ACCESSIBILITY AND THIRD WORLD RURAL DEVELOPMENT: A Case Study of Sumatra*

Road and transport service improvements are widely recognized as important catalysts to economic development in most third world countries. When integrated with other programs which create new employment opportunities, roads and bus services enable subsistence farmers to seek off-farm salary-earning jobs. This paper examines the relationship between accessibility and economic well-being using data from rural Sumatra in Indonesia. The research relies on multiple indicators of both measures. Households in more remote rural villages are found to average appreciably lower levels of consumption expenditures. When isolated from subregional market and trade centers, consumption levels fall dramatically. The research also shows that the average value of farm produce increases with road quality, frequency of bus service, and close proximity of commerical centers. Thus, agriculture productivity is linked to both transport supply and spatial proximity factors. Additionally, the analysis shows that off-farm earnings increase when migrant households have access to both motorcycles and bicycles. Loans and subsidies for purchasing such “low tech” vehicles as bicycles, scooters, and micro-buses could prove more beneficial to many rural villagers than capital-intensive road projects. Lastly, the research suggests that the siting of transmigration settlements within reasonable proximity to regional and subregional market centers is important if the planned villages are to develop trade linkages and experience sustained economic growth.