China was ranked 81st on a list of countries published in the 2006 Human Development Report (HDR). What does this mean for China? Our Stockholm Correspondent, Xuefei Chen, interviewed Kevin Watkins, director of the UN Human Development Report Office, during a seminar held on Friday in Stockholm about how clean water and sanitation will reduce poverty by half before 2015. The seminar was organized by the Stockholm International Water Institute and more than 200 people from the UNDP, business, NGOs, the water industry, and people involved in climate change and human rights participated.
China faces challenge in social equity
Mr. Watkins was the main author of the 2006 HDR. He said that China performed better than expected in terms of average income. Although the Chinese economy is huge, the enormous size of the population means that China's GDP per capita is still very low. Mr. Watkins thinks the real challenge for China is turning its huge economic power into human development in terms of health, education, the environment and so on.
"People in China are very aware of the big issues such as equality and health. I think the big challenge is how to prevent the inequality between different areas and high and low income groups from growing bigger."
Watkins said China has a strong record in immunization programs. These are among the best in the world in terms of coverage and quality. It also making the fastest progress in the world in terms of improving literacy and child mortality rates, achievements made possible by government programs.
The big challenge now in China is the decentralization of health financing. There is a gap opening up between the rich and the poor areas. "And that is a worrying sign," said Watkins. "Now we see some of the poorest areas are falling behind. We see personal illness become the major cause of death in a lot of rural areas; we see people excluded from the health system because they can't afford the fee. I think that is a very dangerous pattern. And I think what China is trying to avoid is a system like that in the US where you have first world health care for some but many people live in a third world health system."
Economic growth should be turned into human development
On the question of whether a GDP per capita growth comparison should be the focus of GDP growth, Watkins says it is important to have good economic growth, but the key issue is whether that growth is shared widely. If it is not shared widely, it can become a very destabilizing factor and over time will hold back growth. He used Latin America as an example, where inequality has become a barrier to economic growth.
"Economic growth should be turned into human development. More growth does mobilize more financial resources, but how does the government allocate those resources? How do they spend them? Do they tax one part of the country and spend in the other part of the country? These issues are crucial in the inequality of distribution."
He thinks it is a good sign that this issue has become an increasingly central part of political debate in China. "I think political leaders recognize that you can't have high growth when rich people are going like this and poor people are going like that because that will be very destabilizing. And it will also create problems like mass migration from rural areas and social instability. So people talk about China's path now. And I do think it is important that China counter balances growth with human development."
Watkins said that, in fact, human development depends largely on political desire to do so. For example, some countries such as Vietnam have performed very well in terms of child mortality and education, better than rich countries such as Saudi Arabia in the Middle East. In terms of water and sanitation, Egypt and Thailand performed better than some richer countries in Latin America. In Africa, poor Senegal performs better in terms of water than the rich Kenya. It doesn't matter how much money one has if the river systems collapses.
Mr. Watkins says there are two major problems in China related to water. One is that water resources in northern China are severely stretched due to urbanization. The development of more commercial agriculture means that more water has been taken out of the glacier system, resulting in the water level dropping. The other is industrialization.
"In any country the industrialization process carries away waste from factories and from human settlements, and that waste goes back into the water system. Now some countries are efficient in managing that ¨C Israel is a good example and to some degree, Mexico is another example. In Mexico they have very strict rules governing water from human resettlements. It can be recycled and used for agriculture, or treated and used again for drinking water. I think China has one of the biggest challenges which is to establish a regulatory framework for treating water in urban areas so that waste water does not filtrate into rural areas without treatment, which can spread disease.
"I think the government in China has acknowledged how serious the problem is. Actually, many people are very critical about China's water management policy, but it is also true that some innovative and positive things have been happening in China. For example, the development of a water demand management system in the north of China and an integrated water management system. I think the difficult thing is that even if you have good laws in place, even if the regulations are written on paper, they may not actually be enforced on the ground. What you find in a lot of cases is that there is a demand conflict between farmers, industry and urban areas, and whatever the regulations say, the small farmer will lose out because of the political influence of industry and urban areas. And that raises the basic question of how you make sure the weak voice of the poor people is heard in water regulation and management. So there is a need for decision-makers to be aware of the weaker parties.
"The tendency of the politician is always, if he has demand for water from two parties, one from the factory and one from the farmer, to favor the factory. These people have a lot of political influence in the Party, and they employ a lot of people in urban areas so he can't afford to upset them. Many politicians want to work with these guys, so the tendency is to give in to their demand. The farmers are disorganized, spread across many areas and they don't have much political influence. I think the critical role of the government is to give those people a voice and that means giving human development and the environment the same consideration as economic growth.
"In the long run, economic development gives you the resources to solve problems, but, if a whole river system collapses, then it doesn't matter how much money you've got, you can't create a river system. Some rivers just dried up in the north and the ground water level has sunk so low that the whole ecological system has collapsed. For these issues, you can't wait until your GDP doubles. You can't say that when our GDP has doubled, we will solve the problem, because it is too late. So you have to integrate it and recognize that there is a tradeoff and constraint, yes, there is some environmental damage, but there is a limit to how much damage the environment can withstand."
Treat water as a very precious national asset
Mr. Watkins thinks China should have a more efficient water management system.
"You have a lot of water intensive industries. What if you change the incentive structure so that you tax them for using too much water? Then they will develop technologies to produce with less water. Perhaps farmers, instead of having a huge irrigation system which draws from rivers, can have small-scale dripping irrigation, targeting the crop more closely. I think that is what the government needs to do to manage the market," said Mr. Watkins.
"You need to treat water as a scarce resource. I think most countries, including China, over the last 50 years, have treated water like it will always be there. I think the government should stop thinking water is free goods, and start thinking it is a national asset, very precious, and that we need to attach a price to it."
Mr. Watkins says that attaching a real price to water will make people use water more efficiently. "That creates a mentality (for factories) that if we have to pay to for releasing waste water, then let's set up an infiltration system so we don't get charged. Or if we use water and we are going to get charged according to volume, then let's take measures to lower the volume of water we use. That mindset will send the right signal to the market, but the government must also recognize that farmers are living on less than one dollar a day and cannot pay the same price as factories, so there needs to be a social pricing system for people who are marginalized."
Watkins says to carry on doing what the country does now is not a good prescription for the future. "After all, you have to say what you are facing in a country. You can carry on as you are, but in the end, the severity of the crisis will ultimately have an impact on growth. You can't escape the fact that these factories which need cheap water to grow will not have cheap water to carry on as they are. So something has to change. And the big issue is how do you facilitate the change. The government can do a lot by creating incentives and establishing the right support to smooth the way for change."
A better way of resolving the water shortage is managing demand
Mr. Watkins thinks that diverting water from different areas is only a temporary solution. In the long run, people have to be aware that snow from the Himalayas can perhaps only support humankind for 100 years because of climate change and global warming. So the main thing is to manage demand and do things within current resource capacity, to slow climate change. The better way is to avoid ¡®hydrological debt' and manage water demand.
"In north China, water use is two or three times the volume of water flowing through. If you carry on using that amount, the consequences will be very visible as the ground water table will collapse, and soil erosion and desertification will make the river system dry up. And that is what is happening."
Watkins says there should be a water management policy to say that "we have hard facts proving that we only have a certain amount of water and that we must scale down water use. How do we scale down? We must levy a tax, invest in more efficient water use, dripping irrigation, new technology in small-scale industry while committing to social equity."
By People's Daily Online
