Thirty years ago, a greater percentage of China’s population lived below the poverty line than in most other countries, according to the World Bank.
Drastic economic reforms were undertaken. From 1981 to 2005, the proportion of China’s population living in poverty dropped from 84 percent to 16 percent.
Photo courtesy of Joel Esler
China’s phenomenal progress occurred in part because individuals had the opportunity to unleash their entrepreneurial spirit: On average China’s economy grew almost 10 percent annually, and today nearly half the economy is driven by privately owned businesses.
A similar story is unfolding in Brazil, in India, and in other countries focused on unlocking entrepreneurial abilities.
From 1981 to 2005, Brazil’s poverty rate was cut from 17 to eight percent, and India’s, from 60 to 40 percent. Through job creation, more people than ever before are being lifted out of poverty, according to the Brookings Institute, and as Dr. Scott Todd of 58: has pointed out, between 1981 and 2005, extreme global poverty was cut in half, from 52 to 26 percent.
Is Africa Next?
According to a recent report from the World Bank, countries in Africa are on the verge of the same remarkable path toward wealth creation as China was 30 years ago. Until the recent financial crisis, its economy was, on average, expanding five percent annually, and even after the recession, it has experienced rapid recovery.
To eradicate poverty in Africa, we need to recognize the way economic development led to China’s success. Then we can focus on initiatives that enable Africans to use their creativity to transform their communities.
Thankfully, there are innovative ways the church is already getting involved:
- Private Investments: Africa’s future looks bright because of the difference private investments are making in the continent. Generating 1.7 million jobs from 2003 to 2010, its impact bypasses the effect of aid, according toThe New Africa: Emerging Opportunities for Business and Africa. SpringHill Equity Partners, Sinapis Group, Karisimbi Business Partners are showing how larger investments and mentoring can create successful, large-scale enterprises. See http://springhillequity.com; www.sinapisgroup.org; www.karisimbipartners.com.
- Education: Prior to its economic reforms, China’s educational system was far more advanced than most other developing countries. According to the World Bank, primary education was “well over 100 percent” in 1980, and its “adult literacy rate… was 66 percent in 1981.” Because of its educational foundation, China’s poor had skills and knowledge that translated to employment in a free-market economy. My friends, Chris Crane and Tiger Dawson, are helping to build the foundation for economic success in the developing world through Edify. Taking an entrepreneurial approach to low-cost private education, they are coming alongside Christian educators and providing business loans and training to advance a model of low-cost private education in the developing world. See www.edify.org.
- Health: China’s health-care system was also better developed than other nations at the outset of its economic reforms, giving it an edge to overcome poverty. To create the groundwork for better healthcare in Africa, a nonprofit called LifeNet is franchising Burundi’s church-based health clinics—upgrading and expanding existing clinics, providing nurse, management and pharmaceutical training—so that more of the poor have access to quality, affordable healthcare than ever before. See www.lninternational.org.
- Microfinance: Microfinance—encompassing business training, small loans, and savings—has been crucial to China’s poverty reduction, according to the chairman of the board for the Bank of China, Xiao Gang. While China is making great strides toward financial inclusion, only 25 percent of Africans have access to such services. Partnering with the poor, HOPE International, Opportunity International, and Five Talents offer small loans to entrepreneurs who can start or expand their businesses and provide for their families—helping pave the way for a flourishing middle class. They often provide biblically based business training and savings. See www.hopeinternational.org; www.opportunity.org ; www.fivetalents.org.
As we as a Church awaken to what is possible within our lifetime—eliminating extreme global poverty—social entrepreneurs and Kingdom-minded investors are playing a critical role.
Re-posted from my guest blog for 58: http://www.live58.org/microenterprise-development/taking-china-story-of-success-to-africa/.
58: is an unprecedented global alliance of Christians, churches and world-class poverty-fighting organizations working together to end extreme poverty in our lifetime by living the True Fast of Isaiah 58.