[lbo-talk] World Bank sets out 5-year China development plan

uvj at vsnl.com uvj at vsnl.com
Wed May 24 15:36:18 PDT 2006


Reuters.com

UPDATE 1-World Bank sets out 5-year China development plan http://today.reuters.com/business/newsarticle.aspx?type=tnBusinessNews&storyID=nN23212234&imageid=&cap=

Tuesday 23 May 2006

(Recasts; adds quotes from statement, China director)

By Mike Dolan

WASHINGTON, May 23 (Reuters) - The World Bank on Tuesday set out a new five-year plan for its development projects in China, lending up to $1.5 billion per year and focusing on poverty reduction as well as easing the environmental and social fallout of the country's economic boom.

The bank on Tuesday said its Board of Directors backed the so-called Country Partnership Strategy for China for 2006-10 and endorsed a range of goals topped by China's further integration into the world economy.

The plan, which is synchronized to run in parallel with China's own five-year economic plans, had also been approved by the Chinese government, the bank said.

"The new Country Partnership Strategy recognizes clearly that the helping China to strengthen its economy, manage its resources and environment and improve governance are important not only for China, but also for people all over the world," World Bank chief Paul Wolfowitz said in a statement.

The World Bank said continued involvement in China, despite the economy there having mushroomed into the fourth largest in the world, was rooted in a need for World Bank expertise in dealing with what was still a mammoth development task.

Five areas of focus included reducing internal and external trade barriers; promoting balanced urbanization and sustaining rural livelihoods; projects to cut air pollution, conserve water use and optimize energy consumption; developing the financial system and reforming key institutions.

The bank said about 70 percent of the proposed projects would be in the poorer inland provinces of China.

"China remains a developing country, with GDP (gross domestic product) per capita about $1,740 and more than 135 million people living on less than a $1 a day -- mostly in rural areas and in the lagging inland provinces," the World Bank said.

The overall plan would include a growing role for the International Finance Corporation, the World Bank's private-sector lending arm, which expects new investments in China to exceed $500 million per year, it said.

Although the planned World Bank lending to China is second in total to the $2.9 billion loaned to India last year, a figure boosted by needs stemming from effects of last year's Indian Ocean tsunami, China is still the World Bank's biggest client in terms of numbers of projects, it said.

ENVIRONMENT AND MIGRATION

David Dollar, who heads the World Bank's 120-strong staff in China, said he saw the bank's continued role as increasingly one of shared learning for both parties, including piloting new ideas to help ease the strains of breakneck growth.

Dollar said one if his biggest concerns was how China copes with the environmental strains resulting from the boom.

"While China has had a lot of development success, in general many environmental indicators have gotten worse,' he told a news briefing, adding this was in many ways going to be the bank's largest area of activity.

About 60 percent of the World Bank projects planned over the next few years will have environmental issues as the primary objective, projects such as waste water treatment, reducing air pollution, changing home heating equipment.

"This new five-year plan that China has just approved puts a lot of emphasis on environmental improvement," Dollar said, citing Beijing's target of improve energy efficiency by 20 percent and cutting the discharge of pollutants by 10 percent over the next five years.

"But more needs to be done," he added.

Poverty reduction and mass migration issues were other key areas of focus and were clearly intertwined, said Dollar.

"There are just, frankly, too many people trying to live off the land in China," he said. "There's just no way 800 million people can live well off China's natural resources."

Dollar said one of the World's Bank's projects was to pilot test a number of social services that help the migrants integrate into the cities and get access to housing, schooling and healthcare.

"We think an inevitable feature of China's next 10 to 15 years will be very significant rural-urban migration -- roughly 10 million per year," he said. Easing this process will help reduce poverty and reduce pressure on the land, Dollar said.

© Reuters 2006. All Rights Reserved.



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