[Mb-civic] An article for you from Michael Butler.

Sun Mar 12 14:11:28 PST 2006

- AN ARTICLE FOR YOU, FROM ECONOMIST.COM -

Dear civic,

Michael Butler (michael at intrafi.com) wants you to see this article on Economist.com.

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HOW THE OTHER 800M LIVE
Mar 9th 2006  

China's leaders are aware of the problem in its rural areas. They are
terrified of the solution

A SPECTRE is haunting China--the spectre of rural unrest. The leaders
of the Communist Party know it, and fear it as only the inheritors of a
revolution born of rural desperation can. This week, as China's supreme
legislative body (aka the rubber-stamping National People's Congress)
met for its annual ten-day session, addressing the plight of the
country poor was at the top of its agenda. But worrying about something
and curing it are two very different things.

It is not just that China's farmers have missed out on the double-digit
growth that has transformed urban China and turned its richest cities
into some of the most dynamic in Asia. The real problem for the
leadership is that, in some ways, the lot of the rural poor has got
worse. The old communist system offered a life of terrible drabness,
but at least it guaranteed certain basics, including free or nearly
free health care and education. As China has become more of a market
economy, those support systems have largely collapsed.

At the same time, many farmers have lost their livelihoods. The rapid
growth of the cities has resulted in their land being seized for
development with little or no compensation. Many of the most violent
disturbances in recent months have come not from laid-off factory
workers, as in the past, but from farmers protesting about these
depredations. Communism may be nearly dead in all but name in China,
but it survives in the form of one last taboo: the fact that the right
of individuals to own agricultural land is tenuous at best. And the
local governments that control most of that land do not administer it
well. Perennially strapped for cash, because so much of it is consumed
in the long bureaucratic trickle-down from the central government to
the counties, they are more or less forced to squeeze farmers as hard
as they can.

Beyond recognising the problem (China's prime minister, Wen Jiabao,
called it a "deep-seated conflict" that "cannot be ignored"), this
week's congress approved a 15% increase in the money earmarked for
agricultural development, rural services and the like. But even though
the amount to be spent has now risen to 340 billion yuan ($42 billion),
or 8.9% of the entire budget, China's vastness makes it trivial. Some
800m people still live in the countryside, so the new spending amounts
to less than an additional $7 a year each.

What more could the central government do? Most obviously, it could
introduce a proper system of land rights. If that remains an
ideological bridge too far, for the time being at least, it could at
least fund its provinces adequately, which would mean that the poorer,
more rural ones could afford to treat farmers better. That would
involve inter-province transfers at a much higher rate than now.

Finally, it could do a lot more to encourage efficient government by
provincial and local governments. A big part of the problem is that
these lower tiers of government are run incompetently. The reason is
hardly a mystery. With a press that is muzzled (and, if anything,
getting tamer, thanks to a media crackdown directed from the very top),
officials are in no sense accountable to the people whose lives they
control.

THE REMEDY THAT DARES NOT SPEAK ITS NAME
How, though, to make officials accountable? China does hold some highly
constrained elections for village councils. For many years, it has
talked of extending the election system upwards to townships, to
counties and perhaps higher. There have even been some electoral
experiments at township level. For the present, however, the Communist
Party, intent on retaining its monopoly of political power, will try to
spend and manage its way out of trouble. History suggests that it will
fail. The spectre in China's countryside will not be laid to rest until
Chinese leaders accept the need for democracy. 

See this article with graphics and related items at http://www.economist.com/opinion/displaystory.cfm?story_id=E1_VGDPQRQ

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