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Tuesday, September 25, 2007

CHINA: Fighting Poverty, Can That Be Real?

As the forward march of economic growth raises per capita incomes from the levels enjoyed in poor nations to those available in moderately well-off countries, it becomes necessary to redefine poverty so that it suits the new economic reality.

A group of Chinese economists suggested in a recently released anti-poverty report that the government should raise the official poverty line to include basic expenditures on education and medical service.

Policymakers should pay close attention to this argument if the country is to cement and build upon China's achievements in alleviating poverty.

One of the overwhelmingly positive characteristics of China's robust economic growth over the past three decades has been the progress the country has made in lifting millions of people out of poverty. The government launched a large-scale poverty-eradication program in 1986, shrinking the number of people living in absolute poverty - those earning less than 683 yuan ($91) a year - to 21.5 million at the end of last year, from 125 million in 1985.

It will take a sustained, long-term effort to totally get rid of poverty. The government must do more to improve living conditions in underdeveloped regions.

Only when the fruits of the rapid development we have seen are more equally shared by all people will the country be able to build itself into a well-off and harmonious society.

The government has vowed to lift 148,000 villages out of poverty by 2010. The plan would benefit 23.6 million rural people.

However, as they focus on the traditional task of increasing incomes, policymakers must also take into account people's basic education and healthcare needs to ensure a decent standard of living for the rural poor.

The new anti-poverty report found that the current official poverty benchmark of 683 yuan would only cover the minimal costs of food and clothing for a year. When education and healthcare are factored in, the poverty line rises to 1,100 yuan a year.

One consequence of raising the line would be an increase in the official number of people living in poverty.

Such a change would not eclipse the country's achievements in the war against poverty. Rather, it would only mark a new starting point in a long-term fight.

As China carves out a place for itself among middle-income nations, the country must be prepared to ensure that poor people of all ages have access to education and healthcare. It is becoming increasingly important to offer these services to ensure that the needy have the capacity to develop their own opportunities.


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