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Help-poor policies on the anvil

(China Daily)
Updated: 2008-12-08 07:18

China is drafting policies to help the rising number of poor because of the slowing down of economic growth.

The Ministry of Civil Affairs is trying to expand the scale of the minimum income protection scheme, or dibao system, and raise the amount of temporary subsidy to poor families from next year, senior ministry official Guo Hongquan said on Sunday.

The move is aimed at helping the growing number of jobless migrant workers returning to villages, as well as urban residents. The policy would become effective once the National People's Congress approves it at its annual meeting in February.

According to World Bank estimates, 1 percent decline in a developing country's growth rate prevents an additional 20 million people to be lifted out of poverty.

The World Bank report, published in the Newsweek, expresses concern over the slowing of economic growth in China and India.

The slowdown in China's growth because of the economic downturn means poverty reduction will be less rapid, said David Dollar, World Bank's director for China.

The government is developing an alternative low-income line (of 1,067 yuan or $152 a year) like the poverty line, Dollar said. And that will be more effective in the present situation.

"China has been so successful (in poverty alleviation) that almost no one lives under the official poverty line," he said. "Hence, that line is not very useful for policy."

"We should not underestimate the impact of the global financial crisis, slowing down of growth, rise in unemployment among migrant workers and frequent natural disasters on impoverished areas," said Fan Xiaojian, head of the State Council's leading group office of poverty alleviation and development.

"Poverty alleviation is still a difficult task," China Business News quoted Fan as having said on Saturday.

The office of the State Council conducted a study on the impact of slowing down of growth on poverty alleviation, said Su Guoxia, deputy director of the policy and law department of the office.

Till the end of last year, about 43 million people were living below the poverty line in rural areas, with another 22 million living in urban areas. This means only about 5 percent of the population is poor.

But, Dollar argued, three times that number - about 15 percent - is part of a group that moves in and out of poverty with a change in its income level. "This is the group most at risk in the downturn."

Chris Spohr, social economist of the Asian Development Bank, said the downturn has made a large population vulnerable to slipping back into poverty, with the migrant population being most vulnerable.