The role of the rural-urban complementarities has gained prominence in current development debates. Rural household strategies and rural economies are increasingly becoming integrated with the urban economies. This integration allows free movement of resources between rural and urban economies and may generate both positive and negative development outcomes. While the interdependence between the rural and urban economies is widely acknowledged in literature there has been scanty empirical evidence about the nature of these complementarities and impact of these complementarities on population dynamics and poverty. Also the role of the savings and credit in these complementarities remains uncertain.
Like in many developing countries one of the national priorities in Tanzania is to reduce poverty. For many years the government and donors have focused on poverty reduction from two perspectives rural poverty in one hand and urban poverty on the other. Efforts to reduce rural poverty have focused on transformation of the agricultural sector. This is clearly stipulated in many policy documents related to development including the Poverty Reduction Strategy Paper, Rural Development Policy, Agricultural Sector Development Strategy as well as the current "Kilimo Kwanza" resolutions. Efforts to reduce urban poverty have focused among other things on environmental issues, employment and housing. Very little attention has been given to the contribution of the Rural Urban complementarities in reducing poverty in the two areas. The outputs of this project will contribute new knowledge on alternative interventions to reduce poverty.
Summary of the theoretical and methodological frame for the research
The core theoretical question in this research project is how economies of emerging (small) urban centers exercise a symbiotic relationship with rural economies. The project takes small urban centers as its point of departure and is theoretically embedded in the growing literature on urban-rural linkages with a focus on what has been characterized as the ‘ambiguous' type of settlements - a term that serve to distinguish this type of settlement from the ‘unambiguously' urban centers along the rural-urban continuum. While small urban centers represent the fastest urban growth in most of the African continent, their economic importance is often overlooked and under-estimated. The renewed interest in the role of rural-urban linkages in economic development has identified dynamic relationships at various levels (local, national and global). This project focuses on the impact of credit and savings on the economic dynamics within rural-urban linkages between small urban centers and rural hinterlands.
Methodologically, the project includes research and field work in both rural and urban areas. The empirical analysis will revolve around four case studies each based on emerging urban centers (EUCs). EUCs are characterized by having experienced above average increase in economic activity and population growth during the previous decade. The increasing economic activity is expected to have fostered increasing employment opportunities that have encouraged growth in temporary migration and permanent settlement of migrants, i.e. population growth. In order to understand the relationships between economic dynamics and urban development four different types of emerging urban centers (EUCs) characterized by one dominating economic activity have been selected for further investigation.. Tomato trade, maize trade, sugar cane processing, and tea processing, have been identified as single product commodities stimulating the development of economic activities and services in the four emerging urban center.
Four emerging centers have been identified: Ilula/Mazombe, Kibaigwa, Turiani and Igowole. All EUCs are expected to perform complementarities with two kinds of rural settlements: 1) rural settlement in the EUCs immediate hinterland, 2) rural settlements located in longer distance from the EUC (where migration linkages have been spurred by labor migration and/or ethnic linkages). Depending on identified complexities 2-5 rural settlements related to the EUC will be included in each case.
Overall aim of the project
The project seeks to understand economic and social rural-urban dynamics and the role of savings and credit for the complementary functions of rural and urban settlements and for poverty reduction. The project focuses on rural-urban complementarities developed through links of migration, assuming that population growth of emerging urban centers predominantly stems from migration from rural areas (either nearby hinterland or far away rural areas). It is anticipated that saving and credit facilities stimulate rural-urban complementarities by:
- enhancing the ability of rural people to migrate to emerging urban centers,
- supporting the economic and social activities of these migrants in the emerging urban centers,
- Stimulating productive investments in rural areas (based on savings from urban incomes and credit facilities).
Overall it is believed that these dynamic relationships will contribute to poverty reduction both in rural and urban areas.