Évolution récente des stratégies de réforme agraire et de développement rural au Proche-Orient

Depuis les années 50, deux stratégies de développement avec objectifs et groupes cibles différents sont appliquées dans la région du Proche-Orient. La première consiste en un programme de lutte contre la pauvreté qui s'adresse aux paysans pauvres (fellahin) et dont les principales composantes sont une réforme agraire fondée sur une redistribution des terres, et des projets publics de mise en valeur des terres et de colonisation rurale à grande échelle.
La seconde stratégie de développement a été lancée vers le milieu des années 80 en liaison avec les programmes étrangers d'allégement de la dette, assortis de certaines conditions en matière de politique de stabilisation, ainsi qu'avec les programmes d'ajustement structurel conçus par la Banque mondiale et le FMI sous la pression des puissants créanciers occidentaux. L'analyse des effets de ces réformes économiques en ce qui concerne la répartition des terres montre qu'elles ont des conséquences négatives pour les ruraux pauvres ainsi que pour les petits agriculteurs, les acheteurs nets de nourriture et sur le nombre croissant de travailleurs agricoles sans terre et qu'elles entraînent une diminution des salaires réels et du revenu par habitant. Les estimations disponibles révèlent une situation plus inquiétante encore: l'augmentation prévue du nombre de personnes vivant en situation de pauvreté absolue dans un Proche-Orient majoritairement riche (Pakistan, Afghanistan et Somalie exclus), qui devrait passer de 80 millions en 1990 à près de 110 millions en l'an 2000. Les terres cultivables étant aujourd'hui - elles le seront plus encore demain - de plus en plus rares dans un Proche-Orient au climat aride, en raison d'une grave pénurie d'eau et du coût élevé de l'irrigation, l'avenir de la génération actuelle des ruraux pauvres risque d'être sombre si la tendance présente se maintient.

Cambios recientes en las estrategias de reforma agraria y desarrollo rural en el Cercano Oriente

Desde la década de los años cincuenta, en la región del Cercano Oriente se han observado dos estrategias de desarrollo con objetivos y beneficiarios contrapuestos. La primera fue un plan de lucha contra la pobreza concebido para beneficiar a los campesinos pobres (fellaheen). Consistía en una reforma de distribución y en grandes planes públicos de rehabilitación y colonización de tierras. La segunda estrategia surgió a mediados de la década de los ochenta, en conjunción con los programas de alivio de la deuda, las condiciones de la política de macroestabilización y los programas de ajuste estructural introducidos por los poderosos acreedores occidentales y formulados por el Banco Mundial y el Fondo Monetario Internacional. Del examen de los efectos distributivos de estas reformas económicas se desprenden consecuencias desfavorables para los pobres rurales y los vendedores netos de alimentos, que forman parte de los pequeños agricultores, y los trabajadores sin tierras, grupo cada vez más numeroso, cuyos salarios e ingresos reales por persona han disminuido. Se estima que aumentará el número de personas que viven en la pobreza absoluta en una región (con exclusión del Pakistán, Afganistán y Somalia) como el Cercano Oriente donde predomina la opulencia y cuya población pasará de 80 millones en 1990 a casi 110 millones en el año 2000. Si perduran las tendencias actuales, además de la escasez presente y futura de tierras cultivables en la parte árida de la región y de agua, y los elevados costos del riego, las perspectivas para los campesinos pobres son sombrías.

Recent changes in agrarian reform and rural development strategies in the Near East ¹

M. Riad El-Ghonemy
Dr Riad El-Ghonemy is a Fellow in the Department of Economics, American University, Cairo, and Senior Research Associate at the International Development Centre at Queen Elizabeth House, University of Oxford, United Kingdom

Since the 1950s, the Near East region has witnessed two development strategies with different objectives and intended beneficiaries. The first was an anti-poverty scheme designed to benefit poor peasants (fellaheen). Its core was a distributive land reform and large-scale public land reclamation and settlement schemes. The second development strategy emerged around the mid-1980s in response to the foreign debt relief programmes that were being adopted and the conditions that these programmes imposed with regard to macrostabilization policy and structural adjustment programmes prescribed by powerful Western creditors and designed by the World Bank and the Internationl Monetary Fund (IMF). The distributive impacts of these economic reforms had adverse effects on the rural poor, small farmers who were net food buyers and the increasing numbers of landless workers. Real wages and per caput income also declined. The most worrying aspect of the available estimates is a projected increase in the number of people living in absolute poverty in the predominantly affluent Near East (excluding Pakistan, Afghanistan and Somalia), from 80 million in 1990 to nearly 110 million in 2000. Given the increasing scarcity of cultivable land in the arid Near East, which is caused by serious water shortage and the high costs of irrigation, the prospects for the present generation of rural poor are gloomy if the current trend continues.

THE INSTITUTION OF PROPERTY RIGHTS AND IDEOLOGICAL CHANGE

In April 1996, the Rural Development Division of FAO held a Rural Development International Workshop in Godollo, Hungary. The post-cold war ideological shift was a point of reference for that workshop. Property rights to land are probably more susceptible to ideological change than any other institution. An overview of the workshop background material suggests that two related questions need to be addressed:

• To what extent would the realization of sustained economic growth and poverty reduction justify changes in the institution of property rights, the power of the state and the freedom of entrepreneurs?

• Has land reform policy been replaced by a renewed faith in market superiority and by countries' adoption of structural adjustment programmes?

These questions are too wide to be addressed adequately in this article. However, the underlying issues can be sketched out, backed by empirical evidence.
Throughout the history of the Near East region, the private property-based economy has predominated, both before and after countries have gained independence. With the exception of Turkey, the Islamic Republic of Iran and part of Saudi Arabia, the Near East was ruled for between one and five centuries by European colonial powers (Ottoman, United Kingdom, French and Italian) who shaped their economies, including the agrarian systems, along capitalist lines. In order to serve the colonial rulers' interests, private landownership, together with mortgages and an appropriate legal framework, were imposed on traditional tenure arrangements. This led to increased concentration of landholdings, landlessness, indebtedness and encroachment on to nomadic groups' grazing areas. The combined effect was a dualist pattern for agricultural development, with a vast area of traditional dry farming breeding poverty and unequal opportunities for progress, and a relatively small area of capital-intensive farming. Underdevelopment problems were generated by violations of the institution of private property within a monopolized rural economy and by denying fellaheens (peasant farmers) their entitlements.

ANTI-POVERTY RURAL DEVELOPMENT STRATEGIES, 1952-1975

During the initial stage of the developments that followed the independence of North African countries in the 1950s, the coups d'état in Egypt (1952), Iraq and the Syrian Arab Republic (1958) and the revolutions in Iran of the Shahs (1962, 1967), strategies aimed at removing the institutional barriers to progress. Foremost among these barriers were violations of property rights in imperfect agrarian market economies (e.g. an institutional monopoly in land, credit and labour markets) which resulted in peasant farmers and national economies losing potential gains. Moreover, interclass relationships based on exploitation and subservience caused social unrest which cannot be explained in economic terms alone.
In many countries, the strategies adopted were based on reforming defective agrarian systems. With the exception of Algeria (1965-1982) and South Yemen (1968-1992), private property rights and individual family farms constituted the institutional foundation of reconstructed rural economies. In addition to fixing ceilings on private ownership and redistributing the expropriated balance, foreign-owned farms were expropriated with compensation. Furthermore, rental values were reduced and terms of tenancy regulated. In several countries (Egypt, the Libyan Arab Jamahiriya, the Sudan, the Syrian Arab Republic and Saudi Arabia) public lands were reclaimed and mostly allocated to small landowners and tenants. Thus, some of the features of these new agrarian policies were similar to those of the former Soviet Union and Eastern Europe, especially with regard to the establishment of state farms and government-administered cooperatives whose members, however, retained individual property rights to land.
Other elements of the 1952-1975 strategies were: migration facilities for an expanded international labour market (Europe for Turkish and Algerian workers and oil-rich countries for Egyptian, Jordanian, Sudanese and Yemeni workers); the provision of health and education services free of charge to rural people; significant income support measures, including generous food subsidies and social security programmes, which supplemented the long-established Islamic tradition of social security payments from richer to poorer people; and, in a few countries, notably Tunisia, Egypt and Jordan, birth control and family planning services were provided voluntarily in order to reduce the ever-increasing population growth rates, which were about 3 percent per annum in the 1970s and 1980s.

REDUCTIONS IN POVERTY AND INEQUALITY PRIOR TO THE 1980s

The author has documented elsewhere the changes in nutritional status, living standards, poverty levels and concentration of landholdings (El-Ghonemy, 1968, 1976, 1980, 1990a, 1990b, 1992, 1993a, 1993b; El-Ghonemy, Tyler and Couvreur, 1993; FAO, 1984a, 1984b, 1986). Table 1 gives some comparable data for five countries during the period of anti-poverty agrarian reform and rural development strategies.

TABLE 1
Land redistribution ratio, changes in agricultural growth rates, land concentration index and rural poverty levels, 1950-1971

Notes:
N/A = data not available.
* Land concentration is measured in terms of the Gini index (or coefficient) which ranges from 0 to 1; the larger the index, the greater the degree of inequality in the size distribution of landholdings.
** These are estimates made by the International Labour Organisation (ILO) using poverty lines different from those of the Tunisian Institute of Statistics given in the preceding column.
Sources: El-Ghonemy, 1990b and 1993c.

In addition to the favourable record shown in Table 1, investment in human capital between 1960 and 1979 reduced infant mortality by an average of 33 percent and increased life expectancy by an average of an average of 10 percent. These welfare gains represent increased potential in everyday life and an accumulation of human capital at the national level. In addition, there have also been such unquantifiable gains as increased self-respect and dignity among peasant farmers and the motivation to participate in the rural development process. Although these are significant elements of anti-poverty strategy, they are difficult issues for analysts, who are dependent on statistics, to assess.
It is wrong to attribute poverty reduction to agrarian reform on its own. As suggested earlier, migrant workers' remittances to rural areas, technological advances (particularly in expanding irrigation), pricing systems, food subsidies, small-scale non-farm activities and income-support measures are equally significant factors. On the negative side, however, prolonged droughts, political instability, civil unrest and frequent wars between countries, and the impact of world market instability are only a few of many factors. The 1985 and 1991 famines in the Sudan, as well as those in Mauritania and Somalia, are reminders of the rural poor's vulnerability to the disastrous consequences of floods and prolonged droughts in the Near East.

MISSED OPPORTUNITIES FOR ENHANCING RURAL DEVELOPMENT

Human capital gains and poverty reduction rates could have been greater if the momentum for wider-scale land redistribution - which was created by the historically unique political environment that prevailed in the 1950s and 1960s - had not been dissipated. Many eligible tenants and millions of landless hired workers did not benefit, because the ceilings on private landownership, above which the balance was expropriated for redistribution, were very high. FAO studies and the results of the 1980 agricultural census indicate that landless households (those who neither own nor rent any land) represented between 20 and 35 percent of total agricultural households in the 1980s. These households were denied the opportunity of owning a piece of land which would have provided them with security of food, employment and earnings. In retrospect, it seems that the polemics of land reform proclamations were used by politicians to pacify the discontented rural poor without harming the interests of large farmers, in anticipation of the latter's political support of the new national leaderships.
The other missed opportunity concerns misuse of the plentiful oil finds made between 1973 and 1981 in seven oil-rich countries in the Near East. Human history has probably never experienced such sudden affluence from a single depletable commodity.
The most dramatic jump, both in income per caput and in governments' (or ruling families') receipt of full economic rent, occurred in two fiscal years (1973/74 and 1979/80). These windfalls coincided with a period when agrarian reform was being implemented in the oil-based economies (Algeria, the Libyan Arab Jamahiriya, the Islamic Republic of Iran and Iraq). The case of the Libyan Arab Jamahiriya is a useful illustration of the extent of the sudden change. In 1940, the Libyan Arab Jamahiriya (along with Saudi Arabia and Kuwait) was among the poorest of the developing countries. In less than 25 years its per caput income rocketed from US$990 in 1961 to US$7 170 in 1985, a rate of increase that it had taken five rich industrialized countries - Canada, France, Germany, Japan and the United States - 220 years to achieve (1750-1970) (Andiaanse and Waardenburg, 1992: Table 1.1).
Have the four oil-rich countries that are implementing land reform-centred rural development strategies succeeded in improving the rural economy and diversifying income sources? Table 2 shows how agriculture, in many countries, has been neglected in terms of its share in total public investment relative to its share in the total labour force. This has led to falling productivity per working person in agriculture and has increased countries' dependence on food imports to feed their own people. In the 1980s, agriculture became the least buoyant sector of the economy. It has also lost its pre-oil boom position as the fastest-growing non-oil producing sector in the economy, when it employed the majority of the total workforce to produce food and tradable commodities. The sectors that have replaced it are the non-productive ones of militarization and government administration, as well as construction, which brought high profits to city contractors and the rural elite but produced only non-tradable goods.

TABLE 2
Present and potential cultivable land, gross investment rates and agricultural production, total per worker, 1970-1992

N/A = data not available.

Sources: Cultivable land data are from: FAO, 1993a; Total and per working person agricultural production are based on data given in World Bank 1982, 1993 and 1994, and FAO, 1989 and 1993b; Investment rates are from World Bank 1982, 1993 and 1994.

One of the worst cases of wasted oil money and loss of human resources is that of Iraq, which dissipated the opportunities it had for completing an extensive agrarian reform and rural development programme (see Table 1). The magnitude of these missed opportunities is illustrated by the fact that Iraq has the third-largest area of potential cultivable land in the entire Near East region, after the Sudan and Turkey. Nearly 80 percent of this land (4 million ha) could have been cultivated, and the present area of irrigated land doubled, if the roughly estimated US$450 billion that was spent during the nine-year Iran-Iraq war and the 43-day Gulf war had been channelled into agricultural development instead (Alnsary, 1994). This US$450 billion represents approximately $63 000 per rural inhabitant, and could have been allocated to health, education and housing services. Even worse than this, however, are the loss of an estimated 750 000 Iraqi people, who were killed during the two wars (McNamara, 1991), and the post-war hunger and collapse of rural people's purchasing power, which led to an increase in the proportion of undernourished children, from 9 to 35 percent. The collapse was particularly severe among the families displaced by both wars, estimated in 1994 to be 45 percent of the total number of poor people. Researchers also reported that child mortality increased fourfold in just one year (1992) and that the incidence of rural poverty in Iraq, for that same year, was greater than that in India². It could, however, be claimed that part of the Iraqi disaster was the result of a shift in ideology which led the former Soviet Union (a strong ally of Iraq and its largest supplier of arms and technicians) to desert its former ally. Iraqi interests and people were thereby sacrificed to the pursuit of improved international relations with Western powers.

THE SHIFT FROM ANTI-POVERTY, EGALITARIAN STRATEGIES TOWARDS ECONOMIC GROWTH AND TRADE LIBERALIZATION SINCE 1985

While Near Eastern countries were making good progress in redistributing wealth, reducing poverty and increasing per caput income, their efforts were disturbed in the early 1980s. The wind of change blew from the West, under the influence of the United States (the Reagan administration) and the United Kingdom (Thatcher's Conservative government). Through their voting power, these countries put pressure on the World Bank and IMF, encouraging them to make foreign debt relief programmes conditional and, thus, to impose changes in development strategy priorities. Heavily indebted countries were faced with a dilemma; national policy-makers had either to accept the harsh effects of economic reforms (and their politically and socially unpopular results) imposed by foreign creditors via IMF's stabilization programme and the World Bank's structured adjustment lending programme, or they had to exhibit a nationalistic attitude by rejecting the imposed policy reform and continuing the anti-poverty efforts to which they had just committed their countries by adopting, in July 1979, the Programme of Action of the World Conference on Agrarian Reform and Rural Development (WCARRD). They found that the longer a government postpones taking action, the narrower its options become.
In some countries (e.g. Algeria, Egypt, the Sudan and Tunisia), programmes were delayed when political stability was threatened by urban working class riots. However, the mounting pressure exerted on economies by high annual debt servicing payments, and the adverse effects of prolonged economic recession in the West accelerated the adoption of the prescribed economic reforms, irrespective of their adverse impacts on distribution.

The production impacts of privatization

The Near East countries' agricultural public sectors are much smaller than are those of the centrally planned and managed economies of the former Soviet Union and Eastern Europe, where the size of state farms, collective cooperatives and the enterprises that produce and supply the means of production were colossal. For example, in the 1980s, state farms covered only 5.8 percent of the total cultivable area in Egypt, Iraq, the Sudan and Tunisia, while the proportions in the Soviet Union and Cuba were 66 and 85 percent, respectively. However, in the Near East, the effects of privatization were greater on the earnings of employees who were guaranteed high wages, bonuses and services, regardless of the actual level of productivity in communal tenure. Several studies have shown that growth rates and labour productivity in communal tenure production are not inferior to those in individual tenure systems (El-Ghonemy, 1990a). This also applies to the privatization of communal tenure in tribal areas; there seems to be no firm evidence of the productive superiority of individual farming over grouped or communally held farms.
Perhaps the greatest impacts of price liberalization during the processes of stabilization and privatization are those on the supply of such inputs as fertilizers, insecticides, seeds, pumped water, farm machinery and fuel. This is a result both of their delivery becoming dependent on private trade and of the removal of subsidies. For example, a study in Egypt (November 1994) showed that a sharp rise in fertilizer and insecticide prices inhibited many small landholders (owning less than 1 ha per head) from purchasing the quantity required and, hence, led to a decline in crop outputs. At the same time, larger farmers - especially those producing exportable crops (cotton, rice, vegetables) - were able to purchase these inputs and increase production. Between 1985 and 1992, the largest increases in cultivated areas were those of wheat and sugar cane, owing primarily to increased farmgate prices, which had been very low when prices were administered by the government. This increase in both price and area cultivated of wheat and sugar cane contrasts with a fall in cotton area, from 480 000 ha in 1980 to 330 000 ha in 1992, caused by low prices and high production costs making cotton less favourable than other crops.

Adverse impacts on incomes of the rural poor in Egypt

The combination of increased production costs for small farmers' crops, declining real wages of farm workers and a sharp rise in the rental values of leased lands has greatly harmed low-income groups and landless hired workers. Egyptian data show that, during 1992, average wage rates fell in real terms to half their 1986 values. In addition, the falling demand for migrant rural workers worsened their poverty conditions. The deterioration in annual incomes was worse in the case of tenants who, until 1992, had been protected by the 1952 land reform law against eviction and guaranteed a low rental value equivalent to seven times the land tax. These protective measures and the resulting tenants' gains were lost by the 1993 law, which allows rental values to be determined by market forces from 1996/97 onwards. Many landowners recovered lands from the numerous tenants who had become hired workers and could not purchase land on the open market. Moreover, priority for the sale of publicly owned lands changed from allocation to small tenants, who could purchase at low prices payable by installments over 30 years, to sale at open auction to the highest bidder, who is usually a land speculator or rich farmer. As a result, the area of land rented fell sharply from 47 percent of the total cultivated in 1967 to 24 percent in 1983, and has dropped further over the last few years. The proportion of small landowners (owning less than 2 ha) has also declined gradually, while that of the medium-sized (owning 10 to 20 ha) has increased.
The sad result is increasing poverty and inequality of income distribution in rural Egypt. The results of household expenditure surveys in 1981 and 1991 indicate a fall in the share of the lower 30 percent of the income scale, compared with a considerable rise in share for the upper 30 percent of total households surveyed. Rural poverty in 1991 was estimated at 54 percent, compared with 29 percent in 1982 and 28 percent in 1975. The number of rural poor has greatly increased, from 5.7 million in 1975 to nearly 15 million in 1991. This increase in rural poverty, in terms both of number and percentage, represents a fall in living standards, rather than a rise. In fact, the author estimates that the adopted economic policy reforms have brought poverty incidence back to its 1950 level of 56 percent, prior to the distributive land reform policy which was introduced in 1952.

Agrarian change in Algeria, the Islamic Republic of Iran and Iraq since 1985

Faced with peasant discontent over tight state control of agrarian reform cooperatives, policy-makers in the three countries introduced measures aimed at
the decentralization of farm management decisions, greater entrepreneurial freedom for beneficiaries and the registration of private landownership. Several inefficient state farms were sold and tenancy arrangements - which had been abolished by an earlier land reform - were reintroduced. The aim of this post-1985 deregulation policy was to strengthen the family farm economy and make it less dependent on government support (e.g. Algeria Law No. 19 of December 1987). In the Islamic Republic of Iran, several farm corporations were liquidated and their ownership rights individualized. However, the Khomeini government's redistribution of private landholdings that exceeded three times the average size of a family farm in each locality was short-lived and, instead, the distribution of public lands was accelerated, allowing large farmers and traders to accumulate land. The anti-land reform faction within the ruling Mullahs, including some Ayatollahs in the powerful Council of Guards and the Parliament, called for the return of land expropriated during the Shah regime to its original landowners. By early 1991, the Determination Council had approved the redistribution of 450 000 ha of land that had been seized by tenants when large landlords fled the country after the collapse of the Shah regime. The end of the redistributive land reform was reflected in the Minister of Agriculture's commitment, announced in 1989, to make no intervention on private property rights³. In addition, the government allocated nearly 1 million ha of public agricultural land for use and development by business people in the private sector, supported financially by the state-owned Agricultural Bank.

Effects of economic reform on social imbalance in public expenditure

As economic reforms are not conditional on government protection of the poor or on the enhancement of priority areas of social concern (education, health, income support, social security and food subsidy), governments have responded differently when making the budget cuts required by structural adjustment programmes. It should also be remembered that sustainable growth and poverty reduction are dependent on adequate resources being allocated to agriculture. Agriculture is the food producing sector of the economy and the main source of income for rural people, among whom poverty is concentrated. The poor are absolutely dependent on public services, not because they prefer government paternalism, but simply because they do not have the means to acquire literacy, good health, adequate nutritional standards and irrigation facilities through the private sector.
Since 1980, country development plans and the government finance statistics published annually by IMF show a general trend of neglect of these two broad areas of concern which are essential for the improvement of fundamental human capabilities (such as literacy and longer life), productivity, employment and incomes of the poor. The neglect of both agriculture and basic social services is suggested by data given in Tables 2 and 3. Military spending has been included as an unproductive expenditure compared with the social necessities of health and education. Total public expenditure/consumption as a percentage of gross national product (GDP) has, since 1985, increased in rich countries (except Saudi Arabia) and in low- and middle-income economies (except the Islamic Republic of Iran, Morocco, Jordan, Egypt and Mauritania). Between 1960 and 1991, features of social imbalance in priority concerns were emerging; for example, governments in most countries of the region are progressively devoting more resources to education than to health and have consistently given military spending higher priority than education and health combined. These comparisons apply to the share (percentage) in both total public expenditure and gross national product (GNP). This striking manifestation of imbalance is in a region where high infant mortality, incidence of malnutrition and illiteracy are still pervasive, especially in rural areas of rich and poor countries alike.
Table 3 shows a decline, between 1980 and 1991, in health spending in eight countries, including the oil-rich Saudi Arabia, Oman and the Islamic Republic of Iran, and a rise in the ratio of military spending to combined health and education spending in four countries (Turkey, the Syrian Arab Republic, Egypt and Yemen). Examination of the data for poor countries shows that, for internal political motives, in 1991 the Sudan and Yemen spent more on military establishments than on education and health, despite having the highest poverty indicators of infant mortality, mortality of under five-year-olds and illiteracy in the Near East. At the other extreme of per caput income, while the rich Saudi Arabia reduced total public expenditure between 1985 and 1991, it spent an average of US$200 000 per person on its armed forces, compared with an average of $17 000 per person on education, although nearly 40 percent of Saudi Arabian men and 60 percent of women are illiterate.

Table 3
Shares of health, education and military spending in national income and total government expenditure in 17 countries, 1960-1991.

Notes:

N/A = data not available.

* Data refer to 1982 and 1989, not 1980 and 1991. Iraq's data on military spending (1980) refer to average (1980-1985).

Sources: World Bank, 1983, 1984, 1993, 1994; Wulf, 1991; Economist Intelligence Unit, 1991.

While economic reforms stress the need for increasing investment rates to accelerate the production growth of tradables, available data (Table 2) show that gross domestic investment rates in national income declined in 11 out of 14 countries between 1980 and 1991, and stagnated in two. Agriculture has been hit hard by the fall in investment rates and also by its share in budget cuts. This neglect, during the period 1980 to 1992, is reflected in falling annual rates of agricultural GDP in all the countries, except Mauritania, Morocco and Saudi Arabia, during the same period.

Increasing opportunities for corruption

Relatively high public expenditure (an average of 25 percent of GDP), particularly military spending, has created opportunities for corruption within bureaucracies and between governments and arms importers and dealers. There is clear evidence of continuing corrupt practices (embezzlement of public money and property) after the adoption of economic policy reforms for the privatization of public economic enterprises. Ironically, whereas donor countries and rich creditors in the West call for anti-corruption measures in developing countries, their powerful multinational corporations are the first to seize corruption opportunities when awarding large contracts in the Near East region.
There is a paradox in these developments. Contrary to economic wisdom, the increase in corruption and illegal rent-seeking coincides with privatization of the public sector and austerity in government spending. Being illiterate and ignorant of their own governments' bureaucratic procedures, small farmers and the rural poor suffer from extortion by traders, tax collectors and bureaucrats.

Prospects and challenges

The limited data available on the impacts of recent changes suggest a gloomy prospect for the increasing numbers of wage-dependent landless workers and the rural poor. This forecast is based on the following considerations:

• The macroeconomic policies adopted by governments for debt relief purposes have not been accompanied by adequate income-support measures. In fact, policies have led to the removal of most subsidies, relaxation of the active application of minimum wage policies and a sharp rise in prices of goods consumed by the poor (e.g. food, textiles, footwear and medicine). The effects of this on the deflationary component of economic reforms tend to reduce the purchasing power of low-income groups' wages and salaries.
• The emphasis on increasing the average income per person as a way of bringing about a sustainable reduction in poverty will be of no benefit to the present generation of rural poor because it has not been accompanied by the necessary reduction of inequality. Although agricultural growth is essential for rural development, its link to the pace of poverty reduction must be clarified. This missing link concerns the timing of distributing the benefits of growth through land reform and other measures of raising incomes, and the capabilities of the peasant farmers. Available data on countries' different experiences consistently show a weak association between variations in agricultural growth and poverty levels. For example, Table 1 shows that, despite Egypt's sharp reduction in inequality and poverty during the agrarian reform period 1952 to 1965, agricultural growth remained nearly unchanged at 2.9 percent. The author has obtained similar results from statistical analysis of data from 21 developing countries, including Egypt and Morocco (El-Ghonemy, 1993a, 1993b). It was found that, with an annual growth rate of 3 percent sustained for 60 years without land reform (reducing the concentration of landholdings), poverty would be reduced by only half its present rate. Poverty reduction could be attained much faster by a one-third decrease in the concentration of landholdings. In the case of Egypt, it took 13 years (1952 to 1965, with two land reforms) instead of the 60 years that would have been necessary if Egypt had relied solely on agricultural growth.
• The assumption made in structural adjustment programmes - that the poor are not involved in markets and are thus not affected by the price changes imposed by economic reforms - is false. It is not valid either for small and landless farmers, who are net buyers of food, or for poor tenants, who are producers, buying fertilizers and selling goods in the market.
• The paradigm that has been imposed on and adopted by countries, and which requires no government intervention in land and credit markets, means the death of redistributive agrarian reform, at least in the medium term (over the next 13 to 15 years). The ideological shift in development thinking in general, and particularly in the former Soviet Union and Eastern European countries, has weakened the land reform lobby in international fora. Until 1990, the former Socialist countries had been strong advocates of land reform in the United Nations Assembly and in its Economic and Social Council. The post-cold war stance has weakened the international aid policy that supported government intervention to reduce inequality in general, and land reform in particular, and that was supported by the Group of Seven and their associates: the World Bank, IMF and the European Community. The absurdity of such a shift against government intervention to reform defective land and credit markets in agriculture lies in the fact that the relationships that these powerful agents used to justify agrarian reform in the 1950s and 1960s still exist today and are still relevant to solving present world development problems. Such relationships are based on the simple principle that access to productive land is a life-time insurance against the risks of poverty and undernutrition, and are grouped as follows:
  1. Several institutional barriers block the poor from entering the credit and land purchase markets. Examples of these are: the auctioning of land for sale; usury; and the fact that the cost of borrowing without collateral is much higher among smaller than larger farmers.
  2. The inverse relationship between farm size and productivity of land and labour has been firmly established and vigorously analysed since the work of Adam Smith in 1776.
  3. The vicious circle of low living standards can be broken by agrarian reform; the low purchasing power of the poor leads to chronic indebtedness and lack of creditworthiness, which prevents them from purchasing land through the market in order to secure self-production of food and family labour, which in turn leads to food insecurity, undernutrition and low purchasing power (poverty).
• The longer the problems of rural development persist, the higher is the demand for land reform. There are, however, some positive prospects which would arise from the completion of a Near East peace agreement that is acceptable to the present adversaries. These prospects include:
  1. reduction in the present colossal levels of defence spending and the use of the public funds thus saved for anti-poverty, pro-food security and comprehensive rural development efforts;
  2. the potential for transferring the human energy and skills of millions of youths, currently involved in unproductive mandatory military service, to productive activities in rural reconstruction;
  3. an expected flow of foreign private capital and aid, including oil money, as well as increased mobility of labour among the affected countries, which would increase employment opportunities;
  4. an expected rise in living standards for the Palestinians who are currently living in occupied territories and refugee camps;
  5. settlement of international disputes over the use of water - the most scarce resource in the Near East - for irrigation to bring new lands under cultivation for redistribution among the landless poor.

PROPOSALS

There is no scarcity of ideas, and no need to search for new strategies. The comprehensive elements and operational principles provided by the WCARRD Programme of Action were adopted by almost all the countries concerned in July 1979. These principles represent the outcome of two years of intellectual discussion on the part of leading world development analysts and practitioners, and are still relevant to resolving current agrarian injustice and rural development problems. The principles might be merged with the recent work on sustainable development in relation to equity, together with the results of the work of both the 1992 International Conference on Nutrition and the 1995 World Summit for Social Development.
FAO and the young researchers who attended the Rural Development International Workshop might consider lobbying for a greater emphasis on poverty reduction and the protection of the poor in the design and implementation of structural adjustment and stabilization policies, as an extension of what the United Nations Children's Fund (UNICEF) did in 1987 as part of its Adjustment with a Human Face thrust. The lobby and the debate would be strengthened by the active involvement of non-governmental organizations (NGOs).
The broader debate should include both the moral dimension (with regard to injustice and caring for the poor) and the time factor, i.e. it should combine the arguments for rapid and sustainable agricultural growth with the time required to reduce quickly existing absolute poverty levels and the numbers of poor landless waged workers in agriculture. FAO - having been mandated by the international community to take the leading role both in nutrition and in agrarian reform and rural development - is in the best position to provide the guidance and assistance needed to meet this challenge.

¹ This article was prepared for the Rural Development International Workshop, held by the Rural Development Division of FAO in Godollo, Hungary, 9 to 13 April 1996.

²The undernutrition and poverty estimates for post-war Iraq were made, in 1991, by Dreze and Gazdar of the Harvard International Team and, in 1993, by a FAO mission.

³Details of the changes made to the post-Shah agrarian system are taken from Lahsaeizadeh, 1988; and Majd, 1987.

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