A new book by a Western economist uses Chinese official statistics to analyse how economic growth policies have led to Tibetans suffering from the highest poverty rates in the People’s Republic of China, the highest rural-urban inequality and by far the worst education indicators.

The book, ‘State Growth and Social Exclusion in Tibet: Challenges of Recent Economic Growth’ by Andrew Martin Fischer (Nordic Institute of Asian Studies Press, 2005) states that the polarizing dynamics of Beijing’s current drive to develop the Western regions of China, including Tibet, combined with the increasing influx of Chinese migrants into urban Tibetan areas, is leading to increasing exclusion of the indigenous Tibetan population in the development of their land. Fischer also uses government statistics to show how ‘huge increases’ in the government administration category of the GDP may indirectly reflect a military build-up, indicating that an expansion of the control apparatus of the state was seen as an essential pre-condition to the subsequent spending and investment under the fast-track economic policies currently being pursued in Western areas of China including Tibet.

Referring to official GDP figures, Fischer notes that the largest tertiary category in the Tibet Autonomous Region (TAR) in terms of both share and growth contribution has been ‘government agencies, Party agencies and social organisations’ – the administrative apparatus of the state. In the initial years of the ‘Western development strategy’, launched in 1999 by the then Party Secretary and President Jiang Zemin, the expansion of government and Communist Party administration had become ‘the engine of growth’ in the TAR.

Fischer argues that in this context the construction of the railroad from Golmud in Qinghai to Lhasa, due for completion later this year, can best be understood in the context of official security concerns, rather than in terms of its economic viability. ‘National interest in the railroad derives at least in part from its strategic military value, and the construction and eventual maintenance of the railway also contribute to the perceived need for increased military presence in order to protect the new installations,’ writes Fischer. ‘Therefore, as in the past, military concerns probably guide much of the developmental policies in the TAR, indirectly soaking up much of the subsidies as well.’

Growth generated through the expansion of government administration is not self-sustaining and requires further revenues in order to be maintained. This means that the growth strategy is intensifying its dependence on outside subsidization in order to continue current growth rates, and that this also exacerbates the inefficiencies of such subsidies – to the extent that in 2001 it required an increase in 2.1 yuan ($0.2) of direct subsidies (and more if investment was included) to produce only 1 yuan ($0.1) of growth. The only way the government can maintain their current strategy is through continually increasing subsidies, not only in nominal terms but also in proportion to the GDP of the region. Yet subsidies are already equivalent to about 75″ of the GDP of the TAR (in 2003), which points to the eventual exhaustion of the growth model – particularly if subsidies slow down after the completion of the railroad, and thus leading to a bust cycle following the current boom – which is typical for small economies that are dominated by one or two large-scale projects.

Fischer notes that much of the external funding to Tibetan areas can be seen as a strategy to nurture or promote regional or national construction companies, subsidizing the development of their expertise and capacity in large and complex engineering projects.

For instance, the Qinghai-Tibet railway involves a consortium of state-owned construction and engineering companies from around the country, many from coastal areas. For instance, a single state-owned company from Chengdu has constructed almost all of the numerous bridges along the railway. ‘This use of public development funds by Beijing or the provinces is therefore comparable to the US strategy of using lucrative defense contracts to subsidise many US businesses, such as in information technology and aeronautics,’ writes Fischer. ‘This logic is also similar to the contracting of US funds for the reconstruction of Iraq to US companies. The country or region is constructed (or reconstructed), in one way or another, however shoddily and almost despite the local population, but in the process ownership in the economy is transferred to foreigners (in the case of the US in Iraq) or to non-Tibetan outsiders (in the case of the TAR in China).’

Official Chinese statistics show that the GDP value of the health care sector in the TAR actually decreased in nominal value between 2001 and 2003, reversing the few years of rapid expansion between 1998 and 2001 – in only two years, its share fell from 6.8 to 4.5″ of the tertiary sector – despite frequent government proclamations that they have been pouring money into health care. More than half a century after the incorporation of Tibet into the PRC, affordable and adequate health care is still not available to the majority of Tibetans. Beijing’s economic development policy for the PRC’s western regions neglects “soft” infrastructure such as health and education provision. As a result of the failure of the health system to reach rural areas, coupled with prohibitive medical costs, large numbers of Tibetans are dying from easily treatable conditions such as diarrhoea, dysentery and pneumonia.

The proportion of resources allocated to education in the TAR has also dropped. Fischer describes these decreases as “alarming, particularly in light of the severe educational and health lags that the Tibetan areas experience relative to the rest of China…Both education and health in the Tibetan areas require a much-more long-term, systematic and well-planned expansion than they appear to be receiving if social crises in these two areas are to be averted.”

Fischer states that the migration of Chinese into Tibetan areas is not about ‘general population swamping’, but about ‘short-term swamping of urban employment’.Where low-skill opportunities do exist within Tibetan cities and towns, Tibetan rural migrants and the urban poor are met by competition from Chinese migrants who possess, on average, much higher levels of education and skills. The disadvantage of less-educated Tibetans is compounded by lack of fluency in Chinese and lack of connections with larger regional commercial networks, which can be critical competitive factors in the lower-skill areas of the economy that are booming, such as services, commerce and tourism. These competitive factors are compounded by the fact that most of the large and medium-sized construction projects in the Tibetan areas are contracted to out-of-province Chinese companies that mostly hire non-Tibetans.

Fischer recommends that the only option ahead to benefit both Tibetans, and ultimately the economy in Tibetan areas, is to pursue a much more proactive, affirmative and preferential policy towards Tibetans, particularly with regard to the rural and urban poor, encompassing education, training, employment and business, and combined with a variety of locally oriented infrastructural and service developments. He envisages two larger policy initiatives that would address the challenges of both exclusion and growth in the Tibetan areas. The first would involve a massive expansion of social services, primarily in education and health care, but also in various forms of social security. The other would involve a re-orientation of economic strategy towards local integration and ownership. These initiatives could lead to an overall shift towards ‘Tibetan-ising’ development.

Some local cadres and scholars, both Tibetan and Chinese, together with national and international NGOs, are already promoting such ways forward. Fischer states: ‘The question remains whether these efforts will be overwhelmed by the general trend of polarization in the regional economy, which is pushing rapidly towards a form of exclusionary growth that is simply not observed elsewhere in China.

‘Polarisation means that whatever small gains are made in the rural economy or in education, the hurdles to access the dynamic sectors of the economy, concentrated in the urban areas and controlled by out-of-province companies or local Tibetan elites, may nonetheless become ever higher for rural migrants and the urban poor. In this manner, social exclusion can be understood as the dark side of current growth in the Tibetan areas; poverty is not merely an issue of a residual of remote communities still trapped in some form of “ecological” destitution, but rather, it is a dynamic integral to the very processes of modernization within the Tibetan areas, processes that are essentially determined by the state.’

State Growth and Social Exclusion in Tibet: Challenges of Recent Economic Growth by Andrew Martin Fischer is published by the Nordic Institute of Asian Studies Press and distributed by the University of Hawaii Press in North America and Marstons Press in Europe.