Development economics PDF

Preview

Summary

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS URBAN RURAL MIGRATION AND ITS IMPACT ON ECONOMIC DEVELOPMENT Class: Student name: Anh Phan Dung Linh Cao Chi Katharina Wiehe Germany Lecturer: Assoc. Prof. PhD Nam Hanoi, 2017 1 migration and its impact on economic development CONTENTS INTR...

Description

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS —o0o—

URBAN – RURAL MIGRATION AND ITS IMPACT ON ECONOMIC DEVELOPMENT Class: KTEE406(1-1718).1_LT Student name: Hồ Ngọc Anh

1412150004

Phan Phương Dung

1411150028

Đỗ Diệu Linh

1411150055

Vũ Cao Quỳnh Chi

1411150023

Katharina Wiehe

Germany

Lecturer: Assoc. Prof. PhD Vũ Hoàng Nam

Hanoi, 2017 1

Urban-rural migration and its impact on economic development

CONTENTS INTRODUCTION .................................................................................................... 2! 1.!

Importance of study ....................................................................................... 2!

2.!

Objectives of the study: .................................................................................. 2!

3.!

Scope of study ................................................................................................. 2!

4.!

Research Question: ........................................................................................ 2!

I.! THEORIES ......................................................................................................... 4! 1.!

Definition........................................................................................................ 4!

2.!

Factors causing migration ............................................................................. 4!

II.! BENEFITS FOR BOTH MIGRANT-RECEIVING AREAS AND MIGRANT-SENDING COMMUNITIES .............................................................. 5! 1.! The mutual benefits between rural labor force and national economic transformation. ....................................................................................................... 5! 2.!

Poverty reduction tool .................................................................................... 7!

3.!

Contribution to the economic growth of the cities........................................ 7!

III.!CONTRIBUTION TO THE RESTRUCTURING OF RURAL LABOR..... 8! IV.! THE URBAN LABOR FORCE IS REPLENISHED AND REJUVENATED ...................................................................................................... 9! V.! THE DISADVANTAGES OF RURAL – URBAN MIGRATION .............. 10! 1.!

The shortage of rural labor at harvesting times ......................................... 10!

2.!

Pressure on infrastructure ........................................................................... 11!

VI.! SOLUTIONS ....................................................................................................11! LITERATURE REVIEW ...................................................................................... 12! METHODOLOGY ................................................................................................. 14! CONCLUSION ....................................................................................................... 14! REFERENCES ........................................................................................................15!

1

Urban-rural migration and its impact on economic development

INTRODUCTION 1.! Importance of study In this study the positive and negative changes in all feature included in industrial economics are expected to help setting out different strategies and policy to handle rural to urban migration situation. It can be important to find out the main reasons influencing people to leave their homeland, which have increased developmental imbalance between urban and rural areas. Introduction of strict rural development leads to effective urban management and weakening of temptations from urban areas. Plus, it may provide the concrete views intentionally to support policy makers and planners in their work. Additionally, it could motivate other researchers to do further research on this topic. Not only that, it may help in raising the awareness on rural to urban migration together with migration in general. 2.! Objectives of the study: This study will be conducted to determine the factor of internal migration in the shift in Vietnam’s economic industries, using the case of the two major cities, Hanoi and Ho Chi Minh City Especially, this study aims to: •! Define the internal migration, Vietnam’s economic structure, and the shift in the economic industries •! Pinpoint the reason why the high flow of population that moves to big cities like Hanoi and Ho Chi Minh City affects the regional economies •! Identify whether this trend is a positive trend or not •! Determine the further solutions for any listed negative effects 3.! Scope of study In this study, we analyze the urban – rural migration and its impact on industrial economies and the shift of occupation preferences in the two biggest cities of Vietnam – Hanoi and Ho Chi Minh city. Vietnam is one of the South East Asian countries. While Hanoi is the capital, Ho Chi Minh City is the economic center of Vietnam. Both cities are home to the largest universities, organizations in the country. With the increasing living standard in these cities, the migration rate from other cities to Hanoi and Ho Chi Minh city has been rising continuously in recent years. People head to these cities to seek for higher levels of education, higher living standards and better employment. These demands that lead to migration put a strain on economic development, human management and political institutions. 4.! Research Question:

2

Urban-rural migration and its impact on economic development

Rural-urban migration: a shift in Vietnam's economic industries and the examples of Hanoi and Ho Chi Minh City. By choosing this topic, our hypotheses focus on the correlation between internal migration and Vietnam’s economics industries. The shift in Vietnam’s GDP by sector is from agriculture to industry and manufacture should be mention. With the high demand of labor force in the latter sector, the trend in rural-urban migration found to be increased. Through the facts of Hanoi and Ho Chi Minh City, we predict that the labour distribution would be: centralized in industry and construction while decentralized in agriculture sector. Therefore, this new trend might bring some positive effect for both migrantreceiving areas and migrant-sending communities, such as poverty reduction and economic sector reformation However the negative effect should be included. The shortage of rural labor at harvesting times might affect the productivity and the production of harvests; thus causing more possible drawbacks. More rural people migrate to big cities make the population of the areas to boom and put more pressure on infrastructure and other social issues. Our specific aim in this report is to: based on facts and statistics, understand better about the fact of internal migration and the correlation between internal migration and the shift in Vietnam’s economic industries. Therefore, there will be suggested solutions in order to overcome drawbacks and enhance the positive effect of internal migration.

3

Urban-rural migration and its impact on economic development

I.!

THEORIES 1.!

Definition

Migration illustrates the process of people moving from one place to another in order to settle temporarily or permanently in the new place. There are two important terms that relate to migration including immigration and emigration. In a little more details, the main difference between emigration and immigration involves identifying the country of origin and the destination country. First and foremost, immigration is especially the international movement of people from one place to a destination where they are not natives in order to settle there with the purpose of taking-up employment as a migrant worker or temporarily as a foreign worker. However, emigration is when people leave one country or region to settle in another, either temporarily or permanently and the migrants involved are called emigrants. 2.!

Factors causing migration Actually, there is a wide range of factors causing the migration of individuals or groups from one place to another destination. In this assignment, we mostly pay attention on doing research on reasons of the rural-urban migration trend which is also a part of the internal migration. The significant factors which encourage people to move to another place can be divided into the five separate categories such as economic factors, demographic factors, social-cultural factors, political factors and miscellaneous factors. (i) Economic factors The basic economic factors which encourage people to move from one place to another may be further classified as ‘Push Factors’ and ‘Pull Factors’. Push factors are things that are unfavorable and cause inconveniences to people living in this area and pull factors are things that have some positive aspects. Therefore, it will attract people moving to this area. We can state some examples of common push factors such as lack of job opportunities, low productivity, unemployment, poor economic activity, lack of opportunities for advancement, exhaustion of natural resources. The Pull Factors are factors which attract the migrants to an area. Opportunities for well-paid jobs, higher wages, modern facilities and equipment, comfortable working conditions and attractive benefit packages are considered as pull factors of an area. (ii) Demographic Factor The demographic factor which will lead to the internal migration is the population growth rate between separated regions of a nation. Due to the fact that the citizens often tend to move to the crowding area because they think that they will 4

Urban-rural migration and its impact on economic development

have better job opportunities and more conveniences in their life, the population growth rate between separate regions of a country will be significantly different and be classified as one of the demographic factors leading to the internal migration. Besides, it cannot be denied that the marriage is also one of the significant demographic factors in internal migration because the wives tend to follow their spouses and start a new life. (iii) Socio-cultural Factors Sometimes the social-cultural factors play a crucial role in the migration of people from on region to another. Taking family conflicts as an example, this problem usually happens in young generations, they want to live independently and far away from their family. Moreover, some other remarkable factors related to social-cultural issues such as development of communication facilities, good network communication and the infrastructure also motivate migration. (iv) Political Factors The political factors should not be underestimated in the analysis of factors causing internal migration. In a little more details, the political background, the attitudes and individual opinions also affected the migration of people. II.!

BENEFITS FOR BOTH MIGRANT-RECEIVING AREAS AND MIGRANT-SENDING COMMUNITIES 1.! The mutual benefits between rural labor force and national economic transformation. On the sixth National Party Congress in 1986, the Party initiated the comprehensive reform of the country, focusing on economic reform. According to the Orientation, objectives of socio-economic development in 1986-1990 (National Party Congress 1986), the process of economic reform has gradually transformed the economic structure of our country from an agricultural country into a modern industrial country. In the process of industrialization - modernization, many large industrial zones have been built in cities such as Hanoi, Hai Phong, Quang Ninh, Da Nang, Ho Chi Minh City, Bien Hoa or Binh Duong. This trend directly leads to a conversion of the usage of land into developing urban area, constructing socio-economic infrastructure, it makes many farmers lose their productive land - their main means of production as well (Nguyen 2015, p.6364). Therefore, they are forced to transition to non-agricultural occupations. Meanwhile, industrial zones and urban areas have developed and the dynamics of economic sectors have created many jobs, human resources are in short supply, not enough to meet the demand. There is no doubt that rural labor are the main source for such shortages through rural-to-urban migration. 5

Urban-rural migration and its impact on economic development

Year Migration flows

Midland and Red river North central Central South East Mekong Total mountainous area in delta and the central Highlands Area river delta the North area coast area 2009 Number of migrants Rural-urban 118,636 395,053 272,948 88,526 1,038,426 198,483 2,112,071 Other flows 373,153 915,724 624,138 286,979 1,838,197 576,269 4,614,507 Total 491,789 1,310,777 897,086 375,541 2,876,623 774,752 6,726,578 Percentage Rural-urban 24.3 30.3 30.6 23.7 36.3 25.8 31.4 Other flows 75.7 69.7 69.4 76.3 63.7 74.2 68.6 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 2014 Number of migrants Rural- urban 83,959 296,902 196,386 55,120 856,723 153,096 1,642,186 Other flows 353,842 747,166 713,322 205,090 1,485,656 521,525 4,026,602 Total 437,801 1,044,068 909,708 260,210 2,342,379 674,621 5,668,788 Percentage Rural-urban 19.3 28.6 21.7 21.2 36.6 22.7 29.0 Other flows 80.7 71.4 78.3 78.8 63.4 77.3 71 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Figure 1: Number of migrants by regions on the 5-year period 2009-2014 Source: Population and Housing surveys 2014: Migration and urbanization in Viet Nam, General Statistics Offices, p. 17. Mentioning the size of migration flows, the Southeast has the largest number of rural-to-urban migrants (856.7 thousand people, accounting for over 50% of total rural-to-urban migrants) due to the rapid development of industry, services, high economic development in this region. The Red River Delta ranks second in terms of the scale of rural-to-urban migration (296.9 thousand, accounting for 18.1% of all rural-urban migrants), compared to the South East the rate is quite low.

6

Urban-rural migration and its impact on economic development

2.! Poverty reduction tool Rural workers go to work in cities, apart from spending in cities, part of their income is transferred to rural areas, which is one of the resources contributing to poverty reduction. Unit: percentage (%) 120 100

96.1

95.8

91.9

80 60 40 20

16.8

11.6 1.2

15.4 0

1.2

0 Permanent1Migrants

Long8term1temporary1 Short8term1temporary1 migrants migrants Artifacts

Liquidity

Other1forms1

Figure 2: Forms of support for family members in the last time by migration status Source: Institutes of development studies- “ Từ nông thôn ra thành phố, tác động kinh tế- xã hội của di cư ở Việt Nam”, published in 2011, Lê Bạch Dương&Nguyễn Thanh Liêm, p. 116. With the development of a market economy and the ease with which money can be sent via secured forms at reasonable costs, the transfer of cash to relatives has become common practice. More than 90% of migrants assist their relatives in cash, while less than one in five migrants have been supporting relatives in the last 12 months in artifacts according to the survey (Le & Nguyen, 2011, p. 116). 3.! Contribution to the economic growth of the cities Migrant workers in cities are not only a source of development, they also contribute to local productivity growth (GDP) through personal spending: eating, rent housing, some other social services (Nguyen 2015, p.63-64) such as health insurance, education, entertainment, ...

7

Urban-rural migration and its impact on economic development

III.!

CONTRIBUTION TO THE RESTRUCTURING OF RURAL LABOR

The majority of rural workers before migrating worked in the agricultural sector. After migration, the workers themselves have made fundamental changes in their career, from agricultural to non-agricultural work, which is one solution to speed up the process of rural industrialization and modernization, contributing to the improvement of the living standard and the raising of incomes. Regions

Whole country Rural

Red river delta South east

2010 2012 2014 2010 2012 2014 2010 2012 2014 2010 2012 2014

Total

Nonfarm Farm wage Farm self Nonfarm wage employment employment self employment employment

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

34.1 34.7 35.9 25.9 26.7 28.1 45.5 44.8 47.7 54.2 54.8 55.0

4.5 4.7 4.5 5.4 5.8 5.5 0.8 0.8 0.7 5.4 5.6 5.8

41.3 41.7 40.9 53.3 52.8 52.2 29.9 31.6 29.3 14.6 16.3 14.6

20.1 18.9 18.7 15.4 14.7 14.2 23.8 22.8 22.3 25.9 23.3 24.6

Figure 3: Population aged 15 years old and over in main job in the past 12 months by type of job, urban rural, region, income quintile and sex Source: Source: General Statistics Offices, Result of the Viet Nam household living standards survey 2014, p. 170-172. The figure 3 shows a considerable increase in rural population in the whole country working in non-agricultural jobs in a 4-year-period from 2010 to 2014 (25.9 to 28.1 percent). This trend was remarkably obvious in two areas including Ha Noi and HCM city: Red River Delta (45.5 to 47.7 percent) and South East (54.2 to 55.0 percent). Unit: percentage (%)

8

Urban-rural migration and its impact on economic development

Occopation1structure1of1employed1migrants1and1non8 migrants 1.32.5

Leaders

6.5 6.4

Semi8professionals

9.4 13.2

2.9 5.4 Services1workers

31.8

22 0.3 0.5 17.719.6 15.8 22.7 17.7

Manual1labor1and1others 4.4 Simple1Labor 0

5

10 Non8migrants

15

20

25

30

35

Migrants

Figure 4: Occupation structure of employed migrants and non-migrants Source: National Internal Migration Surveys 2015, General Statistics Offices, p. 98. The results presented in the figure 4 show that the demand for migrant labor is partly due to industrial development in Vietnam. For example, the percentage of "operators and assemblers of machinery labor" was 12 percentage points higher than that of non-migrants (15.8% and 4.4%). Migrant workers with higher levels of technical and professional qualifications in the capital city of Hanoi and the northern mountainous midlands are higher than in other regions. (11.0% and 11.4%, respectively). The South East and the Red River Delta are home to a large number of factories, factories, and industrial zones, attracting a significant number of migrants and non-migrants working in two occupational groups of “Manual labor and others "and" machine operators and assemblers " (56.6% and 43.5% respectively). Especially clear from the table is that the migrants are moving from the agricultural sector to the non-agricultural sector proved by the figure of skilled labour on agriculture (only 0.5 %). IV.!

THE URBAN LABOR FORCE IS REPLENISHED AND REJUVENATED Migration has contributed to reinforce labour force in cities. Migrant workers are more flexible and more active in finding employment, accepting heavy, hazardous, low-income jobs that urban people avoid. The point is that migrants tend to migrate at relatively young ages for the purpose of labour and continuing education. Ages

Ha Noi

Ho Chi Minh City

9

Urban-rural migration and its impact on economic development

Migrants

Non-migrants Migrants

Non-migrants

Total

10...