Speech by Renata Lok-Dessallien: From Low Carbon development to Inclusive Growth: Why China and the UN need each other?

30 Mar 2011

Asia Society Hong Kong Centre

From Low Carbon development to Inclusive Growth: 
Why China and the UN need each other?

30 March 2011

Ladies and gentlemen,

It is a great pleasure to be with you today. I would like to warmly thank Gavri Lakhanpal of the Asia Society Hong Kong Center for organizing today’s luncheon.

I.                    Introduction – what is development?

"Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime.” I am sure you have all heard this old adage. Nobody knows for sure where it came from. Like so many other pieces of ancient wisdom, it probably originated in China.

Why am I talking about fish and fishing? Because, to be frank, it helps explain what the United Nations Development Programme, or UNDP, does. Our work is complex. We do most of it far from the lime light where sound bites have no resonance. And we are programmed to see things from the perspective of the people we are trying to help, so we are often better at explaining them than we are at explaining ourselves, which brings us to fish.

The man without food, he needs to eat. He needs a fish. It’s essential. It’s life-saving. Such is the work of tremendous charity organizations the world over. And I know that many of you in this room are generous patrons of charities yourselves.

After disasters, such as the 2008 Wenchuan earthquake, UNDP also steps in to give people fish – or tents, blankets, or whatever else they need. But beyond that, UNDP’s role is quite different. What we are about, and what ‘development’ is about, is teaching the man to fish and helping assemble all the factors required for him to have a successful fishing career.

In addition to learning new skills, this can entail a whole range of things. There may be a problem of access – perhaps the neighbours have a monopoly on fishing rights, squeezing out our hungry man. There may be legal barriers – laws that prevent our hungry man from fishing – such as in Cambodia in the late 1990s when riverbanks were privatized which led to many hungry fishermen. There may be cash flow problems – maybe our hungry man cannot access credit to buy the boat he needs to go fishing. Or there may be environmental hazards – chemicals or fertilizers may be killing off the fish. All this to say it’s not actually as simple as merely teaching the man to fish.

Development means looking for all the underlying causes that make our hungry man poor, that make him powerless and vulnerable, and it means engineering lasting solutions. This is what UNDP does.

UNDP’s role in development

From its inception in 1945, the United Nations was given three mutually reinforcing mandates: peace and security, human rights, and development – all are necessary for basic human dignity and human wellbeing.

UN development work began in 1949, the same year as the founding of the People’s Republic. It was then that the organization, which later morphed into UNDP, was born.  Today UNDP has programmes in 166 countries on four continents and many island states. Before the effects of the global financial crisis hit us, we were spending $5.5 billion a year on development programmes. Last year, this dropped to $4.7 billion. In China last year we spent $64 million on development projects.

Today, I will try to give you a flavour of what UNDP has been doing in China, why we are still in China despite the country’s rapid development, why China wants us to remain, and  how this may have some relevance to Hong Kong.

What UNDP has been doing in China for last 30 years

UNDP opened its office in China in 1979, around the same time Deng Xiaoping was opening up the country and introducing market reforms.

In the beginning, we focused mainly on technology transfer, modernizing industries, agriculture, and training. The very first UNDP project was located in Inner Mongolia and it expanded vegetable cultivation. Any of you who were in Beijing in the early 1980s will recall that virtually the only vegetable on the menu was cabbage. After our project, the availability of vegetables in the markets expanded -- we not only increased domestic vegetable varieties, but also introduced new ones from abroad – like the humble broccoli. Yes, it was a UNDP project that introduced broccoli to China.  This boosted farming revenues and people’s nutritional intake.

In those early days, UNDP also worked on upgrading production technologies and energy generation – fields where the country needed special efforts to modernize and where industrial nations had erected walls to prevent the transfer of hi-tech technologies. From synthetic fibre research to oil-drilling techniques, our efforts were generally successful and the government gained confidence in us.

Most of our early programmes involved training of some sort. In fact, it was during a UNDP sponsored study tour to Ireland in the early 1980s that Jiang Zemin, together with Zhu Rongji, first began conceptualizing how Special Economic Zones could be introduced to China. These zones were a sensitive political topic at that time, associated with sovereign rights. Years later, after becoming President, Jiang Zemin mentioned the importance of this study tour to the Head of UNDP. He told us how instrumental it had been in helping him build his case for SEZs in China.

UNDP was also asked to bring in international experts to train Chinese in areas like computer science, economic planning, management. Premier Zhao Ziyang mentioned more than once a small-scale UNDP project that he considered most valuable:  a one week travelling seminar for the up-and-coming young elite who surrounded Deng Xiaoping at the time.  It took place on boat, sailing down the Yangtse River with world renowned international economists, including a Nobel laureate. 

Later, UNDP was asked to help lay the ground work for a new approach to the Chinese Civil Service. It was under a UNDP project that political cadres were separated from the regulation of career civil servants, and that clear rules for the appointment, promotion and tenure of civil servants were set. UNDP also played an important role in helping establish the National School of Administration in 1988. It went on to become a premier training center for middle and senior level government officials, later changing its English name to the China Academy of Governance.  We helped train tens of thousands of government officials across a whole range of fields over the years.

By the 1990s, UNDP was helping China to prepare for WTO accession. For example, we helped the China Patent and Trade Mark Office to start handling intellectual property rights. And we helped modernize the customs service, reducing clearance time dramatically which was vital for China’s opening up. 

In 1992, a major project was launched to assist the Legislative Bureau under the State Council to organize 19 government ministries and departments to develop the country’s new economic legal framework. 23 major economic laws were drafted with assistance from this project, including the Budget Law, the Foreign Trade Law, the Banking Law and the Securities Law.

Around that time, UNDP’s portfolio of programmes also started focusing more on social development, poverty reduction and environmental protection. We began working with ethnic minority communities, we introduced microfinance pilots. In the 1990s, we helped lay the foundation for Social Security reform with several projects that enhanced the technical competence of Social Security planners and administrators.  Later still, we began assisting migrant workers and their families.

UNDP’s portfolio in China eventually settled around 4 focus areas which remain today: poverty reduction and social inclusion; climate change and environmental protection; governance; and working with China on south-south collaboration – China’s own development cooperation abroad. 

You may ask what about health and education?  That is a good question.  UNDP is part of a bigger UN system and these two important areas fall under the mandates of other UN agencies, such as the World Health Organisation, UNESCO and UNICEF.  UNDP does not usually work directly in these fields.  

II.                  Why is UNDP still in China?

China has now immerged as the second largest economy in the world. It lifted over 500 million people – the equivalent of half of Africa – out of grinding poverty. It has become the world’s biggest creditor nation. It not only helps other developing countries with their programmes, it is helping to bail out the economies of Greece and Ireland. Surely China can take care of itself now? Why is UNDP still in China?

It’s true China has chalked up remarkable achievements and is now leading the world in many fields. But there are some very good reasons why UNDP remains in China.

Firstly, China’s impressive modernization, as you know, is only part of the story. Despite  unprecedented achievements, China still has 150 million people who live in extreme poverty,  300 million people who have minimal or no access to clean water, and some 230 million migrant workers who cannot access adequate health care and social security. There are huge disparities between west and east. In some provinces of Western China, per capita income is equivalent to Sudan (Gansu), or Bolivia (Yunnan). China’s rapid rise has not raised all boats equally. So much for the trickle down theory.

Rapid growth also took its toll on the environment. 16 of the world’s 20 most polluted cities are in China. 75% of the countries’ rivers are too polluted for drinking, fishing or even irrigation. And the country is very vulnerable to natural disasters. In 2010 alone, 430 million people were affected by disasters. Nearly 3 million houses collapsed from earthquakes, flooding, mudslides. And 60% of these victims of disasters live below the poverty line. So China still needs our help. China is still a developing country in many respects.

But there is another, equally important, reason why UNDP remains in China. Because most of the big global challenges today can only be overcome if we work with China:

·                     Global poverty. The UN Millennium Development Goal to halve global poverty by 2015 will only be reached if China’s poverty reduction efforts are successful.

·                     Global warming. China produces about 26% of global CO2 emissions. And while per capita emissions are low, they are rising fast; already they have reached 77% of the EU15 countries. Global warming cannot be meaningfully addressed without China.

·                     The environment. If China’s environment is not well managed, many of the ripple effects will be felt far beyond China. Air pollution and contaminated water show no respect for national boundaries.

·                     Natural resources. Across the world, too many countries are using too many of the earth’s resources too quickly. According to the WWF, if all the people of the world were to reach the same level of consumption as that in the United States today, we would require 4.5 Earths to meet the resource needs. As China’s population is 20% of the human race, clearly we must work with China to find sustainable growth paths.

·                     Food security. China is inextricably linked to global food prices. Poor countries the world over are reeling with the latest price spikes, but how much worse it would be if China had not maintained its own food self-sufficiency. And how might things look in future if we do not work with China to ensure it continues to produce enough food to feed itself?

·                     Global financial systems. In 2008, the global financial meltdown revealed serious flaws in Western banking and regulatory systems. The world needs better systems for banking regulation, trade, investment and currency trading. No new system can be successfully conceived without China on board.

In short, without China, we cannot hope to fix the big problems associated with global public goods.

These are some of the reasons why UNDP continues to help China.

But these reasons would be merely abstract notions if it were not for one important fact:  China wants us to stay. Despite China’s great strength, her leaders still want to continue learning from international experience through UNDP and other UN agencies. They still want our assistance in adapting and piloting projects locally, and our help translating successful pilots into policy.

III.                Why does China need UNDP?

So what exactly do we offer that China needs and cannot obtain itself or through other channels? I think that there are five key things:

First, we travel light; we don’t bring baggage – we don’t have national or commercial interests, and we don’t push blue print solutions or development ideology. Yes, we are guided by international standards, norms and knowledge. But at the same time we are context sensitive and we are pragmatic. We help China feel the stones to cross the stream, but with a GPS in hand, a UN GPS. Because of this, we can work on certain issues in China that others may not. For example, when we began working with China on CO2 emissions reduction more than ten years ago, it was under the general radar screen. The international climate change negotiations caused countries to take strong positions on various climate change related topics. But UNDP was able to work quietly with China on some of these very same issues because of our neutrality. For example, since 2000 we’ve been supporting a programme to replace every single lightbulb in China with low energy bulbs – that a lot of lightbulbs and a lot of CO2 emissions saved!  We are getting close to the half way mark now, but still have a long way to go. We also helped in the preparation of provincial climate change strategies – 22 out of 31 provincial plans are now completed.

Second, UNDP’s neutrality allows us to get involved in ‘sensitive’ areas. For example, when HIV-AIDS first emerged as a threat in China in the early 1990s, UNDP supported campaigns to promote condom use and to halt discriminatory treatment against people living with AIDS. These did not go down well with some, as HIV/AIDS was taboo at the time. But it had to be done and by partnering with UNDP, some of the tensions gradually disbursed. Today, HIV-AIDS is no longer taboo and there are action plans in place across the country to address the problem. More recently, UNDP helped China to revise its NGO registration policy – also a sensitive area. At least in Shenzhen now, NGOs can register directly without having first to affiliate with a supervising state organization.  UNDP also supported the revision of national regulations regarding tax deductions on contributions to NGOs.  We know there are still constraints facing implementation, and we are working with Government authorities on how to better enforce the new regulations.

Third, UNDP is widely respected in China.  We are an old friend. This enables us to point out areas in need of attention. Usually we do this quietly behind closed doors. But sometimes we advocate for things more publicly. For example, in 2005 we published a National Human Development Report on inequality and disparity in China. We called attention to important development gaps between rich and poor, urban and rural areas, Western and Eastern regions, and special vulnerable groups. Today, the topic has found its way into the public discourse, but back then it was not discussed openly. While UNDP cannot claim that this was solely the result of our efforts, indeed many other national and international actors advocated along similar lines, we played our part effectively. Our messages may be somewhat uncomfortable at times, but because we are an old friend, I believe China appreciates our frankness and knows that we offer it with the country’s best interests at heart.

A fourth reason China wants UNDP to remain has to do with our convening capacity. We can bring together stakeholders who might not otherwise collaborate. Take for example, UNDP’s work on HIV-AIDS. When the threat of HIV-AIDS first emerged in the early 1990s from the long-distance trucking sector, UNDP worked with three seemingly unrelated ministries, i.e. Health, Transportation, and Public Security, helping them to work together to address the problem.   Last fall we brought together 16 Director Generals/DDGs and 15 provinces to discuss elements of China’s new Ten Year Poverty Reduction Strategy.  We also frequently bring different types of actors together – government, NGOs, private sector, academia – national and international experts.  UNDP is also able to provide unique multilateral fora for countries to dialogue.  For example, in Northeast Asia we provide a platform for promoting economic, trade, energy, and environmental cooperation between China, Russia, Mongolia, DPRK and ROK. And, China and UNDP regularly hold side events at the international Climate Change negotiation meetings to expand opportunities for dialogue between negotiating states and CSOs.

A fifth attraction of UNDP is our universal network of country offices and our decades of development experience. China benefits from this. For a long time, we used our networks to bring experts to China to help build capacity here. While we continue to do that in selected sectors, we also began using those networks to help China with its own development collaboration. For example, back in 2004 UNDP and the GoC created the International Poverty Reduction Centre of China (IPRCC) to analyse China’s poverty reduction work and to train people from other developing countries.  So far the Centre has trained over 720 people from 91 countries.  We helped to mobilize experts and trainees from across Asia and Pacific, Africa, Europe, Latin America to participate.   

IV. What exactly does UNDP do in China?

So UNDP needs China and China needs UNDP. But what exactly does UNDP do in China? Firstly, it’s important to remember that UNDP is an intergovernmental organization. That means that we work in close partnership with governments and national institutions. While we partner with many other development actors, such as the private sector, NGOs, community groups, etc., our primary partner is government. In China, we are coordinated by the Ministry of Commerce, although implementation of our programmes is done through a host of other central and provincial government institutions. Now let me give you a couple of examples from our work to combat climate change and to promote inclusive development.

Climate Change

We all know China is not only the biggest CO2 emitter in absolute terms, but also one of the countries most vulnerable to the effects of climate change.  China has decided to transition to a low carbon society, but that isn’t going to be easy.  UNDP has several big programmes with the National Development and Reform Commission in this area, including one that involves that most basic of kitchen appliances – the refrigerator.

This is the refrigerator in UNDP’s office canteen in Beijing. Like all other refrigerators in China today, it has an innocuous-looking label indicating its energy efficiency on a scale of 1-5, with 1 being the most efficient. It shows that China has internalized the need for energy efficiency as a way of life. But it was not always that way.

 In 1999, UNDP noted that refrigeration had become the largest, single end-use of electricity by Chinese households. By 2003, China was already producing over 30% of the world’s refrigerators with annual sales exceeded 20 million units from the domestic market alone. Yet, Chinese refrigerators consumed almost twice the energy of those from the European Union, United States, or Japan. So we partner with the NDRC to tackle the problem. Our project faced three key challenges:

 ·         First, China had no energy efficiency standards. We had to develop these in a way that was technically feasible, commercially viable, and in line with international standards.

·         Second, the private sector had to be convinced. They would have to transform not only their production floors, but the entire supply chain. Did they have the human resources, management, technology, and capital? Could they make money out of the switch-over? If our project could not demonstrate profitability, it would not succeed.

·         Third, could we encourage retailers to sell and the public to purchase more expensive energy-efficient refrigerators? It’s one thing to develop government standards, but quite another to change people’s consumption habits.  If the public refused to purchase the new product, the initiative would fail big time.

Of these three challenges, let me focus on the second two. The project began by targeting 12 refrigerator manufacturers and 6 compressor companies, which later expanded.  To get these companies to understand what the switchover entailed, we organized in-country and overseas training for their engineers.

To speed things up, a competition was organized for refrigerator manufacturers. They received a modest monetary incentive (ranging from $60,000 to $120,000) to design and produce energy-efficient refrigerators (between 2001 and 2005). The company that could produce and sell the product that saved the greatest total energy over a 12 month period received $1 million.

And the winner was Kelon, who produced and sold 442,000 units during the first 6 months of the contest period, and 1 million units within a year. Its model was 67% more energy efficient than the prevailing norm – and went on to achieve the distinction of being one of the most energy-efficient refrigerators in the world. A similar competition was organized for compressor manufacturers.

The we had to demonstrate to retailers that there was a profit to be made and we had to raise public awareness and build public preferences for energy efficient refrigerators.

In late 2003, we selected 57 large nation-wide electronics and appliance retailers to participate in our program. We sensitized them on the links between energy-efficient appliances, environmental impacts, and the electricity bill savings for consumers. We discussed the new refrigerator efficiency standards and labels. And we trained them on how to persuade consumers to purchase the new product.

We then introduced prize draws in participating stores to attract captive audiences. Over 35,000 top-rated energy efficient refrigerators were sold during the trials.

It was important to ensure that buyers appreciated the long-term lifecycle savings offered by the new refrigerators, rather than just the initial purchase price. So we partnered with the China Household Electric Appliance Association (CHEEA), to hold public awareness campaigns beginning in 2002. We prepared promotional videos, issued media releases in urban markets, radio broadcasts; energy-efficiency slogans.

In the end, all three stands of work came together – the national standard setting, manufacturing, and retailers and customers.  The results speak for themselves.  By 2005, 11 million tones of CO2 emissions had been saved, and by 2010 that figure soared to 42 million tones of CO2 emission savings. That is equivalent to about ten 600 MW coal-fired power plants.

Volunteerism

Now let me tell you about a very different line of UNDP work in China – volunteerism. In China, campaigns and mass events involving volunteers have featured over the years, of course, but a new form of modern volunteerism emerged with UNDP help several years also.  It was inspired by the United Nations Volunteer programme that UNDP administers around the world.

In 2007, UNDP approached the Beijing Youth League with the idea of promoting volunteerism for the 2008 Olympic Games.  They liked it. So we started by recruiting a core group of 100,000 volunteer leaders, managers and trainers.  They went through rigorous training to be able to subsequently train and manage the 1.7 million volunteers mobilized by the Beijing Youth League (through the Beijing Volunteer Federation).  The young volunteers, aged between 18 and 28, were successfully trained and managed and they performed a whole range of useful services for the 3 million visitors to the Olympic Games.

After this enormous success, other event organizers began to solicit our experience.  Our model was adopted for the 2010 Shanghai EXPO with its 1.8 million volunteers, and later for the 2010 Guanzhou Asian Games with its 590,000 volunteers.

Not long ago, the Beijing Volunteer Federation and UNDP were requested to share our experience and management techniques with Kazakhstan for the 2011 Asian Winter Games. 

As our volunteer model spread like wildfire, we decided to turn our sights to promoting volunteerism for development, starting in Beijing.  Rather than using volunteers solely for campaigns and mass events, we are now working on ways for volunteers to deliver services through NGOs to vulnerable groups in local communities. 

This kind of work had already begun by itself.  But NGOs were having trouble managing their volunteers.  So we started helping them by working out the procedures, structures and training needs for successful volunteer management. 

Hong Dan Dan Education Center in Beijing is a good example.  It was established in 2000, and provides free services for the blind.  It has 600 volunteers but only 6 staff and it needed management help.    Our project assigned them a ‘management coach’ who is currently helping them to improve the effectiveness of their services.  We are doing the same in several other NGO pilot centres catering to the needs of the elderly, migrant workers, and children of migrant worker families.  We are also networking them so they can share experiences together.

The ultimate aim is to establish a network of capable service and development-oriented volunteer organizations across Beijing and beyond.  Already Guizhou province has asked us to help them establish a volunteer programme.

V.                 Conclusion

These are just two of many ongoing UNDP programmes in China.  Why might our work be relevant to Hong Kong? Why is UNDP pleased to work with Hong Kong’s Peace and Development Foundation, ably chaired by Daniel Fung?

Well, Hong Kong is already playing a very valuable role on the mainland in terms of investments, creating jobs, charity donations, and development. I think there may be opportunities for us to work together.

In UNDP’s development work, we need to draw on the best possible partners to deliver quality results. Increasingly we find that we need the best private sector advice and inputs. As China’s Government works to transform the quality and structure of economic growth over the next five to ten years, the private sector will have a critical role to play.

And though we still value private sector inputs from Europe and North America, often the most relevant partnership comes from the private sector here in Asia. From growth and development experiences that Asia’s business leaders have guided and lived through themselves. From societies that share history, culture and values. And nowhere fits this description better than Hong Kong.

So my hope is that we can work together, to enhance the work we both do in mainland China. Because a better mainland China means a better Hong Kong. And a better China means a better world.

Thank you.