Like most modern Indians, I’d grown up believing that poverty was inextricably linked to a lack of employment opportunities in rural areas, and the solution was to promote industrialization in cities. The growth of industries would create more job opportunities, and the distressed could migrate to the cities, and avail these job opportunities.
Or at least that’s what I thought. But when I stumbled upon the works of Prof. Muhammad Yunus, an eminent economist, I began to question my belief in cities as ‘engines of economic growth’. I realized that my view of poverty was wrong.
The poor, having negligible transferable skills, can only access jobs of the ‘unskilled’ or ‘semi-skilled’ nature. Such employment seldom ensures them a sustainable livelihood, especially in developing nations, owing to the massive supply glut of unskilled labour, dismal wages, and non-existent social safety nets.
The Coronavirus Lockdowns are a testament to this; they sparked a massive reverse-migration poor migrant workers.
Upon arriving in the cities, most migrants have wound up either jobless or stuck in hazardous, low paying jobs as casual labourers. They rarely make enough money to sustain themselves, and get trapped in a constant cycle of despair.
Even if some migrants do manage to find consistent employment, it doesn’t necessarily imply poverty alleviation. Employment created through industrialisation for the “unskilled” in actuality makes the rich even richer, with a large chunk of the generated earnings being retained by those further up the value chain.
The disparities only stand to increase, while the poor continue to suffer.
Viewing poverty and unemployment from this perspective made me realise that the key to solidifying our economy is building economic resilience at the bottom of the pyramid, not creating more employment in cities.
We need to solve the problem at the root; in rural communities.
By focusing in on poverty alleviation in urban slums, we’re treating the symptoms, not the cause.
But getting back to the matter at hand, how can we effectively build this ‘economic resilience’?
The solution lies in replacing the concept of ‘employment’ with ‘entrepreneurship’. In essence, rather than having to look for jobs, by travelling to cities, the poor need to be given a platform to create value themselves.
The first requirement for this is easy access to cheap credit. The people inhabiting these rural regions are usually reluctant to start small business practices and instead prefer working for others simply because they fear getting stuck in a vicious debt cycle. It’s pivotal for them to have access to loans at minimal interest rates. It’ll allow them to pursue their ventures with the degree of freedom that they need, without having to worry about exorbitantly high interests and repayments.
However, the provision of microcredit without adequate scope for skill development, is futile. Individuals need a platform where they can develop a certain degree of skill to make proper use of the cheap credit.
A combination of these two elements can foster a ‘culture of entrepreneurship’ wherein the underprivileged can become self-sufficient rather than being dependent on large industries.
The effectiveness of this ideology is evidenced by Professor Younus’ work in rural Bangladesh. His Grameen Bank model has provided easy access to microcredit for underprivileged citizens, and several schemes to aid them in developing conducive skills have been implemented to complement it.
To sum it up, an avenue to access microcredit and opportunity to develop skills through better on-ground policy implementation and increased engagement with village communities, will enable the less privileged to create sustainable, albeit small, business enterprises.
This combined with the opportunity for a more resilient and liveable quality of life at the rural level has immense value for us as a nation.
To me, it’s increasingly evident that it isn’t cities, but rather villages, that can be the backbone of our country’s economy.