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The paper reviews the ways in which urban and rural livelihoods are intertwined, drawing on many examples from around the world in developing countries. It highlights how positive rural-urban interactions and equitable development can be fostered by backward and forward linkages between agricultural production and industry and services. For these backward and forward linkages to be made and to work requires some major shifts in the way planners and policy makers think. Policies encouraging these mutually reinforcing linkages need to overcome the traditional separation between rural and urban planners.