Poverty fight a model to the world
China’s campaign greatly contributes to development, prosperity on a global scale
Editor’s note: As China aims to eliminate extreme poverty and be a “moderately prosperous society” ( xiaokang shehui) in time for the 100th anniversary of the founding of the Communist Party of China next year, we talk to leading experts for their take on the country’s commitment.
Ian Goldin insists that without China achieving a moderately prosperous society, the world would be a lot poorer. The professor of globalization and development at Oxford University said important targets such as the United Nations Sustainable Development Goals would be missed and people across the globe, not just in China, would be in a much worse place.
“When you look at the global statistics of poverty reduction, much of what has been achieved has been driven by China,” he said.
Goldin, a former economic adviser to the late South African president Nelson Mandela, said the scale of China’s achievement in delivering 850 million out of poverty in a little more than 40 years is not widely acknowledged in the West. The world’s second-largest economy is set to achieve xiaokang and become a moderately prosperous society in time for the 100th anniversary of the Communist Party of China next year.
“It is the most rapid poverty reduction by far of any country ever in history,” he said. “It is an extraordinary achievement. When you look at the global statistics of poverty, a large part of the progress globally is driven by China. If it had not been for China, we’d be far off target in achieving all the UN goals.”
Goldin, speaking from Oxford during the UK coronavirus lockdown, looks in his latest book, Terra Incognita: 100 Maps to Survive the Next 100 Years, at the important role China has played in global efforts to reduce poverty.
China is right to give priority to eliminating extreme poverty in its own country by the end of this year, he said, adding that poverty is still a massive problem worldwide.
The 65- year- old South African points to World Bank figures showing that 2 billion people live in poverty globally, and in 2015 about 736 million were in extreme poverty, on less than $1.90 a day.
“It is a massive issue. Poverty is widespread and it is perhaps the most significant global issue of our age.”
The coronavirus pandemic could result in many more people being pushed into poverty because many developing countries have weak health systems and nonexistent social safety nets, he said. A World Bank report in June forecast that up to 100
million more people could be pushed into extreme poverty.
“The pandemic is going to greatly exacerbate an already bad situation. It is going to throw hundreds of millions of people back into poverty and many into extreme poverty and starvation.”
For Goldin, this does not come as a surprise, given that he forecast a pandemic in his 2014 book, The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About It.
“This has been a disaster waiting to happen for a long time. It was merely a question of where and when it would start.”
Goldin, who is a frequent visitor to China and a regular speaker at the China Development Forum, an event held in Beijing each spring, and which attracts experts and thinkers from around the world, is impressed by President Xi Jinping’s ideas on poverty.
Xi, in fact, has made poverty eradication a mission since he was Party chief of Ningde city in Fujian province in the late 1980s. In his book, Up and Out of Poverty, he sets out four important principles for tackling it: avoiding a poverty mentality (if you believe you are poor, you will be); adopting development measures appropriate to local conditions; strong leadership and coordination; and not wasting money on grandiose projects just because they may be popular.
“These are all very important but he is right to stress avoiding a poverty mentality,” Goldin said.
“If you believe you are simply condemned
to be poor by virtue of your birth and your circumstances, you will not strive to escape.
“Neither government nor society will feel it is their responsibility to act if they think that some people are just destined to be poor. They will not see it as their absolute responsibility to eliminate that.”
Goldin also said Xi is right to emphasize that poverty-alleviation strategies need to be aligned to local conditions, which Western policymakers have often disregarded at huge cost.
“There has been this cookie-cutter view of it in the West where a particular development model was dreamed up in Washington or by colonial rulers and it was to be applied everywhere. It proved a disaster.
“Africa is littered with the carcasses of development projects which at some point were regarded as a panacea.”
Goldin said good governance and coordination as has been demonstrated by Xi and others in China is vital to alleviating poverty.
“Coordination is certainly vital. There is no point in building a school if you don’t have teachers for it, or a hospital if you don’t have nurses, doctors or equipment.
“You need coordination across the country too. You can’t have provinces which are extremely wealthy because they are easy to access from the capital and others which are more remote and find they are left behind because no one comes and opens projects there.”
Goldin, who studied at the University of Cape Town and also has a degree from the London School of Economics and a doctorate from Oxford University, has had a high-profile career as a professional economist and academic. He has also served on the boards of a number of leading international companies, including Old Mutual, the Pan-African investment and banking institution.
He came to prominence as principal economist at the European Bank for Reconstruction and Development and as program director at the OECD Development Centre in Paris, where he was engaged in sustainable development.
In 1996, he became chief executive and managing director of the Development Bank of Southern Africa, and it was in his five years there that he worked for Mandela. He was also director of development policy at the World Bank from 2001 to 2003 and then its vice-president from 2003 to 2006.
He is best known at Oxford as founding director between 2006 and 2016 of the Oxford Martin School, which brought together the university’s expertise in critical global challenges, including climate change and development issues.
Apart from The Butterfly Defect and his latest work, Goldin has written a number of influential books, including Exceptional People: How Migration Shaped Our World and Will Define Our Future and, with Chris Kutarna, Age of Discovery: Navigat
ing the Risks and Rewards of Our New Renaissance, which present an optimistic view of the world’s development.
Goldin said the current pandemic has the potential to halt global progress and that there needs to be concerted action on the scale of a new Marshall Plan to ensure that developing nations, in particular, do not suffer too much from the crisis.
“What we need is a massive global response from the G20, the G7, the World Bank and other institutions.
“What we have is a very tepid and fragmented reaction, and that’s partly, of course, because of the US not providing any leadership role. It is not only the US. Other countries have not stepped up to the scale of this challenge.”
Goldin hopes one of the more positive outcomes of the pandemic will be the rejection of nationalism and protectionism and an acceptance that globalization is the only solution to the world’s problems.
“Globalization is absolutely essential. Without it there will be no progress in the world, there will be no poverty reduction, there will be no vaccines to stop pandemics, there will be no coordination to stop climate change or antibiotic resistance or the other threats we face.
“There will be no sharing of technologies or investment of market opportunities to help people escape poverty.”
Globalization has played a major part in China achieving xiaokang and eliminating extreme poverty, he said.
“China’s progress has been absolutely associated with its opening up, and it has been a big beneficiary of globalization, but it’s also been a contributor to it.
“China in many senses has sustained the global economy, and it’s been the strongest locomotive by far to the global economy since the financial crisis, and probably will be after this one.”
With his background in development issues in Africa, Goldin is aware of the extent to which African countries look to China as a role model in the way it has become a moderately prosperous society and tackled poverty.
China has forged strong links with Africa in recent years through the Forum on China-Africa Cooperation as well as major investments in and trade with the continent.
“What Africans see in China is a
multidimensional strategy to reduce poverty which focuses on industrialization, urbanization, rural development and priority given to child development and education.
“It is this comprehensive strategy that they would like to emulate. The question though has to be whether they have the government capacity and financial capability to achieve what China has achieved.”
What China has demonstrated not just to African but other developing countries is that the journey is possible, he said.
“China has shown that an extremely poor country can become an uppermiddle-income country over a relatively short period of time and with very little external assistance.”
Goldin said that although China is about to eliminate extreme poverty, poverty levels are rising in a number of developed countries.
“You see the queues for food banks in the US, where there are now people in dire poverty. You have increased homelessness with people living on the streets.
“Rich countries too don’t have adequate social safety nets, and people face extreme hardship. This is a world of rising inequality where a handful of billionaires have the same amount of wealth as half of the world’s population.”
Goldin rejects any notion that China has become rich on the back of countries such as the US, as some prominent politicians now argue.
“The reality is that the US economy is much stronger and has much higher levels of employment and growth because China is stronger and has higher growth.
“The US, in fact, would not be what it is today if China was still where it was in the late 1970s before it opened up. The idea that somehow China’s success has been at the expense of the US is a complete misunderstanding as to how all this works. It is not a zerosum game.”