Tuesday, January 31, 2012

Interview with Dr. Yu Xiaogang, "Civil society should look behind the curtain"

State-owned companies are pushing for a "Great Leap Forward" in dam
building. But Chinese NGOs can hold them to account, environmentalist Yu
Xiaogang tells chinadialogue.

"We should look behind the curtain"
By Isabel Hilton
January 30, 2012



Yu Xiaogang is director of the NGO Green Watershed, based in the city of
Kunming, in south-west China. A veteran environmentalist and past winner
of the Goldman Prize, an award for grassroots green campaigners, he has
been at the forefront of China�s debate on dam building. At a recent
meeting in Delhi, Yu Xiaogang sat down with Isabel Hilton to explain his
concerns about powerful special interest groups in China who, he claims,
exercise undue influence on government policy.

Isabel Hilton: Who are these special interest groups and why are you

Yu Xiaogang: One characteristic is their monopoly. The second is the
combination of their power and capital. China is in a transition period:
in the state-planned economy, every big company or industry was under
government control. Then we changed to the market economy, but big
state-owned enterprises (SOEs) still have power and they now get the
advantages of the market economy. So they use their influence with the
government to ensure they are allocated the assets; then they can get
resources from the stock or the bond markets.

The state benefits from this in several ways: through taxation, or
because such companies listen to the government most of the time. The
government can dominate the market economy because its share in some
industries is much bigger than in others. In energy for instance, it is
as much as 70%.

IH: What impact does this have on dam building in China?

YX: The government can dominate some very critical industries, like
railways, air transport, power industries and telecommunications. They
like to control them, but this also creates contradictions with their
ideology or the targets that the Chinese government is pursuing �
targets such as a just and harmonious society. These monopoly companies
go in the opposite direction.

The Chinese government wants to improve policy and reach "political
civilisation", but we think that the SOE monopolies have a triple role:
they are company owners; they are decision makers (or at least they can
capture the decision makers); and they also manage the market. So they
control everything and that�s not good for the free market or "political
civilisation". Also it creates conflict with the people, because this
combination of power and capital often works against the people�s
interests, against democracy and against public participation.

IH: Civil society managed to bring a halt to dam building under the 11th
Five-Year Plan. In the 12th Five-Year Plan, there seems to be a "Great
Leap Forward" in dam building in preparation. Will civil society be able
to mobilise again?

YX: We have realised that the 12th Five-Year Plan was influenced by
these interest groups. Before this plan was finalised, we observed a lot
of academics, official insiders, like the National Energy
Administration, decision-makers and think-tanks combined saying that
NGOs and civil society have misled the leaders under the 11th Five-Year
Plan and that hydropower�s environmental and social impact was not
negative. They portrayed it as a conspiracy between the international
community and civil society to attack hydropower development. Also they
said that because of the frozen period during the 11th Five-Year Plan,
we now need a "Great Leap Forward" in dam building.

We can see very clearly that this advocacy influenced the
decision-makers and we also think that NGOs can do something. I think
it�s very important to deconstruct this discourse, because Chinese
government decision-making is often influenced by this kind of
discourse. NGOs should debate it. The special interest groups often
operate behind the curtain � people don�t know about it. People think
that SOEs are better than private companies because at least they
operate in the interests of the taxpayer. People don�t know that they
are destroying the economy and the political system and hurting the
taxpayers� interests. So we need to tell people about this.

Why do these interest groups not pay attention to the environmental and
social impacts? Because they want the maximum profit. They don�t care
about the impacts. That�s why I think that civil society should look at
what interests there are behind the curtain; so we can understand why
they don�t listen to us and how they capture the government to make
decisions that favour special interest groups. NGOs can investigate this
and tell people the truth. Then people can perhaps find a solution
individually, or campaign on projects.

IH: What would your solution be?

YX: There are many possible solutions. Some are more political. For
example, some people say that these SOEs should make a profit. Many
don�t. They may pay their taxes but they don�t share their profits. The
taxpayer is the owner and should be recognised as such. The government
should represent the people�s view.

[First], the SOEs should make their profits transparent and share them
with social security funds or foundations for poverty alleviation or
some other public purpose. Second, the government should not be too
dependent on them. For example, in energy saving and emissions
reductions, we have hundreds of solutions and methods. We need to pay
attention and invest, to develop small and medium enterprises (SMEs)
that can solve this. We have many demand-side management opportunities
with small technologies. There are two general approaches: restraint and
counterbalancing with an increase in SMEs. The third element is checking
and monitoring. We should train the SOEs to follow market rules and
reduce their monopoly.

IH: Would you like to see a halt to the kind of dam building that is
proposed in the 12th Five Year Plan?

YX: Of course. We think that in the last 60 years, China has built so
many dams already. Very big dams were constructed, especially in the
last decade. Now the remaining rivers are in seismic-risk areas, so
building in these areas will be very risky to people downstream and we
must assess the environmental impact. We think we must assess the full
cost first.

They may say that we need energy, but we should also rationalise energy
consumption. This needs investment and education and the government to
change its orientation. In this way, the people can save energy and
reduce consumption. Only this way can we stop the dam construction.
First, tell the people the risks and then have the government pay
attention to the many small approaches that can solve the problem.

Isabel Hilton is editor of chinadialogue

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