Urbanization and Poverty Reduction

There is a central idea in current developmental strategies and policies that urbanization results in overall poverty reduction for developing countries. On the surface this makes a great deal of sense: the rate of urbanization greatly effects the economic growth of a country, which is key to reducing poverty. The more urbanized a country is means more investments and businesses, which in turn leads to job opportunities, and in that sense is very beneficial to development. These ‘bigger and better’ opportunities results in a flow of rural migrants into urban environments where cities represent a way out of the cycle of poverty.  How then could urbanization be anything but positive in terms of development?

The problem lies with what is meant by ‘poverty reduction’. If poverty was only measured by income levels, large rates of urbanization causes increases in income and therefore is only helpful for poverty reduction. However, according to Amartya Sen and other economists, poverty is multi-dimensional and does not only mean low income levels, but also a loss of opportunities and rights.

If a city cannot create more new job opportunities for the influx of rural migrants this leads to growing inequality, unemployment, and the creation of an urban poor population. The existence of the urban poor goes to show that urbanization does not necessarily mean equal opportunity for everyone. People living in urban poor areas do not have easy access to education or other services and so cannot get equal job opportunities in the city as easy as those who are well educated. Urban areas might even mean living in a worse environment, loss and deprivation of rights, and social exclusion as the wealth gap becomes more pronounced.

With Cambodia, and Southeast Asia as a whole, continuing to trend towards rapid urbanization, and government and developmental policies geared towards more and more economic growth by way of investments and businesses it is important to remember that while urbanization could be a driving force for development and poverty elimination, it also has the potential risk to lead to new poverty.


Sen, Amartya. Development as Freedom. Oxford:  Oxford University Press. 1999.

Liu, Qianqian. Urbanization and Urban Poverty in Southeast Asia. The International Poverty Reduction Center in China. Retrieved from http://www.iprcc.org/front/article/article!downLoad.action?fileId=765&id=3981

Lorene Moran-Valenzuela
Email: vols2@teangtnaut.com