Global Poverty Reduction and Development Forum 2010-Transforming Development Pattern and Poverty Reduction
The 2010 Forum was timed to mark the 18th International Day for Poverty Eradication, with just five years remaining for the attainment of MDGs. It was clear, that whilst there had been remarkable progress in some areas, the benefits of economic development and globalization hadn’t been equally distributed. The key challenge was how to prevent developing countries and their poor populations from being marginalized in the ongoing development process. This challenge was further exacerbated by the impact of the financial crisis. Such new realities made the rethinking of development patterns imperative: growth is a means but not an end. Poverty should not be the residue from growth and the poor should not be the victims of environmental damage caused by economic development.
In order to deal with the development challenges deepened by economic crisis and climate change, the Chinese government proposed to speed up the transformation of economic development mode into that of scientific development and thus achieve a more sustainable, environmentally friendly and pro-poor growth.
Since the developing countries were facing the challenges and changes together, the International Poverty Reduction and Sustainable Development Forum 2010 focused on the changing patterns of development and poverty reduction under the four themes:
· Industrial restructuring, urbanization and employment;
· Responses to climate change, energy conservation and green development;
· Social security, equal access to public services and poverty reduction;
· Globalization, structural adjustment and economic and trade reforms.
The goal of the forum was to provide a platform for international exchange and formulate better responses to the new challenges, explore the mode of development, economic and social development policies conducive to poverty reduction and create an international cooperation strategy.
Hui Liangyu, Vice Premier of the State Council |
The ongoing Fifth Plenary Session of the Seventeenth Central Committee of the Communist Party will outline and arrange the social and economic development of China for the next five years. The core theme running through the period is to accelerate the transformation of economic development pattern.
To this end, the following measures will be adopted: first, adjust economic structures to consolidate agricultural foundation for further development; second, coordinate urban and rural development and step up the construction of socialist countryside; third, coordinate regional development and accelerate western development; fourth, nurture ecological civilization to balance economic and social progress with environment; fifth, hold on to poverty reduction and development and comprehensively enhance poverty reduction efficiency.
Years of experience prove that reform and opening are the important basis for poverty reduction. China will continue the policy of reform and opening up to maintain stable and relatively rapid economic growth to lay a solid economic foundation for industry to and agriculture to bring more development opportunities for poor areas and people.
It is a common task of the international society to help developing countries transform their development pattern and contribute more to the attainment of the MDGs. Developed countries should abandon trade protectionism to maintain a stable international financial order and an open and free environment for trade and investment. Developing countries should step up their efforts to restructure their economies, transform the development pattern to promote sustainable economic and social development and thus ensure poverty elimination and further development. International organizations should strengthen their development assistance for the transformation and poverty reduction to help developing countries embark on a road of sustainable growth.
Ban Ki-moon, Secretary-General of the United Nations, Message to the Forum |
Decent and productive work is one of the most effective ways to fight poverty and build self-sufficiency. Yet today, more than half the world’s working population is in vulnerable employment. They lack formal work arrangements and social security, and often earn too little to provide for their families, let alone climb the ladder of economic opportunity.
To bridge the gap from poverty to decent work, the following actions are necessary: investments in economic and social policies that foster job creation; promotion of decent labour conditions and deepening of social protection systems. Access to education, public health and vocational training is also essential.
Youth employment must also be emphasized because young people are three times more likely to be unemployed than adults and year 2009 marked the record of youth employment. One of the best ways for youth to see a future of hope is through the prism of a decent job.
Despite encouraging advances in many corners of the globe, hundreds of millions of people still live in appalling conditions, lacking even the most basic services. Addressing the global jobs crisis is central to changing this picture – to defeating poverty, strengthening economies and building peaceful and stable societies.
Widespread economic uncertainty and fiscal austerity should not be excuses to do less. Rather, they are reasons to do more.
Michelle Bachelet, Head of UN Women, President of the UN Social Protection Floor Advisory Group |
· Prosperity to be sustained must be shared. Economic growth alone is not sufficient to eliminate poverty. There can be no sustainable development without income distribution. Redistribution policies are a prerequisite and not an impediment to growth.
· Combating poverty is not only about protecting but also about preventing and empowering. The three dimensions should be combined in a consistent and coherent social protection floor and decent work framework, which should be placed at the core of countries’ economic development strategies.
· Special attention must be given to gender equality and women’s empowerment.
· Poverty cannot be sustainably reduced unless climate change is addressed.
A wider social security is broadly regarded as the most direct and effective way to combat poverty. In fact, social protection and economic growth can complement each other. The connection became evident during the recent economic crisis. In addition to protecting people from becoming trapped in poverty, income transfers have been a major force to boost aggregate demand by increasing purchasing power and reducing precautionary savings.
Countries such as China, Brazil and India have made remarkable progress in extending coverage to as many as possible as quickly as possible. China is close to achieving full national coverage for medical insurance. It has challenges of course, not least those brought about by the scale of migration and urbanization. China’s 230 million migrant workers are not able to bring their social security entitlements with them to the cities, and they leave behind an increasingly ageing and vulnerable population in rural areas. But the Chinese are committed to putting in place a basic social security system covering all urban and rural residents by 2020.
The social protection floor concept emerged as a major United Nations crisis response initiative in 2009 and has increasingly been recognized as a key developmental instrument. The concept is defined as a set of basic social security transfers and essential services in the areas of health, water and sanitation, education, food, housing, life and asset-savings information.
Addressing social security related issues within the social floor framework requires policy consistency. Besides sufficient funding, poverty reduction must be correctly prioritized: the scarce resources must be allocated to those in the most need.
Fan Xiaojian, Director of the State Council Leading Group Office of Poverty Alleviation and Development of China (LGOP), “ Transformation of Development Pattern and Prospect of Poverty Alleviation and Development in the New Decade ” |
In response to the development challenges intensified by the financial crisis, the Chinese government has adopted a series of strong measures to promote the development of poor areas and people.
First measure is to form a new mechanism combining the two major drivers of poverty reduction and well-being – development and social assistance, and second measure is to consolidate the new pattern of “great poverty reduction”, combining industry-based poverty alleviation and society-based poverty reduction. The third measure is to increase assistance standards and advance special assistance work and fourth is to enhance international exchanges and cooperation on poverty reduction.
Despite significant achievements, China still has a long way to go on the road of poverty reduction and development. Problems are mainly reflected in four aspects: the magnitude of poverty, the gaps in development, the volatility of poverty reduction results and the difficulty of assistance work.
To meet those challenges, the Chinese government will continue focusing on economic development, intensifying institutional reform and improving income distribution system and social security system. China will also keep expanding domestic demand, guiding labor-intensive businesses to move toward poor areas to create employment opportunities; keep developing education, and science and technology, keep improving the skills of the laborers in poor areas, and developing modern agriculture. The state will hold on to a growth pattern favorable to poor areas and poor people, combining development with social assistance to implement the poverty reduction policy for the poor in an inclusive way.
China’s economic and social development has entered a new period of coordinating urban and rural development. The way to alleviate poverty and promote development must change with the progress of the time. Therefore, vigorous efforts must be made to achieve the following "ten combinations":
1. Combine state support with self-reliance to improve the capacity of the poor regions and population for self-development.
2. Combine special poverty reduction with industry-based poverty reduction and society-based poverty reduction in an effort to consolidate and improve the working pattern of "great poverty reduction".
3. Combine development-oriented poverty reduction with social security for inclusive poverty reduction.
4. Combine the use of natural resources with the development of human resources in a sustainable way to improve the basic quality of life of the impoverished population.
5. Combine industrial development with environmental protection to develop environmentally-friendly industries
6. Combine the promotion of the development of ethnic regions with the protection of ethnic cultural heritage to realize the harmonious development of various ethnic groups
7. Combine the improvement of basic conditions with the improvement of the healthy life of the poor in order to enable the poverty-stricken population to lead a decent life
8. Combine development-oriented poverty reduction with disaster prevention and post-disaster reconstruction, and vigorously develop disaster prevention industries.
9. Combine on-site poverty alleviation with relocation, and make full use of the development opportunities brought along by industrialization and urbanization.
Combine comprehensive development with key breakthroughs, and regard the prioritized poverty reduction in areas with concentrated poverty and special difficulties as an entry point of our poverty reduction work in the new decade.
Du Ying, Vice Chairman (Vice Minister) of National Development and Reform Commission of China (NDRC), “China’s Current Macroeconomic Situation and Policy” |
In the past two years China has led the world by recovering from the 2008 economic crisis and by making great progress on other fronts. China’s economy has grown steadily and relatively rapidly, the transformation of economic growth pattern has achieved results, key industries have been reformed, people’s quality of life has improved, and various public services such as education, health, culture and sports have progressed. Currently, China’s economic and social developments are facing complex domestic and international challenges. On the global level, the economic recovery is fragile and many risks remain. Domestically, many problems related to imbalanced, poorly coordinated and unsustainable economic growth still exist.
Since reform and opening up, the Chinese government has adopted a massive poverty alleviation and development programme in a well-planned and organized manner. Through unrelenting efforts we have accomplished remarkable results and become the first country to attain the MDG of halving the amount of people living in absolute poverty. At present, the government is working on a ten-year guideline for poverty alleviation and development in rural areas. In addition to previous effective policies, it will take better measures to help poor areas grow in a sound and rapid way thus improving the quality of life of the poor.
Fazle Hasan Abed, Founder and Chairperson of BRAC, “ BRAC’s Practical Model in Adapting to Development Pattern Transformation in a Multinational Environment” |
BRAC is an organization aiming at empowering people and communities in situations of poverty, illiteracy, disease and social injustice. BRAC’s development interventions aim to achieve large scale, positive changes through economic and social programmes that enable men and women to realise their potential.
The most important lesson in poverty reduction is the participation of the poor people in finding solutions to their development problems. They must be empowered to have the confidence to take action.
Besides empowerment, financial resources are the key to enabling people to realize their dreams and aspirations. Savings inculcate a sense of the future and provide hope for something beyond immediate needs. Credit opens a doorway for the poor to start livelihood activities which can create a source of income. While access to financial resources has been important in helping large numbers of people come out of poverty, access to markets and quality inputs have been equally important.
Another important lesson learnt on development is that poverty is multidimensional and requires a holistic response. In addition to financial resources, linkages to markets and the right kinds of inputs, the poor also need education, health and nutrition. With microfinance, BRAC ensures that the poor are able to access essential healthcare and basic schooling within the community. This strategy serves to build the capacity of poor communities, providing essential services while empowering communities to meet their own needs in these critical areas. This is achieved by training and encouraging capable individuals in the community to provide voluntary services.
The third lesson learnt is that what works for poor communities in one place also tends to work in other settings. This is because the root causes of poverty – the lack of empowerment and access to critical resources and services - tend to be the same everywhere. Our experience therefore says that much of this learning can also be expected to be useful in the Chinese context.
Zhao Baige, Vice Minister of National Population and Family Planning Commission of China, “Chinese Development Mode and the Practice of Solving Population Problems as a Whole” |
In the past three decades, China’s fast development has drawn world-wide attention and everyone speaks highly of China’s aggregate economy, trade volume and foreign currency reserve. In addition, China is the first developing country to achieve the MDG of halving the amount of population living in absolute poverty. The HDI in China has increased steadily by nearly 50% since the reform and opening up, and becomes one of the fastest countries in terms of HDI growth. It is currently ranked 92nd in the world and belonging to the medium level.
Regarding population growth and its impact on poverty reduction, in the past years, China has been holding on to the comprehensive plan of population and development, which combines population, economy, society, resources and environment effectively. China will follow the long-term balanced population development plan to reach the optimal amount, quality, structure and distribution of population. Social management and public services mechanisms and systems also need to be built.
China has upheld historic traditions and chosen a development strategy suitable for its specific conditions. In the future, China should keep reforming its policies and strengthening international cooperation.
Jomo Sundaram, UN Assistant Secretary-General for Economic Development in UN Department of Economic and Social Affairs (UNDESA), “Rethinking Poverty Measures and Programmes” |
Poverty reduction and development policies have to be pragmatic. They also have to promote beneficial economic activities. Recent experiences have shown that governments need to strengthen the building of their fiscal capacity. It should be noted that policy space provided by the government is crucial to the protection of the socioeconomic achievements that have been made. Also, the inequality problem must be solved.
There are no simple, universal or indiscriminative solutions regarding poverty reduction and development, but there are some basic facts that can be agreed on: first, economic policy for macro regulation is extremely important and should support sustainable development. Second, creating decent employment opportunities is vital. Third, the fiscal capability of government should be strengthened, especially when it comes to the funds for social spending. And fourth, the significance of social security cannot be underestimated.
Su Ming & Liu Junmin, Research Institute of Fiscal Science, Ministry of Finance, PRC, “Equalizing Essential Public Service and Poverty Reduction under the Background of Development Mode Transformation” |
The transformation of development mode will inevitably have extensive and profound influence on poverty reduction. The transformation means changing the purpose of development from "material-oriented" to "people-oriented" and also changing the driving mechanism of development from investment to consumption. Transformation not only requires a structural balance - a balanced, coordinated and sustainable socio-economic and inter-regional growth, but also wide industrial restructuring: developing modern service industries, enhancing energy conservation and emission reduction and pursuing overall environmentally friendly sustainable development.
Equalization of essential public services is the key to promoting the transformation of development mode because inadequate and unequal delivery of essential public services is an important cause of poverty. In essence, it means that the government provides all the social members with essential and guaranteed public goods and services, and equally distributes the public services that are most urgently needed by the general public and most closely related to the basic rights of survival and development across urban and rural areas, different regions and different social groups, keeping the gap within the scope acceptable for the society.
To conclude, sustainable poverty reduction and the transformation of development mode require equal access to basic public services. This demands adjustments in the national poverty alleviation strategy and reforms in the public service system such as optimizing transfer payment structure and creating and equalizing a service standard system.,
Shantanu Mukherjee, Policy Advisor, Poverty Practice, Bureau of Development Policy, UNDP, “Addressing Regional Inequalities for Balanced Human Development” |
Regional inequalities in poverty reduction are pervasive. The Millennium Development Goals were created to address all the faces of poverty. To reach the MDGs, bottlenecks have to be identified and prioritized. In Columbia, the preliminary lessons from MDG acceleration pilots were:
• The need for government ownership and political support
• Cross-sectoral and cross-ministerial engagement
• Combining the new strategies to existing plans
• Improving the capacity of the service provider and that of the user, thus increasing the demand
• Leverage local actors and institutions
Regional disparities of maternal mortality rates for permanent residents and floating population in China in 2005
Wang Yadong, Deputy Director General, Department of Employment Promotion, Ministry of Human Resources and Social Security, “Employment Promotion for Poverty Elimination” |
Surplus of China’s labor force has been a chronic issue and related structural problems have several outstanding features. First, the issue of labor surplus will continue long into the future. Second, transferring surplus labor from rural areas to cities is an arduous task. Third, structural unemployment is pronounced.
The Chinese government attaches great importance to employment and has actively created employment policies, including the following : adopt economic policies conducive to employment expansion; encourage self- employment and start-ups; encourage businesses to create employment; build and improve employment aid system targeting all people living in difficulty; implement policies aiming at helping businesses and stabilizing the labor market; strengthen public employment services and vocational training; and constantly improve social security.
Wan Guanghua, Principal Economist, Research Department of ADB, “Poverty and Inequalities” |
Major challenges facing China are the “Three Rural Issues”, trade imbalance, sluggish domestic demand, corruption and slow-down and reversal of poverty reduction trend. Since supporting rural development will never close the rural-urban gap, the only long-run solution to the regional imbalances is migration and urbanization. Reforming the hukou system is necessary but won’t be enough to balance the development gaps either. Currently, 780 million Chinese are engaged in agriculture or live in rural areas. Officially, 120 million are migrants but it is estimated that the real number is somewhere between 400-480 million. If those 400-480 million people with limited access to housing, education, health care and other public services were given a “green card”, migration could become more feasible. Also the urbanization strategy has to be formed: the question is whether it should focus on mega-cities (centralized) or medium-sized cities (decentralized).
Luiz Pedone, Professor of International Relations and Public Policies / Political Science, Universidade Federal Fluminense (UFF), Brazil, “Political and Strategic Dimensions of Poverty and Inequality Reduction in Brazil” |
Brazil’s most notable social policy is the Bolsa Familia Program, which combines a schooling program (National Bolsa Escola), a food card program (Zero Hunger) and a gas program for poor families. The BFP benefits 11 million poor families whose monthly per capita income is around 50 US dollars or less. It is conditional to ensure effectiveness: children have to be vaccinated and attend school. In 2008 the program expenditures made up 1 % of Brazil’s GDP or 6,23 billion US dollars.
Brazil’s poverty reduction efforts have yielded results: 19,3 million Brazilians have been lifted out of poverty. However, problems remain since inequalities haven’t reduced as fast.
Long term evolution of extreme poverty as percentage of population in Brazil (1976-2008)
Inequality is very visible, as measured by education. UNESCO’s evaluation of poor Brazilian schooling highlighted two factors: the precarious physical infrastructure of schools and low numbers of hours spent in school. This makes it difficult to achieve universal education. In Brazil, the education funding is biased toward investing too much in higher education compared to basic education. In addition, teachers’ low salaries affect the quality of education: absenteeism is common and quality of work is low.
The most important factors in poverty reduction and social mobility are mobility in education, access to higher education, employment creation and employment, and basic factors such as health and nutrition. Future challenges therefore include reduction of wealth, income, gender and ethnic disparities.
Sarah Cook, Director, United Nations Research Institute for Social Development (UNRISD), “Combating Poverty and Inequality:the Role of Social Policy” |
· Comprehensive social policies are essential for successful poverty reduction.
· Universal social policies are feasible and affordable for countries at fairly low levels of income.
· Social policies need to be part of sustainable and employment-intensive growth paths which support more equitable and cohesive societies
The most significant reductions in poverty have occurred in countries with comprehensive social policies that lean towards universal coverage. Inequalities make it harder to incorporate the poor in the growth process because they limit the size of the domestic market and prospects for sustained growth; may contribute to crime, social unrest and conflict; and encourage the emergence of institutions that lock the poor into poverty traps.
Instead of creating complex targeting and conditionality mechanisms, countries should aim at comprehensive systems that lean towards universalism. They are more socially inclusive and contribute to security and social cohesion. Social assistance programmes are most effective when designed as an integral part of long-term comprehensive social protection strategy that leans towards universalism. Universal programmes are more likely to get broad support from groups with ability to pay and political influence.
Guo Wei, Director General, Department of Rural Economy, Research Office of the State Council |
Poor areas have advantages mainly on resources. However, the development of resources requires standardization and capitalization. Thus the development process becomes less and less linked to local conditions and benefits local people less and less. These factors compromise the effect of poverty reduction. China is transforming its development pattern. An important component is to promote fair distribution of development results, with equalization of public services being a major part. Distribution can be done in direct and participatory ways.
Gaspar Fajth, Chief of Social Policy and Economic Analysis, UNICEF, New York |
Child poverty alleviation is very important. In the long run, the best way to reduce poverty is to invest in children. Child poverty differs from general poverty. For children, poverty may be reflected in physical or mental shortages or needs, which will make them unable to survive or fully realize their potential. Every child faces different problems on different dimensions. That’s why a comprehensive scheme is needed to help children from different angles, based on specific conditions. In addition, specific child-oriented policies should also be adopted.
Xu Xiaoqing, Deputy Director General, Department of Rural Economic Development Research, Development Research Center of State Council |
Currently, the focus of China’s poverty reduction should still be the transfer of rural labor, the migration of rural population into cities and the issue of farmers’ income. The core solution is to promote employment and create employment opportunities for farmers at various levels, especially in the secondary and tertiary industries.
Yang Xiongnian, Deputy Director General, Department of Science, Technology &Education, Ministry of Agriculture (MOA), “Utilization of Agricultural Waste as Resource and Growth of Farmers’ Income” |
As part of the “scientific outlook on development” policy, China is reducing waste and increasing waste recycling. Agricultural waste, namely the dejections of livestock and poultry, has serious environmental impacts: it leads to both eutrophication of water bodies and air pollution due to foul gases and burning inedible parts (straws) of crops. Since the straws are rich in nutrients, instead of burning they could be fed to the animals, used as cultivation base for edible fungus or as industrial raw material for packaging or turned into biofuel.
The dejections can also be developed into biogas (methane) or fertilizer. Biogas development drives industry development and increases farmers’ income. Currently there are three eco-energy modes in China and one of them is called “Five in one”. It combines household waste with animal waste producing biogas and residue, which fertilizes the fruit trees, increasing the wellbeing of the livestock and the farmer.
Raymond Sibailly, Special Advisor to the President of Cote d'Ivoire, “New Direction for Green Industrial Policies – Lessons from African Experiences” |
Africa is the least industrialized continent in the world and consequently has the smallest greenhouse gas emissions. Although the continent has remarkable forest resources, only a very few countries are producing biofuels. After the sustainable development summit of Johannesburg, some countries decided to make biomass their primary source of energy since it has a strong employment creation capacity. It would not only contribute to poverty reduction but also guarantee energy self-sufficiency. However, in view with increasing food insecurity, biofuels are being replaced by solar and wind energy, for example in Kenya and South Africa.
To conclude, African governments haven’t yet formulated their green development policies individually or collectively. A chance to do so will be the Rio+20 summit. This will however require multilateral technical and financial cooperation of both public and private sectors.
Pan Jiahua, Director General of Institute for Urban and Environmental Studies, Chinese Academy of Social Sciences (CASS), Low Carbon Development for Green Job Promotion |
l To cope with global climate change and financial crisis, China pushes energy conservation and emission reduction forward actively, fulfills the concept of low-carbon development and attains positive fruits.
l The policy guided by low-carbon development will have profound effects on promoting the green careers and low-carbon jobs in China.
To cope with the disadvantages brought by global financial crisis to Chinese economy and employment, Chinese government put forward a two-year-period, 4-trillion-yuan economic stimulus plan at the end of 2008. In this plan, green investment closely related to low carbon development takes up at least 15%, covering 3 fields, including energy conservation and emission reduction, ecological construction, industrial restructuring & technology innovation and biogas engineering project in rural area, which accumulatively can create approximately 5.3 million green jobs for Chinese economy.
From 2005 to 2020, in the fields of forestry, electricity, steel industry and “green investment”, over 30 million green jobs will be created in total, equivalent to creating more than 2 million green jobs per year on average. Taking account of the low-carbon development potentials in fields including low-energy buildings, public transportation and innovative energy in rural areas, as well as the employment demands of the overall economy driven by enterprises’ investments and residents’ income increase, positive prospects for the Chinese green employment can be foresee.
Anu Rajivan, Leader of Poverty Reduction and MDG Group of UNDP Regional Bureau in Bangkok and Asia Pacific Region, Climate Change: Countering Vulnerabilities through Social Protection |
Climate change is an aggravating factor that can multiply existing development deficits and even reverse progress. Growth, poverty reduction and greenhouse gas emissions are interlinked: growing cities, increasing energy consumption and reducing carbon sinks mean increasing emissions. Poverty reduction is easier in presence of growth and reaching MDGs requires adequate increase in quality and quantity of energy services.
Megacities with dense populations abound in Asia
Climate change also increases vulnerability aggravating the need for social protection. Countries must put in place systems that address vulnerabilities to reduce inequality and social exclusion. They should provide the essential social services and social transfers to protect the vulnerable, prevent damaging coping strategies, promote livelihood diversification strategies and transform attitudes and lifestyles.
The current social security is far from enough. To improve the social security scheme, fiscal policy needs to be adjusted and social resources increased.
Lin Erda, Professor at the Chinese Academy of Agricultural Sciences |
China faces challenging environmental problems. First, land desertification may worsen and spread further. Second, soil erosion may increase due to changes in the distribution of temperature and precipitation caused by climate change. Third, grassland degradation will become worse. Fourth, water shortage will continue. Fifth, water pollution will increase due to surging demand and pollution discharge. Sixth, wetland recovery is increasingly difficult. Seventh, low output and ecological benefit of forests need to be improved.
Widely scattered rural population, distinct natural conditions and different economic development levels make the energy and climate change-related problems more complex in rural areas than in cities. To reduce poverty in an environmentally friendly way, the status of the development of rural energy in national energy policy and efforts to tackle climate change must be raised; comprehensive measures must be taken to step up the development of rural energy and renewable energy; and stronger international cooperation on coping with climate change is needed.
Tang Min, Deputy Secretary-General, China Development Research Foundation |
Financial sector can play an important role in dealing with climate change. Investments are needed to save energy and cut emissions. Climate change does not only concern us but also the future generations. If each generation shares half the cost, investments would become more bearable.
Aline Ribeiro Dantas De Teixeira Soares, Specialist in Public Policy and Government Management, MDS - Head of Office of Executive Secretariat, Brazil |
Brazil has roughly 190 million people. From 2002 to 2008, 24 million people were lifted out of poverty, thanks to a portfolio of policies. But still, policy integration is not complete: Brazil wants to combine various social policies, projects and environmental protection measures. Resources for research and the level of international cooperation should be increased.
Napoleon Navarro, Deputy Country Director, UNDP China, Summary of the Parallel Session 1 |
China’s growth has a diminishing influence on its poverty reduction, an issue that requires a portfolio of solutions. First, economic growth and employment should be given equal attention. Second, equality in social security shall never be compromised, for social security in China can lessen poverty’s impact by contributing to poverty reduction. This is also true in other countries worldwide where a universal and all-inclusive social security matters. Social security brings spillover consumption benefits to the economy. Therefore, balanced and equal social security and social services should be ensured.
Ma Xiaohe, Vice President, Academy of Macroeconomic Research, NDRC, “Difficulties of the Structure Adjustment & Thoughts for Optimized Development” |
The greatest problem haunting China’s industrial restructuring is that developed countries in the American and European continents have cut down their imports from China. There are mainly two reasons. First, these countries de-leveraged after the recent financial crisis broke out, reducing consumption and increasing savings. Second, prior to the Asian financial crisis, developing countries with similar economic development patterns as China began to export the same kinds of products to the developed countries.
In theory, there should be two solutions for this problem. First, boost consumption and reduce reliance on exports by adjusting the demand structure. Second, in line with the industrial chain theory, evolve the industrial structure into a high-end one, featured by segmentation. However, difficulties arise due to income restructuring, threatening the demand restructuring.
The challenges currently facing China’s industrial structure are: first, although China is at the level of upper-middle income countries in terms of the three pillar industries, it is only on par with the lower-middle income countries when it comes to the overall industrial structure. Second, excessive competition is common in processing and manufacturing industries. Third, as China’s economy is export-oriented, the two ends of its secondary industry are outside the country, meaning that China only processes a certain product while raw materials are not acquired and sales are not conducted within the country’s borders.
There are several recommendations: first, accelerate demand restructuring and push forward urbanization; second, increase the consumption ability of rural residents.
Martin Ravallion, Director, Development Research Group, the World Bank, “Rising Inequality in China” |
To achieve greater equality, the most important principle is that, while promoting equality, the people should not be burdened with extra cost or their living standards undermined. Another principle is the importance of agriculture. With fairly equal access to land and relatively few distortions to incentives, achieving higher agricultural growth and thus strengthening poverty reduction in China will require sound investments in research and development, and in rural infrastructure.
In the future, China must build on previous achievements in reducing inequality. In this aspect, China should focus on two policies: the elimination of the hukou system and the deregulation of land market. Either of the two policies, if accomplished, will play an important role in poverty and inequality reduction. Second, access to credit must be secured for rural residents. Third, human resources should be developed by providing inclusive access to education and medical services, including a universal coverage health insurance.
Aziz Khan, Professor of Economics Emeritus, University of California, Riverside, Comment |
China has achieved remarkable success in poverty reduction. From 1980 to 2005, China reduced the number of people living in abject poverty by 621 million, a 44% decrease. Poverty reduction depends on two aspects, income growth and changes in income distribution. Though China has made great progress in both aspects, inequality still exists in income distribution and perhaps, poverty reduction wasn’t as effective as we saw it. It should be noted that the growth rate of agriculture overshadowed that of inequality. Therefore, China can give full play to its comparative advantage in agriculture by promoting trades with increased labor productivity. Further, equality of access to land has assured an egalitarian distribution of income from farming. Thus, land market should be fully deregulated.
Zheng Wenkai, Deputy Director (Vice Minister) of the State Council Leading Group Office of Poverty Alleviation and Development of China (LGOP), Final Remarks |
The 2010 International Poverty Reduction and Sustainable Development Forum focusing on the transformation of development mode and poverty reduction achieved good results. Representatives attending the forum shared the macro trends of China’s economic and social developments, China’s current progress, new practices and fresh challenges in poverty reduction, and also their research results and opinions regarding poverty reduction. They were very beneficial. First, there were in-depth discussions: representatives not only fully analyzed the overall backdrop and trends in global economic and social development, but also touched upon such aspects as employment, security, environment, industries, population, and women and children. Their discussions regarding development and poverty reduction came in multiple dimensions and were theoretically sound, specific and enlightening. Second, the comments were excellent: forum mediators and commentators showed their professionalism and added the finishing touch to the forum by complementing speakers with their comments. Third, there were fruitful results: the multi-dimensional achievements of the forum can be attributed to the considerate preparation and participation of all parties. Let’s join hands and make concerted efforts to ensure that this forum will translate into tangible effects on poverty reduction. Let’s strive together to contribute to China’s exchange with the international community in poverty reduction and development.
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