James Thurlow, Sam Morley, Alejandro Nin-Pratt and Paul Dorosh International Food Policy Research Institute

1. Agricultural Productivity, Regional Inequality and Development Strategies in Latin America and sub-Saharan Africa James Thurlow, Sam Morley, Alejandro Nin-Pratt and Paul Dorosh International Food Policy Research Institute Presentation based on: Thurlow, James, Sam Morley and Alejandro Nin-Pratt, “Lagging Regions and Development Strategies: The Case of Peru” and Dorosh, Paul and James Thurlow (2009), “Agglomeration, Migration and Regional Growth: A CGE Analysis for Uganda”. Brasilia Conference – June 2010

5. Recent growth and poverty in Peru Economic growth has accelerated rapidly (>5% p.a.) National poverty has fallen in urban and rural areas BUT remains virtually unchanged in the Sierra (so the region’s share of extreme poverty has risen)

9. Peru: Interventions to reduce regional inequality Comparison Transaction costs : Strong growth-effect at the national level Weak inland supply response means import competition outweighs export opportunities Regional inequality worsens Social transfers : Regional and rural-urban inequality declines Slows down national growth rate Taxes and slower growth reduce urban incomes Inland productivity : Positive growth effect at national level and in the Sierra , but weak regional spillover effects reduces coastal GDP. Increases the national growth rate while reducing regional inequality.

11. Uganda: On track to halve poverty by 2015 Uganda has performed well since the 1990s: Fast broad-based growth (esp. over recent years) National poverty rate has fallen (but slower declines in recent years) Source: WDI, 2007 Despite high population growth, GDP per capita has risen (US$310 in 2005)

12. Uganda’s north-south divide Rural and urban poverty rates have fallen, BUT northern poverty remains high and virtually unchanged Northern region Population share: 19.7% GDP share: 11% Poverty rate: 60.8% Share of poor: 38.5% Poverty headcount (%) Poverty is geographically concentrated: Southern region Population share: 80.3% GDP share: 89% Poverty rate: 23.8% Share of poor: 61.5% 1992/93 2005/06 National 55.7 31.1 Rural 59.7 34.3 Urban 27.8 13.8 North 72.2 60.8 South 51.7 23.8

13. Three strategies to address north/south divide 1. Kampala growth strategy Focus investments to encourage faster growth and agglomeration in capital city and attract northern migrants 2. Corridor growth strategy Invest in a north-south transport corridor and encourage faster growth in northern major urban centers 3. Rural agriculture strategy Raise investments in agricultural productivity in both northern and southern rural areas Kampala stats Population: 1.7m (6.1% of 27m) GDP growth: 10% p.a. Nat. manuf. share: 60% Gulu and Lira stats Population: 0.2m (0.7%) GDP growth: 4% p.a. Nat. manuf. share: 0.8%