From the Soil: Can Private Money Really Cut poverty?

 In op-ed, personal

Hannah Ryder, CEO Development Reimagined visited Sangua, or ‘Three Melon Community’ in Anhui Province, to understand how private capital can support poverty reduction? Can the same be done elsewhere?

Watch her vlog to find out!

On November 23, 2020 China announced a landmark triumph – absolute poverty had been eradicated in rural areas countrywide. An incredible achievement when just four decades ago China was one of the most impoverished places in the world. Since the reform era of the late 1970s, over 700 million have been lifted out of poverty, contributing to over 70% of worldwide poverty reduction!

The Chinese government first pledged to eliminate poverty in 2015 at the United Nations, setting a goal for 2020. This hugely ambitious project seemed almost unfeasible. However, China quickly made progress. In 2012, there was 98.99 million living in rural poverty. This fell to 5.51 million by the end of 2019 – a total of 93.48 million lifted out of poverty in just 7 years.

But how did China do it? Tackling poverty in rural regions has been a monumental task across the globe, with many initiatives often failing or making minimal progress. To understand how China’s experience can be adapted to other developing countries, Hannah Ryder CEO of Development Reimagined visited Sangua, or ‘Three Melon Community’ in Anhui Province, Eastern China.

In 2015, the villages within Three Melon Community had an annual income under $500 – this falls under the international poverty line, which characterises extreme poverty at $1.25 per day. However, by 2017, the average income rose to $38 per day, an increase of 30.4% in just 2 years.

The key to this success may come as a surprise to some – as it was largely due to private capital. Typically, when discussing poverty alleviation, and especially when it comes to China, NGOs, charities, and governments spring to mind. There are endless examples of governments and charities around the world targeting poverty, with initiatives centred around aid and donations. However, as the Three Melon Community has demonstrated, bringing in innovative profit-driven private companies with a vested interest in the community’s success can generate effective results too.

So, what’s the story behind the success of Three Melon Community? Its history is relatively short. The community began as an artificial construct in 2015 and initially incorporated three local villages but covered a further twelve. It was the brainchild of Huaishang, a private company focused on the construction and management of restaurants and hotels, who invested over $120 million into the project, as did the local government – a “public private partnership” of sorts.

But how did this support poverty reduction?

Three Melon Community’s growth was driven by linking into two core trends: tourism and e-commerce. In China, domestic tourism expenditure has skyrocketed over the past decade and is expected to persist as China’s middle class expands. The China Tourism Association estimated that in 2017, there were over 2.5 billion domestic trips to internal rural areas, generating $240 billion in revenue. Huaishang capitalised on this trend and in 2018, the community attracted over 7 million tourists due to creating seasonal attractions that ensure year round consistent tourism levels – including “hot springs” for winter.

E-commerce was the other core component behind the community’s success, with chic boutique shops and e-commerce centre sitting in the heart of the village. The community has attracted the biggest e-commerce platforms in China, including Alibaba and JD.com. E-commerce as a method of poverty reduction is prevalent across rural China and is often associated with Alibaba’s Taobao Villages, numbers of which have soared over to 4,310.

Can Sangua provide lessons for the rest of the world, particularly the poorest? Well it may still be too early to tell.

Indeed, not everything is totally smooth sailing in Three Melon Community. For example, the community has faced challenges in attracting local tech-savvy talent alongside facing fierce competition with other rural areas who sell similar products. In addition, across China, rural communities often buy more through e-commerce than they sell. In 2017, rural consumers purchased over 5 times the amount they sold.

However, the experience from the Three Melons Community of combining e-commerce with tourism using private capital investment certainly provides important inspiration. The fact is, rural areas both in China and overseas need to continue to develop and improve living standards, attract talent and diversify income to overcome poverty. All too often the approach taken is to simply make small – between $10-$50m or so – investments in agriculture or in improving inputs for farmers to increase yields. Or to provide new schools and clinics for rural villages. But Three Melon Community provides an alternative to these strategies, which fits into a different model of investing significant capital in potentially profitable enterprises while helping village people to be enterprising.

Perhaps private capital could be the secret to unlocking these novel approaches in African countries too.

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EDMOND BOSILONG

Research Analyst

Edmond is a research analyst who is passionate about sustainable development, innovation, and the environment. Passionate about climate financing, he firmly believe there is a more reliable system to promote equality, growth, and welfare in societies without affecting the ecosystem. Through his skills, knowledge and experienced gained over 7 years, he wants to make an impact in the world of development. Edmond holds a Master’s Degree in Public Policy from Korea Development Institute and a BA Degree (Honors) in Business from University of Derby.

HANNAH RYDER

Founder and CEO

Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE's International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.

LEAH LYNCH

Deputy Director

Leah Lynch is Deputy Director of Development Reimagined (DR), and head of the China office. Leah has over 10 years of experience in development and has lived in China for over 8 years. Leah has also travelled extensively around Asia and Africa for research. Leah supports the strategic direction of the team across China, with a mission to deliver high quality research on sustainable development and poverty reduction. Leah is also Chair of the Sustainability Forum at the British Chamber of Commerce in China, providing direction on sustainability initiatives for British and Chinese business. Leah has also consulted on various evaluations on UK aid (ICAI) and is a specialist on development cooperation from the UK and China. Leah has also consulted on various UN projects, including providing support to the UN China team during the COVID-19 Pandemic. Prior to DR, Leah was at the United Nations Development Programme (UNDP) China, supporting the UN’s portfolio on communication strategies, China’s South- South Cooperation and the Belt and Road Initiative (BRI). Before UNDP, Leah lived and worked in Kenya developing sustainable water policies for the Kenyan government.

YIKE FU

China-Africa Policy Analyst

Yike Fu is a Policy Analyst and has been responsible for leading numerous areas of work, including on debt analysis in Africa and beyond, and China-Africa trade and investment logistics and analysis. She is the co-author of “African Debt Guide”, in which she challenged the narrative that Africa is in the midst of a new debt crisis by analysing data back to the 1970s and adopting new metrics to present the real story behind the data. She also developed a benchmark to compare the financial distribution of development partners such as the UK, US, Japan, France and China in Africa. Prior to her role at DR she worked at the International Finance Corporation and African Union Representational Mission to the US. She holds a Masters in International Affairs from George Washington University.

JUDITH MWAI

Research Analyst

Judith is a Research and Policy Analyst, where she specialises in Africa-China relations, international development, and diplomacy. During her time at Development Reimagined, Judith has co-authored several articles published in The Diplomat on debt and China-Barbados relations and was quoted by China Daily in a piece on Women Rights in China. Previously, Judith worked as a research analyst for an Advocate and Commissioner and Oats office in Kenya.

OVIGWE EGUEGU

Policy Analyst

Ovigwe specialises in geopolitics with particular reference to Africa in a changing Global Order. He is adept at critically analysing the politics of contemporary development processes and providing insight into the geopolitical interests that influence them. His work includes research, publications, tailored briefings and advising on global and regional trends, and issues at the nexus of geopolitics and development. Ovigwe appears frequently in media around the world such as Al Jazeera, TRT World, SABC, CGTN, BBC Radio, and other platforms.

JING CAI

Policy Analyst

Jing leads China-African health and agriculture cooperation research at Development Reimagined, having managed our FOCAC Policy Analysis and Advocacy project. She is also the co-author of “China-Africa Health Cooperation under FOCAC Umbrella”, in which she analysed China’s commitments around health cooperation since the first FOCAC summit and deepdived into four African countries’ health overview, challenges and cooperation with China as cases studies. Before DR, Jing worked at GIZ Cambodia on M&E of a disability advocacy project. She also worked as a translator with Chinese medical team in Benin.

PATRICK ANAM

Trade Policy Analyst

Patrick is an International Trade Policy and Trade Law Expert with over 5 years of experience. His expertise includes trade law, trade policy analysis and regional integration. He is currently engaged with Development Reimagined as a Senior Trade Analyst and was the lead author of Development Reimagined's recent Report on Africa-China Relations titled "From China-Africa to Africa- China: A Blue Print for a Green and Inclusive Continent-Wide Strategy Towards China." and “Reimaging FOCAC Going Forward.” Patrick has previously consulted for the East African Community, UNECA and for the Kenya Ministry of Trade.

ROSIE FLOWERS

Senior Policy Analyst 

Rosemary is our Senior Policy Analyst. She is a skilled policy analyst and has previously worked as a UK civil servant. She is studying Human Rights at Birkbeck, University of London with a research focus on international law in the context of health crises such as the COVID-19 pandemic.

JADE SCARFE

Project Manager and Africa-China Communication Assistant

Jade is a Project Manager for Development Reimagined’s flagship project Africa Unconstrained, which focuses on financing needs and debt vulnerabilities of African countries. Her research focuses on China-Africa development finance alongside debt vulnerabilities, infrastructure needs and South-South cooperation. She has worked with a breadth of stakeholders from China, Africa and the wider international community, including governments, private sector, NGOs and civil society. Her writing has appeared in a number of publications, including The Africa Report, The China-Africa Project, The Diplomat and more. Jade holds a Master’s in China and Globalisation studies from King’s College London.

ROSIE WIGMORE

Programme Manager

Rosie is the Project Manager of Africa Reimagined (AR) at Development Reimagined (DR) where she supports high-end African brands with entering the Chinese market by operating services such as trademark protection, Chinese market research, Chinese partnership building, and Africa to China logistical support and import/export services. Rosie has worked with DR for over two years now with proven success in helping high-end African brands navigate the Chinese market. She is extremely passionate about her work because more African brands selling in the Chinese marketplace means African countries can export MORE value-added goods, create MORE jobs and foster MORE innovation in African countries.

Rosie is also alumni of the School of International Studies at Peking University in Beijing where she is also an editor at the Peking Africa Think Tank. PATT is led by a diverse group of scholars who specialise in African Studies within the context of Sino-Africa relations.

LAUREN ASHMORE

Consultant

Lauren has lived in six countries from the Americas to Europe and Asia and speaks both French and Spanish proficiently. At Development Reimagined, Lauren’s research focuses on climate action both in the Asia-Pacific and in Africa, and how countries are using tools such as SDGs and Covid-19 action to build a more climate-resilient future. She holds a Masters in International Relations from Leiden University.

ETSEHIWOT KEBRET

Consultant

Etsehiwot holds a Masters’s degree in Development Studies from the London School of Economics. She has diverse experience in humanitarian and development issues by working in both multilateral organizations and international non-governmental organizations. Etsehiwot is currently a consultant focusing on the SDGs and development finance.

DIBEKULU MULU

Economist Consultant

Dibekulu is an economist by training. He holds an MSc in International Development Studies from Palacky University Olomouc, an MSc in Development Economics from the University of Clermont Auvergne, and an MSc in Economics, Finance, and International Integration from the University of Pavia. At Development Reimagined, he works as an Economist consultant. He has strong data analysis skills, with research interests centring around development finance, impact assessment, food security, and agricultural insurance.

OSARU OMOSIGHO

Research Analyst

Osaru is a health professional with an MSc in Health Systems Policy and an interest in women’s health and population management. At Development Reimagined, she applies her health sector experience to global health research and collating locally applicable development insights from China.

PIER FERDINANDO CINOTTO

Research Analyst

Ferdinando’s research at Development Reimagined is centred on South-South Cooperation dynamics, specifically on the analysis of Chinese investment and debt flows in Africa and their linkages to African industrialisation. He is currently a Yenching Scholar at Peking University, after having graduated from the University of Cambridge with an MPhil in Development Studies.

DAVID TINASHE NYAGWETA

Research Analyst

David is a Research and data analyst at Development Reimagined. His scholarly focus is mostly on interdisciplinary research in demographic economics and development with interests in migration, economic development and policy, education, health and subjective well-being. He is currently a PhD scholar at Nelson Mandela University from which he also holds B.com Economics and Statistics and M.com respectively.

IVORY KAIRO

Research Analyst Kenya

Ivory is a Kenyan lawyer with experience in policy research and analysis. She also supports the communications team at DR. Ivory speaks English, Swahili and French.

JOY ENE

Research And Data Analyst China 

Joy Ene is a Research and Data Analyst at DR. Joy is passionate about African/global development, poverty eradication and trade policies between underdeveloped and developing countries. She is also a fourth-year student of International Economics and Trade at the  Liaoning University, Shenyang, China. She serves as the President of the Student Union, Liaoning University, International Students chapter.

CHENSI LI

Research Analyst 

Chensi Li is a research analyst. She has previously worked for local NGOs in Nigeria and Cameroon and think-tanks in China.  Her research areas include Sino-African relations, African foreign affairs, public diplomacy, state-building and national governance.