Africa: “Chinese recipe” against poverty could help African countries

31 March 2008

Macau, China, 31 March – The “Chinese recipe” against poverty that has raised the standard of living for hundreds of millions of people over the last 25 years, could work for African countries, if they prioritise agriculture and strengthen their state bodies.

This is the conclusion of researcher Martin Ravallion, in the recent study, “Are there lessons for Africa in China’s success against poverty?”, sponsored by the World Bank, based on the realisation that China had a much higher level of poverty than that of African countries, before far-reaching economic and social reforms allowed it to attain the standard of more developed countries so quickly.

“It is clear that a combination of healthy policies with strong state bodies was a key factor in China’s success against poverty. It is also clear that the two ‘ingredients’ are complementary. Less ideology does not help if the state bodies are weak. China’s lessons for Africa on the importance of ‘looking for the truth in facts’ in policy making will count for little if African state bodies remain weak,” says the author.

Ravallion’s data shows that, since the 1980s, the percentage of people living on less than a dollar a day in Africa has remained above 40 percent, while in China it has fallen from close to 66 percent to less than 10 percent, which already puts it well below the average of other developing countries.

The main driving force, he says, was the push from the Primary sector, made possible by the reform of the collective agricultural production system in the 1980s, and in the following decade by intensive growth in the export industry which, stimulated by significant waves of foreign investment (from 1995), made it possible to maintain the surge in the rise of Chinese living standards up until today.

Between 1981 and 2004, around 500 million Chinese were lifted out of poverty, while in the same period 130 million more Africans were living on less than a dollar a day.

“Given such different fortunes of their poor, naturally many people are asking if China could be ‘an economic example to follow’ for Africa. Private investment and China’s help can certainly benefit the African poor,” and, as well as this, political lessons could bring profits in the longer term, said Ravallion.

The author outlines the differences between the two situations, notably the greater social and political stability in China in recent years and Africa’s problems of unequal pay, a higher level of dependence and lower population density – factors which contribute to the greater weakness of state bodies, which in China’s case played a pivotal role.

In addition to the opening up of markets and the need for strong public bodies, other elements the author cites in the “Chinese recipe” are the integration of internal markets and the efficient adoption of a policy for the stabilisation of the macro-economy, in particular the capacity to cope with inflation.

A “highly relevant” lesson for African countries today is that “a strategy (for development) based on agriculture has to be at the heart of any escape from poverty, as was the case in China in the 1980s,” deserving absolute priority, and Africa still has a large amount of land available, distributed relatively fairly.

With regard to China’s involvement in Africa, the author maintains that the Asian nation has already shown that its being averse to external interference, “it prefers African governments to decide what they can learn” and with whom, although it facilitates the learning process by the sharing of knowledge and training initiatives.(macauhub)