China’s role in ef­forts to erad­i­cate poverty

Con­trary to pop­u­lar be­lief, in­equal­ity be­tween all peo­ple in the world has de­clined con­sis­tently since 1990 — driven in large part by coun­tries such as China and In­dia catch­ing up with richer coun­tries.

China Daily (USA) - - VIEWS -

There is much to cel­e­brate on In­ter­na­tional Day for the Erad­i­ca­tion of Poverty 2016: theWorld Bank’s lat­est data show that since 1990 nearly 1.1 bil­lion peo­ple have es­caped ex­treme poverty. China’s role in this global suc­cess story has been cru­cial: The coun­try lifted 730 mil­lion peo­ple out of ex­treme poverty over the same time pe­riod, due to im­pres­sive growth, and poli­cies that fa­vored the im­prove­ments in in­comes and liveli­hoods of the poor­est.

This suc­cess, how­ever, is no cause for com­pla­cency. World­wide nearly 800 mil­lion peo­ple were still liv­ing on less than $1.90 a day in 2013, the most re­cent year for which we have global num­bers. This is un­ac­cept­able in a world in which so many have so much. Ac­cord­ing to of­fi­cial fig­ures, in China, 55 mil­lion peo­ple were liv­ing in poverty in 2015— so re­duc­tions in poverty in China will con­tinue to have a strong im­pact on the world’s goal to end ex­treme poverty by 2030. The road ahead will not be easy. More than half of the world’s re­main­ing ex­treme poor are now liv­ing in Sub-Sa­ha­ran Africa, and in the fu­ture will in­creas­ingly live in frag­ile sit­u­a­tions and be part of marginal­ized groups that have tra­di­tion­ally not ben­e­fit­ted from poli­cies and pro­grams that have worked for oth­ers— so it will take de­lib­er­ate pol­icy ac­tion and newap­proaches to go the last miles to­ward 2030.

Be­yond poverty, many cit­i­zens and pol­i­cy­mak­ers around the world are in­creas­ingly con­cerned about in­come in­equal­ity. Re­duc­ing high in­come in­equal­ity will, sim­ply put, be vi­tal to end­ing ex­treme poverty by 2030, the goal that the world com­mu­nity has com­mit­ted to as part of theUnit­edNa­tions Sus­tain­able Devel­op­ment Goals. We can­not rely solely on eco­nomic growth to get there. It will be cru­cial to en­sure that growth ben­e­fits the poor­est the most, and is able to un­lock op­por­tu­ni­ties for to­day’s ex­treme poor to get bet­ter jobs, ac­cess bet­ter qual­ity ser­vices, and lay the foun­da­tions for the next gen­er­a­tion to es­cape the con­fines of ex­treme de­pri­va­tion. Re­duc­ing in­equal­ity is also cru­cial for sus­tain­ing the po­lit­i­cal sup­port for the mea­sures coun­tries need to take to gen­er­ate the eco­nomic growth and jobs that can lift peo­ple out of poverty.

Con­trary to pop­u­lar be­lief, in­equal­ity be­tween all peo­ple in the world has de­clined con­sis­tently since 1990— driven in large part by coun­tries such as China and In­dia catch­ing up with richer coun­tries. Even within-coun­try in­equal­ity has been fall­ing in many coun­tries since 2008. For ev­ery coun­try that sawa sub­stan­tial in­crease in in­equal­ity dur­ing this time pe­riod, two oth­ers sawa sim­i­lar de­crease. In­equal­ity is still far too high, though, and im­por­tant con­cerns re­main around the con­cen­tra­tion of wealth among those at the top of in­come distri­bu­tion. In­come in­equal­ity in China seems to have peaked, but more can be done to fur­ther its re­cent de­cline. Of­fi­cial sta­tis­tics show that in­come in­equal­ity (us­ing the Gini co­ef­fi­cient, the most com­mon mea­sure of in­come in­equal­ity) de­clined from 0.49 to 0.46 be­tween 2008 and 2015, but re­mains con­sid­er­ably higher than it was 30 years ago.

China has set the am­bi­tious goal of elim­i­nat­ing ex­treme poverty dur­ing the pe­riod of its 13th FiveYear Plan (2016-20). Al­ready, the gov­ern­ment has made im­por­tant strides in a num­ber of ar­eas iden­ti­fied by our re­searchers as es­sen­tial to build­ing poor peo­ple’s earn­ings, in­clud­ing early child­hood devel­op­ment and nu­tri­tion, uni­ver­sal health cov­er­age, uni­ver­sal ac­cess to qual­ity ed­u­ca­tion, cash trans­fers to poor fam­i­lies, ru­ral in­fra­struc­ture — es­pe­cially roads and elec­tri­fi­ca­tion— and pro­gres­sive tax­a­tion. Key chal­lenges ahead in­clude fur­ther im­prov­ing ac­cess to bet­ter jobs through fur­ther re­forms in the house­hold reg­is­tra­tion sys­tem, strength­en­ing poverty data and the tar­get­ing of poverty pro­grams on the re­main­ing poor who may be harder to reach, such as the el­derly and eth­nic mi­nori­ties, and im­prov­ing tar­get­ing and depth of China’s main so­cial safety net, dibao.

As we mark End Poverty Day 2016 in China, we can be proud of the role that the coun­try has played in lift­ing hun­dreds of mil­lions out of ex­treme poverty, while be­ing re­al­is­tic about the chal­lenges ahead. China will un­doubt­edly con­tinue to drive global progress in elim­i­nat­ing poverty, and has an op­por­tu­nity to show that more in­clu­sive growth and bet­ter op­por­tu­ni­ties for its poor­est cit­i­zens is pos­si­ble. The author is theWorld Bank Coun­try Di­rec­tor for China.

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