There is also considerable disparity in the incidence of poverty between urban and rural areas. The incidence of poverty in rural areas is 41.0 percent while in urban areas, it is 26.7 percent. Although rural poverty, particularly in the northern area, is extremely high, rural poverty has been reduced more significantly compared to urban poverty during this period. The Government s development goal is to eradicate absolute poverty by 2010. Three key components of its poverty reduction strategy are rural development, human resource development, and public participation.
Most poverty is rural based, reflecting in part low agricultural productivity.
Improved agricultural productivity is a major way to increase real incomes, create a local market, and favor the emergence and development of nonfarm activities in the poor provinces. An improvement of labor productivity in agriculture can also free labor for nonfarm activities. The expansion of nonfarm activities in rural areas should target primarily small and micro enterprises where the scope for economies of scale is limited. Such a development is a condition for the transition from a subsistence to a modern agriculture sector and for a more balanced development. Rural poverty is perpetuated by serious weaknesses or gaps in basic education and health services, and by very poor rural infrastructure including irrigation, market access roads, and electricity.