Evergrande in GuizhouOver the course of 40 years, China pulled 700 million people out of poverty. Rural poverty “decreased from 55.75 million to 16.6 million” between 2015 and 2018. China had planned to completely end extreme poverty by 2020. The country’s agenda is one key driver; however, the effort from the rising private sectors has also been pivotal. China’s private companies have demonstrated innovative ways to tackle poverty-related issues. This article will introduce the case of one leading private company, Evergrande in Guizhou.

Private Investment

China has already had success with private companies working to eradicate poverty. E-commerce has been fiercely discussed on different stages both internationally and domestically for its role in poverty eradication. Alibaba has successfully exercised the strategy of promoting small business from remote and impoverished regions on its online platform to stimulate the commodity economy and end their poverty. In fact, Alibaba’s online sales platforms have helped more than 100 poor counties in China reach a sales record of $14 million in 2018.

In 2019, the United Nations Environment Program honored Ant Financial Services Group for its achievement in afforestation of 122 million trees in arid regions in China to improve their overall living conditions. This tech company also works to finance small businesses. Its Alipay platform provides online money transfer services, lending and investment funds.

Evergrande in Guizhou

However, differing from these online giants, Evergrande leads the real estate business in China. In 2018, the head of the company, Jiayin Xu, said the private sector should do more in poverty alleviation. In the same year, Evergrande won the trophy for its donation of $560 million, which also make them the number one organizational donor. That year, 68 percent of the money donated went towards poverty alleviation.

Absolute numbers of donations are not the only hallmark of Evergrande’s approaches in poverty alleviation. Evergrande has an obvious provincial focus on its poverty reduction projects. Evergrande started working in Guizhou, one of China’s more underdeveloped provinces, in 2015. According to the report, Bijie, Guizhou, received 51.9 percent of the total donation, which equals $302 million. In, Bijie, the number of people living in poverty has decreased by 5.94 million, dropping the poverty rate from 56 percent to 8.89 percent in the last 30 years.

Agricultural Reclamation

Besides the massive amount of financial input, the success that Evergrande in Guizhou has had in combating poverty demonstrates another key mark: a detailed and localized strategy. Evergrande’s research corroborates Guizhou’s traditional disadvantage in agricultural reclamation. Therefore, it developed various alternative measures.

Its plans were to develop Dafang County, Bijie City, Guizhou Province. The company had completed 103 projects targeted poverty by 2017. More than 180,000 local residents benefited from these projects. Through supply, production and sale integration, Evergrande helped Dafang county create 16,473 acres planting bases of economic fruits and 317 beef breeding farms. It also built 10,223 greenhouses and 22 cultivation centers.

China’s private companies have had impressive success in combating poverty. As a new player in the field, Evergrande in Guizhou demonstrated how a private company turns poverty alleviation into an economic opportunity for both local communities and companies. Indeed, the company has had a relatively short time in the field, but its role is no less critical than governmental help.

Dingnan Zhang
Photo: Flickr

Global Infrastructure
One of the key challenges facing developing nations is the lack of available infrastructure. Proper infrastructure can help a country build itself up by improving health, transportation, energy, education and a myriad of other vital institutions. Global infrastructure initiatives are a vital form of potential aid that can improve the quality of life for developing nations.

How Energy Infrastructure Helps Emerging Countries

USAID currently works around the world to improve the infrastructure of developing nations. In Afghanistan, the organization helped develop a national electric company that reduced energy loss in the country from 60 percent to 35 percent. Likewise, in the Philippines, USAID was integral in providing energy to 13,000 rural households via solar and hydroelectric plants. Similar projects are taking place in countries such as Jordan, Vietnam and the Ukraine.

Infrastructure is important to a country’s development because without it growth becomes difficult. Without the energy to power development projects of their own, foreign aid ends up catalyzing a nation to empower itself. By providing clean water, countries can save on healthcare costs and invest in other issues. This makes infrastructure one of the most cost-effective ways to invest in the future of a country.

How It Can Be Improved

Unfortunately, there’s a gap between infrastructure development funding needs and its availability. Erecting fundamental structures and corruption are both costly and difficult projects for governments to overcome.

In order to combat these issues, some experts have suggested acquiring funding from the private sector so as to help aid some of USAID’s massive energy project proposals. The theory is that by selling projects to private contractors, governments can cut costs and prevent corruption. However, others such as W. Gyude Moore suggest that actions like these do not resolve the core issues. In either case, it will take a combination of private investors and foreign aid to solve the problem for good.

According to Moore, there are a few key things to keep in mind while thinking about global infrastructure.

Global Infrastructure

  1. Not Every Country is the Same: It seems obvious, and yet current global infrastructure planning could do a better job of differentiating between countries. The G20 Global Infrastructure Hub Pipeline aims to help alleviate this problem by providing investors with comprehensive data on each project. With unique and accurate information, investors will be able to better match their skills and resources with each project.
  2. Private Investment is too Risky in its Current Form: With imperfect information and little standardization, many investors stay away from global infrastructure initiatives unless they can be guaranteed a profit from governments; this issue is then also combated by the G20 Global Infrastructure Initiative. By providing comprehensive information, investors can better prepare for their jobs, thereby reducing costs for themselves and the governments they work with.
  3. Different Types of Infrastructure are More Profitable than Others: While energy infrastructure attracts a large number of investors, more fragile sectors like water and transportation do not. Part of USAID’s infrastructure initiative is to help build these important systems. In Jordan, these efforts supported a water treatment plant that now provides clean water to two million citizens.

While tough challenges do exist for foreign infrastructure in the future, progress can be made via a combination of foreign aid and private sector investment. USAID is currently working to help foreign governments establish infrastructure, and the G20 Global Infrastructure Hub Pipeline helps investors make informed decisions. While there is always more that can be done in regard to global infrastructure, this is a promising start.

– Jonathon Ayers
Photo: Flickr