China’s achievements in the fi ght against poverty are remarkable. Can the African continent profi t from these experiences? Definitely, according to a new study by the World Bank, especially if it concentrates on two measures: opening up the markets and investing in agriculture.

In 1981 two out of every three mainland Chinese were living on less than one US dollar a day. In sub-Saharan Africa this was true of around 40 percent of the population. However, while by 2004 less than ten percent of Chinese were below this one dollar threshold, the proportion in sub-Saharan Africa remained at 40 percent. In absolute figures: in China it was possible to reduce the number of poor by 500 million people, while in Africa, the number of poor people rose by 130 million in the same period. However, there have also been negative developments: since the mid-1980s, China has witnessed a steep rise in inequality, with socially and geographically disparate levels of opportunity. The sharp difference between urban and rural living standards reflects biases in public resource availability. This contributes to unequal opportunities in health and schooling, depending on where one lives.

It would of course be impossible merely to replicate China’s policy, according to the study – if only because of the different starting conditions (for instance, higher income inequality, lower population density and higher dependency rates) in comparison with China at the beginning of the 1980s. Nevertheless the continent could take on board some of China’s experiences, believes Martin Ravallion, director of the World Bank’s Development Research Group. As well as liberalising the markets this means above all concentrating on the rural economy and increasing productivity among small-scale farmers. At first glance exports and the booming manufacturing sector appeared to have been at the heart of China’s fi ght against poverty, but the growth in agriculture between 1981 and 2004 had about four times the impact on national poverty as growth in manufacturing or services, according to Ravallion. It is true that in the 1990s the manufacturing sector took on many redundant workers from rural areas, but the “heavy lifting” in the fight against poverty took place in the early 1980s, in the wake of China’s rural economic reforms. With Africa’s levels of poverty and relatively abundant supply of land, and with today’s high food prices, an agriculture-based strategy must be at the centre of any effective route out of poverty. Additional policy lessons for Africa are as follows:

1. Policies must avoid doing harm to poor people. This can be achieved by reducing the explicit and implicit taxes they often face, and by reducing biases against them in public spending policies.
2. Market-oriented reforms must be complemented by strong state institutions, which provide supportive policies and public investments. Africa needs to improve its capacity to implement the required policies.
3. Internal market integration should not be neglected. This is more difficult for Africa than for China, in part due to coordination problems across country borders.
4. In contrast to China industrialisation should not take place too quickly. Impatient governments often try to “jump start” the (mostly urban) industrialisation process, often bypassing the pressing needs of their rural poor.
5. Rising inequality does not have to be a consequence of the fi ght against poverty. When growth comes from relaxing the constraints that poor people face in accessing markets, it can help counter inequality.
    

(sri)