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Develop Rural Economy, Preserve Results of Povert…

2019-11-08 17:28
来源:澎湃新闻·澎湃号·媒体
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China Investment :Investment is of great significance for a region to shake off poverty. However, poverty in poor areas is not attract capital. So how to solve this problem? What role can the government play?

Matteo Marchisio :Investments – productive investments, but also social investments (in health, education, etc.) – are important pre-conditions that trigger economic and social development, which ultimately contribute to poverty reduction. The case of China is exemplary in this regard, as one of the key factors behind the country’s remarkable achievements in terms of poverty reduction was the combination of investments in the infrastructure sector (roads, electrification, water infrastructures), economic sector (production enhancement and “industrialization” of rural areas), and social sector (health and education).

However, as rightly pointed out, one of the key challenges in promoting development in poor areas is that poor areas are not attractive for investments, as their lack of basic conditions (basic infrastructures, human capital, etc.) make investments in these areas risky or costly. Investors are thus reluctant to invest in poor areas.

Addressing the issue is like solving the “chicken or egg” conundrum: we know we should invest in poor areas to make them attractive for investors, but we also know that investors are reluctant to invest in poor areas because it is risky and costly.

The Government can (and should) play a key role in solving this conundrum and address this issue: public resources can be strategically used to finance those “public goods” (connectivity, access to economic and social services, etc.) that create those basic conditions that reduce the risks, reduce the costs, and increase the returns of investments – making investments more attractive.

China Investment :What role can social capital play in poverty reduction? What can they do to help reduce poverty? Correspondingly, the population after poverty reduction is a large group and there will be huge business opportunities. So what opportunities will be brought to them?

Matteo Marchisio :The core idea of social capital is that relationships and norms have a value when they enable individuals and groups to cooperate for mutual benefits. The idea is that formal and informal social networks may enable people to carry out collective actions to participate in decision making, to lobby for improved services, etc.

The role that social capital can play in poverty reduction can be summarized in three points. First, informal networks (for instance of relative and friends) represent a network of mutual insurance and trust that reduce the risks and act as safety net people use to reduce the impact of shocks.

Second, social capital may improve poor people capabilities, particularly in those contexts where institutions are weak and markets fail to deliver services. For instance, informal credit networks may replace formal credit networks when these are not available or difficult to access.

Third, social capital may help the poor to improve their conditions through collective action, allowing people to collectively advocate or lobby on issues of common interest – something they would not be capable to do as individuals.

Developing social capital is not only effective to help people dealing with poverty, but also to take advantage of (business) opportunities that may materialize once they have moved out of poverty. One example that I can refer to from my experience in IFAD-funded projects in China relates to our efforts to establish and strengthen pro-poor farmer cooperatives. By empowering poor farmers to organize themselves in cooperatives, and strengthening their collective capacity, as cooperative, to better deal with suppliers and vendors and better take advantage of market opportunities.

China Investment:You must have been to poor areas in China and have a better understanding of their situation. What do you think are the characteristics of these areas? Please give us some examples to talk about them in detail. For private investment, how to drive and attract these capital into the countryside? Entering poor areas? Is there have any good methods and cases?

Matteo Marchisio : My organization, the International Fund for Agricultural Development (IFAD), invests in the most poor and remote areas of the world, with the precise intent of promoting the development of these areas. In China, we have been working for four decades in the so-called “national poverty priority areas” – or national poverty blocks: the Chinba Mountain Area in Shaanxi and Sichuan, the Luoxao Mountain Area in Jiangxi, the Liupan Mountain Area in Qinghai – just to name a few.

Each area is different and has its own specific characteristics. However, if I have to identify a few common features in these areas which make them poor or vulnerable, I would say these areas are invariably characterized by a combination of these issues: remoteness and limited transport facilities – which make it difficult for the populations living in these areas to access markets or other income-generating opportunities; poor infrastructures and facilities – particularly safe drinking water, and limited access to social services – particularly health and education; limited asset base – particularly arable land and skills, and limited access to inputs, productive assets, and capital; and high exposure to natural calamities.

As indicated in my previous answer, in order to attract private investments in the poor areas, you need to reduce the risks and the costs of investments, and create other enabling conditions that would make investments attractive. IFAD’s investments are precisely aimed at creating these favourable conditions that would attract investors and make investments less risky and more profitable. Examples of investments that IFAD finances or co-finances include: rural infrastructures (typically rural roads to reduce the time and costs of transportation, or irrigation to increase the productivity of lands); guarantee facilities or other innovative financial products to reduce the risks and the costs for financial institutions to lend to rural households or rural enterprises; trainings and other capacity building activities to strengthen the capacity of farmers, farmer organizations, cooperatives and rural enterprises to improve the quality and standards of their production and post-production, link to markets, and – in general – be more profitable. These are some of the key elements of our most recent projects in Hubei, Jiangxi, Qinghai, Sichuan, Ningxia, and Shaanxi, and of the projects we are currently designing in Yunnan and Hunan.

China Investment:What role can financial institutions and financial instruments play? How effective can it be? How does the marketization of financial instruments combine with public welfare?

Matteo Marchisio :Financial institutions play a fundamental role in promoting investments in rural areas as limited access to capital is regularly indicated as one of the key constraints to development in these areas. Financial institutions are in general reluctant to lend to rural households and rural entities (enterprises, cooperatives…), as their activities – often linked to agriculture – are perceived as risky and little profitable, they often lack a credit history or collaterals to guarantee their loans, and the financial institutions often do not have financial products specifically tailored for the needs of this typology of clients.

IFAD, through its projects, has tried to address some of the bottlenecks that restrain financial institutions to lend in rural areas by, for instance, establishing or supporting guarantee facilities to reduce the risks of default or non-repayment, supporting the development of new financial products specifically tailored to smallholder farmers or rural cooperatives, and engaging with fintech companies to explore new mechanisms and modalities to provide access to finance to rural households, cooperatives and enterprises.

In addition, by broadly supporting the creation of favourable conditions to investments, IFAD contributes of making investments less risky and more profitable, and thus more suitable to access financing from financial institutions.

China Investment:What development needs is the comprehensive effect of infrastructure, social development and economic development, in order to achieve sustainable development and truly block the return to poverty after poverty eradication. What other development policies do you think China needs to improve in order to achieve sustainable development in these poor areas?

Matteo Marchisio :First of all, let me say that China already has very effective policies and programs that contributed to the development of its poor rural areas – as demonstrated by the extraordinary progress in reducing rural poverty over the past decades. These include the setting-up of an inter-ministerial body in charge of overseeing and coordinating poverty reduction efforts in the country (the Leading Group Office on Poverty Alleviation and Development); the development of precise targeting mechanisms and tailored poverty reduction measures; and a multi-sectoral and integrated approach to poverty reduction, properly supported by adequate financial resources – among other policies and mechanisms.

However, if I have to identify a few remaining challenges which China should focus on in the next years in order to achieve and sustain poverty reduction efforts in the poor areas, I would say: first, reduce the vulnerability of those that were brought out of poverty, so that they do not risk to fall back into poverty in case they experience unexpected shocks. Second, make poverty reduction programs financially sustainable, so that they do not depend on the heavy injection of public resources. Third, economically develop the rural areas, so that they can attract investments and self-sustain poverty reduction achievements.

China Investment:China will solve the problem of absolute poverty by 2020, including some areas with deep poverty that have extremely harsh natural conditions and fragile ecological environment. It’s extremely difficult to get rid of poverty. Do you have any suggestions on this? What do you think of the poverty problem of those who lack intrinsic motivation to get rid of poverty?

Matteo Marchisio :Eradication of extreme poverty is not easy to achieve. It took 40 years of strong political commitment and continuous support to poverty reduction efforts for China to achieve such goal – and China has to be commended for that. However, though addressing extreme poverty is an important achievement, it is only a step for China towards achieving the status of a moderately prosperous society – or xiǎo kāng shè huì.

Several challenges still remain to be addressed. First, addressing “relative” poverty. Though absolute poverty is about to be eradicated in China, relative poverty – that is to say the status when a group of people in the society does not enjoy the same standard of living as the majority of society – would emerge as an increasing issue in China.

Second, reducing “inequalities”. Although absolute poverty will be eliminated, inequality (between urban and rural areas, between Western and Costal provinces and – within the same province – between better-off and worst-off counties, and between different groups within the society – with women, the elderly, the children, and ethnic minorities being the most vulnerable groups) would still persist.

Third, reducing “vulnerabilities”. Although the people that were living below the poverty line will be brought out of poverty, they will still remain vulnerable to shocks: diseases or other unforeseen events, the loss of a job or long periods of unemployment, the costs of children's education, unfavourable weather events or fluctuations in price commodities – particularly for those households engaged in agriculture, etc. Shocks may easily bring this vulnerable segment of society back into poverty.

Lastly, to respond to your question (What do I think of those who lack intrinsic motivation to get rid of poverty): I believe that no-one likes being poor, and that everyone aspires to live a decent life in a condition of non-poverty. However it’s true that several of the welfare programs implemented by the Government in the past years with the objective of bringing everyone out of poverty by 2020 may have reduced the incentives for some people to actively look for sustainable livelihoods options as beneficiaries of social programs. While these programs were justified by the ambition of bringing everyone out of a condition of extreme poverty, they would need to be completed in the next few years by programs that strengthen the capacity and enhance the opportunities for these people to stay out of poverty without passively relying on social programs.

China Investment:Some farmers have entered the city but their income has not increased. Cities emerge poor areas. How do IFAD think China needs to deal with the problem of poverty shifting from rural areas to cities?

Matteo Marchisio :Although my organization, IFAD, does not directly work on urban issues, it is certain that China would need to soon face issues related to emerging and increasing urban poverty in the next years.

From the perspective of my organization, IFAD, an organization mandated to promote poverty reduction in rural areas and to support the development of rural areas, the answer to this question (how China needs to deal with the problem of poverty in urban areas) is – however partial – “by developing rural areas”. By developing the rural areas, creating investment and employment opportunities, making them attractive for people to live in, you reduce – and possible revert – the need of rural people to migrate to urban areas in search of income opportunities, and reduce the pressure that these people exert on cities (e.g. decreasing employment opportunities, limited access to social services, etc.).

This is by the way the strategy of the Government – as conceived in the concept of “rural revitalization” coined by President Xi Jinping two years ago.

Editor | Zhang Pan

Design | Sun Ziyue

本文刊于《中国投资》2019年11月号。版权所有,侵权必究。欢迎个人分享,媒体转载请回复本微信号获得许可。

《中国投资》杂志创办自1985年,由国家发改委主管,国家发改委投资研究所、中国国际工程咨询有限公司主办,是我国投资领域唯一的中央级刊物,业界最早专注于投资领域趋势报道的核心期刊。创刊三十多年以来,杂志以全球视角看中国投资,涵盖宏观经济、行业分析和企业投资案例,同时以全球市场为坐标,聚焦特定国家、地区和重大国际趋势,目前已经成为世界各国政府官员、各类投资机构、专家学者、企业家以及记者媒体的专业对话平台。

《中国投资》杂志每期覆盖包括上市公司在内的200多家央企国企和10000多家中国民营企业、1000多家中央与地方政府决策部门和机构、1000多家行业协会和商会、300多家主要金融机构等,是了解宏观经济环境、行业趋势前景和企业投资案例的重要参考。

自2016年始,在中联部等相关机构的共同支持下,《中国投资》非洲版面世,为非洲各国与中国持久的大规模合作,提供一个专业而强大的对话平台。

2017年,《中国投资》丝路版诞生,为一带一路框架下各国各方与中国的合作互鉴,提供前瞻包容的思想引领,分享各行各业的创新创举,在探索人类命运共同体的道路上共创未来。

China Investment, founded in 1985, is a monthly under the supervision of National Development and Reform Commission (NDRC) China’s macro-economic management agency, It’s jointly operated by Investment Research Institute under NDRC, China International Engineering Consulting Corporation. Enjoying an exclusive position under the central government, China Investment is the core journal which started the earliest among similar magazines to focus on the investment trend. Over the past 30-plus years, China Investment has been in line with theglobal market as its fundamental coordinate with a strategic focus on specific countries and regional markets and those major international propensities. China Investment is a key dialogue platform for officials from different countries, investment agencies, experts and scholars, business people and journalists.

China Investment has been a key source of references for the better understanding of macro-economic environment, sectoral and industrial outlook, and cases of investments, thanks to the fact that each of its new issue touches upon activities of more than 200 Chinese SOEs, listed or non-public, 10,000 private enterprises, 1000 decision-making bodies at the central and local governments, 1000 trade associations and chambers, and 300 strong major financial institutions.

Starting from May 2016 and under the auspices of the Ministry of Foreign Affairs and International Department of the Central Committee of Communist Party of China, China Investment African Edition came into being, providing a professional and powerful platform of dialogue for the ever-growing and sustainable cooperation between China and the African countries throughout the continent.

Inspired by Belt and Road Initiative, China Investment Belts & Roads Edition was born in May 2017, which provides forward thinking for the cooperation and mutual learning between China and related countries. It also aims to share the innovative ideas in various trades and industries and explore a shared future in building a common community formankind.

原标题:《Develop Rural Economy, Preserve Results of Poverty Alleviation》

    本文为澎湃号作者或机构在澎湃新闻上传并发布,仅代表该作者或机构观点,不代表澎湃新闻的观点或立场,澎湃新闻仅提供信息发布平台。申请澎湃号请用电脑访问http://renzheng.thepaper.cn。

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