Special Edition on ADB's Work to Support Poverty Reduction in the People's Republic of China (PRC)
IN FOCUS
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 The China Poverty Reduction and Regional Cooperation Fund (PRC Fund)
In March 2005, the Government of the People's Republic of China (PRC) set up a special trust fund of $20 million with the Asian Development Bank (ADB) to support initiatives on poverty reduction through regional cooperation. The Poverty Reduction and Regional Cooperation Fund (PRC Fund) is the first financing facility for the implementation of ADB Regional Cooperation and Integration (RCI) activities in Asia. It finances projects up to $500,000 for research and analytical work, innovative pilot projects, capacity building and institutional development, as well as dissemination, networking, and cross-learning.
The PRC Fund is managed within ADB by the Office of Regional Economic Integration (OREI). The Office of Cofinancing Operations (OCO) is the official channel for communication on financial aspects and reporting of the Fund. The Regional and Sustainable Development Department (RSDD), along with the other regional departments, assists in the review and selection of project proposals.
As of December 2008, 41 project proposals totaling $16 million have been approved. Between 2005 and 2007, the Fund supported 50 training programs, 46 seminars, 14 research studies, and 4 websites. Regional policy dialogues supported by the Fund also led to the signing of 11 cooperation arrangements. The PRC Fund contributed 13% to total ADB regional technical assistance approvals in 2005-2007. Consistent with the geographical priority of the Fund, 70% of its resources are channeled to the Greater Mekong Subregion and Central and West Asia. Projects support cross-border infrastructure development and regional public goods in line with ADB's regional cooperation strategy.
A midterm review in 2008 showed that projects supported under the Fund have regional cooperation as overriding theme but contributed more indirectly to poverty reduction. The review suggested that future projects should strengthen their poverty focus and target geographical, social, and environmental dimensions of inclusive growth. RSDD will assist project proponents in improving poverty impact assessments in project design. Projects that address cross-border issues and have direct impact on poverty reduction, such as prevention of communicable diseases, environmental protection, disaster mitigation and management, and others, can be prioritized.
For more information on the PRC Fund, visit the PRC Fund website.
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Examples of Projects Financed by the PRC Fund that Directly Target Poverty Reduction and Inclusive Growth
Poverty Network TA (RETA 6502)
The project on "Regional Knowledge and Partnership Networks for Poverty Reduction and Inclusive Growth" aims to improve the strategic thinking on the new poverty reduction and inclusive growth agenda in an increasingly regionalizing and global Asia. The main intention is to work with key institutions in Asia and the Pacific to establish knowledge networks, wherein the participating institutions will produce knowledge products on poverty reduction and inclusive growth. These knowledge outputs include working papers, policy briefs and opinion pieces that will be shared to policy makers, development practitioners, academe and other stakeholders and interest groups through a regional website that will be maintained jointly by ADB and the International Poverty Reduction Center in China (IPRCC).
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CONTACT US
For suggestions and questions, please contact the Poverty Unit in ADB's Regional and Sustainable Development Department
Email: Poverty-Matters@adb.org |
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The initial activities will establish knowledge hubs through IPRCC (Beijing) - to coordinate within PRC and Central Asia), the Korean Development Institute (for work in Korea), the National Council of Applied Economic Research in Delhi (NCAER, for work in India and South Asia), and the ASEAN Center for Strategic and International Studies (CSIS) in Jakarta for coordination in Southeast Asia and the Pacific.
The project is equally financed with $0.5 million each from the PRC Fund and the Korean ICT trust fund with ADB; additional parallel financing of $0.2 million is coming from the ASEAN Foundation. The project focuses on three major subjects: (1) in 2009, on the social impact of the global recession; (2) in 2010, on the environments of the poor, and (3) in 2011, on the new poverty and inclusive growth agenda of emerging middle income countries. The project will support a major conference with ASEAN and other development partners on 28-30 September 2009 in Hanoi, Viet Nam on the impact of the global recession on Asia's poor and vulnerable people.
When the project ended in 2008, beneficiary communities rehabilitated about 4,000 km of rural roads, 351 bridges, 23 boat stands, and 365 irrigation systems. They had also established about 550 wells and more than 500 drinking water reservoirs, and constructed 345 communal sanitation facilities. All these helped improve the quality of life of more than 2 million people in over 400,000 households.
Second ASEAN+3 Seminar on Poverty Reduction (RETA 6382)
The small scale technical assistance project supported a seminar with ASEAN+3 countries through which regional experiences on poverty and poverty reduction efforts were disseminated. The seminar also reached consensus on key priorities and directions for policies and cooperative efforts linking ASEAN+3 countries, and put in place new mechanisms for regional cooperation and information sharing on poverty issues. As a result, the Leading Group on Poverty (PRC's poverty reduction ministry) could strengthen its profile in the international discussion. Seminars under the poverty network TA build on this experience, among others.
Transboundary Animal Disease Control for Poverty Reduction in the Greater Mekong Subregion - Phase 2
Infectious animal diseases spread widely across the Mekong subregion, and the poor are most affected by the resulting decline in livestock, unsafe food, and related health hazards. In response to these problems, the ADB and the United Nations Food and Agriculture Organization help control cross-border outbreaks by addressing constraints to effective responses to transboundary animal diseases (TAD).
The second phase of the project aims to improve knowledge on livestock trade and movements in the GMS, build stronger local and regional diagnostic capacity to deal with TADs, and develop well-targeted pilot disease control programs. The expected results of these pilot programs should show the positive impacts of TAD control on livelihoods of poor farming communities as well as on regional livestock trade in the GMS.
Partnership on Persistent Organic Pollutants (POPs) Pesticide Management for Agricultural Production in Central Asian Countries (CACs)
Persistent Organic Pollutants (POPs) cause great health and environmental risks because of their high toxic levels and lingering characteristic, bio-accumulative ability, and long-range environmental transport. The drive to contain or completely eliminate these chemicals has been the goal of this technical assistance, as with the subsequently established International Partnership on POPs Pesticides Management in Central Asia.
The project has delivered two main reports namely, "International Experience with POPs Pesticide Management for use in the CACs" and "Design Outline for an Integrated Pest Management Component". These reports featured an overview of the POPs pesticide issues in the CACs, an assessment of the current use and status of POPs and alternative methods of pest management, a review of the international experience on POPs pesticide management, and presented recommendations on existing projects implementing the POPs pesticide management method.
GMS Public Health Forum on Regional Cooperation in Communicable Disease Control and Health Systems Development
This small scale technical assistance project facilitated a regional public health forum on communicable disease control and health system development on 5 November 2007 in Vientiane, Lao PDR. Participants from six countries in the Mekong region developed recommendations on regional cooperation in health and regional health strategies. The project is linked to a $200,000 technical assistance grant from ADB, a $9 million investment grant from ADB for indigenous people in the region, and a $270,000 grant from the World Health Organization (WHO) for strengthening the national surveillance and response systems, improving communicable diseases control for vulnerable populations, and enhancing regional cooperation in controlling communicable diseases in the Greater Mekong Subregion.
In Metro Manila alone, more than 1 million people are poor and about 40% of the megacity's population live in slums or similar conditions. Through public-private partnerships, the pilot project's three major components (i.e., business preparedness, creditworthiness for housing improvements and microenterprises, disaster preparedness) aim to reduce urban poverty and improve the living conditions in 23 poor communities of Metro Manila. Private sector companies extended financial and in-kind contributions, as well as business know-how to communities and local government units.
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Examples of Projects Financed by the PRC Fund that Indirectly Contribute to Poverty Reduction
Capacity Building on Designing, Negotiating and Implementing Free Trade Agreements in Selected Asian DMCs (RETA 6345)
In recent years, free trade agreements (FTA) have become widespread in Asia. However, the region does not seem to be ready for the demand for new technical skills among government officials in such areas as services, intellectual property rights, and government procurement. This is a challenge particularly for poorer countries which lack training institutions that can provide the necessary support. The limited capacity hinders these countries from benefitting from the opportunities available in open markets of multi-trading systems.
 A regional technical assistance (RETA) by the ADB pioneered a capacity building program that aims to strengthen the technical and analytical skills of trade officials in trade design, negotiation, and implementation. Based on training course evaluations, the program was highly relevant and useful. Moreover, it led to the conceptualization of technical assistance projects on FTA training targeted for developing member countries in South Asia and East Asia (Cambodia, Lao PDR, and Viet Nam), as well as in-country FTA trainings.
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Phnom Penh Plan for Development Management Phase II (RETA 6237)
After the 1999 decentralization, the need for timely and routine district information on prices and wages in Indonesia had become more pressing. Current and locally relevant data on the goods and services produced and consumed by the poor are necessary in helping district policymakers and decisionmakers come up with strategies to address the gaps in poverty-related programs and policies, and improve social protection for the poor.
Since its inception in 2005, PPP has delivered 60 demand-based learning to 1,161 GMS officials. A Learning Resource Center has also been established as well as a network of capacity building partners. Knowledge dissemination was undertaken through the Journal of GMS Development Studies, the Mekong Leaders newsletter, a website, and also through a Development Dialogue on energy and security in the GMS and the Distinguished Speaker Series, where noted individuals share their knowledge and lessons learned in their areas of expertise. The success of the PPP is attributed to the ownership and political will of the GMS member countries to the program. |
Support for Establishing a Regional Monitoring and Early Warning Network for Dust and Sandstorms in Northeast Asia
Dust and sandstorm (DSS) is a long-range transboundary environmental problem that mainly originates from the desert and semidesert areas of the People's Republic of China and Mongolia, and spreads throughout Northeast Asia. Since the 1950's to the present, DSS has been occurring in greater frequency and intensity, heavily affecting the livelihood and quality of life of the populations it hits, leaving in its wake economic losses, health problems, and even death.
To address this, ADB, United Nations Economic and Social Commission for Asia and Pacific (ESCAP), United Nations Convention to Combat Desertification Secretariat (UNCCD), and the United Nations Environment Programme (UNEP) promote regional cooperation through the establishment of a mechanism that would alleviate DSS. The governments of the PRC and Mongolia have designed programs to prevent land degradation and desertification to combat DSS. |
Enhancing Trade Facilitation in the Greater Mekong Subregion (RETA 6328)
 The project promotes integration within the GMS and with countries outside the region by facilitating the movement of goods and people and building capacity for development and application of trade-related policy. It has two main activities: it helps GMS countries implement the strategic framework for action on trade facilitation and investment (SFA-TFI) endorsed at the 2nd GMS Summit on 5 July 2005. And it provides trade-related capacity building activities in partnership with the International Institute for Trade and Development (ITD) in Thailand.
The draft national and regional action plan for SFA-TFI has been completed and submitted and the national and regional trade facilitation workshops have been held. The draft action plan to support implementation of the strategic framework for action on trade facilitation and investment, and priority programs/projects were also discussed in the regional meeting in September 2007 in Nanning, People's Republic of China (PRC).
Five training workshops (a 4-5 day intensive course for the services module and trade in goods module; 3.5 half days intensive course for trade remedies module): 3 on WTO trade remedies, 1 on trade in services and investment, and 1 on trade in services have been held. All training workshops have been GMS-wide training workshops, with participation of all six GMS countries, including representatives from the PRC (from the central government and from Guangxi and Yunnan). The RETA is aiming to hold at least 11 training sessions for about 300 participants from GMS government agencies, research institutions, and the private sector. As for the trade modules, the WTO trade remedies module has been completed and submitted, while the modules on trade in services and investment, as well as on goods, are being prepared. Due to very positive feedback from participants on the usefulness and relevance of the training sessions, the project is planning, in collaboration with ITD, to hold more training sessions than originally planned. |
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Poverty Reduction Projects in PRC Supported by other ADB Funding
Reaching the Poor: Strengthening Inclusive Road Development and Management in the PRC
In the PRC, more than 30 million people living in poverty reside in geographically isolated spots in the rural areas. This raises challenges in social service delivery and access to socioeconomic opportunities. This issue stems from the fact that major highways are built on the peripherals of key urban areas, but do not reach or have no connecting roads to rural townships and villages.
The Poverty Impact of Area-wide Road Networks Project aims to link the rural poor to economic centers by designing a plan that will maximize the road network investments and building the capacity of road agencies in incorporating economic, social, and poverty concerns in road and project planning. Roads linking the rural areas to major economic centers would increase the rural poor's mobility in terms of trading (market goods), employment opportunities, and better access to health, education, and other social services.
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Poverty Reduction in PRC's Coal Mine Areas
The PRC is the world's largest producer and consumer of coal. In the 1990s, the Government decided to close all resource depleted and operationally inefficient and unregulated coal mines. The closing of small illegal mines and economically unviable state-owned coal mines has institutional, and social implications: the rise of unemployment and social hardship for inhabitants of many mining towns and communities, the Shanxi province included. This technical assistance explored alternative livelihood opportunities for displaced coal miners in the Shanxi province. The report recommends re-employment and vocation redevelopment, as well as development of alternative coal-based industries in the province.
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A Campaign Targets Vulnerable Cultural Minorities in the PRC
HIV/AIDS is not just a medical issue, but a social one. Especially among cultural communities, the infection is intertwined with socio-development issues like poverty, gender equality, medical service delivery, and education.
Under the NGO Initiatives to Prevent HIV/AIDS Project, the China Association of Ethnic Economy (CAEE) is partnering with local NGOs to fight HIV/AIDS in the northwestern provinces of Gansu and Qinghai. The campaign takes advantage of religious gatherings and horse trading fairs to distribute educational pamphlets and condoms to students. Its target populations are the Tibetans, Mongolians, and Hui and Qiang, among which injected drug, unsafe blood transfusions, and poverty are prevalent.
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ADB Helps Combat Land Degradation and Reduce Rural Poverty in Western PRC
The PRC has some of the worst land degradation problems in the world. Rural poverty further drives damaging land practices, including overuse of water and agrochemicals, and the conversion of marginal lands for irrigation. A $100 million loan from ADB, cofinanced by a Global Environment Facility (GEF) grant of $4.6 million will provide alternative livelihood opportunities for 46,000 rural households in Ningxia province for setting up clean, resource-efficient industries, such as horticulture, in lieu of traditional agricultural activities that are low-yielding, water intensive and cause pollution. A skills building program for farmers will complement the project.
Through other forward linkages, the project will benefit 140,000 smallholder farmers. The region also hopes to increase the number of tourists with the restoration and continued protection of wetlands and mountain reserves throughout (and even after) the six-year project course.
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Other recently approved projects:
KNOWLEDGE DEVELOPMENT
Strategic Policy Conferences and Studies for Poverty Reduction
This technical assistance was set up to fund a total of 22 activities (e.g., studies, conferences, and meetings) on policies that support poverty reduction in the PRC. The coverage areas of funded activities ranged from public policies and poverty alleviation in rural areas, which includes rural education, health services, social security, and taxation reforms; management of poverty alleviation loan capitals; labor transfer research; poverty and the environment; development of industries in the poor areas; role of NGOs and public welfare organizations the poverty reduction; and poverty analysis.
The next steps, as the study recommends, involve disseminating and applying project results and establishing a fund for poverty alleviation studies.
Inclusive Growth toward a Harmonious Society in PRC: An Overview
The PRC's rapid development in the last twenty years has resulted to income disparities between the rural and urban areas as well as inequalities in nonincome areas such as access to health and social services. To address this, the Government has included the concept of a "harmonious society" (a term very closely related to inclusive growth) in its 11th Five Year Plan while the 17th Chinese Communist Party Congress in (held in October 2007) enhanced this vision. The study overview summarizes key findings in inclusive growth and policy options, balancing efficiency and equity, and empirical analysis of income inequalities in the PRC. The study concluded that inclusive development policies and strategies are needed to achieve a harmonious society in the PRC.
Renewable Energy for Poverty Reduction in the People's Republic of China
This technical assistance study assesses the impact of the 2006 Renewable Energy Law on growth and poverty reduction in Zhangye City, Gansu province. It recommends sustainable ways of delivering renewable energy to poor rural areas of Zhangye City, Gansu province, as well as energy projects for commercial investment.
Around 99% of the PRC's villages are now connected to grid systems. However, for many poor families, electricity and heating comprises up to half of household expenditures. Subsidized renewable energy (e.g., biogas from animal waste, wind, solar heating, stalk gasification, and hydropower) not only reduces the poor's household expenditures, but will also improve their economic and social profiles. Moreover, the construction of renewable energy systems provided new employment opportunities and will continue to provide employment during the operational and maintenance stage.
Poverty Reduction in Forestry Conservation Programs in the PRC
Over the last 20 years, the People's Republic of China has been steadily implementing poverty alleviation and environmental sustainability programs. However, these programs were designed without further attention to the interactions between them. Hence, despite successful forestry programs, a decrease in logging, and forest/grassland conversion, reports have shown negative impacts on the poor and marginalized.
To address this, the People's Republic of China has emphasized poverty reduction and environmental sustainability in its national level five-year plan. Poverty Reduction in Key Forestry Conservation Programs, an ADB technical assistance, aims to bridge the gap between poverty alleviation and environmental programs by conducting a more comprehensive analysis of the relationships between the Government's priority forestry programs and the impacts these have on the welfare and livelihoods of the poor.
Poverty Reduction Challenges in the PRC
 The Chinese government has raised the official poverty line from RMB785 yuan yearly income to RMB1,067 ($156), increasing the number of poor to 43.2 million. However, applying the international poverty line ($1.25), about 190 million rural and urban people are in extreme poverty. Despite these challenges, the People's Republic of China's success in reducing income and social poverty is rather outstanding. In a very informative CCTV interview Chris Spohr from ADB and Prof. Wang Sangui discuss new challenges for poverty reduction, inequality, and inclusive growth in China.
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Did You Know: The International Poverty Reduction Center in China* (IPRCC) is serving as a regional knowledge hub for ADB's Poverty Network project. Under this project IPRCC is coordinating knowledge exchange on poverty reduction and inclusive growth in China and Central Asia. IPRCC is also the secretariat of the World Bank's Poverty Analysis and Development Initiative (PADI).
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TOOLS AND PARTNERSHIPS
ADB LOOKS FOR POVERTY CONSULTANT
ADB has just approved its technical assistance for knowledge networks on poverty reduction and inclusive growth. The project will facilitate working papers and policy briefs, seminars and conferences, and the development of an Asian website on Poverty Reduction and Inclusive Growth, linking up to 70 think tank institutions in the region. In this context, we are looking for an eminent adviser (or team) on poverty reduction (working from home office) to manage and coordinate this project. Interested colleagues may contact: abauer@adb.org. |
Measuring Income Mobility, Income Inequality, and Social Welfare for Households of the PRC
This paper focuses on describing and analyzing longer-run distribution of incomes in the rural and urban areas of the PRC, and the degree of income mobility that is observed for these households. The methods used were income clustering, Monte Carlo simulations, correlation and regression analyses, among others.
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LOOKING AHEAD
The next issue of the Poverty Matters Newsletter (May 2009) will have a special feature on the social impact of the global recession on the poor and vulnerable in Asia. It will also provide more information on a forthcoming conference on the impact of the global recession on poverty and inclusive development in Asia. The conference will be organized on 28-30 September 2009 in Hanoi, together with other development partners such as the ASEAN Secretariat and the ASEAN Foundation, the Poverty and Development Initiative (PADI), and the Asian Development Bank Institute (ADBI), among others.
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