Industrialization 'key to poverty reduction'

By ANDREW MOODY | China Daily USA | Updated: 2017-09-10 00:03

The continent should be pragmatic about implementing labor and environment laws, says Chinese academic

Chinese academic Li Xiaoyun believes it is important that Africans do not put up unnecessary barriers to attracting manufacturing jobs leaving China.

It is estimated by the World Bank that China could shed 100 million low-skilled manufacturing jobs over the next few decades.

But the professor of development studies at China Agriculture University believes whether Africa gets a significant proportion of these depends on how attractive a location it is for investors. The vast majority of jobs are currently going to Southeast Asia.

"The number of jobs China eventually releases could be as much as 20 to 30 percent of Africa's effective workforce.

"The problem for Africa is that it has some of the highest standards of labor protection, with labor unions very protective and similar to those in Britain and the US, as well as high standards of environmental protection."

Li, who was speaking at the Hilton Addis Ababa after the first day of the Africa-China High-Level Dialogue and Think Tank Forum addressing poverty in Africa, says there is nothing wrong with setting safeguards but there is a need for more pragmatism.

"I would say it is a huge barrier. It could, in fact, be the only barrier. They can have this political correctness and there is nothing wrong with that but it can also be a rich man's ideology."

Li says one of the problems for Africa is that it has become enmeshed in an aid culture, which has put in place a wide range of standards that in the end do not benefit the people.

This culture, he argues, is partly the result of the World Bank and aid agencies having too large a control over much of Africa's recent development.

"They are what I call a psuedo safety net concept and they do not really help," he says.

Li believes Ethiopia, whose government has strong links with Beijing, has adapted the right approach to attracting Chinese manufacturers.

One of the biggest manufacturing success stories is Huajian, the Chinese shoemaker which set up operations in 2012 and now employs 6,000.

"Huajian is exactly the model that Africa should learn from. They are taking advantage of what Justin Yifu Lin (the former chief economist of the World Bank and an advocate of African industrialization), says is their comparative advantage, which is labor.

"If this is your advantage you need to create an environment where labor can be employed. This can then generate what I call inclusive growth and then you could have poverty reduction."

Before the forum, a Financial Times report highlighted World Bank data that showed manufacturing shrinking from 7.8 percent of gross value added, or GVA — an alternative measure of national output — in 1997 to 4.1 percent in 2015.

"It is actually not declining but it is not growing as fast as other sectors. You have sectors like telecommunications and transportation growing faster. Manufacturing might be growing by 7 to 9 percent a year but as a percentage of GDP it is becoming actually lower."

Li insists industrialization holds the key to poverty reduction across Africa because it is labor intensive and provides jobs.

"Telecommunications and sectors such as mining are highly capital intensive and do not hire a lot of people."

Li, 55, from Dingbian in Shaanxi province in the Northwest and whose father was a Party official and mother a teacher, did a bachelor's degree in soil science and agronomy at Ningxia University.

He then went to Beijing to do his master's and doctorate at China Agriculture University, where he studied crop science and ecology.

Following his studies, he worked as a research scientist for the government at the Development Research Center of the State Council.

He later studied at the Catholic University of Nijmegen in the Netherlands before returning to China Agriculture University in 1994 as a professor of development studies and he has remained there ever since. He was also dean of the College of Humanities and Development there until 2014.

Li, who has written numerous research papers and regularly attends conferences, makes numerous trips to Africa every year, advising on agriculture projects.

He believes his scientific background gives him particular expertise in the whole area of development studies.

"It has given me a lot of advantages. I understand a lot about meteorology and soil sciences. I can say to people that they can't plant this because the soil is not right.

"People ask me how I know this and I say to them that I am a scientist and it is very basic. Like ABC, you know."

He is known for his hands-on approach and has been the team leader of a number of agriculture and poverty reduction projects in Africa.

He has done extensive work, in particular, in the Morogoro region of Tanzania, where he has worked with local farmers.

"I worked in one village, where they were producing three or four bags of maize per acre. I told them that I was an ecologist and that they needed to increase plant density. Within five years they were producing 20 to 25 bags an acre," he says.

He says this is a completely different approach than that of the World Bank or the African Union.

"They would just say that there needs to be investment in fertilizers and irrigation to do this, but there just isn't the money for that. You can organize farmers into communities where they can have their own water collection systems, their own small canals. It is so simple and there is no need for really big investment."

Li, a spry, wiry figure, works closely with the farmers in their own communities and likes the contact with local people.

"I find this work very interesting. I don't actually stay in the villages because you can easily contract malaria. I stay in very remote and often not very good local hotels," he laughs.

Li believes many of the problems Africa now faces relate to the colonial period when many African countries were run by European powers.

"There was very little in the way of industrialization and agriculture was not very developed. You had these very little colonial economies within the countries that just basically hired local labor. It was often about just transporting raw materials out to Europe."

The academic insists the experience was very different in white Commonwealth countries of Australia, New Zealand and Canada.

"These were not really colonies but settler economies. People settled there and invested in infrastructure and there were genuine technology transfers. When the colonizers left Africa in the 1950s and 1960s, the (indigenous) people who were left didn't know how to manage anything. There was no industry anyway and no manufacturing.

Li says that, in contrast, China pioneered irrigation techniques more than 2,000 years ago during the Qin Dynasty (221-207 BC) and that by the time of the Ming Dynasty (1368-1644) had quite advanced agriculture.

"Chinese agriculture was very much green crop-centered, such as wheat and rice, basically food crops. Because Africa is mainly tropical, the main crops were dry, like bananas, cassava and millet. Maize is quite new to Africa," he says.

Li says China's strong agriculture base meant it could also build the foundations of an industrialized economy and this is something that has been a problem for many African countries.

"This is the big difference between China and Africa. China began industrializing from the 1950s onward."

One of the focuses of the debate at the Addis Ababa forum was the book, Up and Out of Poverty, a collection of speeches and articles by President Xi Jinping when he was Party chief of Ningde prefecture of Fujian province almost 30 years ago.

"One of the principles of the book is the importance of self-reliance and that is something that Africa needs to think about," Li said.

"It has been used to being supported by aid and other initiatives and this is very bad."

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