The Financial Express

Increased SME activities may help reduce migration from rural to urban areas

| Updated: October 09, 2021 10:52:51

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Increased employment opportunities generated by non-farm activities within the SME clusters in the municipality areas may help reduce rural-to-urban migration tendency, according to a new study.

The study, unveiled in Dhaka on Wednesday, came to the conclusion based on its findings that higher concentration of non-farm activities in the country's western region had held back migration to urban areas.

In contrast, it found higher migration from eastern and southern districts due to lower concentration of non-farm activities than that of the western ones.

Besides, the households having some sort of education and higher non-farm income tend to migrate less to other districts or even abroad in search of jobs.

The study findings were presented at a webinar titled "Local Nonfarm Opportu-nities and Migration Deci-sions: Evidence from Bang-ladesh", organised by Bang-ladesh Institute of Develo-pment Studies (BIDS).

BIDS Senior Research Fellow Dr Kazi Iqbal presented the findings at the programme, presided over by BIDS Director General Dr Binayak Sen.

In his presentation, Dr Iqbal said the share of non-farm income in the households (HHs) in municipality areas is about 84 per cent while it is nearly 49 per cent in rural HHs.

"Such gap encourages rural population to migrate to cities for better jobs and living standards as their income from the farm sector has been quite unstable due to changes in weather patterns, natural disasters, and climate change," he said.

The study showed that about 85.20 per cent of the rural migrants go to cities like Dhaka and Chattogram while the rate is 80.30 per cent for the municipality areas.

Out of the migrants from both rural and municipality areas, about 32.6 per cent are engaged in the industrial sector while 62.6 per cent in the services industry.

Some 34.8 per cent of the rural migrants work in the industrial sector while the rate is 22.8 per cent for migrants from municipalities.

Besides, about 72.8 per cent of the migrants from municipalities work in the services sector of urban settlements while the rate is 60.4 per cent for rural migrants.

Dr Iqbal said the understanding of the relationship between migration and non-farm income is pivotal for rural development strategies, sustainable urban development and policies influencing domestic migrations.

He emphasised that the study provided the first robust evidence of this relationship for Bangladesh, combining two sets of secondary data - Household Income and Expenditure Survey (HIES) 2016 and Economic Census 2013.

It was observed that the municipalities within the SME cluster create more non-farm work opportunities for people, slowing down the tendency to relocate.

However, there are some indications that higher non-farm income in fact encourages migration in the rural areas while the impact is more pronounced for the income rich, land poor and educated HHs in rural Bangladesh.

Per capita agricultural income induced by climate change resulted in increases of net out-migration rates by 1.4 to 2.4 per cent in Bangladesh, Dr Iqbal said, adding: "Farm income is more unstable than the non-farm income in rural economy due to adverse weather, natural disaster, and climate change."

He said infrastructure development such as roads, bridges, culverts, development of local markets and rural bazaars can reduce rural migration.

Besides, public investment in rural and semi-rural areas such as development of small industrial estate at union level and developing secondary towns closer to villages can also reduce internal migration.

In his remarks on the study findings, Dr Sen said the small towns across the country have changed a lot based on the non-farm activities, led by SMEs that have created many jobs over the years.

If the authorities concerned take a policy to establish small industrial zones or sector specific factories at upazilas and union level, more jobs could be created to slow down the rural to urban migration, he said.

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