On December 19, the Chinese government and the Asia Development Bank (ADB) announced a decision to put China's non-governmental organizations (NGOs) in charge of village-level poverty relief projects in Jiangxi Province, signifying the first time that NGOs will have access to public poverty alleviation funds.

Project funds totaling about US$2.38 million will be allocated to the scheme. NGOs will bid for the right to manage a project or projects, the bidding process to be conducted through the China Foundation for Poverty Alleviation. The government will only play the role of policy maker and supervisor.

The central government and Jiangxi provincial government will contribute 11 million yuan (US$1.38 million) to the scheme, which is intended to cover 22 villages throughout southeast China's Jiangxi Province.

The ADB will contribute US$1 million to be used for planning, management, promotion and evaluation of the scheme. 

"The move will not only improve the effectiveness of poverty relief financial resources, but also encourage the participation and development of China's NGOs in poverty relief campaigns," Toru Shibuichi, ADB's Country Director for China, said.

According to the China Foundation for Poverty Alleviation, nine NGOs have started bidding for the first six village projects including the China Association for NGO Cooperation (CANGO), the China-Netherlands Poverty Alleviation Project (Huoshan County, Anhui Province) and the Jiangxi Youth Development Foundation.

Successful bidders will get a project fund of 500,000 yuan for each village.

"Non-governmental organizations in China will play a more active role in poverty alleviation at village level as a 'partner' of the government," Prof. Kang Xiaoguang from Renmin University of China and also chairman of the evaluation committee of the project said.
 
"Over the past few decades since China embarked on its modernization drive, the government has undertaken a series of multi-level and multi-field poverty alleviation projects, and has succeeded in reducing the country's poor population from 250 million to 26 million," Kang said.

"However, in the case of the increasing divide between the rich and poor, the ongoing economic development mode is hardly beneficial for those who still live in poverty," Kang added.

According to He Daofeng, vice chairman of the China Foundation for Poverty Alleviation, a curious situation has arisen: "About 44.5 percent of poverty relief funds has been spent on rich households and 20.2 percent on middle-income households. But only 35.3 percent has been channeled to needy families."

He said that bureaucratic kinks and ineffectiveness are to be blamed for this.

In 2000, the National Audit Office reported that a fifth of the funds earmarked for poverty relief projects had been embezzled, He added. 

Government and NGO interaction

NGOs play important role in the public sector, where government does not function effectively.

However, China's NGOs are currently still not mature enough, according to Wang Ming, the president of Tsinghua University NGO Research Institute.

The resources available to them are limited. Funding, for example, is an average of 70,000 yuan a year. He Daofeng added that management of NGOs is generally poor and many lack direction or concrete plans and projects.

Nevertheless, they are an important part of poverty alleviation and many have been able to make a difference. Project Hope and Spring Bud Project, for instance, which are powered by NGOs, have made great progress in educating, and protecting the rights of girls and children.

Although the amount of 11 million yuan might seem paltry, especially when compared with Jiangxi Province's poverty reduction fund that has about 2 billion yuan, the scheme will still make a difference. According to Liu Dongwen, director of the Village-Level Poverty Alleviation Project, the scheme is a first step from "government only" poverty reduction mode to "government & NGO cooperation" poverty reduction mode.

Wang Ming, president of the Tsinghua University NGO Research Institute, said: "NGOs will benefit a lot from this scheme," which also injects competition into the public service sector.

(China.org.cn by Wang Zhiyong and Wang Sining, January 23, 2006)