How much does China spend on poverty alleviation each year? How are the hundreds of billions in poverty alleviation funds used?
To escape poverty, money must be spent. To lift more than 70 million poor people across the country out of poverty, the funds needed over the next five years will amount to at least hundreds of billions of yuan.
Recently, at the Central Conference on Poverty Alleviation and Development, General Secretary Xi Jinping stressed that the intensity of investment in poverty alleviation and development must match the requirements of winning the battle against poverty.
Under the grand goal of fighting poverty, no matter how much investment is increased, funds are always limited, and the “precious ammunition” cannot tolerate the slightest waste. General Secretary Xi Jinping proposed that poverty alleviation achieve “six precisions,” one of which is precision in the use of funds.
How exactly should poverty alleviation funds be spent so that they are truly used on the “edge of the blade”?
How much does China spend on poverty alleviation each year?
From 2011 to 2014, China's central government special poverty alleviation funds grew from 27.2 billion yuan to 43.3 billion yuan, with an average annual increase of 18.1%. This year, the central government budget arrangement for poverty alleviation funds has again increased to 46.745 billion yuan.
Poverty alleviation investment at the provincial level is also considerable. For example, in Henan, this year the central government invested 2.06925 billion yuan in special financial poverty alleviation funds in Henan, and the provincial-level budget invested 524.34 million yuan in financial poverty alleviation development funds, roughly equivalent to 1/4 of the central investment. If calculated at this ratio, the provincial-level special financial poverty alleviation funds of the country's 31 provinces would reach more than 11 billion yuan.
This means that in 2015 alone, the central government and the provinces, autonomous regions, and municipalities invested at least nearly 60 billion yuan in special financial funds for poverty alleviation and development.
This is far from all of it. In addition to special financial poverty alleviation funds, various industry departments also have a huge amount of poverty alleviation funds. According to incomplete statistics, since the “12th Five-Year Plan” period, Henan Province has cumulatively invested more than 48.3 billion yuan in social undertakings funds in poor areas, more than 50.5 billion yuan in rural road construction funds, more than 15 billion yuan in agricultural funds such as farmland water conservancy and safe drinking water, and more than 2 billion yuan in work-relief funds.
In other words, in Henan Province alone, the average annual industry poverty alleviation funds are no less than 23 billion yuan. A rough calculation shows that each year China invests as much as hundreds of billions of yuan in special funds and industry department funds for poverty alleviation and development.
⟦NL> With so much money comes heavy responsibility, and not the slightest carelessness is permitted.
Two stories, one positive and one negative
Qi Meizhi, a poor household in Lixi Village, Zhuaying Township, Lankao County, Henan, received 4,000 yuan this year in household income-increasing funds. How should this money be spent?
“Originally the county wanted us to raise piglets, saying that when the pigs were fat, they could be sold to a meat processing plant, and the piglets born could continue to be raised.” Qi Meizhi said, “But many poor households were unwilling. First, they had no experience; second, they thought it was dirty; third, they were afraid the pigs would get sick and they would lose money.”
If not raising pigs, then what? After repeated visits by the village work team and village cadres, it was learned that most poor households most hoped to work near their homes, so that they could have a stable income while also tending to farm work and caring for the elderly and children.
As it happened, a small boss in the village, Zhai Baochang, was just thinking of opening a glass door and window factory. Work team leader Zhai Jicheng and village Party secretary Zhai Jinlu then approached Zhai Baochang to discuss whether poor households could become shareholders in the form of pooled funds, both finding a way out of poverty for poor households and partially solving Zhai Baochang's funding problem for opening the new factory.
The two sides hit it off immediately. In July this year, the glass door and window factory was established and began operating with Zhai Baochang contributing his own funds and a loan of 400,000 yuan, and 25 poor households each contributing 4,000 yuan, totaling 100,000 yuan, as shareholders. For poor households with labor capacity, the factory gave priority to hiring them; for those without labor capacity, there was a fixed annual dividend.
Qi Meizhi works in this factory. She said with a smile: “I can earn more than 2,000 yuan a month, and every half year there is another share dividend, around another 2,000 yuan.”
In this story, the poverty alleviation funds were spent to everyone's satisfaction. In the next story, the money was spent in a somewhat awkward way. At the request of the interviewee, when telling it, we must conceal the place name and personal names.
The incident occurred in a mountainous town in the west. The county allocated more than 2 million yuan in poverty alleviation funds, but the town found it difficult to figure out how to spend it. It turned out that, as part of industrial poverty alleviation, higher authorities required them to add more than 2,000 mu of seedling-raising area, with a subsidy of 1,000 yuan per mu, totaling more than 2 million yuan.
By rights this was a good thing, but almost every household in the town grew nursery stock, and there was not much spare land left, so it was simply impossible to complete the task of adding new area. But the money still had to be spent, so what could be done? Hold meetings.
One cadre said that all households with seedlings should share it equally according to planting area. Someone immediately objected, saying this was poverty alleviation money, and many large growers were not poor households, so they could not take this money. Another cadre suggested giving subsidies only to registered poor households. Someone immediately objected again, saying this was a special fund for nursery stock, poor households that had not grown seedlings could not take it, and the seedlings planted by all poor households in the town together were not enough for 2,000 mu, so the money still could not be spent.
In the end, after several meetings, the cadres finally racked their brains and spent the money in a way that did not violate regulations. As for exactly how it was spent, the interviewee kept it confidential, and we were helpless about it.
Who decides how the money is spent?
Both are spending money, so why do completely different results occur? The key lies in who decides how the money is spent. If the town has money but finds it hard to spend, and if higher authorities listened to opinions from below so that decisions were more in line with reality, the awkwardness would not be unavoidable.
China's traditional poverty alleviation model is that higher authorities make plans, lower levels implement them, counties wait for arrangements from provinces and cities, and townships and villages wait for arrangements from counties. Now the right to use poverty alleviation funds has been delegated to the county level, and counties have decision-making power, but townships and villages are still waiting for arrangements.
In a nationally designated poor county in Henan, the poverty alleviation office had 13 authorized positions, of which 3 people had long been unable to work due to illness and other reasons. When the reporter interviewed, half of the people happened to be out cleaning sanitation. It turned out that the local area was carrying out a “health city creation” campaign, and every department had contracted sanitation for a section of road, and 3 days a week people had to be sent to sweep the streets.
Ten people had to be responsible for the poverty alleviation plans of tens of thousands of poor people in the whole county and the allocation of tens of millions of yuan in poverty alleviation funds, and from time to time they also had to take on unrelated work. How could they ensure that the plans were scientific and precise? The poverty alleviation departments themselves also complained that there were too few people and too much work, and that they had little power but heavy responsibility.
This inevitably led to situations where plans were disconnected from reality. In 2010, projects such as roxburgh rose planting and walnut planting organized and implemented by 4 units including the Machang Township government in Zhenning County, Guizhou, had poor results and caused losses of 3.3723 million yuan because preliminary feasibility arguments did not take into account local climate, soil, and other conditions. In 2010, the poverty alleviation office of Xihe County, Gansu, arranged 100,000 yuan for the construction of a cultural and sports center in a certain village. Because the plan was unreasonable, the cultural and sports center was demolished immediately after completion.
Perhaps plans will always have a certain degree of error, and “precision in the use of funds” is precisely about eliminating such errors to the greatest extent possible.
Funds are “sleeping”; who can “wake them up”?
In 2014, Shanxi Province's budget for subsidized interest loans for leading poverty alleviation enterprises and industrial support projects used only half: of 88.77 million yuan in interest subsidy funds, 43.5 million yuan was issued, and half sat in accounts unused.
Here the money could not be spent, while there poverty alleviation enterprises wanted to use money but could not.
Also in 2014, the Shanxi Poverty Alleviation Office successfully issued 115 million yuan in private placement bonds for the Taiyuan Shuanghecheng Food Co., Ltd. and Taiyuan Bencao Agricultural Development Co., Ltd. under the Hundred Enterprises and Thousand Villages industrial poverty alleviation project.
“When we applied to issue private placement bonds, the poverty alleviation department promised to seek preferential loan interest subsidy policies for us, but now we have successfully issued the bonds for more than a year, and the interest subsidy matter still has not been settled.” said Dai Hailiang, financial director of Shuanghecheng Food.
The poverty alleviation department also felt wronged. “On the one hand, the government's budgeted interest subsidy funds cannot be spent; on the other hand, innovative financial poverty alleviation forms such as private placement bonds cannot receive national policy support.” said Zhao Junchao, station chief of the industry station of the Shanxi Provincial Poverty Alleviation Office.
Under current regulations, only “regular forces” such as bank loans can enjoy interest subsidies, while “wild paths” such as private placement bonds can only stand aside, and tens of millions of yuan in poverty alleviation funds continue to lie in accounts “sleeping.”
Why is this so? This is “similar in approach” to the more than 2 million yuan in poverty alleviation funds in that western town that took great effort to spend: both reflect a disconnect between the planning for the use of poverty alleviation funds and reality, except that one result is that what is used is not what is needed, and the other is that what is needed is not what is used.
This is not an isolated phenomenon. Auditing in Henan Province showed that as of the end of September 2014, 53 counties had 1.819 billion yuan in remaining poverty alleviation funds. The 2014 audit report of Guizhou Province disclosed that due to reasons such as poor project selection and inadequate project technical training and services, 174 million yuan in poverty alleviation projects had poor implementation results. In addition, 20 counties had 796 million yuan in poverty alleviation funds idle for more than 6 months, of which 192 million yuan had been idle for more than 2 years.
What should be done? Decision-makers at any level must be good at listening to public opinion and adapting to local conditions, and must not engage in empty talk or stick to old rules. The use of poverty alleviation funds is not decided solely by higher authorities, nor solely by poor households themselves, but should be discussed together by everyone.
Easier said than done. This requires the trust and delegation of power from higher levels, the responsibility and innovation of lower levels, the flexibility of policies, and the strictness of institutions. It requires letting implementers go into battle lightly while leaving no loopholes to exploit. Achieving this is by no means easy.
It is necessary to “swat flies and clear borers,” and even more necessary to improve decision-making
The reporter reviewed more than 100 audit reports from all provinces across the country from 2011 to 2014 and found that “leakage and seepage” of poverty alleviation funds was not uncommon. Some enterprises fraudulently obtained poverty alleviation funds by “fabricating false contracts,” “listing fictitious projects,” and “repeatedly applying for projects”; some government departments used poverty alleviation funds for hosting guests, giving gifts, receptions, and even travel, buying cars, and building offices.
These uncovered cases of violations of regulations and discipline were of every description and heartbreaking.
Auditing in Henan found that from 2010 to 2014, the secondary vocational education “blue-collar class” trained 74,400 poor students, and nearly half involved fabricated identities and training information, fraudulently obtaining nearly 100 million yuan in poverty alleviation funds.
In response, Liu Quan, director of the Henan Provincial Audit Office, said that the provincial poverty alleviation office entrusted 3 accounting firms to verify 37,120 “blue-collar class” trainees at 141 training bases involved. As of now, relevant cities and counties have been ordered to recover 1.804 million yuan in subsidies fraudulently obtained by 10 training bases.
At the same time, the Henan Provincial Poverty Alleviation Office also revoked the training qualifications of 27 training bases that violated regulations and discipline; handled 7 relevant responsible persons in poverty alleviation departments and 70 supervisors and staff members of training bases.
Judging from information reported from various places, many “flies and borers” in poverty alleviation funds are being cleaned up. But improving the decision-making level of poverty alleviation investment is more crucial than “swatting flies and clearing borers.”
If poverty is compared to an illness, then poverty alleviation funds are the “treatment injections” continuously infused. Targeted poverty alleviation must not only ensure that the “injections” are infused into the “diseased body,” but also ensure that the “injections” are infused in the correct way into the appropriate “location” so as to produce the greatest efficacy.
Intercepting and misappropriating poverty alleviation funds is like stealing the “injections,” or giving short measure on the “injections.” As long as institutions are strict and oversight is in place, this is relatively easy to discover and eliminate. But whether the “injections” are used appropriately is not so easy to discover and judge. By the time it is discovered, the money has often already been spent, and there is not much chance even to mend the fold after the sheep are lost. This is the greatest threat to “precision.”
Open holes are easy to patch, but hidden cavities are hard to guard against. Using it is easy; using it well is hard. To meet General Secretary Xi Jinping's requirement for the precise use of poverty alleviation funds, there is still a long way to go.