china's lessons in poverty reduction
TRANSCRIPT
CHINA’S LESSONS IN RURAL POVERTY REDUCTION
Guobao WU, Professor, DirectorCenter for Poverty StudiesChinese Academy of Social Sciences
ISSUES DISCUSSED Definitions of Some Concepts
Related to China’s Poverty Reduction
China’s Progress made in Poverty Reduction
Factors underling China’s success in poverty reduction
Lessons
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DEFINITIONS OF SOME CONCEPTS RELATED TO CHINA’S POVERTY REDUCTION
Poverty in China usually refers to rural poverty
Poverty lines The first poverty line built in 1986 was
defined as per capita net income of RMB 200 in 1984’s price, about 56% of the national per capita income, but declined to only 19% of the national average by 2008
Modified in 2008 by raising the old line by 1/3, but being only one-quarter of the national average
Updated in 2011 with per capita net income almost doubled (up by 92%), about 21% higher than USD 1.9 per day (2011 PPP)
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DEFINITIONS OF SOME CONCEPTS RELATED TO CHINA’S POVERTY REDUCTION
Poor households Identified by local GOV’T according to estimated
income and physically distinguished indicators Eligible for access to any poverty reduction projects
and resources allocated by the GOV’T Key villages (communities) for poverty reduction
designated by provincial GOV’T based on the criteria (% poor population, infrastructure access, etc.)
Eligible for access to any poverty reduction projects 148,000 villages designated as poverty villages in
2002 and 128,000 in 2015
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DEFINITIONS OF SOME CONCEPTS RELATED TO CHINA’S POVERTY REDUCTION
Poverty-stricken counties (poor counties) Designated by the national GOV’T since 1986 based on
income and development criteria Eligible for access to any poverty reduction projects and
resources allocated by central GOV’T Serve as the units for planning, implementation and
administration of poverty reduction project Poverty blocks
Regions that encompass contiguous poverty-stricken counties
Designated by national GOV’T, totally 14 blocks defined in 2011
Serve as units for planning and coordination of poverty reduction programs
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DEFINITIONS OF SOME CONCEPTS RELATED TO CHINA’S POVERTY REDUCTION Poverty alleviation and development
Development oriented poverty alleviation focusing on improving the capacities of the poor and poor areas to escape of poverty by themselves
One most important way for poverty reduction of Chinese characteristics
Major poverty alleviation and development phases 1st stage of poverty alleviation and development
1986-1993 China “Lifting Eighty Million out of Poverty in Seven
Years” program (1994-2000) China Poverty Alleviation and Development Program
(2001-2010) China Poverty Alleviation and Development Program
(2011-2020) Precision Targeting Poverty Reduction and
Development (2014-)
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CHINA’S PROGRESS MADE IN POVERTY REDUCTION
The number of rural poor population declined dramatically since 1978
Marked progress made in human development
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Figure 1 Change of poor population in rural China over time
1978 1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 20150
100000000
200000000
300000000
400000000
500000000
600000000
700000000
800000000
900000000
1000000000
770390000765420000
661010000658490000
554630000
462240000
286620000
165670000122380000
98990000824900007017000055750000
877803648
785502408755809502
511979775507860796
244447500
14955597810618627087390290
25111530
Official poverty line USD 1.9 per day
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1980 1990 2000 2010 2011 2012 2013 2014 20150
10
20
30
40
50
60
70
80
90
10096.2
73.5
49.8
17.212.7
10.2 8.5 7.2 5.7
95.6
78.95
56.4
21.315.44
12.98
3.38
Head count ratio based on official poverty line Head count ratio based on USD 1.9 per day (2011 ppp)
Figure 2 Change of poverty head count ratio in rural China over time
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Worldwide China1981 1997.28 877.8
1990 1850.54 755.81
2013 766.62 25.11
Change in size of the poor population 1990-2013
-1083.92 -730.7
China’s contribution 67.41%
Change in size of the poor population 1981-2013
-1230.66 -852.69
China’s contribution 69.29%
Table 1 China’s contribution toward worldwide poverty reduction( 1.90 USD a day, 2011 PPP) : 1981-2013
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Figure 3 Change in China’s Human Development Index over 1980-2014
1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 20140
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.430.467
0.501
0.545
0.588
0.641
0.699 0.707 0.718 0.723 0.728
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Indicator Period ValueLife expectancy at birth 1970–75 63.2
2014 75.8Infant mortality (per 1000) 1970 85
2013 10.9Under 5 mortality (per 1000) 1970 120
2013 12.7Adult literacy (%) 1985–94 77.9
2010 95.1Maternal mortality (per 1000) 1990–2005 51
2015 27Access to improved drinking water sources (%)
1990 672015 96
Table 2 China's Change in Human Development Indices
Source: UNDP: http://mdgs.un.org/unsd/mdg/Data.aspx
KEY FACTORS UNDERLINING THE ACHIEVEMENTS MADE IN PR
Sustained economic growth, combined with
Pro-poor growth pattern Targeting poverty reduction
intervention Improvement in access to social
services Social security system established for
protecting the vulnerable from falling in poverty
Participation of all concerned actors Improvement in management
effectiveness Innovation in poverty reduction
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SUSTAINED ECONOMIC GROWTH The poverty reduction in China has
been supported by sustained economic growth, which works by means of Creating jobs Increasing demands for agricultural
products And increasing the fiscal capacity for
financing the poverty reduction program
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Table 3 Economic Growth and Poverty Reduction in China
1978-
1980
1980-
1985
1985-
1990
1990-
1995
1995-
2000
2000-
2005
2005-
2010
2010-
2014
Annually reduced poor
population( million) 2.4920.8
80.50
20.77
18.48
35.12
24.19
23.88
Annually growth rate of per capita
GDP( %) 6.3 9.2 6.3 11.0 7.6 9.1 10.7 7.5
Annually growth rate of VA in
agriculture( %) 2.3 8.2 4.2 4.1 3.4 3.8 4.3 4.1
Annually growth rate of off-farm
employment( %) 5.8 7.2 6.6 4.7 2.1 2.7 3.2 3.1
Reduced No. poor population every increased CNY 10,000 GDP 0.84 3.71 0.08 1.28 0.97 1.05 0.38 0.43
GROWTH PATTERN BENEFITING TO THE POOR
Agricultural development, which has been one of the priorities of the national development strategy, has made a large contribution to the poverty reduction in China
The value added of agriculture has grown 4.5% annually over 1978-2014
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GROWTH PATTERN BENEFITING TO THE POOR
Example: agricultural development and poverty reduction over 1978-1985 in China The farmers’ income mainly achieved
through increasing agricultural income, had increased 1.5 folds while the income distribution kept unchanged over 1978-1984, leading to halving of the rural poor population
Major interventions were to increase the farmers’ access to land utilization, increasing agricultural productivity
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GROWTH PATTERN BENEFITING TO THE POOR
The agricultural development for poverty reduction in China further enhanced by Improving physical infrastructure Improving Technical extension networks
Restructuring production organizations
Industrialization of agriculture
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GROWTH PATTERN BENEFITING TO THE POOR
Developing labor intensive economies (e.g. processing industry, construction and services) through fast industrialization and urbanization supported by increasing the government investment and FDI
The rural migrated labors increased to 169 million in 2015 from 1.7 million in 1980
The incomes of rural residents earned from off-farm employment in China had increased 134% faster than the average income from 1983 to 2012.
The share of off-farm income for bottom 20% HHs has increased to 43% in 2012 from 26% in 2002
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GROWTH PATTERN BENEFITING TO THE POOR− Sustained and extensive
development in physical infrastructure• Improving the living conditions• Increasing social productivities• Creating employments
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GROWTH PATTERN BENEFITING TO THE POOR
Supporting the development of SMEs 81 million more jobs created by SMEs in
rural China from 1992 to 2014 Market integration and supportive
policies Reducing regional disparity
Regional integration Special regional development programs,
in particular, the west development strategy
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A CASE: WEST DEVELOPMENT STRATEGY The west regions with 71% of total land areas
and 26% of population fell behind the rest of the country in development
Starting from 2000, total investment amounted to RMB 6.1 trillion up to 2014
Major interventions: improving physical and environmental infrastructure, social services, and supporting the development of growth centers
The gap of GDP per capita between the west and the rest declined
Gaps remained
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201460
70
80
90
100
110
120
130
140
150
160
170
East regionCentral regionWest region
% o
f nati
onal
ave
rage
Figure 4 Change in the rate of GDP per capita in three regions against national average
TARGETING POVERTY REDUCTION INTERVENTION
Intervention of Chinese characteristics, but it does work well for poverty reduction
Focusing on raising the capacities of the poor and poor areas and improving their access to assets to reduce poverty by themselves
Area targeting poverty intervention, 18 regions 1986, 592 counties identified 1994, 148,000 villages identified 2001,14 blocks identified in 2011
Comprehensive interventions Interventions based on the contexts and
causes of poverty in the targeting areas
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TARGETING POVERTY REDUCTION INTERVENTION
Major interventions improving physical infrastructure, such as road, electricity, water supply, irrigation;
improving social services, mainly education, health care, social assistance;
Supporting income generation by providing technical training and access to credit
Assisting in migrated employment Resettlement of the poor living in the remote and ecologically fragile areas
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POVERTY REDUCTION PROGRAMS Central budgetary funds RMB 470 billion
and poverty alleviation loans of RMB 300 billion from 1980-2016 allocated
Six specific programs implemented Integrated poverty village
development program, 20% of the national villages covered. Village is taken as a unit to launch integrated intervention based on the constraints and resources available in the village
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POVERTY REDUCTION PROGRAMS
Agricultural industrialization for poverty reduction program by supporting the leading modern agricultural production and processing business to link the poor small holders to market, 625 dragon head enterprises identified and 10 million poor farmers benefitted
Training for the poor labors to gain outside employment program by skill training for poor labors to earn more wage and salaries
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POVERTY REDUCTION PROGRAMS
Resettlement for poverty reduction program by resettling the poor in the areas lacking necessary production and living conditions, over four million farmers resettled
Public works (food for work) program, RMB 102 billion allocated through the program for rural infrastructure
Government department participation in poverty reduction, 320 central departments and large state owned enterprises involved and mobilized over RMB 80 billion funds and human resources in last five years
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POVERTY REDUCTION PROGRAMS East-west partnership for poverty
reduction built at government, corporates and individual level. The areas cover funding, human resources and business cooperation on basis of social responsibility and mutual benefit principles
NGO’s involvement in poverty reduction. Contributions by social and civil society organizations have mostly been in the areas of resource mobilization and the promoting of innovation in ways for poverty reduction in addition to donations
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Year
% Villages accessible to
motorable road
% Villages accessible to
electricity
% Villages accessible to telephone
% Villages accessible to TV signals
National Average
Poor counties
National Average
Poor counties
National Average
Poor counties
National Average
Poor counties
2000 95.0 92.6 98.1 96.5 87.0 78.3 97.8 96.0 2001 96.0 92.1 98.3 96.0 90.8 72.5 98.1 95.4 2002 96.8 95.4 98.4 96.8 92.2 83.8 98.4 95.8 2003 97.6 96.6 99.0 97.7 95.5 88.4 98.8 96.2 2004 98.0 97.5 99.0 97.8 96.7 90.5 99.1 96.5 2005 97.2 97.8 99.2 98.0 97.1 93.7 98.3 96.4 2006 97.8 99.1 99.4 98.3 98.1 97.2 98.6 97.9 2007 98.6 98.7 99.7 98.3 98.7 97.4 98.9 97.8 2008 98.7 99.0 99.5 98.7 98.7 98.0 99.1 98.0 2009 98.8 99.2 99.6 98.6 99.1 98.2 99.4 98.0 2010 99.1 99.5 99.7 98.8 99.3 98.4 99.5 98.3
Change
2000-2010
4.1 6.9 1.6 2.3 12.3 20.1 1.7 2.3
Table 4 Change in Physical Infrastructure in Poor Counties
PRECISION TARGETING POVERTY REDUCTION AND DEVELOPMENT STRATEGY
Starting in 2014, the strategy focusing on targeting all the resources at the real poor to improve the effectiveness of poverty reduction
Identifying all eligible poor households and villages
Case by case intervention and assistance provided to each poor household
M&E strengthened Responsibility system built
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IMPROVING THE ACCESS OF THE POOR TO SOCIAL SERVICES Education
Universal free compulsory education to improve the access and affordability of the poor
Special program on improving the education in poor areas
Compulsory Education Program in Poor Areas Incorporating education development into the
poverty alleviation and development program Extra educational supports for the
poor Free tuition for the students in technical school Subsidies the dormitories of senior high school
students Free lunch for all students in poverty blocks
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Year
National Rural Average Poor Counties
Age 7—15
Of whichAge 7—15
Of which
Girl Age7—12
Age13—15 Girl Age
7—12Age13—15
2002 94.4 93.5 96.2 92.3 91.0 89.2 94.9 85.4 2003 95.8 95.3 97.4 93.9 92.2 91.0 95.2 88.4 2004 97.3 97.1 98.5 95.9 93.5 92.8 95.8 90.7 2005 97.2 97.1 98.5 95.5 94.6 94.1 96.9 91.7 2006 98.3 98.4 99.2 97.3 95.3 95.1 97.0 92.9 2007 97.4 96.9 98.2 96.6 96.4 96.3 97.7 94.4 2008 97.6 97.7 97.2 98.1 97.0 96.7 97.9 95.7 2009 97.9 97.9 97.8 97.9 97.4 97.2 98.2 96.2 2010 98.0 98.1 97.7 98.6 97.7 97.6 98.3 96.82002-2010 3.6 4.6 1.5 6.3 6.7 8.4 3.4 11.4
Table 5 Change in Schooling rate in Poor Counties over 2002-2010(%)
IMPROVING THE ACCESS OF THE POOR TO SOCIAL SERVICES
Medical care Improving access and affordability of
the poor by establishing rural cooperative medical care insurance system, covering all rural residents
Improving clinics in poor villages, 94% villages with clinics
Training of the doctors in poor rural areas
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SOCIAL SECURITY SYSTEM ESTABLISHED FOR PROTECTING THE VULNERABLE FROM FALLING IN POVERTY
Rural Minimum living allowance scheme
Adopted nationwide since 2007 50 million rural residents benefitted Funded by central and local GOV’T,3/4 by
central GOV’T Lower and varied thresholds Leakage of real poor and spill-over of
resources
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SOCIAL SECURITY SYSTEM ESTABLISHED FOR PROTECTING THE VULNERABLE FROM FALLING IN POVERTY
Rural social pension insurance scheme
Piloted in 2009 and covered all counties by the end of 2012
Jointly funded by individuals, local and central GOV’T
Lower standards and full coverage
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SOCIAL SECURITY SYSTEM ESTABLISHED FOR PROTECTING THE VULNERABLE FROM FALLING IN POVERTY
Program for supporting the aged and orphans without family’s supporting
One social security of long history started in 1950’s
Combining financial supports with income from land utilization
Direct assistance and relief system Medical assistance to those suffered
serious illness Assistance to the poor children for
education
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PARTICIPATION OF ALL CONCERNED ACTORS
Government plays dominated roles Establishing leadership for poverty
reduction The leadership group for poverty alleviation
established from central down to townships Offices and staffs designated in each level of
GOV’T Integrating poverty reduction into national
development planning Making strategies and policies for poverty
reduction Allocating special funds Mobilizing participation of departmental and
local GOV’T governments Responsibility system for poverty
reduction
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PARTICIPATION OF ALL CONCERNED ACTORS
Private sector makes largest contribution by creating jobs, taxes, and providing direct assistance
Civil organizations work in social mobilization, innovation of poverty reduction ways
International organizations brought in new ideas and knowledge
Empowerment to the poor participation of the poor in project
planning, implementation, and M&E Allow the poor make their own choices
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IMPROVEMENT IN MANAGEMENT EFFECTIVENESS
Attention drawn to improving governance, accountability of the management of poverty intervention projects and fund delivery, utilization
institutionalizing transparent and participatory planning , implementation, and M&E
Efforts made to improve the effectiveness and targeting of poverty reduction projects
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PROCESS AND DYNAMICS OF INNOVATIONS IN POVERTY REDUCTION IN CHINA
Learning from outside and the past Pilot first, and upscale the
effective ones Listening to the grassroots (incl.
NGOs and communities) . But It takes time
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LESSONS LEARNED Pro-poor growth pattern and strategy Pay more attention to the social
development of the poor Targeting poverty intervention, when
possible Participation of all actors in poverty
reduction Pilot first, scale up Management matters in poverty
reduction Right direction is more important
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Thanks for your attention!!