Development Cooperation A p p ro ache s to Pro-poor Growth: Lessons and Strategies

1. Development Cooperation Approaches to Pro-poor Growth: Lessons and Strategies Dr.He Wenping Professor, Director of African Studies Section Institute of West Asian & African Studies, Chinese Academy of Social Sciences

2. Outline What is Pro-poor Growth: definition How is current growth in developing countries: growth came with rising inequality General Lessons for Development Cooperation for Pro-poor Growth Development Cooperation for Pro-poor Growth: China’s experience and Lessons Strategies for Pro-poor Growth: How and what Development Cooperation can do

3. What is Pro-poor Growth: definition Definition 1: “pro-poor growth” means that poverty falls more than it would have if all incomes had grown at the same rate (focuses on the distributional shifts during the growth process. The incomes of the poor should grow at a higher rate than those of the nonpoor) Definition2: “pro-poor growth” is growth that reduces poverty (focuses on what happens to poor’s average living standards)

4. How is current growth in developing countries : growth came with rising inequality Have growth, but don’t have development Economic growth came with rising inequality, increasing Gini index and widen gap between city and rural area, few or even zero correlation between changes in inequality and rates of economic growth ---- The case in Nigeria, DRC ---- The case in Tunisia and the root cause for “Arab Spring”

5. With the approaching of achieving MDGs in 2015, and also the new wave of social unrest in Tunisia, Egypt, Libya plus other North Africa and Middle East countries, we see very clearly how importance it is to improve people’s livelihood, to promote economic development and guarantee the equal, fair distribution of social public property.

6. General Lessons for DevelopmentCooperation for Pro-poor Growth ---- Uneven resources input between Least Developed Countries and resource-rich countries, between city and rural as well as between different sectors within a country ---- Development Cooperation Policy should coordinate closely and fully support recipient country’s national anti-poverty strategy ---- South-South Cooperation should be further encouraged: fresh developing and poverty reduction idea and experience, more equal-footing, more adoptable technology, etc

7. Development Cooperation for Pro-poor Growth: China’s Experience and Lessons Experience and contribution for Pro-poor growth in Africa ---- In general, China’s involvement in China has helped to boost African economy, improved people’s living standard and buying capacity (rising mobile phone users, new motors/cars, living in dignity—from wearing second-hand clothes to new clothes) ----The infrastructure investment helped to boost the African economy and people can enjoy the better roads, railways and sports centres, etc.

8. At the 4th FOCAC in early November 2009, a package of new development assistance to Africa has been issued which put more emphasis on the projects that closely link with people’s livelihood and environmental protection, such as establishing 100 clean energy projects in Africa, providing $10 billion concessional loans, setting up a $1 billion special loan for small and medium-sized African businesses, and further opening up China's market to African products (zero-tariff treatment to 95 percent of African products and starting with 60 percent of the products within 2010) in the next three years

9. Lessons for China: ---- Pay more attention to capacity building, from give fish to teach fishing. In the past, co-op projects used to be “turn-key” projects, most of them ended up in an unsustainable manner. ----Sectors shift from “symbolic buildings” (such as stadiums, parliament, some are even named as “white elephant” projects) to productive projects (such as factory, manufacture industry that could generate jobs and increase income for the poor)

10. ---- More focuses should switch from city to the rural area. (my personal experience in Rwanda, sharp comparison between capital city Kigali and surrounding area. Chinese medical team normal based in rural area. Rural schools building is another new initiative, but facing difficulties) ---- Providing more development assistance to the Least Developed Countries. Huge challenges for African countries for achieving the U.N.’s Millennium Development Goal of halving the 1990 $1/day poverty rate by 2015

11. ---- Institutionally speaking, China doesn’t have an equivalent independent aid agency in charge of development assistance issue so far. There are conflicts between ministries or departments that all bear responsibilities on aid issue. ---- facing short of personal, experiences and professional knowledge in dealing with the huge foreign aid programs ----the mechanism of supervision and evaluation of the aid simply doesn’t exist.

12. Strategies for Pro-poor Growth: How and what Development Cooperation can do ---- Development Cooperation Policy should coordinate closely and fully support recipient country’s national anti-poverty strategy. Policies for pro-poor growth can only be achieved through country-level processes that are inclusive of the poor and based on country-level analyses.

13. ---- More resources and focuses on rural area, appropriate support and incentives providing to field staffs, and empower them to negotiate, co-ordinate and implement programmes. ---- Realizing the important contribution of agriculture to pro-poor growth. Agriculture has in many places connected broader economic growth and the rural poor, increasing their productivity and incomes.

14. ---- Insufficient, inadequate economic infrastructure is among the most pressing obstacles to achieving pro-poor growth. The need for increased investments in infrastructure and for making infrastructure management and maintenance more efficient. The recent 18th AU Summit highlighted the importance of infrastructure for improving intra-trade of Africa and people’s livelihood

15. ---- Focuses more on productive projects to address the unemployment issue, which in turn could help to maintain social stability. Employment, particularly women and youth, is the main route out of poverty for poor people in developing countries.  ---- Focuses more on improving social service and social protection programmes for poor people, such asbuilding clinics, schools, market in the poor rural areas and installing the electricity and sanitary system, etc.

16. ----Strengthen the South-South cooperation. S-S and South-North Co-op can be mutually complementary with each other. Even South-South-South co-op is also a new approach needed to be encouraged. For example, China and India can co-op in their development assistance in African countries. Unlike China’s focus on infrastructure, India’s aid in Africa focuses more on economic technical cooperation such as telecommnications, health, education and the promotion of food security.

17. Thank you !