Poverty Reduction and Neighborhood Diplomacy under ASEAN + China Framework 2

III. Benefit Evaluation on China-ASEAN Cooperation on Poverty Reduction

  The social and economic benefits for poverty reduction cooperation are not only reflected in the practical help for recipient countries, but also in the understanding and response of the people and civil society of the recipient countries to the assistance programs. Despite the lack of sufficient data to evaluate the social benefits of China-ASEAN cooperation in poverty reduction, the results of cooperation can still be seen from the reaction of the governments and the public of target countries.

(A) Positive effects of China-ASEAN cooperation in poverty reduction

1. The cooperation on poverty reduction has achieved remarkable results in helping target countries improve their people's living conditions.

  The poverty reduction cooperation between China and ASEAN countries has been focusing on agriculture and infrastructure construction, which is of great significance to improving local people's production and living conditions fundamentally. The China-aided Luang Prabang Laos-China Friendship Hospital, the Laos National Stadium and the GMS Information Highway of Myanmar all received warm welcome from the local people. [1]In August 2010, Sinohydro Group Ltd. and the Laos National Power Company signed three contracts of power projects in Beijing, including the Laos Nam Khan 2 and Nam Khan 3 hydropower stations and 230 kV Hin Heup - Luang Probang electric transmission and transformation lines, with a total amount of approximately $ 559 million. [2]Sinohydro Group Ltd. and the Laos National Power Company signed the Memorandum for Cooperation on Xe Kaman 2 Hydropower Project in Vientiane on September 12, 2012, which has a total installed capacity of




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[1] Lu Guangsheng, Xiong Xin: "Aid of China for the Greater Mekong Sub-region Countries", p.41.

[2] "Sinohydro Group Ltd. and Laos signed three contracts of power projects of $ 559 million", www.xinhuanet.com, August 14, 2009, http: //news.xinhuanet.com/fortune/2009-08/14/content_11882715.htm. (Login Time: May 30, 2015)

about 135 MW, and a designed annual power generation of about 703 million kwh. According to the provisions of the Memorandum, Sinohydro Group Ltd. will develop the project in the way of EPC overall contracting, and after its completion, the project will greatly improve the problem of insufficient power supply in Southern Laos, with good economic and social benefits.[1]

  In Cambodia, China's official assistance plays a key role in improving local infrastructure facilities, which is conducive to local people better access to markets and social services, increasing investment and business opportunities, and improving the people's living standards.[2]

  Cambodia Development Resource Institute selected three villages along the National Highway No.7 from Kratie to Trapeang Kriel[3] reconstructed with the aid of China for interviews so as to understand the influences of road construction on villagers' life. After the highway was built, due to the improvement of transportation, the villagers sell their products more easily in the market, and their bargaining ability is also enhanced. In addition, it is more convenient for villagers to go to work, study and seek medical treatment than before.[4]

  In terms of time and costs reduced in the distance, Ou Svay villagers used to spend 100,000 Cambodian Riels to arrive in the capital city of Stung Treng Province by waterway, which took one day; after the new highway was constructed, they can reach the provincial capital within two hours, and traffic costs are also substantially reduced. In addition, the highway also provides more opportunities for villagers to increase the access to education and healthcare services. In the past, due to the lack of teachers, backward educational facilities and poor road conditions, the children could mostly receive basic education for 1-6 years, of which the situation has changed significantly after the construction of new highway. In medical services, the villagers had to use traditional medicines and therapies only when they were sick before, so they often missed the best time for treatment of their major diseases because of long distance.




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[1] "Sinohydro Group Ltd. and the Laos National Power Company signed the Memorandum for Cooperation on Xe Kaman 2 Hydropower Project", www.ctgpc.com.cn, September 12, 2012, http: //www.ctgpc.com.cn/xwzx/news. php? mnewsid = 64910. (Login Time: May 30, 2015)

[2] Ibid., p.61.

[3] The National Highway No.7 from Kratie to Trapeang Kriel has a total length of 509 km, which connects Kampong Cham Province and Veun Sai Province on the border of Laos, and connects the Laos Highway No.13, reaching Luang Prabang along the Mekong River to the north. The reconstruction of the road is based on the concessional loans of $ 60.98 million and the contributions of $ 2.43 million. The project started in November 2004 and was completed in November 2007. National Highway No.7 is part of the ASEAN National Highway Network, and also of the Asian Highway No.11; the local people of Kratie and Stung Treng provinces usually call it ASEAN Expressway.

[4] Ibid., p.54.

 

Since the road was built, the villages' medical facilities and staff training have been significantly improved, and the time taken for medical treatment has also greatly reduced. The newly-built highway has brought more economic benefits to local villagers, which enables them to expand planting area, improve agricultural facilities, thereby increasing the income, improving the living conditions, and also attracting more tourists.[1]

  The site interviews of Cambodia Development Resource Institute on another project built with Chinese aid - Prek Tamak Mekong River Bridge of Kandal Province[2] also received similar feedback. The Kampong Domrey and Svay Ath Leu villagers have the following expectations after the completion of the bridge:[3]

  First, saving travel time and expense. After the completion of the bridge, the villagers can cross the bridge at any time, no longer dependent on ferry service. For example, the villagers cost 40,000 riels from the village to Phnom Penh, and it was required to pay 500 riels per motorcycle and 300 riels per person if using the ferry service; the return fee for taxi ride cost about 20,000 riels. After the bridge was opened to traffic, they save extra expenses, and are no longer restricted by the time of ferry service.[4]

  Second, increasing income and improving living standards. The products the villagers sell no longer need the help of middlemen, with the sales prices increased. In addition, they can save the cost of renting in the city as they can easily go from home to Phnom Penh. For some villagers who earned money by selling small wares near the ferry before, the construction of the bridge has a certain impact on their household income, but the impact is small.[5]

  Third, more convenient access to social services. The construction of the bridge enables more children to get a chance to go to school, and those who study in Phnom Penh can come back home on the same day. More importantly, when they are sick, they can be sent to the hospital in time. The construction of the bridge brings appreciation of land value and more investment, and ultimately will improve the quality of life of the villagers.[6]




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[1] Ibid., p.55.

[2] The Prek Tamak Mekong River Bridge is 1,060 meters in length, and 13.5 meters in width, about 40 kilometers north of Phnom Penh. The project began in June 2007 and was completed in September 2010, which was built with the preferential loans of the Chinese government.

[3] Ibid., p.52.

[4] Ibid., p.57.

[5] Ibid., p.58.

[6] Ibid., p.58.

 

In addition to the aid to the construction of some major government projects, the Chinese aid is also concerned about the development of livelihood infrastructure. From 1996 to 2002, the Chinese government drilled 1,000 wells in the rural areas of all provinces of Cambodia with free assistance, solving the problem of drinking water of 250,000 rural residents.

2. Poverty reduction cooperation has improved the capacity-building of target countries in poverty reduction.

  In addition to the exchanges of poverty reduction policies and experience with the ASEAN countries to promote learning from each other, China also supports ASEAN countries in capacity-building for poverty reduction through various channels and forms. China has provided personnel exchange programs covering agriculture, forestry, transportation and health for relevant countries, such as the GMS training program for senior telecommunications officials of GMS countries, agricultural training class and health training class. [1]China has launched more than a dozen of training courses of pro-poor policies and practices for ASEAN countries to [2]help improve the skills of relevant personnel for and the effectiveness of poverty reduction by way of training. 

  From 2010 to 2012, China successively announced the assistance initiatives at the ASEAN-China Summit, focusing on infrastructure construction and the construction of a large number of industrial and agricultural production and infrastructure projects to boost economic development of ASEAN countries. Since 2010, China has continuously intensified its efforts to implement the "Action Plan for China-ASEAN Comprehensive Grain Production Capacity Enhancement", and jointly built 20 experimental stations of good crop varieties with ASEAN countries, covering a demonstration area of ​​1,000,000 hectares. [3]China has also built three agricultural technology demonstration centers in ASEAN countries, and sent 300 agricultural experts and technicians for guidance so as to promote the comprehensive development of agriculture there. [4]In addition, China has trained more than 5,000 officials and technicians for ASEAN countries, involving the fields of business exhibition, cultural art, Chinese, finance and taxation, traditional medicine and infectious disease control,




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[1] Ibid.

[2] Ibid.

[3] "Authorized Release: China's Foreign Aid (2014)", www.xinhuanet.com, July 10, 2014, http: //news.xinhuanet.com/politics/2014-07/10/c_1111546676.htm. (Login Time: May 30, 2015)

[4] Ibid.

 

new energy and agriculture.[1]

3. The poverty reduction cooperation has pushed forward the alleviation of social issues in regions. 

  The spread of drugs in the "Golden Triangle" area remains a prominent regional issue that even threatens the world. The program of poppy substitutive planting is an important way to alleviate this problem. As of 2010, there were over 180 Chinese enterprises conducting poppy substitutive planting in Myanmar and Laos, with a total planting area of ​​210,000 hectares (120,000 hectares in Myanmar and 90,000 hectares in Laos), including 47 varieties, such as rubber, sugar cane, rice, corn and fruits. The substitutive planting program has created jobs for local people, and driven a large number of tobacco growers to abandon poppy cultivation, which effectively improves their living standards. The substitutive planting enterprises also built roads and bridges, and opened canals in Myanmar and Northern Laos, helping improve the development of local infrastructure.

4. The poverty reduction cooperation has promoted the deepening of sub-regional cooperation.

  Since 1992 when the ADB held the First Ministerial Conference for Six Countries of the GMS in Manila, and officially launched the GMS cooperation, a lot of  achievements have been made in the common participation of China (Yunnan Province and Guangxi Zhuang Autonomous Region), Cambodia, Laos, Myanmar, Thailand and Vietnam, which gives a strong impetus to the economic and social development in the GMS, and becomes a successful example of regional economic cooperation mechanisms in Asia and South-South cooperation. By 2010, sub-regional member countries had carried out 227 projects in 9 key fields of cooperation, namely transport, energy, telecommunications, environment, agriculture, human resource development, tourism, trade facilitation and investment, with a total investment of about $14 billion. Among them, 55 investment projects, which totaled an investment of $13.8 billion, were mainly used to support infrastructure construction; 172 technical assistance projects, involving a grant funding of $ 200 million, were mainly used to support the member states to carry out related research and capacity-building activities.[2]The implementation of these projects has effectively promoted sub-regional cooperation and the infrastructure development of member states.




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[1] Ibid.

[2] Zhang Lei: "Greater Mekong Sub-region will become a demonstration pilot of 'One Belt One Road'", China Central Television, December 18, 2014, http: //top.cntv.cn/2014/12/18/ARTI1418902272232440.shtml. (Login Time: May 30, 2015)

 

In December 2011, the 4th GMS Summit was held in the capital of Myanmar, Naypyidaw, which approved the "New Ten-year Strategic Framework for GMS Economic Cooperation (2012-2022)", determining new strategic goals and direction of development of the sub-region in the next 10 years. As of 2012, the GMS cooperation projects in transport, energy, information and communications, agriculture, environment, tourism, human resources development and other key areas had attracted a total of over $15 billion of investment. The 19th GMS Ministerial Conference, themed as "making good planning for a new generation of the GMS sub-region cooperation and promoting the rapid sub-regional development", was held in Vientiane, Laos on December 10-11, 2013. The Conference approved the Plan for the Regional Investment and Cooperation Project, signed the Memorandum for the Establishment of the GMS Railways Alliance, and provided institutional arrangements to promote the interconnectivity of hardware within the sub-region. [1]In December 2014, the 5th Summit of GMS Economic Cooperation was held in Bangkok, Thailand, with the theme as "pursuing inclusive and sustainable development of the GMS", at which all parties exchanged in-depth views on deepening regional cooperation and strengthen interconnectivity.

  The PRCF provided funding support for the second to the fourth stage of the "Phnom Penh Plan for Development Management" in the GMS. The project aims to improve public policy management capacity of the government officials of GMS countries, and has organized a total of 90 trainings, benefiting 1,770 government officials from the six GMS countries. In the Plan, one item is the project of leaders' knowledge network, which aims to provide knowledge sharing, networking, and improve the capacity of lifelong learning. The PRCF has provided funding support for 10 activities of the project.[2]

5. The poverty reduction cooperation has consolidated the foundation for the relationship between China and poor ASEAN countries.

  In recent years, affected by the "Asia-Pacific Rebalancing" strategy of the US, some ASEAN countries sway over their policies to China, hedging their bets. But by contrast, countries that have been getting the support from China in the economic and social development have more firm stance in their relations with China. Take Cambodia for example, China is one of the major donors to its development assistance. Since 1992, Chinese aid to Cambodia has exceeded $ 2 billion, most of




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[1] Zhang Lei: "Greater Mekong Sub-region will become a demonstration pilot of 'One Belt One Road'"

[2] Ibid., p.16.

 

which are soft loans. From 2000 to 2009, China's official aid reached $ 465 million, accounting for 7 percent of all aid to Cambodia. From 2000 to 2010, thanks to the trade growth brought by China's investment and official aid as well as its economic development, the number of poor population reduced by 1 percent annually in Cambodia, which were mostly concentrated in rural areas. [1]It is the strong economic ties and political goodwill that Cambodia stands firmly on the Chinese side on regional issues. During the ASEAN Foreign Ministers Meeting in July 2012, Philippines, with the support of Vietnam and other countries, tried to release the contents of China-Philippines confrontation on the Huangyan Island in the meeting's declaration, but as the rotating presidency, Cambodia withstood pressure to oppose the practice of the Philippine side, and eventually the meeting did not leave any communique.

Table3: Amount of Aid of China to Cambodia Classified by Sectors in 2005 - 2009 (million US $)[2]

Sector	2005	2006	2007	2008	2009	Total
Health		0.13				0.13
Education		0.38			0.08	0.46
Agriculture	1.71	0.07				1.78
Manufacturing, mining and trade	0.05					0.05
Information and communication			8.85			8.85
Post and telecommunications		8.46				8.46
Transport	25.83	12.68	42.31	87.12	114.62	282.56
Community and social welfare services	18.53	19.04	26.22			63.79
Culture and art		0.28	0.3			0.58
Environmental protection		0.02	0.02			0.04
Government administration	0.52	12.18	14.75	8.29		35.75
Total	46.64	53.24	92.45	95.41	114.7	402.43
Source: The Cambodia Aid Effectiveness Reports 2007, 2008, 2009.




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[1] "Our Institute and the government jointly sponsor the International Symposium on the 'assessment of China's Influence in Poverty Reduction Policies for the Greater Mekong Sub-region'", niis.cass.cn, September 2010 27, http: //niis.cass .cn / news / 558136.htm. (Login Time: May 30, 2015)

[2]

Ibid., p.48.



 

 

Figure5: Amount of Assistance of Aid-giving Countries to Cambodia (million US $)[1]

 (B) Shortcomings in China-ASEAN cooperation on poverty reduction

  Although the China-ASEAN cooperation in ​​poverty reduction has achieved fruitful results, limited by institutions and mechanisms, the potential of the cooperation has not yet been given full play, which still needs further improvement.

  First, poverty reduction cooperation is lack of an overall strategy and a system-wide policy. For a long time, restricted by the level of economic development, the cooperation on poverty reduction remains in a subordinate position in ASEAN's foreign policy, thus leading to a lack of system planning on poverty reduction cooperation in the ASEAN countries from the strategic level. And because of institutional reasons, foreign development assistance and specific cooperation on poverty reduction is in charge by different departments, which have differences in the allocation of resources, resulting in poverty reduction cooperation more limited to soft cooperation such as exchange of experience or training, and only a few substantial poverty reduction projects have exerted a significant impact.

  Second, foreign aid is lack of enough attention to poverty reduction and other livelihood projects. China's traditional cooperation on poverty reduction is mainly carried out through cooperation with recipient governments, which has the shortcomings of high economic benefits, low social benefits and political benefits likely to be offset by social benefits in the process of practices. Although in recent




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[1] Ibid., p.49.

years China's assistance projects in the GMS countries have gradually increased the focus on people's livelihood, those with a significant influence remain mainly government projects on the whole, such as the Cambodian government buildings, the Laos' government system and the Laos' National Sports Center, which are beneficial to the development of friendly relations between China and these countries, but do not benefit directly much on the general public, so it is difficult to give full play to the effect of poverty reduction. In addition, a number of projects aided by China often use domestic raw materials, technology and labor, and hire few local people, with short work duration. For example, the construction of the National Highway No.7 from Kratie to Trapeang Kriel of Cambodia only employed a few local labors, which took only several weeks, without providing more jobs there. Thus, the statement of reducing poverty by creating employment opportunities through the construction of road infrastructure has not been recognized by the local people. In contrast, most of Japan's assistance to GMS countries pays more attention to infrastructure construction. For example, in Vietnam, Japan repaired the Hanoi - Ho Chi Minh City train lines, and transformed and improved the water supply and drainage system in some provinces and cities; in Cambodia, it focused on improving education, health, comprehensive environmental governance and people's basic living security; in Myanmar, it aided the construction of schools and drinking water pipelines and road, and provided medical equipment. These practices of Japan enable the people of recipient countries to get a lot of benefits so as to improve its image in the people.

  Third, enterprises and social forces have a low participation in international cooperation on poverty reduction. In view of the experience from the assistance of other countries, the aid of civil forces and NGO tend to be more popular among the recipient population as their work is involved in any "governmental color". Civil forces may go deep into the recipient masses, more communicate with them, and listen to their advice, which will make the communication channels between the two sides more smooth, allow the public of the recipient countries to learn more about the purpose and true intention of the aid, and establish a good image of the aid-giving country in a broader range. In recent years, state-owned enterprises, public service groups and some civil society organizations of mainland China have had a certain ability to provide poverty reduction assistance for relevant countries, which need more guidance and support of the government.

 

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