Resettlement

A couple of days ago a reader, Nicholas Cantrell, posted a very interesting comment in my post “Nam Theun 2: Just about ready to start filling in.” The comment poised a number of questions, but if I can paraphrase just one of them, I think the basic premise was this: “how does the World Bank [or any of the financiers] ensure that the new lives of the resettled populations are sustainable in the long run?”  The truth is, I ask myself the same question all the time.

If you’ve read any of the posts in my blog so far, you’ll notice that I’ve mentioned multiple times how much information there is on Nam Theun 2. One of the cornerstones (pdf) for the World Bank’s involvement on NT2 was that the project would be handled in a transparent manner, and that’s why all of the key reports on NT2 are publicly available. The aim of being transparent means that key documentation related to the project as it was being developed and now implemented is public, that the Bank proactively keeps people informed about what is happening (ahem, the blog for one), and that there would be continuous outreach to stakeholders including local and international consultations.

In the Bank's recent China macro quarterly we included an appendix on the implications of the new PPP estimates for poverty analysis in China (PPP or Purchasing Power Parity).  Perhaps because it was an appendix it did not receive much attention. 

The new PPPs reveal that prices are about 40 percent higher than had been assumed under the old PPP, which was an academic guestimate.  Some researchers immediately applied the new PPP conversion factor for GDP to household data and came up with hugely higher estimates of the $1 per day poverty rate for China.  However, the World Bank does not use the GDP conversion factor in measuring poverty.  The research department of the bank will produce a conversion factor for poverty analysis that takes account of two important things:

(1) the basket actually consumed by the poor is different from the GDP basket; and

(2) the poor almost exclusively live in rural areas where prices are lower.