Asian Development Bank

ADB and PRC: Working Together to Reduce Poverty 

By David Sobel
Senior Programs Officer, PRCM

PRC's Poverty Reduction

Achievements

Since economic reforms began in 1978, PRC has been successful in reducing the number of absolute poor in rural areas and has already achieved the Millenium target of halving poverty from the 1990 level.

The poverty reduction performance has also been good based on social development indicators such as increasing life expectancy, decreasing infant mortality rates and improving literacy rates. This success in poverty reduction reflects the strong government commitment to equitable and inclusive development; the mainstreamed efforts of a wide variety of actors, programs and funding channels; and significant budget allocations for initiating self-help among the poor.

PRC's poverty reduction approach is area-focused, with a strong emphasis on social and economic infrastructure provision, creation of employment opportunities for the poor, and group-based income generation and microfinance through township and village existing and development.

Challenges

The Government recognizes a continuing need to address existing and emerging poverty reduction challenges such as

• targeting the core poor living in areas with a degraded environment
• addressing the non-income dimensions of poverty related to health, education and the environment
• rising urban poverty associated with enterprise reform and labor retrenchment
• new challenges posed by an aging of the population and the need for social security reform
• rural migration to cities due to a lack of rural income opportunities
• the growing inequality between the western and eastern regions of the country and between urban and rural areas
• poverty issues related to minority groups, the elderly, and women
• the need to increase poverty program effectiveness through participatory approaches involving the poor themselves and non-government entities

PRC's New Poverty Reduction Strategy

In May 2001, the Government adopted a new ten-year poverty strategy featuring a "key county" system for poverty reduction and development to assist 30 million rural people with incomes under the Government's official poverty line of Y625 per capita annual income.

Key counties and poor villages in non-key counties are eligible for national poverty funding. The selection of these 592 key counties was based on income, social, geographic and physical conditions.

Priority will be given to remote and mountainous areas, minority areas, and pockets of severe poverty. The focus of the new strategy is on poor household and village activities. Participatory approaches will be used to ensure the involvement of the poor. In addition, the western region development strategy embodied in the Tenth Five Year Plan is using geographic targeting to promote pro-poor economic growth.

Inadequate infrastructure, severe ecological problems such as desertification and soil erosion, and weak human resources in the western region will be addressed. Programs are also being developed to address urban poverty through social security reform, income and job generation for laid-off workers, and creation of off farm employment opportunities in small towns. The official poverty line is a rural subsistence line. This poverty line is low compared to international practice. PRC does not have an official urban poverty line.