Poverty alleviation: With three years to go, what has to be done?

After years of work, China is closing in on its goal of building a “moderately prosperous society” by 2020, with the baseline task of lifting people out of dire poverty. As of the end of last year, there were still 43.4 million people, about three percent of the population, living below China’s poverty line of 340 US dollars per year. With three years to go, will the goal be met? What has to be done?

Once again, I was a guest of CCTV’s “The Point” to discuss issues related to poverty alleviation. China is making a major media push in this area. More will surely follow.  Full video here

China is trying to eradicate from poverty the last remaining group, via a set of targeted policies. While in the early days, poverty reduction was a blanket policy and reducing poverty form 80% to lower numbers was relatively easy. But, in order to reach the “last mile”, a more focused effort is needed because the umbrella approach does not work. China aims at eliminating poverty entirely by 2020, which would be a major achievement. In particular, China is targeting along many dimensions: who exactly are these 43million people, where exactly they live, who are the leaders responsible for this.

In my view, there are three main elements that help China achieve its poverty reduction targets”

1)      A strong central government is key in getting results.

2)      The perfect alignment of interest between the central government goals and the local officials whose promotion prospect now depends more on achieving poverty reduction objective.

3)      Focus on Urbanisation and management of rural to urban migration flow.

As a side note, the World bank poverty definition of 1.9US$ is higher than Chinese official definition of 1US$, so the numbers of people under poverty line is different, if we take into account PPT-adjusted poverty line, things get even more blurred, but it does not matter. The core principle remains.

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