2. Government and Development
This report studies government's acts and functions in the development of Tibet not only because the government should shoulder many responsibilities and obligations, but also because in recent years one important driving force behind Tibet's rapid economic growth is investment. Especially in the past five years, the amount of investment in fixed assets has accounted for over 75% of the region's GDP. Of this, financial transfers and investment in the construction of major projects from the central government account for a very large proportion. Take 2008 as an example. The investment under the state budget accounted for 75.9%of the investment in fixed assets. Thus, investment from the government plays a significant role in Tibet's economic development. In other words, investment in Tibet is largely decided by the central government.
As capital-the most crucial and a comparatively rare resource for Tibet's development-is in the hands of the government, the government's strategy for economic development and where to make the investment will have a great impact on Tibet's economic development.
From the beginning of the reform and opening-up in 1978 to the end of the 20th century, the Tibetan local government, based on the theory of stratified development adopted by the inland areas and many countries and regions in the rest of the world, invested heavily in the construction and rebuilding of infrastructure in cities and towns as well as infrastructure connecting cities and towns with farming and pastoral areas. This was known as the "blossom in the center" strategy. However, this investment strategy, plus the defects in the market, may increase the discrepancy between urban and rural areas. For instance, from 1997 to 2000 the average increase of farmers' and herdsmen's annual net income was 8.1 percent, a little bit lower than the rate of increase in the previous five years. However, Tibet's GDP during the same period maintained a high, double-digit rate of increase, and investment from the central government and assistance from other areas of the country soared. Against this background, the discrepancy of income between farmers and herdsmen in Tibet on the one hand and urban residents on the other seemed to be widening. This situation drew keen attention from the central government, Tibetan local government and domestic and foreign scholars.
We should point out that, during the early and middle periods of the reform and opening-up, concentrating limited resources on key areas and starting from the easy and then moving to the difficult and letting the development of one small spot lead the development of a larger area is a choice that suits the realities in Tibet, where the land is vast, capital is limited and infrastructure backward. This development mode was based on the successful experiences of the development in China's inland areas as well as those of developed countries in their early stages of development.
After initial success of the construction of infrastructure in cities and towns, and as the increase in the infrastructure's functions began to have an effect on the vast farming and pastoral areas, the government of Tibet decided to shift the focus of development and construction to the farming and pastoral areas whose demand for development was now more urgent than before. From 2000, "increasing the incomes of farmers and herdsmen has become the top priority of local government's work in the farming and pastoral areas, and it is the foremost task in their economic work." They put this passage in the autonomous region's Government Work Report of that year. In each of the following years, governments at all levels in Tibet all regarded solving the issues concerning "agriculture, farmers and rural areas" satisfactorily as their top priority. In its newly-instituted 11th Five-Year Planof Development, the People's Government of the Tibet Autonomous Region reiterated: "We must make sure that preferences are given to grass-roots areas and farming and pastoral areas in terms of all investment projects and the allocation of capital."
Thanks to the investment from the central government and the people-oriented development strategy of "aiding people, helping people and making people rich," after 2000, the Tibetan government greatly raised the standards of the "three guarantees," aiming at ensuring compulsory education for children of farmers and herdsmen in the countryside. The system of cooperative medical care has been established in most farming and pastoral areas. Comfortable housing project for farmers and herdsmen was completed. So was the project that provided clean drinking water to people and animals. Moreover, people with lowest income in the farming and pastoral areas received basic livelihood allowances from the government.
While respecting laws of the market, the government takes various macro-control measures to make up for the shortcomings of the market. The practice of the development of modern economy has proved that the market itself has the propensity to "favor the strong and neglect the weak," which means that the market tends to allocate rare resources to regions and people that can make more efficient use of them. Without macro-controls and interference from the government, the backward farming and pastoral areas with relative low returns on investment face the danger of being mercilessly rejected by the market, and the farmers and herdsmen who lack competitive strength are in danger of being marginalized by the market.
So governments at all levels in Tibet earmarked more funds to promote the development of the farming and pastoral areas, and to increase farmers' and herdsmen's incomes. They also implemented policies regarding loans, taxation, etc., giving preferential treatment to those in the farming and pastoral areas. In addition, they experimented with other macro-control measures, among which, two policies were particularly welcomed:
First: to guarantee that farmers and herdsmen enjoy complete employment rights, the people's government of the Tibet Autonomous Region stipulated that civil engineering projects funded by the government should recruit at least one third of their workers from among farmers and herdsmen. Efforts are made to employ farmers and herdsmen in all working posts for which they are competent.
Second: As Chinese Caterpillar Fungus, with its soaring prices, has become an important source of income for farmers and herdsmen, the government of the Tibet Autonomous Region soon promulgated regulations that grant the right to pick Chinese Caterpillar Fungus to local farmers and herdsmen. The regulation not only protected the resource and immediate interests of farmers and herdsmen, but also ensured that the Fungus was picked in an orderly manner.
One result of a long-term investigation conducted by the China Tibetology Research Center in Tibetan countryside shows that, at present, one of the three sources of the income of over half of the farmers comes from government subsidies, and that nearly half of the income of the ten percent of farmers at the bottom of the income level comes from government subsidies. This underlines the fact that the government plays a significant role in alleviating poverty, aiding the poor and promoting coordinated development.
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