Professional Documents
Culture Documents
Lessons Learnt For Rwanda From China's Poverty Reduction Strategies: Policy Analysis Review's
Lessons Learnt For Rwanda From China's Poverty Reduction Strategies: Policy Analysis Review's
www.kspjournals.org
Volume 6 June 2019 Issue 2
By Gerard BIKORIMANA aa
& Shengmin SUN ab†
Abstract. The present study analyzed the possible lessons to learn in Rwanda from the
China performance experiences in poverty reduction tragedies. Over the last 35 years, China
has impressively made enormous treads in its fight averse to poverty as it has changed in
one of the greatest vibrant economies in the global. The China success in poverty reduction
is dedicated largely to different economic reforms which lead to economic growth,
implementation of poverty lessening strategies, rural development programs and as well as
open door policies. Recently, China has been serving as an economic role model for many
developing countries including African states due to its substantial progress in fighting
against poverty. In the same way, Rwanda is still struggling with a high rate of poverty
even if there is a huge achievement but still there is a long journey to go. The growing
cooperation between China and Rwanda are frequently elucidated by the country's call for
its natural resources to be based on country development, China is an astonishing example
which clearly indicates how a country can revolt from poverty within a decade and be a
leading performer on the worldwide scene. From this perspective, there are some policy
lessons that African countries including Rwanda can learn from the socio-economic
transformation success of China. Even if Rwanda has been gradually facing the
developmental restrictions which China did not, and given that the background for
Rwandan country differs too much with China, it is worthwhile to draw important lessons
from China's success story on how it escaped millions of its population from poverty.
Keywords. Poverty reduction, Strategy, Policy, Rwanda, China.
JEL. H50, H70, I38.
1. Introduction
N
owadays, China has emerged as a powerhouse for many industries
and some scholars argue that China has become the World factory.
In that perspective, China impress the whole African continent and
it is now a pragmatic development partner; whereby may political and
economic observers consider a new era and move of South-South
relationship to replace the North-South relationship in the future. Persistent
poverty in Africa is due to constantly failed and unpopular policies taken
by the many Government of African countries, and this malaise is a
common cause for chronic and extreme poverty in Africa. From this point
of view, there is a lesson to learn from China on how it overturned the
aCentre for Economic Research, Shandong University, Jinan, Shandong Province, China.
. +8615628930017 . [email protected]
b† Centre for Economic Research, Shandong University, Jinan, Shandong Province, China.
. 8653165857 . [email protected]
Journal of Economics Bibliography
similar malaise between the years of the 1950s and 1980s when China was
closely comparable to many African countries have the same socio-
economic status. The research made by Chen & Ravallion, (2007) indicated
that in the 1980s two out of three Chinese were living under poverty line of
$1 a day, whereby on the other hand in Africa especially in the Sub-Saharan
Africa 40% of the populace was living under poverty. The efforts of China
in fighting against poverty since 1978s created a dramatic gap between
Sub-Saharan Africa and China to the extent that in the 2000s in China less
than one person was living under-poverty while it was the same
proportion of 40% of the population in Sub-Saharan Africa who were living
underneath the poverty line. The poverty reduction trend percentage was
1.9% in China while it was 0.1% in Sub-Saharan Africa. However, it is not a
straight forward task to compare Sub-Saharan Africa and China and then
figure out many valuable lessons for African countries because the contexts
of the two parts of World are quite different.
In fact, in most Sub-Saharan Africa including Rwanda in the last thirty
decades failing leadership and bad governance used to lead to political
instability which usually resulted in wars. However, China was building a
strong leadership and good governance that contributed to the promotion
of market liberalization which facilitated the Foreign Direct Investment and
innovation and creativity (Van de Walle, 2001; Posner & Young, 2007). The
Sub-Saharan African countries are mostly unable to finance their economic
development through public investment in Agriculture and Infrastructure
developments as did China over thirty decades. In this paper, the author
attempts to outline and emphasizes the impressive policy lessons that
Rwanda can learn from China's success. However, it would not be a good
practice for Rwanda to copy and paste any policy from China in order to
eradicate poverty but it can be worthwhile to draw some lessons to support
homegrown solutions in fighting against poverty.
The Economic Development and Poverty Strategy of Rwanda has to be
inspired by the Chana's subsequential economic reform over last thirty
decades but it is important to note that by liberalizing too much the
economy would create inequality which is not a good example from China
to follow. In addition to this, there some important common characteristics
between Rwanda and China namely high inequality, high dependence
rates because of high fertility rate, and high population density; which
enable the author to easily compare Rwanda' strategy for the fighting
against poverty with one of China and then draw impressive domestic
policy lessons on how China initiated and implemented its strategy for
poverty reduction and why it made a successive progress against poverty.
In fact, China’s success in lessening poverty is factual indeed from 1981
to 2013, whereby China lifted 850 million people out of poverty, and
including particular achievement of lifting a great percentage of people
from extreme poverty from 88% to 1.85% in that period. Throughout this
era, China fascinated the attention of many economic practitioners and
social scholars and other worldwide organizations to lay out important
G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.
53
Journal of Economics Bibliography
lessons, especially for the underdeveloping countries particularly the Sub-
Saharan Africa. In this perspective, Dollar, (2008) presents a number of
policies that China implemented to drop down poverty and those policies
can give valuable inspiration and foundation for Sub-Saharan Africa. Heilig
et al., (2005) indicated that the economic reforms must be a major pillar in
fight against poverty in their first stage for the under-developing countries,
and in next stage, they have to focus on social scheme and regional
integration and market reforms.
The reason why the World can learn from China’ s success in escaping
from poverty is that in the eras before 1980 China was even poorer than
some of the African countries and among the poorest in the worldwide.
However, over the period of 35 years, China has been constantly
experiencing ambitious and sounding socio-economic transformations that
allowed to achieve pragmatic achievement in the economic and human
development and consequently dramatic reduction in poverty. China’s
economy has steadily been rising at an average rate of 9.8% every year
from the time when the economic reforms was introduced in 1978, the per
capita income has been gradually increasing in fifty-fold over 35 years. The
Human Development Index (HDI) was improved gradually from 0.423 to
0.719 respectivery in 1980 to 2013 and this has placed China on the table of
honors with high human development classification at 91 out of 187 states
around the World (UNDP, 2013). In addition to this, by 2013 China had
already attained almost all Millennium Development Goals (MDGs) ahead
of Sustainable Development Goals by 2050. This extraordinary socio-
economic development has made China the second heaviest economy in
the worldwide in 2010 after the USA, and hence increasing China’s global
power and influence. However, stable and sustainable economic growth
and extraordinary transformational achievements of China was not smooth
at all because they created rough domestic disparities, especially socio-
economic development imbalances in terms of admittance to social facilities
economic prospects, between regions whereby the eastern region and
seaboards were heavy than the interior and far west regions, and severe
disparities are observed between urban and rural populations. Within the
initiation of new economic reforms in late 1978, the Chinese economy
outstretched at a stable growth rate beyond 8% per capita, foremost to a
histrionic upgrading in living conditions. This progress has powered
historically unheard of poverty lessening: the split of populace below the
poverty live in worldwide based “cost of basic needs" decreased from 60% at
starting of economic reform in 1978 to 7 percent in 2007 (Sardana & Zhu,
2017).
The remaining underdeveloping countries fighting to develop and
decrease poverty are indeed attracted by impressive progress in poverty
reduction of China, their wandering about the sources of progress and if
possible lessons which can be drawn from that success. There are
numerous ingredients that have guided to China's achievement. Some of
these ingredients are deep-rooted on a characteristic of Chinese culture
G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.
54
Journal of Economics Bibliography
which put much focus on education and as well as saving practice. Others
factors involved in the success change the system ("Gai Ge Kai Feng”) which
was about altering economy from nearly full state-owned to private
management, promotion of direct foreign investment, development of
infrastructure, and as well agriculture promotion and rural development
(Qin, 2015). All those initiates and reforms had been positively contributed
to a sharp reduction in poverty in China and some other developing
countries may draw very important lessons from such practices.
However, poverty in Rwanda has changed, throughout the previous
three eras. The Rwandan economic situation replicates a chronic failure to
achieve production increases in the framework of a large and in the
proportion of population growth. This problem of failure dated a long time
as evidence from the 1980s and early 1990, topping to severe physical
hitches. Additional, 1994 Tutsi genocide left a terrible legacy, further
depriving the country and leaving in a horrific situation of poverty.
Different poverty programs were implemented in Rwanda. The poverty
evaluation in Rwanda indicate gradual achievement from 44.9 to 39.1%
respectively in 2010/1 to 2013/4 (NISR, 2016), but the MDGs objectives were
also achieved except the ones poverty reduction whereby the achieved was
39.1% compared to 30.2% as a target to reach. With this situation, the study
raised relevant questions which are about: why has Rwanda stayed behind
schedule? What might be the lesson which Rwanda could learn from
China's success in poverty reduction? For sure China is a typical better case
to learn from their achievements.
Nevertheless, there are motives for wisdom in printing lessons for
Rwanda from greatest achievement in poverty reduction of China. The idea
behind this is not to copy and paste china's particular program for
achieving the same success as China. For instance from the period of 1978
was characterized by the series of economic reforms in China and has
successful achieve impressive results. Also, Rwanda should not only learn
from successes, likewise to the development pathway of China. In this
learning process, it must be recognized that the challenges faced by
Rwanda in this journey of poverty reduction, are not definitely the same as
those faced China. From this perspective, since the beginning of economic
reform period, the differences between China and Rwanda are quite
apparent; Rwanda tends to have upper inequality, a higher rate of poverty,
high dependency level, landlocked geographic location and higher
populace density. Therefore, nothing of this justifies that Rwanda cannot
learn from the extraord achievement of China in reducing poverty. The
present study aim at understanding the extraordinary success of China
averse to poverty, specifically the mechanism throughout the reforms
preside over poverty lessening, to offer a historical general situation of
poverty reduction strategies in Rwanda and as well to pull out some
policies lessons from the achievement of China in poverty reduction.
The remaining of the paper is structured as follows, section two present
briefly sympathetic china’s progress averse to poverty, the third section
G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.
55
Journal of Economics Bibliography
reviews policies and Strategies for poverty reduction in Rwanda while
section four describes some policy lessons learn for Rwanda from China
and final section stretches conclusion and Polcicy recommendations.
Figure 2. GDP Growth Rate since the reform of 1978 of China and Rwandan situation
Source: Computed from World Bank, (2018)
Figure 3. China’ Agriculture, forestry, and fishing, value added (current LCU)
Source: Computed from World Bank, (2018)
Figure 4. China’s FDIs, net inflows Figure 5. China 's Situation of Export and
Import
Source: Computed from World Bank, (2018)
Figure 7. Income inequality, Gini coefficient for China and Rwanda, 1990-2017
Source: Computed from World Bank, (2018)
Figure 11. Rwanda’s Controle of corruption, Political stability and absence of violence
Source: Computed from World Bank, (2018b)
5.2. Recommendations
Rwanda and China have to deepen economic reforms by restructuring
their economies and facilitating the broad pro-poor growth. The effective
attraction of foreign direct investments (FDI) is a major weapon to
galvanize economic growth and encourage affordability, which is essential
to promote integration into the worldwide economy. In addition to this,
Copyrights
Copyright for this article is retained by the author(s), with first publication rights granted to
the journal. This is an open-access article distributed under the terms and conditions of the
Creative Commons Attribution license (http://creativecommons.org/licenses/by-nc/4.0).