China Testing New Approach to Poverty Alleviation

May 31, 2006

Beijing, June 1, 2006: In a pilot program promoting stronger village engagement in poverty alleviation, participating poor communities in four provinces will themselves make local development decisions, manage funds, and directly implement small-scale infrastructure and public service improvements.

This is a two-year "community-driven development" program (CDD) launched yesterday by China's State Council Leading Group Office of Poverty Alleviation and Development (LGOPA), in collaboration with the World Bank. The program is expected to benefit about 100,000 poor farmers in 60 participating villages in Shaanxi and Sichuan provinces, and in Guangxi and Inner Mongolia autonomous regions. If successful, CDD could become a platform for poverty alleviation programming on a broader scale under China's 11th Five-Year Plan (2006-2010).

China has achieved tremendous success in poverty alleviation in previous decades, but now confronts residual poverty issues in relatively remote areas that generally have been beyond the effective reach of government programs. Because of their remoteness, many villagers also lack the education or experience that is helpful in actively involving themselves in development.

In contrast to existing approaches to poverty alleviation, the CDD program encourages more active engagement between local residents and local government agencies. Local residents will identify their own local development priorities and manage many aspects of local development processes, while local government agencies shift from a planning role to become more effective local service providers. The program is expected to improve the targeting of poverty alleviation funds, by allowing poor people to manage funds in pursuit of their own highest priorities.

"Based on successful experiences in poverty alleviation over the past 20 years and the status quo in poor areas in China, we have deepened our understanding of the importance of CDD to poverty alleviation in China," said Deputy Director Wang Guo Liang of LGOPA. "I believe the objective of this pilot is quite consistent with a radical requirement for construction of a "New Socialist Countryside' put forward by the Government of China. This CDD pilot will promote more participation of villagers in project planning and implementation and encourage local governments to provide services to poor areas and poor people in a new way. Therefore, the CDD model will strongly promote our development strategy for construction of a 'New Socialist Countryside.'"

In the pilot, 60 participating administrative villages will receive grants in support of three activities intended to attack inadequate living conditions and incomes. In one activity, villagers will receive funds to undertake small-scale infrastructure or public service improvements. A second activity provides funds to improve village natural resource management or local environmental conditions. The third activity allows villagers to collectively manage a revolving fund that provides small investment loans to households. Within each administrative village, smaller natural villages will compete for access to program grants through participatory processes.

A facilitator will be hired and trained for each participating village, to assist villagers with program processes and to monitor program performance. Within each participating county, a local governmental leading group will be formed to supervise the program. Local government agencies will play key roles in assisting villagers with designing program proposals that are technically feasible and within available budget. The CDD program provides support only for village-level initiatives. Local governments retain overall responsibility for planning and implementing all larger-level activities.

The pilot program, modeled in part on CDD operations supported elsewhere in Asia by the World Bank, is expected to cost RMB 64 million (USD 8 million). The program is supported by a grant of RMB 16 million (USD 2 million) from Japan through the Japan Social Development Fund in the World Bank. Three international NGOs – Action Aid, Plan International and World Vision - are assisting in program training and local facilitation. A fourth NGO, Oxfam Hong Kong, also is supporting program design, monitoring and evaluation.

"CDD has great potential for China," said David Dollar, World Bank Country Director for China. "Many other programs in China have involved consultations with local people, or even involved them in local participatory planning. But giving communities more control over decisions that directly concern them at the local level is likely to be another big step toward a 'well-off and harmonious society.'"

The pilot program, which will run through October 2008, will be based in Jingxi County in Guangxi, in Jialing District of Sichuan, in Baishui County in Shaanxi, and in Wengniute Banner of Inner Mongolia. Aspects of the program that prove successful potentially could be applied more broadly in LGOPA's Village Development Planning Program, which will operate through 2010 in 148,000 officially designated poor villages throughout China.

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