Families who leave rural areas of Brazil often end up unemployed and living in the slum areas of the nation’s cities.A group of researchers from Ben-Gurion University’s School of Management in Beersheva, Israel, is helping the Brazilian state of Ceara with a plan to reduce poverty in its rural areas as agricultural workers flee to increasingly crowded cities.

The advisory team, led by Rafi Bar-El, head of Ben-Gurion’s Department of Public Policy and Administration, will soon complete a two-year study financed by the World Bank. Research was conducted in cooperation with two Brazilian universities and the Ceara government and many of the group’s recommendations are going to be implemented soon.

The crux of the economic problem in Ceara is similar to problems Israel has faced, Bar-El said. Agriculture is now more advanced and requires less manpower to produce more, so farms in Ceara are now supporting fewer workers. Large industries are also declining and the migration of unemployed workers to the cities in search of work is exacerbating rural poverty and leading to urban overcrowding.

Ceara, located on the northeast coast of Brazil, has a population of about 7.5 million and Fortaleza is its chief city. Although the state’s economy has developed rapidly in the last few years, this boom has done nothing to reduce poverty in rural areas.

“There are considerable gaps between the population centers and outlying areas. To a large extent rural economies have relied on agriculture and large industries attracted by government incentives,” Bar-El said.

The most important measure recommended by the team will be an urban development restructuring program, including the creation of four “economic clusters” within Ceara, areas with relatively dense population that can be linked to create a larger economic unit. Farmers living near these clusters will find it easier to sell their products in their local market, which will help to reduce poverty in the surrounding region. Investment will be directed towards the four clusters instead of being spread throughout hundreds of minor settlements, Bar-El said.

“The main component in creating the clusters is the improvement of interregional and intra-regional transport and communications networks,” Bar-El said.
“Development of this infrastructure brings together many settlements and towns, and creates a larger, more viable, economic and social entity.”

Bar-El’s Israeli team included Dafna Shwartz, also of BGU’s School
of Management, Arieh Shachar of Hebrew University of Jerusalem and
independent consultant David Bentolila.

Shwartz, an expert in entrepreneurship and economic development,
also recommended a series of measures to develop peripheral areas while
strengthening local entrepreneurship and increasing competition among
local industries.

“A whole body of assistance is available to small and medium-sized businesses, in Brazil and the state of Ceara, but few people utilize these services,” Shwartz said. “We recommended the establishment of an experimental program to encourage use of these services. The program began in May 2001, and we can already quantify significant improvements.”

A further recommendation of the research group was the creation of a
Regional Economic Development Unit to help increase networking between prominent citizens in the region. Monthly meetings now take place between leading personalities in Ceara; politicians and industrialists meet with religious leaders and other influential people and, by coordinating their efforts, the whole region benefits, Shwartz said.

Efforts are also being made to increase literacy in rural settlements, while providing vocational and professional training.

An offshoot of the success of the program is that two Brazilian partner universities, The Federal University of Ceara, and the State University of Ceara, now wish to create Regional Development Courses based on the economic plan and have asked Ben-Gurion University to help build the syllabus.

“It is very satisfying to see that Israeli expertise can be so useful in many parts of the developing world,” said Amos Drory, dean of Ben-Gurion’s School of Management. “We are hoping that the positive results of the Ceara experience will be adopted by other states in Brazil, and perhaps even other parts of the world.”