Archive for ‘Low income’

15/10/2015

Nobel Prize Winner Angus Deaton on the Chinese and Indian Miracles – China Real Time Report – WSJ

Angus Deaton, the economist who won a Nobel Prize this week, has spent much of his career trying to measure poverty and progress in India and China.

He won the Royal Swedish Academy of Sciences award in economics by devising systems to understand consumption and poverty using household surveys and number crunching.

“Deaton’s focus on household surveys has helped transform development economics from a theoretical field based on aggregate data to an empirical field based on detailed individual data,” the academy said.

His decadeslong deep dive into data on the poor, their spending habits and their health gave him a surprisingly upbeat assessment of human progress, largely owed to the great strides that have been made in China and India. His book, “The Great Escape: Health, Wealth, and the Origins of Inequality,” documented why the world is a better place to live than it used to be.

A recent World Bank report suggested that more than one billion people might have been lifted out of extreme poverty already this century. Most of that progress was in China and India.

Here are a few of the things Mr. Deaton said in his book about the massive shifts in China and India that are changing the world.

On what China and India have taught us … “China and India are the success stories; rapid growth in large countries is an engine that can make a colossal dent in world poverty.”

On infant mortality in India and China … “India’s decline in infant mortality has been remarkably steady–not at all responsive to changes in the rate of growth–and the absolute decline from 165 out of every 1,000 babies dying in the early 1950s to 53 in 2005-10, is actually larger in absolute numbers than the decline in China, from 122 to 22.”

On how Chinese and Indian bodies have evolved with the economy… “Indian children are still among the skinniest and shortest on the planet but they are taller and plumper than were their parents or grandparents … Indians too are now growing taller decade by decade, though not as quickly as happened in Europe, or indeed as is now happening in China, where people are growing at about (the now familiar figure of) a centimeter every decade. Yet the Indian escape is only half as fast–about half a centimeter a decade–and that figure is for men; Indian women are growing too, but at a much slower rate, so that it takes them sixty years to grow a centimeter.”

On a better measure showing how China and India have lifted the world … “Although China and India are only two countries, their rapid growth at the end of the century meant that around 40% of the world’s population lived in countries that were growing very rapidly … (Thus) the average country grew at 1.5% a year in the half century after 1960, but the average person lived in a country that was growing at 3%.”

On how long the miracle can continue …  “At least over the past half-century the fast-growing countries in one decade have tended not to repeat their performance in the next or subsequent decades. Japan used to be the place that had perpetually high growth, until it didn’t any more. India, now one of the most rapidly growing countries, seemed capable of only slow growth for much of its existence, not to speak of the half-century that preceded its independence, when there was no growth at all. China is the current long-run superstar, but by historical standards the longevity of its growth spurt is extremely unusual.”

On the difficulty of defining poverty …  “In India, as in any country where a substantial fraction of the population is poor, there are millions of people who are close to poverty, either just above or just below the line … We don’t really know where the line should be, yet its precise position makes a huge difference. To put it more brutally, the truth is that we have little idea what we are doing.”

Source: Nobel Prize Winner Angus Deaton on the Chinese and Indian Miracles – China Real Time Report – WSJ

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28/12/2013

Li drops in to help realize home dream|Politics|chinadaily.com.cn

For Li Zongyi, 77, an unexpected visitor to her home has realized her decades-long dream.

The guest was Premier Li Keqiang. During a one-day trip to Tianjin on Friday, he paid a surprising visit to Li Zongyi\’s home in the Xiyuzhuang community, one of the oldest shantytowns in the city, and promised residents that they will be able to move into new apartments in the next year.

Han Huixia, Li Zongyi\’s daughter, said: \”I have been waiting for this moment for so long. I dare not burn coal to keep warm in winter, in case there is a gas leak or a fire.\”

Like families in the Xiyuzhuang community, hundreds of millions of residents in shantytowns nationwide are expected to move into new apartments, analysts said, as the country pushes ahead with renovation projects for these areas.

Huang Xiaohu, a researcher at a consultancy center affiliated to the Ministry of Land and Resources, said the renovation of some shanty areas can be very difficult, due to the complexity of the local population, a lack of financial support, and disagreements among residents on the relocation plan.

The Xiyuzhuang community, covering 64 hectares and with low-income residents comprising 20 percent of its households, is a typical case, Huang said, as the cost of compensation is too high.

\”The only way out in this case is to let the government play the dominant role and provide residents with low-cost houses, instead of costly commercial apartments,\” he said.

A State Council meeting in June pledged to improve housing conditions for the underprivileged and to promote urbanization by accelerating shantytown reform.

Urbanization will also be pushed for another 100 million people living in the country\’s less developed western areas.

To achieve the target, the government will encourage private capital and enterprises to invest in the shantytown transformation, and will allow local authorities to use corporate bonds to solve the financing problem.

As of 2013, China has solved the housing problems of 2.18 million households living in shantytown areas and embarked on projects that could solve such problems for another 3.23 million households, 6 percent higher than planned.

Tao Ran, a professor at Renmin University of China, said the government has looked to the resettlement of residents in shanty areas to be one of its key economic drives in coming years.

But some fundamental work should be addressed before any steps are taken, he said.

Tao suggested that a universal guideline be introduced for local governments to follow during demolition of homes to avoid misconduct and conflicts.

via Li drops in to help realize home dream|Politics|chinadaily.com.cn.

21/07/2013

How poverty wages for tea pickers fuel India’s trade in child slavery

The Observer: “When the trafficker came knocking on the door of Elaina Kujar’s hut on a tea plantation at the north-eastern end of Assam, she had just got back from school. Elaina was 14 and wanted to be a nurse. Instead, she was about to lose four years of her life as a child slave.

Saphira Khatun, whose daughter Minu Begum was trafficked to Delhi at the age of 12

She sits on a low chair inside the hut, playing with her long dark hair as she recalls how her owner would sit next to her watching porn in the living room of his Delhi house, while she waited to sleep on the floor. “Then he raped me,” she says, looking down at her hands, then out of the door. Outside, the monsoon rain is falling on the tin roof and against the mud-rendered bamboo strip walls, on which her parents have pinned a church calendar bearing the slogan The Lord is Good to All.

Elaina was in that Delhi house for one reason: her parents, who picked the world-famous Assam tea on an estate in Lakhimpur district, were paid so little they could not afford to keep her. There are thousands like her, taken to Delhi from the tea plantations in the north-east Indian state by a trafficker, sold to an agent for as little as £45, sold on again to an employer for up to £650, then kept as slaves, raped, abused. It is a 21st-century slave trade. There are thought to be 100,000 girls as young as 12 under lock and key in Delhi alone: others are sold on to the Middle East and some are even thought to have reached the UK.

Every tea plantation pays the same wages. Every leaf of every box of Assam tea sold by Tetley and Lipton and Twinings and the supermarket own brands – Asda, Waitrose, Tesco, Sainsbury’s and the rest – is picked by workers who earn a basic 12p an hour.

If it says Fairtrade on the box, or certified by the Rainforest Alliance or the Ethical Tea Partnership, it makes no difference: the worker received the same basic cash payment – 89 rupees (£1) a day, a little over half the legal wage for an unskilled worker in Assam of 158.54 rupees. To place that in context, a worker receives about 2p in cash for picking enough tea to fill a box of 80 tea bags, which then sells for upwards of £2 in the UK. The companies say they know the wages are low, and they are trying to make things better, but their hands are tied by the growers. The growers, who set the wages by collective bargaining, say it is all they can afford.

But there is a price for keeping wages so low, and it is paid by the workers who cannot afford to keep their daughters. When the traffickers come knocking, offering to take the girls away, promising good wages and an exciting new life, they find it hard to say no. “He said he would change our lives,” says Elaina, now 20. “The tea garden was closed when he came and my parents were not working, so my father wanted to send me.”

The trafficker had promised excitement and glamour: instead she started work every day at 4am and worked until midnight, and though he promised to give her 1,500 rupees a month, she was never paid. He kept her as a prisoner, unable to leave the house or contact her family.

“His wife was suspicious about what was happening. I told her he had raped me but he denied it and told me to shut up my mouth,” she says. “After that, I was always crying, but he kept me locked in the house. I was afraid. I had no money and he threatened that I would end up in a brothel.”

She was saved only when he sent her to a new owner who, on learning her story, sent her home.”

via How poverty wages for tea pickers fuel India’s trade in child slavery | World news | The Observer.

03/06/2013

Sonia seeks quick implementation of rural livelihood schemes

The Hindu: “Buoyed by the response to UPA’s rural livelihood scheme, Congress president Sonia Gandhi on Monday sought quick implementation of Aajeevika mission across the nation especially its central and eastern parts.

Congress chief and UPA Chairperson Sonhia Gandhi with womens from various states during the AAJEEVIKA DIWAS 2013 in New Delhi on Monday. Photo: R.V. Moorthy

Ms. Gandhi’s thrust on the scheme comes at a time when Congress is bracing for Lok Sabha elections due next year and assembly elections in five states including BJP-ruled Madhya Pradesh and Chhattisgarh this year.

Giving a thrust to poverty alleviation in her address at the second anniversary of the National Rural Livelihood Mission (NRLM) here, Ms. Gandhi said that the empowerment of weaker sections and women has been the main pillar of our UPA government.

The Congress president also chose the occasion to announce that a special package is being prepared for North Eastern states and hilly states like Uttarakhand and Himachal Pradesh to give a fillip to such measures.

She said that in the next ten years, 7 crore BPL families have to be freed from poverty, which is not an easy job.

“But by adopting the Aajeevika Mission, many states have proved that through women SHGs, economical and social changes can be brought in the rural areas.

“Seeing this success, it seems that now the Aajivika Mission will have to be implemented fast across the country especially in central and eastern India,” Ms. Gandhi said.

Aajeevika was launched by Ministry of Rural Development (MoRD) in June 2011. It aims at creating efficient and effective institutional platforms of the rural poor enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.

The NRLM has set out with an agenda to cover 7 Crore BPL households, across 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats and 6 lakh villages through self-managed Self Help Groups (SHGs) and support them for livelihood collectives in a period of 8-10 years.

Hailing the NRLM as an important programme of the UPA, Ms. Gandhi claimed that in no other country of the world, such an ambitious and huge scheme for the empowerment of women exists.

“Today everybody has proved that this programme can free women from the curse of poverty. Such an an emancipation is based on stable and self-made employment and not on the mercy and kindness of anybody.

“Our purpose is clear. We have to strengthen the women SHGs and their instruments financially,” she said.”

via Sonia seeks quick implementation of rural livelihood schemes | The Hindu.

31/05/2013

Urbanisation: Some are more equal than others

The Economist: “FOR many migrants who do not live in factory dormitories, life in the big city looks like the neighbourhood of Shangsha East Village: a maze of alleys framed by illegally constructed apartment buildings in the boomtown of Shenzhen, near Hong Kong. There are at least 200 buildings, many of them ten storeys tall (see picture). They are separated by only a metre or so, hence the name “handshake buildings”—residents of neighbouring blocks can reach out from their windows and high-five.

The buildings are China’s favelas: built illegally on collectively owned rural land. Rents are cheap. An eight-square-metre (86-square-foot) flat costs less than $100 a month. They symbolise both the success of the government’s urbanisation policy and also its chronic failures. China has managed a more orderly system of urbanisation than many developing nations. But it has done so on the cheap. Hundreds of millions of migrants flock to build China’s cities and manufacture the country’s exports. But the cities have done little to reward or welcome them, investing instead in public services and infrastructure for their native residents only. Rural migrants living in the handshake buildings are still second-class citizens, most of whom have no access to urban health care or to the city’s high schools. Their homes could be demolished at any time.

China’s new leaders now say this must change. But it is unclear whether they have the resolve to force through reforms, most of which are costly or opposed by powerful interests, or both. Li Keqiang, the new prime minister, is to host a national conference this year on urbanisation. The agenda may reveal how reformist he really is.

He will have no shortage of suggestions. An unusually public debate has unfolded in think-tanks, on microblogs and in state media about how China should improve the way it handles urbanisation. Some propose that migrants in cities should, as quickly as possible, be given the same rights to services as urban dwellers. Others insist that would-be migrants should first be given the right to sell their rural plot of land to give them a deposit for their new urban life. Still others say the government must allow more private and foreign competition in state-controlled sectors of the economy such as health care, which would expand urban services for all, including migrants. Most agree the central government must bear much more of the cost of public services and give more power to local governments to levy taxes.

Any combination of these options would be likely to raise the income of migrants, help them to integrate into city life and narrow the gap between the wealthy and the poor, which in China is among the widest in the world. Such reforms would also spur on a slowing economy by boosting domestic consumption.

Officials know, too, that the longer reforms are delayed the greater the chances of social unrest. “It is already a little too late,” Chen Xiwen, a senior rural policy official, said last year of providing urban services to migrants. “If we don’t deal with it now, the conflict will grow so great that we won’t be able to proceed.”

Yet Mr Li, the prime minister, would do well to dampen expectations. The problems of migrants and of income inequality are deeply entrenched in two pillars of discriminatory social policy that have stood since the 1950s and must be dealt with before real change can come: the household registration system, or hukou, and the collective ownership of rural land.”

via Urbanisation: Some are more equal than others | The Economist.

See also: https://chindia-alert.org/2013/05/14/right-thing-to-do-comes-with-a-price-tag/

03/05/2013

* China Factories Try Karaoke, Speed Dating to Keep Workers

WSJ: Third in a Series: China’s Changing Work Force

“After years of offering production bonuses and other financial incentives to boost employee loyalty, TAL Group this year tried an unconventional tactic at its factory here in southeastern China: holding a “Sewing Olympics.”

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The manufacturer for such companies as Burberry Group BRBY.LN +1.21% PLC and Brooks Brothers Group Inc. had workers race to cut, stitch and fold raw fabric into high-end dress shirts. The 10 winners received small cash prizes and had their life-size images hung at an outdoor location where thousands of workers pass on the way to meals.

Cheng Pei Quan is a winner of the ‘Sewing Olympics’ at a factory. Manufacturers are looking beyond bonuses to retain workers and boost production in China.

First in the Series: China Manufacturers Survive by Moving to Asian Neighbors

Second in the Series: A Billion Strong but Short on Workers

“Chinese people put quite a lot of value on ‘face,’ ” says 23 year-old winner Cheng Pei Quan, who earned the nickname “The King of Collars” because he can sew 95 collars an hour, a third more than average. “This competition gives me a sense of pride that other benefits such as rising wages cannot give me.”

After boosting pay to compete with other manufacturers, factory owners are finding money alone no longer is enough to attract and retain a generation of workers that demand a greater work-life balance than their parents did.

Companies are holding “American Idol”-esque singing contests, sponsoring dating events, constructing libraries and karaoke rooms on campus, and organizing small dinners between managers and top workers.

Businesses also are sending postcards to workers who visit their families during the Lunar New Year—when manufacturers can lose 20% or more of their staff—urging the employees to return to work.

The measures are a response to an unprecedented shortage in China’s workforce. Demand for workers exceeded supply by a record in the first quarter. China’s working-age population, defined as people from ages 15 to 59, fell last year for the first time in decades, a result of the national one-child policy that was implemented in 1980.

While the number of migrant workers in China rose 3.9% last year, manufacturers face stiff competition from construction, mining and other industries for staff. The average monthly wage for such workers has increased 74% in the past four years, to $395 in the first quarter.

For factory owners, the ability to recruit workers is a matter of survival. If plants can’t find or replace staff quickly enough, they won’t be able to fill customer orders on time. Those that can’t will be forced to turn elsewhere in Asia to manufacture goods—or go out of business.

via China Factories Try Karaoke, Speed Dating to Keep Workers – WSJ.com.

21/04/2013

* Thirty-three percent of world’s poorest live in India

Reuters: “India has 33 percent of the world’s poorest 1.2 billion people, even though the country’s poverty rate is half as high as it was three decades ago, according to a new World Bank report.

India reduced the number of its poor from 429 million in 1981 to 400 million in 2010, and the extreme poverty rate dropped from 60 percent of the population to 33 percent during the same period. Despite the good news, India accounts for a higher proportion of the world’s poor than it used to. In 1981, it was home to 22 percent of the world’s poorest people.

The World Bank report comes just days after it proposed a $12 billion to $20 billion plan to reduce poverty levels over four years in the Indian states of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh. Sixty percent of the financing would go to state government-backed projects, according to the Hindu Business Line newspaper.

The study that came out today showed a similar decline in the number of people living in poverty in recent years. People living below $1.25 (67 rupees) a day fell considerably from more than half the people in the developing world in 1981 to 21 percent in 2010, despite a 59 percent increase in world population during the same period.”

via India Insight.

14/04/2013

The real cause and impact of China’s labour shortage

So far this labour shortage has not had a significant impact on the economy. But if ignored, it will.

China Daily Mail

China continues to suffer a labour shortage in its key coastal manufacturing regions. This, no doubt, is impacting U.S. and other foreign companies operating in China. But the labour shortage is not due to a lack of available workers. Instead, it is prompted by Chinese government policies, as well as prevailing work and living conditions in affected regions.

The Alienation of Migrant Workers

During the last two decades of China’s development, rural workers migrating to urban manufacturing regions have been the chief source of labour in coastal cities. According to the Chinese government’s, own statistics, migrant workers have increased to more than 250 million from just over 60 million in the last 20 years. Many non-government organisations place this number at a more realistic 350 to 400 million.

Even with a massive number of workers available nationally, China Daily recently reported that labour shortages are growing worse in cities like Guangzhou

View original post 935 more words

03/03/2013

* A push for change in China as new leaders take the helm

Reuters: “For Chen Qiuyang, the new Chinese leadership that formally takes over this month can radically improve her life by doing just one thing: providing running water in her village in a remote corner of the northwestern province of Gansu.

Chief of China's Communist Party Xi Jinping is seen in a picture during a visit in Yuangudui village, Gansu Province February 12, 2013. Communist Party chief Xi Jinping, who takes over as China's new president during the annual meeting of the legislature beginning on March 5, visited Yuangudui in February to highlight the poverty that still reigns in huge swaths of the country. Closing a yawning income gap is likely to be one of the policy priorities of his administration and the impoverished villagers are fully conscious of the inequality plaguing China, even if some of them had never heard of Xi Jinping before he showed up in town. Most young people have left for the provincial capital of Lanzhou, where they can make 1,000 yuan ($160) a month, more than the average village income of 800 yuan a year. Picture taken on February 12, 2013. REUTERS-Carlos Barria

“We have to carry water from the well on our shoulders several times day. It’s exhausting,” Chen, who looked older than her 28 years, said in Yuangudui village, resting on a stool outside her home after completing another trip to the well.

Communist Party chief Xi Jinping takes over as China’s new president during the annual meeting of parliament beginning on Tuesday and bridging the widening income gap in the vast nation is one of his foremost challenges.

Xi has effectively been running China since assuming leadership of the party and military – where real power lies – in November, and has already projected a more relaxed, softer image than his stern predecessor Hu Jintao.

But there will be pressure on him to tackle problems accumulated during Hu’s era like inequality and pervasive corruption, which have given rise to often violent outbursts in the world’s second-biggest economy, sending shivers through the party.

Outgoing Premier Wen Jiabao will likely address these issues in his last “state of the nation” report at the National People’s Congress to nearly 3,000 delegates, whose ranks include CEOs, generals, political leaders and Tibetan monks – as well as some of China’s richest businessmen.

China now has 317 billionaires, a fifth of the total number in the world, and is on track to overtake the United States as the largest luxury car market by 2016.

Yet the United Nations says 13 percent of China’s 1.3 billion population, or about 170 million people, still live on less than $1.25 a day.

While parliament is a regimented show of unity that affirms rather than criticizes policies, income redistribution is likely to be a hot topic, along with other issues like ministry restructuring, corruption and the environment.

In January, the State Council, or cabinet, issued a new fiscal framework designed to make rich individuals and state corporations contribute more to government coffers and strengthen a social security net for those at the bottom.

But tackling China’s wealth gap will need more than just taxes. Analysts say state-owned enterprises will have to be privatized and the household registration, or hukou, system that prevents migrants from enjoying the benefits of urban citizens, will have to be dismantled.

“Fiscal reforms and changes to let private firms advance and the state retreat will decide whether this round of reforms can succeed,” said Xia Bin, an economist at the cabinet think-tank Development Research Centre and a former central bank adviser.

“There is definitely no way out,” he wrote in the latest edition of China Finance, a magazine published by the central bank.

via A push for change in China as new leaders take the helm | Reuters.

30/12/2012

* China Pledges Rural Reforms to Boost Incomes, Consumption

Another angle on narrowing the wealth gap.

Bloomberg: “China said it will better protect farmers’ land rights and boost rural incomes and public services to help narrow the divide with urban areas.

China Pledges Land Reforms to Boost Incomes as Wealth Gap Grows

A farmer works in a field in Pinggu, on the outskirts of Beijing. Photographer: Tomohiro Ohsumi/Bloomberg

The government will increase agricultural subsidies and ensure “reasonable returns” from planting crops, the official Xinhua news agency reported on Dec. 22, citing an annual work conference to set rural policy.

The goals, which include increasing rural incomes by at least as much as those in urban areas, reflect a new leadership’s focus on reforming the land system and addressing wealth disparities as it encourages migration into towns and cities to boost consumption. Li Keqiang, set to take over from Wen Jiabao as premier in March, is championing urbanization as a growth engine.

“A completely new policy approach is emerging under Li Keqiang,” said Yuan Gangming, a researcher in Beijing with the Chinese Academy of Social Sciences. “It’s about giving farmers a bigger share from land deals, it’s about changing local governments’ reliance on revenues from land, and it’s ultimately about a fairer system of sharing China’s economic growth.”

Yuan said he expects the government to be appointed in March to announce “a slew of policy initiatives” from changes to the household registration, or hukou, system to trading in land-use rights as part of Li’s urbanization drive.

The Shanghai Composite Index closed up 0.3 percent. Some Asian markets are closed today, while trading hours are restricted in some others.”

via China Pledges Rural Reforms to Boost Incomes, Consumption – Bloomberg.

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