The rural-urban relationship

As important a factor in industrialization and technology mastery as the relationship between the external global environment and the internal situation in a country is the rural-urban relationship within a country. It is this that affects the terms of trade and other relationships between town and countryside and between industry and agriculture, intimately colouring processes of technology absorption.

In China, the Republic of Korea, and Japan, extensive land reforms after the Second World War prepared the background for rural agricultural production and also a rural market for industrial products. In Korea and Japan, the high purchasing price of rice, several times above the world market price, enhanced this rural market pull. In Thailand, the growth of agriculture on an extensive basis developed the rural economy, although the intensity of agricultural development was less than in other countries. In India and the Philippines, although no significant agrarian reforms were made, the introduction of high-yielding varieties provided increased incomes for rural areas. The passage of technology to industry is helped greatly by enhancing the mutually rewarding relationships between town and country.

Yet, in a large country like India, even given a high degree of inequality, a large urban middle class estimated at 200 million could still provide a viable market for some industrial consumer products. In the Philippines, the relatively small size of the urban middle class, combined with factors of dependence, has largely limited the level of industrialization.