Sunday, 7 February 2010

The Conflicted Nature Of Rural Development

Six weeks of Political Science Study Mission (PSSM) research, articles, readings and analyses has taken me through the dynasties of China to the founding struggles of modern China to today's contemporary China, which is grappling with being both the country with the fastest economic growth of the world and the country with its rural areas housing some of the world's most impoverished populations.

With regards to poverty and underdevelopment, what has consistently appeared is the trade off between economic development and dedicated social welfare, which I think corroborates at least somewhat with my opinions about charity and poverty.

If one dedicates government budget to public spending, such as health and education, there is a social safety net where minimum levels of welfare are met. However, it rarely stops here, because this is seen as stagnation in the eyes of a country that wants to press forward economically. Welfare eventually has to switch hands from public to private, and before long decentralization, where government transfers the reins of hospitals and schools to the market, leads to social welfare institutions competing on the market for their own resources and capital in order to stay afloat.

In a nutshell, when welfare becomes a privatised issue, the costs are always transfered to the consumers (in accordance with economic math). This is because non-private ventures are at odds with profit-driven aims, which are fundamental to efficient economics of firms in the private sector. Before long, even the smallest social inequalities of the poor in these rural villages are magnified, as the poorest of the lot benefit the least from market reform and economic development because they are too poor to participate.

What has always happened is that those hospitals that once guaranteed health care services become too expensive or inaccessible to the poorest (ironically the ones who need the services the most) whenever those hospitals are forced to fend for themselves on the market.

And I think China is worth giving the benefit of the doubt when it comes to whether or not the government is honest about its efforts to take care of the poor. If we look at, perhaps, Sub-saharan Africa, one can rightfully accuse corrupt governments of conceited efforts towards poverty reduction. But because China's policies are quite possibly an honest attempt at dealing with the issues of its rural poor, the intentions of the government does not confound with this issue of the trade off between economic development and social welfare dedication.

Once again, it appears that any meaningful attempt at targeting poverty should leave the market - the corporations, the economy, the private bank loans - out of the picture. Based on the historical evidence, public/social/welfare doesn't mix well with private endeavours (which I would believe is why even private firms that announce their wish to be socially responsible have to engage in an activity as perverse and convoluted as Corporate Social Responsibility, which still has profits as the bottom-line).

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