A silent revolution is happening in Asia as the rise in rural wages bring the end to the seemingly inexhaustible source of cheap, unskilled labour in rural Asia within sight. Oxfam’s Duncan Green and ODI’s Steve Wiggins launched the 'Rural wages in Asia’ report, discussing the extent and consequences of this historic phenomenon.
The figures in the report are staggering: in Bangladesh, for example, the average male rural wage rose by 45% in real terms between 2005 and 2010, while in India it increased by 35% between 2005 and 2012, and more than doubled in China between 1998 and 2007.
The consequences of rising rural wages are already felt across the region. From Malaysia where it has become increasingly difficult to recruit workers for palm oil estates, to Myanmar which is experiencing farm labour shortages.
What lies behind this trend? Does this represent the end of extreme poverty in Asia? Will Asian manufacturers look for cheap labour elsewhere bringing millions of new jobs to Africa, something already starting to happen outside Addis Ababa in Ethiopia? If so, what can African countries do to take full advantage of this revolution?
Steve Wiggins, ODI Research Fellow and author of the report, described how falling fertility rates and the growth of manufacturing are driving up agricultural wages across much of Asia – and shrinking the pay gap between men and women. Not only could this signal the end of extreme poverty in Asia, but the implications for Africa and Latin America could be huge.
Steve argued that as food costs rise in Asia, there will increasingly be opportunities for low-cost producers in other parts of the developing world to export foodstuffs to Asia. Meanwhile Africa’s ‘youth bulge’ could leave it well-placed to take Asia’s place as a new supplier of cheap labour.
Duncan Green, Strategic Advisor at Oxfam GB, warned that we should not underplay the significance of the report’s findings – potentially the end of mass poverty in Asia – before highlighting some of the other positive implications of these demographic changes, such as greater women’s empowerment. He asked which African countries might end up benefiting from this phenomenon.
A wide-ranging discussion followed, covering the different policy implications for rural and urban poor; the implications for land use in Africa and Asia; the fate of regions not seeing these gains in productivity and wages; and the potential impacts on women in sub-Saharan Africa if large numbers of manufacturing jobs – in some industries done largely by women – do come to Africa.