US$2 a day or less. This situation will not change without the combined efforts of all stakeholders, including governments, the international, national and local communities, and the rural poor themselves. Important lessons that emerge from the World Bank’s experience are: place more emphasis on off-farm employment creation; focus work at the community and local government levels rather than at the central government level to give rise to more projects modeled on community-driven development; make more effort to consult with all interested stakeholders, including ministries beyond the sectoral ministry, during all stages of project preparation and implementation; incorporate natural resource management issues into projects where feasible; pay strict attention to fulfilling the requirements of safeguard policies; strengthen local implementation capacity and put good governance structures in place (especially important since the onset of the East Asian financial crisis in 1997); use a holistic approach when selecting and designing projects and convince our partners on the importance of viewing rural issues holistically; and have a rural strategy and sufficient economic policy analysis undertaken in order to maintain a coherent country dialog and lending program.
Back to top World Bank Support The World Bank provides support through financing for development project investments and through analysis of agriculture and rural development issues and of policy options. The focus of this support is in four main areas: agricultural productivity, non-farm rural economy growth, alleviation of rural risks and vulnerability, and natural resource management. Increased Agricultural Productivity and Competitiveness. These contribute to household as well as general economic growth, national food security and trade earnings.  Agricultural growth in the region is increasingly coming from diversification away from food staple crops and from regional specialization, and these opportunities require farmer access to new technology and market knowledge as generated by agricultural research, and as communicated through extension and information technology. Efficient use of productive inputs is an important aspect of agricultural competitiveness, and two areas where important gains are possible are land management and administration – to improve security of tenure for farmers that is key for improved land stewardship, and irrigation development and efficient water use – to improve yields, reduce production risks, and permit water savings to accommodate the growing water demands of other sectors of the economy. With farming in most of the region’s countries largely dependent on millions of small-scale farmers, there are significant gains in sector competitiveness achievable through strengthening of farmers’ ability to act collectively through member-driven organizations, whether to manage irrigation perimeters, achieve scale-economies in marketing their output, or gaining voice in research and extension programs.  Stronger organizations capable of collective action are particularly important in commodity value chains as these face increasing pressures from markets to meet food safety and quality standards. World Bank work is increasingly giving emphasis to improvement of the governance context of agricultural service delivery. This includes strengthening the demand side in agricultural knowledge and information service delivery (e.g. getting greater farmer/farmer organization involvement and clout in research and extension planning, implementation and evaluation) along with getting greater competition on the supply side (e.g. competitive research grants, multiple extension providers). A Robust Non-Farm Rural Economy. Rural households throughout the region typically have diverse sources of incomes beyond farming that often contribute to half or more of total family income.  Where population pressure results in very small farm sizes, rural families have to look beyond farming to make ends meet through other income-earning activities. Elsewhere, income opportunities are often better outside of agriculture and attract family labor towards these more attractive uses. Understanding the local contexts of how these push-and-pull factors are evolving and affecting families’ livelihoods constraints and opportunities is important so as to be able to better assist Governments and families directly in the design of interventions to support these livelihoods strategies. Diagnostic tools that are increasingly used in World Bank work to better understand the rural non-farm economy are rural investment climate assessments and rural product value chain analysis. These tools often reveal that key constraints faced by rural non-farm enterprises are difficulty of access to rural financial services and the inadequacy or rural infrastructure, while in other cases, corruption or burdensome regulation are impediments. Strengthened Social Services and Reduce Risk and Vulnerability of Rural Households. Rural populations confront difficult access to quality health care and education services. Support to poor populations to overcome these challenges is one of the primary goals of the World Bank (see rural development strategy for the region).  In addition, risk and vulnerability to rural household livelihoods come in many forms in the region. These are being addressed through work with governments and other stakeholders in areas ranging from natural hazard mitigation and preparedness, agricultural risk insurance, long-term climate change response and adaptation, and newly emerging risks to livelihoods and health such from avian influenza.
This work pays particular attention to addressing the circumstances of vulnerable groups who may face difficulty accessing services or risk management activities because of language barriers, ethnicity, geographic remoteness or gender.
Also, with provision of social services and addressing poverty and vulnerability of households increasingly being decentralized as a local government responsibility, attention to local government capacity building, pro-poor investment planning, and decision-making transparency is growing and guiding World Bank policy advice and investment operations.
Sustainable Natural Resource Management. Besides their labor, rural households are usually highly dependent on natural resources for their livelihoods. Often their access and rights to these resources are uncertain or under threat.  Resource degradation is often a problem, resulting in both lower incomes for direct users, and deteriorating provision of environmental functions from these resources. The World Bank is working actively with Governments and natural resource users across diverse environments to address these pressures on water, pasture, forest, fishery, coral reef and other resources. Important components of this work are property rights security and titling, improving mechanisms for rights allocation and reallocation, with attention to social and equity impacts.
Back to top The World Bank's East Asia and Pacific rural development and agriculture lending portfolio is approximately US$4.5 billion of net financing commitments through 47 active projects (2006). As shown in the pie chart below, activities in China comprise the largest share (61 percent) of this program, with Vietnam, the Philippines and Indonesia the next three most active programs. Programs in Cambodia and Lao PDR are also active, but limited by current constraints on IDA resources available for project finance support. 
| East Asia and Pacific Rural Development & Agriculture Lending Portfolio (US$ millions) |
October 2007 |
RSS