Led by think tank China Development Research Foundation, a group
of economists are pushing the country's leadership to accept their
proposal to redefine poverty in China.
In a report on poverty released yesterday, about 30 economists
led by Wang Xiaolu suggested the government raise its poverty line
and include basic expenditure on education and medical services in
the calculation.
Preliminary estimates have found China's poverty line -
including annual average expenditure on education and health -
should be around 1,100 yuan instead of the current 683 yuan. The
current amount is the yearly sum needed to buy minimal food and
clothing for survival.
"Using the standards we propose, 80 million Chinese are still in
poverty, rather than the official figure of 23 million (using the
official standard)," said Wang, a senior research fellow of China
Reform Foundation and leading author of the report, Alleviating
Poverty through Development.
Different countries have different formulas for setting the
poverty line. Some use the relative poverty standard, for example,
which defines 20 percent with the lowest income in society as poor,
regardless of economic and price conditions. The World Bank defines
those who live on less than US$1 a day as poor.
Some experts said Wang's proposal to include basic expenditure
on education and health is encouraging but even his poverty line is
low.
"Under the current inflation level, the new poverty line can't
cover basic needs, including education and medical services," said
an economist surnamed Lin with the Chinese Academy of Social
Sciences.
China's consumer prices have been rising for five straight
months, with the inflation rate reaching an 11-year high of 6.5
percent in August, making it impossible for many poor people to buy
even meat.
With the economy growing at an annual pace of 9.7 percent in the
past 29 years, Wang said the country has gathered the capacity to
redefine poverty and invest in the poor.
"Our second suggestion is to treat the poor as potential human
capital, instead of just needy people," Wang said. "This mindset
change is vital."
The economists urged the government to take "social inclusion"
actions to ensure that the poor can access education and medical
services to enable them to live a decent life.
The economists warned that if the basic needs of vulnerable
groups are not satisfied, China's growing disparity gap will be
further widened and the poor will be even more marginalized, posing
a threat to the leadership's goal of social harmony.
Treating the root
Lu Mai, secretary-general of the China Development Research
Foundation, said all suggestions were based on an analysis of the
causes of poverty and China's current development status.
Organized by Lu's foundation, the survey done in 2006 among
4,041 poverty-stricken households in 72 villages nationwide found
that poor income in the agricultural sector and growing expenditure
on healthcare and children's education are the three top causes of
poverty.
About 72 percent of the respondents listed low returns from
crops as the major reason for their poverty.
China's 23 million poor people, decreasing from 218 million in
1980, mainly live in mountainous regions and along the borders.
These regions are not as well connected and have limited resources
to develop the local economy.
Nearly half of the poor households said expenditure on medical
services had made it difficult to make ends meet.
China has already brought 70 percent of its farmers under a
cooperative medical insurance network, according to the Ministry of
Labor and Social Security. However, farmers on an average still
have to shoulder at least half of their medical costs.
About 36 percent of the households cited the high cost of
children's education as the reason for their poverty.
Wang Sangui, a co-author of the report and professor of Renmin
University of China, said the pace at which China has been lifting
its poorest citizens out of poverty has slowed in recent years and
the major reason for that is the lack of human development capacity
among the poor. This, in turn, is caused by financial difficulties
in taking care of healthcare and education.
The economists said they expect the country's leadership to
adopt more concrete measures and ensure their implementation to
curb destabilizing factors such as the growing income gap, which
can endanger social stability and public security.
China's Gini coefficient, an internationally accepted measure of
income equality, was estimated by some research organizations at
0.47 this year. The "alarm boundary" is 0.4. The coefficient was
0.3 in 1982 and 0.45 in 2002.
The report said it is high time the government targeted balanced
social development as a major policy goal as China is trying to
quadruple its economy by 2020.
"Inequity is evident and concrete help should be immediately
extended to those in the lower levels of the social ladder," said
Chen Xiwen, renowned development researcher and director of Central
Leading Group of Agricultural and Rural Work.
To achieve equality for the poor, the government will need to
redouble its efforts to set up a social security network and
increase educational and medical subsidies, Chen said.
Without good education, the poor won't find decent jobs and
their vulnerable social status will be perpetuated over
generations.
(China Daily September 26, 2007)
