CIAO DATE: 04/2014
January 2014
The paper proposes a three-pronged strategy for dealing with regional inequalities and reducing the rural-urban divide. First, there is a need to move to a more transparent and inclusive system for economic planning and the allocation of public expenditures. The poor and lagging regions have been receiving less than their fair share of public funds, and this would only change if the whole decision-making process for budget allocation is revised so that ordinary citizens, particularly the poor, have a greater say in budgetary allocations. Second, the approach to social protection and social safety nets needs to be modernized and made more sensitive to the needs of rural-dwellers. The current system that relies mainly on subsidized prices, especially for energy, does not properly target the rural poor. It is argued here that the rural poor would be better served by a system based on direct cash transfers similar to the systems used in Brazil and Mexico. Third, since most of the rural poor depend directly or indirectly on agriculture for their livelihoods, agriculture development and modernization focusing on support to small-holder farmers would be important for rural poverty reduction.
Resource link: Improving Regional and Rural Development for Inclusive Growth in Egypt [PDF] - 1.4M