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Bank of China's Poverty Alleviation Stories


2010-02-03

Eight-Year Poverty Alleviation in Target Areas

Eight years ago when the first poverty alleviation team of Bank of China came to the Weibei rainfed highland in Xianyang City, Shanxi Province, they were all shocked by the poverty there.

Local farmers are reduced to poverty due to lack of drinking water, inconvenient traffic, less education resources and harsh residential circumstances (four difficulties).

Guided by the principle of "Urgent Needs First, Help the Unaided, Immediate Effectiveness and Direct Benefits to the Poor", the bank provided poverty alleviation projects and offered aid focusing on the four difficulties mentioned above. Bank of China's poverty alleviation projects not only bring hope to the rainfed highland, but also inject energy for its further development. Over the years, the bank has developed an innovative approach: large-scale exploration spurred by active poverty alleviation and great development by large-scale exploration.

On the Weibei rainfed highland, people live in a harsh environment: less or even no water, inconvenient traffic, living in caves which are frequently damaged by heavy rain, even causing human injury or death… Eight years ago when the first poverty alleviation team of Bank of China came here, they were all shocked by the situation.

Surveys show that Yongshou, Changwu, Xunyi and Chunhua counties, located at the southern edge of the rainfed highland, with a population of over 840,000 on an area of more than 4,200 sq. km, are national-level destitute counties. Of the total 858 administrative villages governed by the four counties, 639 villages are national-level destitute ones, with a population in poverty of more than 400,000 and an annual income per capital ranging from RMB 500 to RMB 600.

"The natural conditions of the four counties in northern Xianyang are extremely hard, and people there have to either carry water 5 km far away or drink cellar water. But many families could not even afford a cellar at RMB 200. Several lads of our team have suffered diarrhea for several days after drinking the cellar water…" The poverty alleviation team member wrote in the report made to leaders of Bank of China Head Office.

Successive leaders of the bank have attached much importance to the report and adhered to "Pushing forward the poverty alleviation to make changes in people's lives there". From then on, the bank has given special treatment to the poverty alleviation projects and disbursed funds as soon as possible. Teams went to the area one after another and played an active role in the rainfed highland.

Local farmers are reduced to poverty due to lack of drinking water, inconvenient traffic, less education resources and harsh residential circumstances (four difficulties).

Guided by the principle of "Urgent Needs First, Help the Unaided, Immediate Effectiveness and Direct Benefits to the Poor", the bank provided poverty alleviation projects and offered aid focusing on the four difficulties mentioned above.

Now, reporters set foot on the highland again and find that, guided by the strategy of "Project Integration, Funds Attached to Projects, Poverty Alleviation in Key Villages and Further Development of Whole Region", thousands of people there now live a good life they could never imagine before. "The water is good indeed!" "To entertain guests, water is more like a feast than bread." These local sayings tell us how precious water is to them.

"Shortage of water is the main cause of poverty in Yongshou County." said a staff of the poverty alleviation office of the county. At Machengsi Village of Changwu County, there is only a small stone pit for 150 residents to get water, and people live on water dripping in the pit. Local villagers recalled that sometimes it took 45 minutes or even one hour to get two buckets of water. In the busy farming season, no matter day or night, there were always people waiting for water by the pit.

Situation was even harder elsewhere. People in Wangjiazui Village of Yijing Town, Yongshou County failed to find any water source within the village, and had to buy water from neighboring villages 3 km away every day. In case of insufficient water in the neighboring villages due to drought, they had to buy water at a much higher price from Guantou Town of Gan County 15 km away. Five years ago, when the poverty alleviation team arrived there, leaders of the village had to treat the guests with beer instead after seeking water throughout the village. They told us, "Water is more expensive than beer here". Liugou Village of Yuyuan Township of Changwu County has water but it contains high content of fluorine, which is harmful to health. One year, the physical check given by the epidemic prevention station to the primary school students revealed that over 70 of the total 120 students had Kaschin-Beck disease, accounting for 60%.

People on the highland can only have cellar water. They store rain water in the cellar for daily use. Since autumn is the rainy season, the rain water is kept from this autumn till the next.

Water concerns people and drives people to search high and low. Life there revolves around water. To meet their urgent needs, the team launched a project immediately for well drilling. The message, Bank of China's gratuitous RMB 200,000 investment in well drilling, made the village cry with zeal. Many people cried when they saw water come out of the well. Branch secretary of Wangjiazui Village said excitedly, "Bank of China helps us drill this deep well, which provides us with sufficient drinking water. The water is good indeed." During the interview, reporters read the data that by the end of 2009, the drinking water project funds from the bank to the four counties had amounted to RMB 8,931,900, which meant people there would never suffer from shortage of water.

Farewell to Cave Dwelling

Dig a large pit in the ground and more pits on its four sides. That is the home for people in the Weibei rainfed highland, the houses they live in for generations.

"In the past, the cave was dug by hand, with no rack trucks or other machines. Earth in the pit was taken out with windlass, which was no easy job. One cave took five years to build." said a villager from Zhuangtou Village, Yongshou County. Because of the loose earth on the top of the cave and short distance between caves, caves are not strong enough. A heavy rain could make some caves crack or even collapse. Years ago, a rainfall of more than 20 days knocked down over ten caves, killing all three lives of villager Yang Shenggui's family.

Because of poverty, 30 out of 40 young men at Machengsi Village of Changwu County remained single. The village branch secretary Zhang Xinglong's words: "For ten years, our town hasn't seen anyone get married", deeply impressed the poverty alleviation team members.

At Liugou Village of Yuan Township, Changwu County, four villager groups, totaling 418 members in 124 households, lived in highlands, deep valleys or among the steep slopes. The longest distance between groups reached 8 km. Concerns about drinking water, traffic and education troubled inhabitants there.

It is not easy to solve all the problems. It is estimated that the funds to solve water, power and traffic problems of Liugou Village can be used to build four villages like that. More importantly, even if all problems are solved, poverty cannot be eradicated due to the harsh natural conditions.

With detailed investigation and study, the bank's poverty alleviation team proposed a plan: "Resources Integration and Overall Relocation" for the scattered households in remote areas by cooperating with local governments and considering development of a new countryside. Overall relocation means resettling those scattered households to such places where new villages are constructed in a centralized manner, while for their original villages, restoring the ecological environment and implementing rehabilitation of grassland and forests for land reclamation. Resources integration refers to optimizing utilization of funds related to agriculture to construct infrastructure in respect of water, electricity, transportation, education and healthcare. However, how to raise these funds?

Bank of China's staff had an idea: according to the estimates, construction cost for each house is about RMB 30,000. The bank provides subsidies for the villagers to relocate based on the "5+1" policy, which means each household will receive a subsidy of RMB 5,000 and each family member will receive additional RMB 1,000. If a household has five family members, it will obtain a total of RMB 10,000 from the bank. One household could use that RMB 10,000 from the bank, pay RMB 10,000 by itself and borrow another RMB 10,000 to build a new house. While the debt will be cleared with the following year's income from apple planting.

By promoting poverty alleviation in key villages and furthering development of the whole region as well as combining development of a new countryside and industrial structure adjustment, Bank of China gives a good example with profound significance, making Xunyi County a model of regional and new countryside development.

By the end of 2009, the bank had provided gratuitous RMB 5,543,200 for Yongshou, Changwu, Xunyi, and Chunhua counties, helping thousands of villagers in hundreds of households move from caves to new houses. Fellow villagers in the Weibei rainfed highland thus ended a thousand years of cave dwelling.

According to relevant leaders of the bank, they adjusted the previous subsidy standards in 2010 from "5+1" to "1+1", raising the subsidies per household from RMB 5,000 to RMB 10,000, which further promoted improvement of the production and living conditions of people in financial difficulties. High mountains and deep valleys are widespread over the four counties of the Weibei rainfed highland, and gullies can be found on every kilometer of the land. Gullies not only cut off the connection of the farmers with the outside, but also impair transportation, healthcare and education. The rough roads choke the economic development of the area.

Chemen Village of Qiupotou Township, Xunyi County has a total orchard area of over 33.35 ha, contributing 80% to the average per capita income of local villagers. Although a direct distance of 1.5 km from the village to the National Highway 211, poor transport facilities are the most troublesome obstacle to selling apples. Apple dealers would rather purchase apples along the highway at a price of RMB 0.2/kg higher than that of the village.

The road constructed with the investment of RMB 180,000 from Bank of China made the village rich rapidly. One villager told us: thanks to the road, the village's annual income from apple planting alone hit RMB 80,000.

Bank of China's staff says that the bank has invested more than RMB 1 million in the four counties of Weibei, radically changing their traffic conditions and breaking the bottleneck of their economic development. At time of the interview, Jiaojiahe Village has already achieved the goal of "every villager has land to plant and each household has cattle to feed" … "With years of practicing the principle of "Urgent Needs First, Help the Unaided, Immediate Effectiveness and Direct Benefits to the Poor", the bank has developed an innovative approach: large-scale exploration spurred by active poverty alleviation and great development by large-scale exploration .

Within nearly eight years since 2002, Bank of China has donated RMB 23,476,800 to the four counties, building 21 schools, constructing 19 water drinking facilities for people and livestock, and completing 28 relocation projects. Particularly in 2009, the poverty alleviation project of "Relocation, Safe Drinking Water, Road Construction and Village Organization Establishment" relieves the difficulties of 6,619 poor villagers. With poverty alleviation efforts in target aeras, the bank not only brings hope to the rainfed highland, but also injects energy to the area for further development.

It is worth noting that the bank operates the funds in a closing manner to make sure the specific funds is used only for the specific project. The funds attached to projects is paid after delivery and verification of the projects, thus ensuring projects are funded in time and preventing unfinished projects.

The article is published on Financial Times on February 2. Written by Li Lan

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