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[Beijing Forum 2015] Stefan Dercon: Poverty Reduction-- Chinese Lessons to the World

NOV . 09 2015
Peking Univerity, November 9, 2015: Stefan Dercon is the current chief economist of the UK Department for International Development (DfID). He is a notable Micro-Development Economist who has, since 2004, been a Professor of Development Economics at Oxford University and a Fellow of Wolfson College. Between 2000 and 2002 he was Programme Director at the World Institute of Development Economics (WIDER), United Nations University where he led their research programme on “Insurance against Poverty”.

Professor Stefan Dercon

Q: What’s you comments on China poverty reduction? What does it mean to the world poverty reduction career?

A: There are lessons definitely to be learned from China’s success in poverty reduction. First of all, they found a way to ensure that the economy grew in a way that employed a lot of people and got a lot more people to better incomes and better jobs, which is in the end that poverty reduction is always about being able to get better opportunities and incomes to people. And the way it managed to do it has also some lessons, which involves a government that was very committed to try to achieve this. China could do it in a particular way, because the state in China is historically very strong. The historic circumstances of China with a very strong state capabilities from centuries to centuries definitely help.

Q: Do you think Chinese model of poverty reduction is applicable to other parts of the world?

A: The general lesson for everywhere in the world is that it is important to try to achieve economic growth, and try to absorb and bring people to better jobs and transform the economy. Secondly, it is important to have political clouds, and political leads that are very committed to try to achieve this. But we should be careful to simply say that in any circumstances the way to achieve this is going to be the same. There will be states that just not have the state capabilities or the circumstances of history or geography that will allow them to do that in the exactly the same way. Some African countries are very strong and well organized, while other states have a history of relatively poor state capabilities. They will need to find other models than simply coping the Chinese models.

Q: What’s your opinion about Chinese future poverty reduction career?

A: In terms of China poverty reduction, the future is bright. For the last 35 years, there’s been a rapid declining of extreme poverty. It doesn’t mean that people are all very rich , but in terms of at least basic needs, it has been tremendously progressed. But what comes next is a big question. China’s economic growth is now slowing down, and it will have to keep on finding ways of innovating and renewing its economy, ways the states and the economy interact and ways to reform and improve it. The society, the politics and economy need to continue to renew and rethink what they should do. I am quite optimistic, but it will not go as fast as people thought.

Q: Now there has been a heated discussion about China’s aids to other countries. What do you think of China’s massive foreign aids?

A: Even though I work myself within an aid organization, I think it’s very helpful for everyone involved to realize that aids in general sometimes may have negative impacts. Whether it’s Chinese aid or western aid, there are at times problems. In general, it depends also a lot on the recipient countries: the way it is used there, and the way the state and the politics in these countries function to actually get a good or a bad return. There are countries benefiting a lot from foreign aids, while there are quite a few countries with weak governance, weak states and weak politics that are not very committed to development, where we have to all be very careful. I think it will be good if more people in China learn about the circumstances of these countries, so that it will actually help the aids get more effective. But if you say that it is bad necessarily, I don’t think so. But there is still a lot of learning to be done .

Q: The theme of this forum is hamony of civilizations. Now some people like to use the clash of civilization theory to interpret the conflicts in the world, what’s your opinion about this idea?

A: I think some of these big theories are not usually very helpful. My interest is much about what’s happening in the poorest countries in the world. What we do know is that when the world is united with common goals, it tends to be also better for the most poorest people. So it’s not very helpful to try to encourage the  clash ideas. I think, as we’ve learned in the past, that things like the world war, often poor people are the people that most suffer. The clash ideas may encourage the competition in the world, which is not bad, but for those who are the weakest, cooperation tends to be a better strategy.

Reported by: Ouyang Yixuan
Edited by: Ouyang Yixuan