When Nobel season comes around every year, the Chinese media always asks: "Why can't the famous prize be awarded to Chinese more often?" After the 2006 Nobel Peace Prize was conferred to Muhammad Yunus inventor of the Bangladeshi micro-credit programme, which inspired similar practices in many developing countries press articles asked again: Why a "banker of the poor" can't be spotted in China, a country with record-breaking rapid development and the largest group of rural poor in the world? The question does not arise from a shallow sense of self-importance but alludes to events in China's long history, which can reveal important lessons about this country's politics and economy. For the most part, China's history reveals a land of striking contrasts a country of abundance and destitution. Farmers remained in a precarious state and had little access to help from outside their clans even when the economy was said to be more prosperous than anywhere else in the world. More often than not, the only help these farmers could count on was from cousins and in-laws who offered a little cash for necessary production materials to sustain their meagre rural business. The money helped protect many families from collapsing during the planting season, when savings from the previous year had run out and the harvest was still far away. So from a Chinese point of view, there is nothing mysterious about micro-credit. Basic forms of this system have always been in practice on a person-to-person level, within various communities. Sometimes the practice was even more extensive, involving people in a wider area and money was offered at a mutually agreed interest rate. Wang Anshi (1021-86), the reform-minded prime minister of the Northern Song Dynasty (960-1127), practised it when he began to tinker with the imperial financial system and render credit to all farmers. Wang had a plan of changing his office into some sort of a national agricultural bank. What a good thing, he thought, if the empire could, by rendering credit to its subjects, reap a healthy inflow of interest income to finance the defence and the endless need for luxury by the court. He failed, of course, and the failure shattered both his career and, to some extent, the empire. The idea was noble. Farmers or any other grass-roots-level business owners deserved financial support, however the failure occurred in converting a clumsy bureaucracy into a direct service to millions of farmers and small business owners. It was mission impossible. By the logic of bureaucracy, there can be a banker of the poor but never a finance minister of the poor. The Northern Song Dynasty has not been the only government, which failed at improving the efficiency of its bureaucracy. All modern governments see corruption and waste at some level when they try to cater to the needs of their citizens. The challenges of health care, education, public housing and retirement benefits, are enough to rack the brains of government officials in the wealthiest nations of the world. To build up a strong and harmonious society, in addition to large banks and large industries, there must be an intermediary level of services. To pursue its social programmes, a government must learn to mobilize and rely on society's own resources. Thanks to China's economic reform, there have been millions of small enterprises and thousands of autonomous organizations rising from the community level. If China cannot create the world's first bank for the poor, at least it can create an environment to make one hundred banks compete, like one hundred flowers blossoming, in their services for the poor and the grass-roots co-ops. Email: younuo@chinadaily.com.cn (China Daily 10/23/2006 page4)
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