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Africa-China

China Poverty Reduction and Development Conference


Addis Ababa, 1
1-2 November, 2010

Substantive Overview
Contents

1. Context ............................................................................................................................................ 3
2. Key objectives .................................................................................................................................. 4
3. Themes a. Development as Transformation: Towards a High Growth Africa ................................... 4
b. Transformational Lessons: The Chinese Experience in Reducing Poverty ...................................... 5
c. A Food Secure Continent: Africa as the Next Agricultural Power? ................................................ 6
d. Enhancing Societal Capabilities and Social Cohesion..................................................................... 7
e. Emerging Economies, New Development Partnerships in a Globalizing World .............................. 8

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1. Context

The Africa-China Poverty Reduction and Development Conference will consider ‘development as
transformation’ approaches to reducing poverty, accelerating broad based growth, and advancing
progress towards the Millennium Development Goals in Africa.

The emphasis will be on experiences from developing countries, including on China’s astounding success
in lifting more than half a billion people out of poverty in three decades. At almost every stage of reform
over the last thirty years, China charted an independent path. While it studied and learned from
international experience, it did not simply import others’ models and prescriptions. Its development
model and related policies came from within, based on its own understanding of the realities on the
ground. China’s development was a transformative process, involving and requiring continuous changes
not only in the economy, but in institutions and in society. Its leadership (and ruling elites) took on the
task of building institutions and investing in capacities to catalyse, and manage the process of change.

Other emerging economies and African countries have also been successful in reducing poverty and
advancing human development. The cases of Vietnam and Brazil, for example, are impressive even by
Chinese standards. The extreme poverty in Vietnam dropped from 64 percent in 1993 to 22 percent in
2006. This corresponds to a drop of 42 percentage points, more than what China achieved during the
same period. Brazil has an equally remarkable story to tell, halving the rate of extreme poverty over
from a comparatively low starting point of 17 percent in 1981, to 8 percent in 2005. The gains in infant
mortality in Brazil were even more remarkable. In 1981 infant mortality in Brazil stood at 72 deaths per
1,000 live births. In the same year, infant mortality in China was already much lower, at 46 deaths per
1,000 live births. By 2005, Brazil had caught up to China, with both countries registering around 21
deaths per 1,000 live births.

There are notable and increasingly numerous success stories in Africa too, from which we can draw
inspiration and lessons. Botswana has been one of the top economic performers globally since the early
1970s, mimicking the growth rates of rapidly expanding Asian economies. Ghana has reduced the
extreme poverty rate from above 50 percent in 1992 to 30 percent in 2006. Ethiopia offers another stark
illustration of how it is possible to sustain amongst the highest growth rates in the world in Africa, while
rapidly reducing poverty.

China’s success has been an inspiration to other developing countries. The conference will reflect upon
the relevance and applicability of lessons from China’s experience in the African context. The
perspectives will come from Chinese as well as eminent international speakers. They will look at both
the successes and the challenges encountered in China’s development.

The focus of the conference is squarely on what lessons are transferable and how to adapt the
experience of China and other leading emerging economies in the African contexts. Over the last decade
Africa has seen rapid and stable economic growth, reductions in poverty rates, and progress towards the
Millennium Development Goals in many parts of the continent. The Conference will thus also provide a
platform for African countries to share and learn from its own experiences and policy lessons.

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2. Key objectives

The conference is expected to contribute new elements to the conceptual thrust and approaches
towards breakthrough strategies for poverty alleviation and accelerating growth in Africa. Key objectives
of the conference include the following:

1. To enrich and broaden policy discussions towards compelling and renewed growth acceleration
and poverty alleviation strategies in Africa, in support of the on-going efforts being deployed by
African governments and organizations, along with other development actors.

2. To deepen understanding and explore the usefulness of China’s on the poverty reduction and
development approach and experiences of China (as well as other South-South experiences).

3. To help identify and bring to the table new ideas to increase resilience and reduce vulnerability,
including by accumulating assets and preserving wealth during shocks. Galvanise South-South
dialogue and cooperation on key policy themes (including agriculture, social protection, and
public private partnerships).

3. Themes

a. Development as Transformation: Towards a High Growth Africa

The first session will set the scene and help anchor subsequent discussions within a broad discussion on
the notion and practice of ‘development-as-transformation’ – as illustrated by China’s own experience.
It will underline the importance of rapid and sustained economic growth as a necessary – albeit
insufficient – condition for achieving a development breakthrough in Africa. It will also consider how
China specifically was able to grow its economy so fast for so long, and the social factors that helped
sustain that growth and in the process drastically improve the living standards and prospects of its
citizens. Discussions will focus on what transformative lessons can be distilled from China’s experience,
and which might be pertinent and adaptable to the African context.

The session will also examine Africa’s impressive economic performance over the last ten years when
compared with the preceding two decades. It will examine the sources and drivers of growth in the
continent, as well as the current opportunities and challenges in terms of delivering sustained high
growth rates going forward.

The transformative nature of development in emerging economies, typified by China, will provide the
overarching theme for this session. This transformation helped sustain and at the same time was
enabled by consistently high growth rates over long periods of time. This process of transformation
involved and required continuous – and often profound – changes in the economy, institutions, and
society at large. Its approach has been at once pragmatic and ‘gradual’ in the application of
development strategies, guided by its long term vision of the Four Modernizations (the modernization of
China's industry, agriculture, national defense and science and technology) and Xiaokang (an all-round
well-adjusted society).

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This session will explore for example how broad-based social, demographic and structural changes
shaped and accelerated development outcomes. It will also reflect upon the capacities and leadership
which China built to catalyse, absorb and manage the processes of change during the 30 years of
reform. And it will examine how China built up its human capacities as an essential precursor to
economic take-off, and how its approach to capacity development, whether they be individual
capabilities, institutions or social capital, has been in perpetual adjustment reflecting changing and
predicted capacity needs.

The potential of public-private partnerships to enable investments that stimulate growth and contribute
to poverty reduction will be another central theme throughout this session. An important factor in
emerging economies’ rapid and sustained economic growth was the government’s ability to tap
investments and resources from the private sector, through innovative arrangements for sharing the
associated risks, costs and revenues. In China’s case this enabled costly up-front investments in
infrastructure, which provided a solid backbone for the Chinese economy and was an important source
for jobs in small towns and rural areas.

There will be important lessons to draw from China’s success in tapping financial resources from the
private sector – namely from the diaspora – to finance large-scale public investments. And likewise from
its ability to effectively create and shape markets, e.g. by guaranteeing purchases in certain strategic
sectors of the economy, that is, sectors that provided an important underpinning for the achievement of
long-term development goals. In addition to considering Chinese and global experiences, this session
will explore current multilateral frameworks for facilitating investment, with a view to identifying how to
expand public-private partnerships which may be of value in the African context.

Thus by comparing and exploring African and Chinese developmental circumstances, the session aims to
contribute to identifying the core elements of a transformational approach to development, which could
be adapted to the African context.

b. Transformational Lessons: The Chinese Experience in Reducing Poverty

Building on the examination of the Chinese and African development paths in Session 1, the objective of
this session is to consider how China sought to maximise the impact of its growth on poverty reduction,
the special initiatives it took to accelerate development in less prosperous regions of China, and to
identify the implications of this experience in the African context.

China’s poverty rates did not fall smoothly over the last 30 years. At each step of its development
journey, China tried out new policy responses to the challenge of reducing poverty. That journey is not
yet complete, as there are still great challenges ahead, including significant numbers remaining in
poverty, large and growing social and geographical inequalities, and rampant environmental pollution
and degradation, exacerbated by the effects of climate change.

Notwithstanding the ongoing challenges, China’s achievement in lifting more than 500 million people
out of poverty in the last 30 years is unique. This session will seek to identify the successes and
challenges of the last 30 years, and analyse what lay behind them. It will consider the extent to which
China’s overall approach to income distribution made a difference, which sectors (such as agriculture)
the Chinese invested in, the importance of strategies which sought to prioritize development of

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particular regions, and the role which targeted poverty reduction programmes played. It will also
consider some of the mechanisms China used to ensure that localized successes were quickly introduced
to other parts of the country.

c. A Food Secure Continent: Africa as the Next Agricultural Power?

This session will focus on the possibilities, challenges and requirements for attaining food security on
the African continent. It will consider what lessons can be drawn from overall global experience, and
from China’s achievements in food security despite having limited arable land in relation to the
population, raising agricultural productivity and reducing rural poverty, for African countries’ agricultural
development and poverty reduction.

Food security has moved to the forefront of the development debate. Estimates suggest that the share
of the population in developing countries suffering from hunger increased in both 2008 and 2009. In
Sub-Saharan Africa some estimates also indicate there was an increase in the proportion of
undernourished between 2004-2006 and 2008. This implies a reversal in progress towards achievement
of Millennium Development Goal 1, to halve the population living in hunger by 2015 from 1990 levels,
both globally and in Africa. While encouraging progress and success stories are being registered by a
number of countries in Africa; food insecurity still constitute a key challenge in the continent.

Awareness of setbacks on hunger has helped to galvanize global attention and action. Commitments
made at l’Aquila and Rome have lent important support to African initiatives, notably the
Comprehensive Africa Agriculture Development Programme (CAADP), a program of the African Union’s
New Partnership for Africa’s Development (NEPAD), which aims to improve food security, nutrition, and
increase incomes in African countries. This political momentum, and the significant resources and
political will it has unleashed, raises a historic opportunity to accelerate efforts to advance food security
across Africa. The session will analyze progress to date in Africa, and what more is needed to achieve
food security.

Climate change will constitute a major challenge for achieving food security in African countries, in China
and globally. There is mounting evidence that future climate change can seriously aggravate food
insecurity and malnutrition. Higher temperatures can severely impact on crop yields particularly in
Africa, as many crops in Africa are grown close to their limits of thermal tolerance. The amount of arable
land is predicted to decrease, sometimes significantly, as are agricultural yields per hectare, and growing
seasons are expected in many cases to shorten or be disrupted altogether. All of the above will pose
formidable challenges for agricultural production in future. Local food supplies are projected to be
further negatively affected by decreasing fisheries resources in large lakes and oceans due to rising
water temperatures.

Impacts on agricultural output will vary from country to country: in the worse cases yield reductions
could be as much as 50% by 2020. The impacts will be economy-wide because of the large contribution
of agriculture to the gross domestic product (GDP). Small-scale farmers will be most vulnerable, as will
the urban poor who depend on food markets. Southern Africa is particularly vulnerable. The maize crop
– which is the mainstay of southern African diets – is already experiencing drought stress on an annual
basis. Climate change will most likely exacerbate this stress, with the result that maize production may
become very difficult if not impossible in many parts of Zimbabwe and South Africa.

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In addressing its food security challenges African countries can benefit from China’s and other South-
South experiences. Against the backdrop of limited progress and even reversals globally, China’s food
security story has been remarkable. Despite a large population, growing food consumption per capita, a
relative scarcity of high quality agricultural land, and water availability at one quarter the world average
per capita, China remains food secure. Key to China’s food security was the rapid increase in agricultural
yields accompanied with broad-based programmes to develop infrastructure and connect farmers to
markets. The session will examine the policies that have underpinned this success, and look at some
specific approaches China has used, including new, self-sustaining business models applied to
agricultural extension services.

d. Enhancing Societal Capabilities and Social Cohesion

Development seldom occurs along a smooth and predictable path. Rather, it is fraught with
uncertainties and unintended consequences and punctuated with societal tensions.This session
considers the importance of social cohesion and social policies in cultivating a broad-based common
agenda for change, and in providing the ‘glue’ that binds society together as it faces the dislocations that
development entails. Studies show that cohesive societies tend to grow faster than less cohesive
societies and that the latter are better as well in dealing with crises and exogenous shocks.

As the economy grows, social costs may affect or leave behind some people, resulting in rising income
inequality, pockets of unemployment. These social issues greatly challenge the sustainability of
economic development in many developing countries. Social cohesion provides a crucial underpinning of
the implicit ‘social contract’ whereby people support the development and reform agenda.

Enhancing social capabilities was a key underpinning of China’s transformation. This was done
particularly through early investments in health and education and a more recent focus on an inclusive
welfare system, which played a key role in laying the foundations for rapid growth and mitigating the
social costs associated with rapid change. China’s approach to the empowerment of women in the
development process is also worthy of study.

Brazil provides an interesting contrasting example, illustrating the benefits and effectiveness of broad-
based and inclusive social protection programmes. Brazil has indeed been at the forefront of
innovations in social protection, for example in the form of conditional cash transfers, in which
payments are made conditional on investments by families in child health and education. Starting with
rates of income inequality that were amongst the highest in the world, the country has thus been able
to consistently reduce inequality in recent years.

African countries are faced with challenges in establishing cohesive societies, especially in post-conflict
settings. Income inequality has increased in several African countries, mitigating the impact of growth
on poverty reduction and even generating social instability. High inequality can generate a sense of
disenfranchisement in those excluded. Studies show that societies with high inequality are generally less
committed to addressing collective action challenges, resulting in lower provision of public goods that
are essential for growth. High and increasing inequality can also contribute to perpetuating institutional
settings in which economic gains accrue mostly to small segments of the population, but are not
conducive to high and inclusive growth. In this context, promoting policies that enhance social cohesion,

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including social protection,would contribute not only to ensure the security and well-being of those that
are left behind, but would also be an investment in future growth.

e. Emerging Economies, New Development Partnerships in a Globalizing World

Having considered in earlier sessions some of the substantive experiences of China, African countries
and the broader international community which could be adapted and deployed elsewhere, this final
session will consider some of the new types of international partnerships which can help to bring about
greater sharing of knowledge and practical support for growth and poverty reduction in the Africa
region and across the developing world.

Whilst assistance and demand from developed countries remains essential for African countries, in the
21st century new possibilities are rapidly emerging. The intensity, depth, and scope of the economic
interactions across the south is growing rapidly. The majority of Africa’s trade today takes place with
other developing countries. Increased flows of ‘south-south cooperation’ in development, trade,
investment, knowledge and technology transfer present new opportunities to accelerate growth and
development.

This session will provide an opportunity to hear from Chinese and other developing country
representatives their view of the complementary relationships and future possibilities for south-south
and triangular cooperation with African countries and institutions, as well as to hear from African
participants their objectives and priorities for such cooperation.