Tricontinental: Institute for Social Research in collaboration with the UL (Uralungal Labour Contract Cooperative Society) Research Centre

The artwork in this study was produced by members of Young Socialist Artists (YSA). Since 2020, this group has brought together artists and cultural workers from across India who are embedded in social and political movements in their regions. Most of the YSA members who created the illustrations for this study are from and based in Kerala, where these cooperatives are part of the fabric of everyday life. The illustrations are based on photographs taken by the researchers who produced this text during their field visits.

Ashique Ali Thuppilikkat is the co-founder and director of the SAFAR Foundation, an action research centre based in West Bengal, India. He was active with the student movement at Delhi University and Jawaharlal Nehru University, where he researched cooperatives during his MPhil in political science. He is currently a PhD student at the University of Toronto, Canada, and a researcher at STREET Lab. His research focuses on socio-technical designs for resistance, exploring the intersection of technology and labour/social movement organising.

Aswathi Rebecca Asok is a development economist and law graduate with expertise in interdisciplinary, evidence-based, and policy-oriented research. Over the past nine years, Aswathi has conducted extensive research on Kerala’s development trajectory and explored a wide range of topics such as financial inclusion, poverty, gender, migration, labour, and decentralisation. She was a student activist at multiple universities and campuses in India.

Najeeb VR is a social scientist and research coordinator at the UL Research Centre in Kozhikode, Kerala, where he integrates transdisciplinary approaches to cooperative development, social transformation, and knowledge systems. He is also a member of the expert committee for the 14th Five-Year Plan Subgroup of the Kerala State Planning Board and actively contributes to academic outreach, curriculum development, and public scholarship. He holds a PhD in sociology from Jawaharlal Nehru University and is a recipient of the Revise PhD Fellowship of the Kerala Council for Historical Research.

Vijoo Krishnan is the general secretary of the All India Kisan Sabha (AIKS) and a polit bureau member of the Communist Party of India (Marxist). As a leader of the AIKS, he played a crucial role in the historic farmers’ agitation in Delhi in 2021–2022. Before becoming a full-time political activist, he was the head of the Department of Political Science at St. Joseph’s College, Bangalore. In 1998–1999, he was the president of the Jawaharlal Nehru University Students’ Union. Vijoo is also a photographer who captures the everyday life of the working class.

Nidheesh J Villatt is a member of the All India Kisan Sabha’s Central Kisan Committee as well as the research coordinator of the P Sundarayya Memorial Trust, a research institute that focuses on agrarian issues and movements. Nidheesh is dedicated to studying and building the worker-peasant alliance, with a focus on its political economy and philosophy. He has written about agrarian and industrial class struggles, ‘competition’ under capitalism, political ecology, and Hindutva.

Nitheesh Narayanan is a movement researcher and writer who works at Tricontinental: Institute for Social Research. He studies the history of working-class movements, including cooperatives, and was previously the vice president of the Students’ Federation of India and editor of its journal, Student Struggle. He has a PhD from Jawaharlal Nehru University. He is the author of a number of books in English and Malayalam, including The 1921 Rebellion in Malabar: A Collection of Communist Writings, edited with Vijay Prashad, and If Humanity Is A Country: Cuban Days.

Sarga TK is an assistant professor at Azim Premji University, Bhopal. Her research engages with themes of urban mobility, labour migration, and construction cooperatives, exploring how work and movement shape the urban landscape. She previously taught at Kannur University in Kerala.

Subin Dennis is an economist and a researcher at Tricontinental Institute for Social Research. He worked with the online news portal NewsClick as a correspondent before joining Tricontinental. He was active with the student movement and served as the Delhi state vice-president of the Students’ Federation of India. Subin’s writings in English and Malayalam on issues related to the economy and politics appear in various periodicals and websites. He is currently based in Kerala.

Vijay Prashad is the director of Tricontinental: Institute for Social Research. He is the author of forty books, including The Darker Nations: A People’s History of the Third World, The Poorer Nations: A Possible History of Global South, and (with Grieve Chelwa) How the International Monetary Fund Suffocates Africa. Vijay is an editor at LeftWord Books (New Delhi), Inkani Books (Johannesburg), and La Trocha (Santiago).

Introduction: Possible Communism

But there was in store a still greater victory of the political economy of labour over the political economy of property. We speak of the cooperative movement, especially of the cooperative factories raised by the unassisted efforts of a few bold ‘hands’. The value of these great social experiments cannot be overrated. By deed, instead of by argument, they have shown that production on a large scale, and in accord with the behest of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolised as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart.¹

– Karl Marx, Inaugural Address of the International Working Men’s Association, 1864.

Misery greets the planet. Poverty persists for billions of the world’s people. Climate change – the product of capitalist expansionism – threatens the survival of life on Earth. Wars of grotesque proportions creep across the globe in myriad forms, including Israel’s genocide against Palestinians in Gaza, as famines driven by human behaviour plague swathes of the population. It is as if the five horsemen of the apocalypse are no longer sufficient – instead, untold horsemen ride around the planet suffocating the possibilities of human life.

All of this contributes to the sense that nothing other than this nightmare is possible, that alternatives cannot be imagined. When resilient people dare to think of a better future, as they inevitably do, those in power meet them with mockery and strive to snuff them out. It is better for the powerful and the propertied to see to it that no alternative is allowed to flourish. The survival of even one kernel of hope would call into question the claim that History has ended.

One of these kernels is the Indian state of Kerala (population of 35 million), which has a rich history of socialist construction. Ten years after India won its independence in 1947, the Communist Party of India won state elections in Kerala. Right from the start, the left government in Kerala adopted an agenda to smash ancient social hierarchies and customs, provide social goods to the public that were not readily available in the rest of India (including quality public education, health care, and transportation), and construct the basis of working-class and peasant power by defending workers’ rights to organise in unions and build cooperatives. Though the national government in Delhi unconstitutionally removed the communist state government in Kerala in 1959, the agenda set by the left remained largely in place. The left has returned to power periodically (1967–1969, 1980–1981, 1987–1991, 1996–2001, 2006–2011, and 2016–present), each time expanding the agenda of decentralisation, encouraging public action, and building the basis for social democratic state institutions.² Even when the right came to power in the intervening years, it was not able to undermine the dynamic that had been set in motion by the left governments. It was in this context that the cooperative movement developed in Kerala.

People who are critical of the capitalist system are often as critical of the alternatives being built within the parameters of this system because they argue that such institutions are captive to capitalism’s logic. But this is a flawed assessment of cooperatives, which are – in fact – incubators of different logics of life and work that serve as beacons of inspiration and hope, offering a window into what humanity is capable of once the fetters of capitalism are transcended. Cooperatives provide schools for the working class and peasantry to learn how to build social relations based on a different economic foundation. In his third volume of Capital, Marx wrote:

The cooperative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e. by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage.³

Marx’s insight here is crucial. Cooperatives are neither inherently mired in the capitalist law of value, nor are they easily able to transcend it. They are ‘sprouts’, he writes, of an alternative through which the working class can experiment with the annulment of capitalist management. Marx looked with great pride at the workers’ utopia being built in the Paris Commune of 1871, where he saw how the communards developed workers’ cooperatives and other means of building a new society amidst the jubilation of toppling the Second Empire of Louis Napoleon III (1852–1870).⁴ In The Civil War in France, Marx wrote that during the two months of the commune’s existence, from March to May 1871, the commune was the ‘form at last discovered’ for the future workers’ state. It was in this text that Marx wrote of the insights of cooperatives:

If cooperative production is not to remain a sham and a snare; if it is to supersede the capitalist system; if the united cooperative societies are to regulate national production upon a common plan, thus taking it under their control and putting an end to the constant anarchy and periodical convulsions which are the fatality of capitalist production – what else, gentlemen, would it be but communism, ‘possible’ communism.⁵

This text, The Cooperative Movement in Kerala, India, is part of a series from Tricontinental: Institute for Social Research called Studies on Socialist Construction. It is about possible communism, the possibilities in our time of a future society. An honest appraisal of a heroic venture, this study shows us that Kerala’s cooperatives have been able not only to survive in a small niche, but also to grow into substantial institutions that have become an integral part of the region’s social life. There are 16,429 registered cooperative societies in Kerala today (12,278 of which are active, 3,354 of which are dormant, and 797 of which are under liquidation).⁶ Cooperatives operate in a wide range of sectors, from the production and distribution of goods and services to hospitals and restaurants to agricultural production and housing construction. The largest cooperative (although not strictly registered as a cooperative), Kudumbashree, has 4.8 million members, all of whom are women. One in four women in Kerala is a member of this cooperative. There are also many cooperative-like organisations that are registered as charitable societies and trusts, such as the Brahmagiri Development Society, which focuses on agrarian development, and the Janatha Charitable Society, a major milk producer. Most of the active cooperative societies have branches in different parts of the state.

There are, of course, challenges and contradictions, and these are discussed with clarity: there is no sense in exaggerating the possibilities presented by cooperatives that must struggle to survive in a world where the capitalist law of value is the law of the land. Nor is there sense in minimising these cooperatives’ important contributions to the people who live in Kerala – both in material and spiritual terms. These cooperatives are not merely a source of inspiration: they provide a blueprint for cooperatives around the world as seeds of a just future that exist within the confines of capitalism today.

Kerala’s Cooperatives

In 1943, at the 7th Session of the All India Kisan Sabha (AIKS, the country’s largest farmers’ union) in Bhakna Kalan, Punjab, the delegates discussed a range of issues, including the building of cooperatives. In one of their resolutions, the AIKS argued that cooperatives could help the farmers fight the ‘distress and humiliation’ of capitalist and colonial agriculture and enable them to achieve ‘economic, social, and national freedom’. During the deliberations, communist leader EMS Namboodiripad (1909–1998), or EMS as he was called, wrote a note entitled ‘Organisation – Not a Machine’. In the note, EMS pointed out that the resolutions would mean nothing without militant organisation that goes beyond ‘abstract politics’. Cooperatives would need to be built by the peasantry and agricultural workers to expand the democratic revolution and build the confidence of rural workers.⁷

In October 1956, the Communist Party of India held a meeting in Thrissur, Kerala, that focused on cooperatives. The meeting was chaired by Professor Joseph Mundassery, who would become the first minister of education and cooperation during EMS’s tenure as the chief minister of Kerala (1957–1959), and resolved that rather than allow the cooperatives to become a ‘pocket borough’ of the feudal classes, working people themselves would build them and there would be political education about the role these cooperatives played in building democracy and socialism. The party leadership also emphasised the need for successful rural credit societies and cooperative banks controlled by communists and workers as a way of eliminating the stranglehold of the moneylenders, nourishing agricultural production, and improving the living conditions of peasants and agricultural workers. It is out of this ideological clarity that Kerala’s cooperatives emerged to become a beacon for democratic worker-led cooperatives around the world.

Brief portraits of some of Kerala’s cooperatives make up the rest of this study. These portraits are written by scholars and political leaders who have worked closely with the cooperatives to learn about them and assess them. The data in the essays has been largely accumulated from the cooperatives and from government documents. We are grateful to the UL Research Centre for assisting us with this work.

These essays reveal some important facts:

1. The cooperative sector in Kerala would not have flourished without a long history of social reform that created the social basis for cooperation. When news about the Soviet Union trickled into Kerala, people involved in the social reform and anti-caste movements expressed their curiosity about its attempts to reconstruct social and economic relations. This curiosity led to studies about the cooperative movement in the Soviet Union, which were then presented in social reform and anti-caste movements’ public meetings.
2. The cooperative sector developed due to the vitality of the class struggle in Kerala, where organised peasants and workers pushed the social reform movement to combine the struggles against caste, landlordism, and colonialism. It was in these struggles that the peasant movement – mainly in northern Kerala – took the initiative to start peasant cooperatives to help the most impoverished amongst them. The emergence of these cooperatives weakened the grip of landlords, who could no longer lend money at usurious rates to the indebted peasantry or continue to be their main provider of consumer goods. Instead, they watched as the peasant cooperatives lifted the confidence of the masses. The success of cooperatives led to their duplication in other parts of the region, building on the organisational habits of mass movements.
3. The first communist ministry that came to power in Kerala (1957–1959) received mass support from the mass social reform movement and was bolstered both by the class struggle of previous decades and by the success of the cooperative movement. In turn, the communist government used a part of Kerala’s social wealth to finance the growth of more cooperatives across the state. The government set up coir (coconut fibre), handloom, and toddy (fermented coconut sap that is an alcoholic drink) cooperatives to enhance these sectors of the economy and improve the working conditions and wages of the workers.
4. The emphasis on building cooperatives to ensure mass employment and higher wages as well as to improve the efficiency and productivity of different enterprises meant that cooperatives could compete against the private sector.
5. The leadership of oppressed castes was drawn to the cooperative system and saw in them an opportunity to realise their independence and emancipation. At the December 1929 Cheramar Samajam Conference, for instance, the organisation’s president, Chaajan, told the two thousand members of the Pulaya community present there that these cooperative societies, along with education programmes and an anti-alcohol campaign, would be crucial for their struggles.⁸
6. The role of political education within cooperatives enabled their members to understand what they were building (socialism) and how what they were building was different – and better – than what the private sector had built (capitalism).
7. Without an extensive network of financial cooperatives, the entire sector would have been starved of funds. This system has also depended on the left’s periodic entry into government, which has prevented the large-scale privatisation of Kerala’s credit markets.
8. The cooperatives’ democratic structure, alongside the innovation of their members, allows them to diversify their work and adapt to the changing times. When tobacco consumption habits changed, for instance, the Dinesh Beedi⁹ Workers’ Central Cooperative Society shifted to food production.
9. A key element in Kerala’s cooperative movement is its commitment to social change, with an emphasis on using cooperative organisation to transcend patriarchy (through women’s cooperatives), caste hierarchies (through oppressed caste cooperatives), discrimination against tribal or Adivasi communities (through Scheduled Tribe¹⁰cooperatives), and discrimination against transgender communities (through transgender cooperatives) as well as to promote equality for people with disabilities.

This study shows how effective these cooperatives have been in promoting a social form of economic activity that offers a counter to the pressures of capitalism. In that regressive form of economic competition, workers’ livelihoods are the first to be dismissed, while profit is enshrined as a god. Kerala’s cooperatives invert this value system, putting the needs – and dignity – of the working class at their heart.

Vanshika Babbar (Young Socialist Artists), Uralungal Cooperative Workers, 2025.

Sahya Tea Cooperative

Nidheesh J Villatt and Vijoo Krishnan

At the 35^th conference of the All India Kisan Sabha (AIKS) in December 2022, every delegate received a pack of Sahya tea along with Kerala’s famous spices and other condiments. It was not until months later, during a visit to Assam to report on the decisions made at the conference, that one of the delegates took note of the brand of tea. Local delegates inquired about it, claiming that it was better than their world-renowned Assam tea. Their query led us on a quest to find out more about the brand and the collective effort that went into its emergence.

In a letter to Wilhelm Bracke on 5 May 1875, Karl Marx wrote, ‘every step of real movement is more important than a dozen programmes’.¹¹ The story of the Sahya Tea Cooperative Factory, located in the remote area of Thankamany in the hilly district of Idukki, Kerala, shows the significance of the ‘real movement’ of socialism. Launched in 2017, the factory was established by the Thankamany Service Cooperative Bank, Ltd (founded in 1966). The Cooperative Bank has 15,000 members, most of them small peasants and workers, and operates in the Kamakshy village panchayat,¹² which is mainly inhabited by small tea growers. The Thankamany Cooperative Tea Factory mostly manufactures black, green, and a variety of blended teas.

The cooperative bank and tea factory must be understood within the broader trajectory of Kerala’s communist-led cooperative movement.¹³ Russia’s 1917 October Revolution had a tremendous impact on Kerala’s progressive movements and helped reshape their orientation within the national movement. In 1934, the strongest sections of these movements formed the All India Congress Socialist Party. Five years later, the party’s Kerala unit went on to transform itself into the Kerala unit of the Communist Party of India, which eventually built the AIKS and a number of trade unions in the region. It was in this period and in this context that the AIKS and other progressive forces began to intervene in the cooperative movement and confront the British strategy of keeping cooperatives insulated from the intensified class struggle that was erupting in the 1930s and 1940s. For instance, as EMS documented, during the People’s War (1941–1945)¹⁴ communists pressured the imperialist British government to procure grain from landlords and distribute it through ration shops, which were subsequently converted into producer and consumer cooperative societies.¹⁵ Communists in Kerala identified building cooperatives as part of the expanding class struggle, distinct from the benevolent colonial idea of cooperatives derived from the Rochdale Principles, which have served as the primary guidelines for cooperatives since 1844.¹⁶

The dialectical relationship between building a strong working-class organisation that opposes imperialism and building cooperatives had already been established in the AIKS’s 1943 resolution on cooperatives, passed at its 7^th Session. This resolution called on AIKS cadres to initiate cooperatives as a strategy to combat the economic and social subjugation of the peasantry. The insights from this resolution, particularly EMS’s note ‘Organisation – Not a Machine’, emphasised the necessity of militant class organisation to prevent cooperatives from devolving into ‘abstract politics’ and provided a crucial framework for later discussions on building cooperatives.

By the time communists and cooperative movement leaders convened in Thrissur in October 1956, the focus had shifted from the theoretical foundation laid in 1943 to the practical challenges of implementing this foundation in Kerala.¹⁷ During the meeting, participants took stock of the cooperatives’ activities in Kerala and criticised the delusions of Prime Minister Jawaharlal Nehru’s bourgeois landlord regime, which suggested that the creation of cooperatives by itself would lead to socialism. The participants made the point that communists had to be consciously involved in the organisation of cooperatives and enrol large numbers of working people into these and other mass organisations in order to ensure their political education in the process. Reference was made to the successful cooperative rural credit societies and banks, which had eliminated the stranglehold of moneylenders and nourished agricultural production, thereby increasing the income of the peasantry and agricultural workers. What distinguished these cooperatives from unsuccessful ones was the role of communists in ensuring that the cooperative form was not coopted by reactionaries who tried to maintain old forms of rural power.

The Emergence of Small Tea Growers

In the late 1990s, the tea industry underwent a sweeping restructuring driven by the profit fetish of monopoly capital, marked by mergers, acquisitions, and an aggressive focus on brand building. Vertically integrated monopolies such as Unilever and Tata – known as Big Tea – abandoned direct ties to agricultural production and divested from tea estate ownership and management. For instance, in March 2000 Tata acquired Tetley Group, the world’s second-largest tea manufacturer and distributor, for £271 million.¹⁸ Both Tata and Unilever, the world’s largest tea company, shifted to creating and marketing new branded teas – including crush, tear, and curl (CTC) as well as blended tea products – aimed at a variety of tastes and price ranges.

This transformation coincided with a financial crisis in tea estates, which grow and process tea and are largely managed by non-monopoly capital. While most estates were sold to smaller firms, the monopoly companies secured their supply through contractual clauses that guaranteed access to sufficient unprocessed tea. As Professor Natalie Langford observes, the industry shifted from ‘vertical integration’ to value chains in which ‘firms have sought to advance their competitive position through the outsourcing of lower value-adding activities’.¹⁹ In practice, Big Tea considered agricultural production and estate management the most troublesome links in the chain, as they were heavily regulated by labour and environmental law, and sought to distance themselves from these sectors to avoid class struggle. Instead, they consolidated control over higher value-added activities such as blending, packing, branding, distribution, and sales. Meanwhile, small tea growers rose as the main producers of tea leaves: their share increased from 7% in 1991 to 52% in 2022 and is projected to reach 70% by 2030.

Before the formation of the Sahya Tea Cooperative Factory, the roughly 3,500 small tea growers in the Idukki area operated under the stranglehold of a system run by monopoly firms such as Tata and AVT Beverages (a leading player in southern India). These large companies bought green leaves (freshly plucked, unprocessed tea leaves) from both the farmers and ‘agents’ (intermediaries who often act as buyers on behalf of factories, typically charging a commission on the green leaf collected from small farmers) at ‘an arbitrary rate and [under] humiliating terms and conditions’, a group of farmers told us. Many of the farmers shared stories with us about how companies turned away their green leaves when they tried to bargain for a fair price, inventing superficial excuses which forced the farmers – who had carried the leaves from far away – to dispose of them or use them as manure. Scenes of dispirited farmers returning home on their tractors with their rejected crops were commonplace. These methodically planned rejections were designed to create a docile peasantry that would be inured to selling their crops to the companies at low prices. The entire system was highly favourable to the large companies.

In the absence of successful cooperative action, trading agents generally charge small growers across India a commission of 15%–20% per kg of green leaves. A large chunk of this is sold to bought leaf tea factories, which process tea from purchased leaves rather than growing their own. Another chunk is sometimes sold to tea estate factories owned by big plantations. Trading agents evaluate the quality and price of the leaves based on their ‘fine leaf count’ (the proportion of young, tender leaves and buds, which determine the tea’s overall quality) in a very subjective way, compromising the interests of small farmers.²⁰

Bought leaf tea factories usually sell their processed tea at auctions. Since the process is controlled by Big Tea companies (the primary buyers), the tea is sold at distorted prices.²¹ The entire auction mechanism in India is designed in such a way that the basic postulate of neoclassical economics – that the interaction between supply and demand determines prices – appears as a farce. On the other hand, estate factories typically sell only half of their processed tea at auctions, as mandated by the regulations outlined in the 1983 Tea Marketing Control Order (itself under the 1953 Tea Act), and sell the other half through more profitable private channels.

Auction participants consist of major tea packing companies, trading agents, and other leading packet tea brands. Since these companies then undertake value-added processes such as blending, sorting, grading, and packaging the tea before distributing it to consumers, small tea growers, who are on the lower end of the value chain, receive a disproportionately lower share of consumer spending on tea – around 15%. Tea packing companies, on the other hand, which are mostly big monopoly companies, receive 50% of consumer spending on tea. That is why it is imperative for small tea growers to climb the value chain and gain direct access to markets in order to secure better prices.²² This is exactly what the Sahya Tea Cooperative is setting out to accomplish with its brave move to enter the terrain of Big Tea.

Cooperative Tea

It was the difficult circumstances facing farmers that drove AIKS members to form the Sahya Tea Cooperative in 2017. Designed to process 15,000 kg of green leaves per day, the Sahya Tea Cooperative generates employment for more than 150 workers, most of them recruited from the agricultural working class and peasantry, while also protecting the interests of the peasants amongst the small tea growers. When we visited the cooperative factory and catchment area in September 2023, what caught our attention was the visible confidence among the small tea growers.

The first three years of the cooperative, from 2017 to 2020, were challenging: not only did it have to begin to pay back the large loan it had taken at 12% interest, but it was besieged by a number of shocks, such as the 2018 Kerala flood and the COVID-19 pandemic (2020–2023). Yet, despite the financial challenges the cooperative faced, it was able to procure green leaves and pay farmers INR 12 per kg (far higher than the corporate rate of INR 7 per kg). The cooperative’s steady prices in turn forced the corporate tea suppliers to increase the rates they pay to small tea growers.

The cooperative’s leadership convened peasants and workers to brainstorm how to improve their financial situation. Since Big Tea companies dominated the market with their packaged tea products, they decided to improve their marketing strategy and launch an effort to make inroads into the market. KS Chithra, a popular singer known as the ‘Nightingale of Kerala’, became the Sahya Tea Cooperative’s brand ambassador and helped popularise its brand, refusing to take any payment for her work. To strengthen its market presence, the cooperative also made use of Kerala’s Public Distribution System, such as Supplyco (Kerala State Civil Supplies Corporation) and Consumerfed (Kerala State Cooperative Consumers’ Federation), as well as the system that provides goods to police canteens.

The cooperative also received other forms of support from the state, such as in 2020–2021 when Kerala’s state government bought Sahya tea for the food kits distributed during the pandemic. As a result of these creative marketing mechanisms and state assistance, the cooperative turned a profit in its fourth year (2020–2021) and began to pay INR 18 per kg for green leaves and distribute the profits as incentives to the farmers who supplied the leaves. This set a historic precedent: for the first time, farmers were remunerated fairly for their contributions.

Vanshika Babbar (Young Socialist Artists), Udayapuram Cooperative Workers, 2025.

The Uralungal Labour Contract Cooperative Society

Najeeb VR

In 1925, before the communist movement was established in southwestern India, the followers of the social reformer Vayaleri Kunhikannan Gurukkal, also known as Sri Vagbhatananda Guru, (1885–1939) founded the Uralungal Labour Contract Cooperative Society (ULCCS) to provide construction workers with social protection. Today, the ULCCS is Asia’s largest workers’ cooperative, and it was ranked second in the 2021 World Cooperative Monitor list of industry and utilities cooperatives. United Nations Development Programme Resident Coordinator in India Lise Grande calls it a model cooperative whose success provides ‘great lessons for the rest of the world’.²³ From its origins amongst a group of labourers, ULCCS, located in a rural part of Malabar in northern Kerala, now constructs roads and bridges, buildings, and software systems. The cooperative’s commitment to social harmony and inclusion as well as worker cooperation has allowed it to succeed in areas of social production that are often challenging for cooperatives.

The ULCCS was formed at a time when work was difficult to come by and when forms of caste and class discrimination were even more severe than they are today. In 1917, Sri Vagbhatananda Guru’s followers started the Atma Vidya Sangham school, whose members formed the United Credit Cooperative in 1922 to help each other if any of them faced financial problems due to discrimination in the credit market, which was controlled by the dominant castes. They also founded a school for their children, who had been denied education by the dominant castes in the region. Taking the advice of Vagbhatananda, they decided to form the Mutual Aid Society of Daily Wage Labourers in 1924 to circumvent the labour ban that the elite had imposed on them in an effort to curtail their struggle against caste discrimination. Then, on 13 February 1925, the workers created the Uralungal Kooli Velakkaarude Paraspara Sahaaya Sahakarana Sangham (Uralungal Labourers’ Mutual Aid and Cooperative Society, now ULCCS). Slowly, more and more workers joined the ULCCS, which now has a presence across Kerala.

During its initial years, the ULCCS was seldom able to obtain contracts, and when it did, the tender (or contract) amounts were set at a very low level. In order to compete, the ULCCS underbid private contractors, offering 27.5% less than the private bids. Though this enabled them to get some contracts, the profit margins were negligible. Inexperience with road work and other forms of large-scale construction led to problems for the ULCCS. The cooperative sustained itself by obtaining minor contracts from local governments and by receiving short-term loans from the better-off members of the cooperative. The ULCCS also received funds from microfinance systems such as payattu (money-gathering games) and kurikkalyaanam (marriage announcements)²⁴ and used its growing prestige to provide assistance for its members’ basic needs by collecting donations from local merchants.

As time went by, ULCCS workers improved their skills and became more adept at basic business practices. The increased efficiency and quality of their work in turn attracted more lucrative contracts, and their work ethic introduced a new culture of excellence in Kerala’s construction industry. By the 1940s, they began to receive funding from the Malabar Cooperative Central Bank as well as fixed deposits by the public in ULCCS schemes.

Over the past century, the ULCCS has grown from a collective with an initial capital of INR 0.37 (USD 0.13 in 1925 dollars) to an annual revenue of INR 25 billion (USD 300 million) in 2023. It is comprised of 18,000 workers, including more than 1,000 engineers and 1,200 technicians. The cooperative not only advances the well-being of its workers and the surrounding community, fulfilling thirteen out of the seventeen United Nations Sustainable Development Goals, but also ensures that the quality of the work (including its timely completion) is balanced by reasonable costs. These factors, alongside the ULCCS’s modern construction techniques, allow it to compete against private corporations and win major contracts, such as those from the National Highway Authority of India, the Union Ministry of Road Transport and Highways, and the Government of Kerala. The ULCCS has completed over 7,500 major projects and is currently working on 500 projects worth INR 6.5 billion. Since it operates as a cooperative, the ULCCS has been able to provide better pay for its workers than they would earn in the private or even government sectors.

As part of its effort to keep pace with workers’ aspirations, the ULCCS has entered various sectors of the knowledge economy such as software development, diversifying from its initial form as a construction workers’ cooperative to take on the challenges facing cities and work in our times. These initiatives include:

1. UL CyberPark in Kozhikode, the first cyberpark in India’s cooperative sector and part of one of the central government’s Coastal Economic Zones.
2. UL Technology Solutions, a next-generation digital solutions firm located in the UL CyberPark.
3. The arts and craft villages Sargaalaya (in Iringal) and the Kerala Arts & Crafts Village (in Kovalam), which the ULCSS manages on behalf of the Government of Kerala. These villages help artisans produce handicrafts for the domestic and international markets.
4. UL Housing, which uses the cooperative’s construction skills to build apartment projects under the brand name UL SpaceUs. The first such building, called One Anthem, is in the UL CyberPark.
5. The high-tech Matter Material Testing and Research Laboratory, or MatterLab, an outgrowth of the ULCCS’s construction work created in 2021 to develop and test new sustainable construction materials.
6. The Indian Institute of Infrastructure and Construction, which ULCCS manages on behalf of the Government of Kerala in collaboration with national and international educational institutions.
7. UL Education, which develops students’ skills through a range of institutions and projects, such as:
   1. The Madappally Academic Project for Learning and Empowerment
   2. The Vagbhatananda Edu Project
   3. The Scholastic Excellence Programme for Students
   4. The UL Space Club (for young aspiring astronauts).
   5. The ULCCS Centenary LP School, an aided lower primary school in Muttungal managed by the ULCCS which offers classes from kindergarten to the 4^th standard.
8. ULCCS Charitable and Welfare Foundation, the cooperative’s social responsibility wing, which runs three key projects under the name UL Care:
   1. The Prasanthi School for Children with Special Needs
   2. The Nayanar Sadanam Institute of Vocational Training and Placement for Adults with Intellectual Challenges
   3. The Madithattu Geriatric Centre
9. UL Insight, a management consultancy firm jointly managed with Insight Advisory and Consulting India

As a workers’ cooperative, the ULCCS does not allow non-workers to become members. Its board – which is elected by and represents the workers – has thirteen directors, each of whom has between thirty and thirty-five years of experience in various sectors of the construction industry. Each worksite, including the project’s management, is overseen by a board member who evaluates the work at the end of each day.

Navin S. (Young Socialist Artists), Tailors of Dinesh Apparels, 2025.

Credit Cooperatives in Kerala

Aswathi Rebecca Asok

Credit cooperatives – member-owned financial institutions that provide affordable credit and financial services to rural and marginalised populations – were formed in Kerala even before the state was established in 1956. They largely service small-scale farmers and workers, often where private commercial banks are absent or insufficient. In Kerala, they have historically played a vital role in supporting land reform beneficiaries and preventing the re-concentration of land ownership. For instance, the Trivandrum Central Cooperative Bank was set up in 1915 to provide finance to the emerging cooperative sector in the area. Later, similar credit cooperatives were established across the northern Malabar region and in Cochin. In 1956, the Trivandrum Central Cooperative Bank became the Kerala State Cooperative Bank, anchoring the credit cooperatives of the new state. Today, there are 4,146 credit cooperatives in Kerala, accounting for over one-third of the total lending institutions in the state.²⁵ These credit cooperatives have played a vital role in economically uplifting the people, particularly in rural Kerala. For example, when the communist ministry initiated land reforms in 1957, small-scale farmers who received land needed finance to begin cultivation, but this credit was not available from the private sector in sufficient volumes. It was the credit cooperatives that stepped in, providing the necessary capital and sparing farmers from having to borrow from moneylenders and the feudal class. Without the presence of credit cooperatives, a substantial portion of the distributed land in Kerala would have returned to the feudal class and moneylenders in the form of mortgages.

Though private commercial banking has emerged in rural Kerala, credit cooperatives continue to provide a vital function. Kerala is the fifth-best connected state in India in terms of coverage by commercial bank branches, yet there is a wide rural-urban gap in the distribution of these branches. Reserve Bank of India data from 2024 shows that only 5.3% of these branches are located in rural areas, while 22.5% are in urban areas and 72.2% are in semi-urban areas.²⁶ However, if cooperative credit institutions are added into these figures, 25% of the bank branches in the state are located in rural areas.

The Structure of Credit Cooperatives in Kerala

Kerala’s credit cooperative sector is structured into two parallel systems: short-term cooperatives, which provide seasonal working capital loans for agriculture, and long-term cooperatives, which offer investment credit for rural infrastructure and agricultural development. Each system has its own institutional structure, including banks operating at village, district, and state levels.

Short-term cooperatives have historically operated through a three-tier structure consisting of Primary Agricultural Credit Societies (PACSs) at the village level, district cooperative banks at the district level, and the Kerala State Cooperative Bank at the state level. In 2019, this structure was simplified to two tiers by merging the district- and state-level banks into a single entity now known as Kerala Bank. This simplified structure has strengthened the integration and efficiency of the short-term cooperative network. Broadly speaking, this structure can be visualised as a pyramid: PACSs form the base, and Kerala Bank serves as the apex. Long-term cooperatives form a separate structure anchored by the Kerala State Cooperative Agricultural and Rural Development Bank at the state level and supported by primary cooperative agriculture and rural development banks at the district and block levels.

At the foundation of the short-term cooperative structure are the PACSs, popularly known as ‘societies’. Each village in Kerala has at least one PACS, making them the most accessible and familiar financial institutions in rural Kerala. These PACSs also form the backbone of the state’s broader cooperative movement. With 30.3 million members in 2022, Kerala’s PACSs account for the largest membership in India – more than double that of West Bengal, the state with the second highest membership.²⁷ Most members come from small and marginal farming households or other economically and socially disadvantaged communities. This large membership base has enabled PACSs in Kerala to mobilise INR 1.217 billion in deposits – over two-thirds of the total deposits held by PACSs across India.²⁸

The vibrant role that Kerala’s PACSs have played in enhancing credit availability and accessibility for the rural poor and other marginalised sections of the population underserved by commercial banks is illustrated by several Kerala-based empirical studies.²⁹ These studies show that socially and economically deprived groups perceive cooperative societies as their friendly neighbourhood institutions and, therefore, as the most approachable banking institutions. Half of the low-income households in rural Kerala rely on the cooperative sector for loans, while 25% borrow from commercial banks. The studies also note a higher dependence of Dalit and Adivasi borrowers and extremely poor households on credit cooperatives compared to other socioeconomic categories and point to the barriers that stand between poor people and commercial banks. Further, the specific characteristics of financial cooperatives – familiarity between customers, employees, and the members of the boards of directors, as well as the right of anyone in the locality to secure membership – make these institutions easily accessible to marginalised populations. Complex forms, complicated procedures, and even the attire and sophisticated nature of commercial bank staff often instil a feeling of ‘otherness’ among the poor towards commercial banks.

The potential of credit cooperatives in Kerala to free socially and economically vulnerable groups from the clutches and exploitation of moneylenders is evident from the story of Mannarkkad Rural Service Cooperative Bank Ltd, located in the district of Palakkad.

Mannarkkad Rural Service Cooperative Bank Ltd

The Mannarkkad Rural Service Cooperative Bank Ltd (MRSCB) began operating in 1989 with just 305 members and a share capital of INR 30,000. Over the last three decades, the bank has made tremendous progress in terms of membership, deposits, and share capital. Currently, the bank has more than 16,000 members, a share capital of INR 40 million, and an annual turnover of INR 7.5 billion. It has mobilised a total of INR 2.7 billion as deposits, distributed a total of INR 2.5 billion as loans, and consistently earned a profit since 1994. It pays a dividend of 25% to its members, which is the maximum permitted amount by the Kerala Cooperative Societies Act. In 2018, the bank launched a microfinance scheme called Muttathe Mulla (Jasmine in Your Yard) for poor villagers who live near the bank in order to save them from illegal moneylenders and private microfinance companies that charge exorbitant interest rates. Under this scheme, a person is eligible for bank loans at a discounted rate, which enable them to pay off older loans taken from moneylenders. The scheme has been implemented with the support of Kudumbashree neighbourhood groups, which are entrusted with the responsibilities of identifying those in need, distributing the loans, and collecting the weekly payments from borrowers at their doorsteps. Seeing the success of this scheme, the Government of Kerala adopted it at the state level and decided to implement it all over the state through PACSs.

Apart from providing traditional banking services, PACSs are also making diverse interventions to advance the development of rural local economies, thus acting as the backbone of the rural financial sector in Kerala. The institutions undertake a range of activities, such as distributing credit and inputs at subsidised rates; supporting farming, animal husbandry, and small-scale industries; and arranging facilities for processing, branding, and marketing local produce.

Palliyakkal Service Cooperative Bank Ltd

The Palliyakkal Service Cooperative Bank Ltd (PSCB) was established in 1943 in the Ezhikkara grama panchayat (village panchayat) of Ernakulam district. Predominantly an agrarian village, Ezhikkara is known for the cultivation of pokkali rice (a salt-tolerant rice variety) and fish farming, both of which serve as the local community’s major income sources. During its first decades of its existence, the PSCB engaged in traditional banking activities such as lending money and accepting deposits. However, its financial performance turned out to be very poor with a very low recovery rate. In 2000, the PSCB’s board of directors conducted an in-depth analysis of the bank and found that the low profitability and reduced employment opportunities in the region’s farming sector were the major contributing factors to borrowers’ low repayment. The bank recognised the need to enhance the local community’s income in order to improve its financial viability.

With this in mind, the PSCB decided to address the agrarian crisis facing farmers in its area. It held consultations with its members and the local community and developed a strategic plan for achieving local self-sufficiency in food production, ensuring local food security, and driving local economic development. Mutual aid groups were formed under the aegis of the PSCB in seven sectors: pokkali rice cultivation, horticulture, floriculture, milk production, poultry, pisciculture, and herbal plant cultivation. To increase agricultural production, the PSCB regularly provided these community-based farmer groups with training, accessible (such as low-interest or easy-to-access) credit, and forward and backward linkages (connections to input suppliers and to markets for selling their produce). The bank also provided farmers with continuous agricultural consultancy through its agricultural officer, as well as financing, and introduced innovative agricultural practices. In addition, it offered facilities to procure and market produce and arranged its own distribution centre for agricultural inputs such as organic seeds, organic fertiliser, and agricultural equipment. The PSCB organised agricultural labourers into the Green Army, a service through which it provided farmers with a sufficient labour force, and set up a pokkali rice mill to improve the processing of pokkali products. It also organised markets where fruits, vegetables, milk, and eggs procured from the farmers were sold at some of the highest prices in Kerala. Landowners in the area supported these initiatives by allowing the bank to use their land for farming. Presently, more than a thousand families in the locality are involved in activities initiated by the bank, whose concerted efforts and achievements in reviving the local economy are widely recognised.

Over the past few years, the bank has won several performance awards in the cooperative sector. In the 2020 state budget, then Finance Minister of Kerala Dr T. M. Thomas Isaac announced the virtual Kerala Food Platform, which enables farm products to be purchased directly from farmers and delivered to consumers, ensuring not only more widely accessible and healthier products but also better returns for the farmers by avoiding intermediaries. In recognition of the PSCB’s interventions in the area, the bank was selected to implement the programme.

Cooperative Development

Kerala’s extensive network of credit cooperatives has received international acclaim for its achievements furthering the development of rural economies. Free of the rigidities and cumbersome procedures that characterise commercial banks, these ‘people’s banks’ play a key role in making several state programmes a success. Such initiatives include the Care Home project, which built safe and better homes for families affected by the floods and landslides of 2018, and welfare pension schemes. Furthermore, these grassroots credit institutions played a key role in helping the state recover from the massive floods of 2018 and the COVID-19 pandemic by extending financial support to the people of Kerala. Between the long-term process of development and the short-term dynamic of relief, these institutions have proved themselves vital to progress in Kerala.

Kadambari (Young Socialist Artists), Dinesh Beedi’s Read Aloud Programme, 2025.

Kerala Dinesh Beedi Workers’ Central Cooperative Society

Nitheesh Narayanan and Ashique Ali Thuppilikkat

On 15 February 1969, the Kerala Dinesh Beedi Workers’ Central Cooperative Society (Dinesh Beedi) was registered with the State Registrar of Cooperative Societies. Initially, the cooperative established one central society and twenty primary production units, where the workers rolled beedi (a type of thin hand-rolled cigarette). The cooperative was formed after a sustained period of agitation by the workers, whose demands to improve their working conditions were also taken up by the communists. In 1966, the efforts of communist leader AK Gopalan led to the passage of the Beedi and Cigar Workers (Conditions of Employment) Act in the Indian parliament, which laid out a minimum guarantee for the well-being of beedi workers, including decent wages and social security, and left the responsibility to implement the act to the discretion of state governments. It was worker agitation and the passage of this act that provided the impetus for the formation of Dinesh Beedi three years later.

When the communists won the 1967 state elections in Kerala by a landslide, EMS Namboodiripad, the new chief minister, implemented the Beedi and Cigar Workers Act. Private owners of the beedi factories protested, with some of them – such as Ganesh Beedi – going as far as abruptly shutting down their factories. They refused to negotiate with workers because they wanted the government to withdraw from implementing the legislation. When workers from the districts of Kannur and Kasaragod in northern Kerala began to suffer from the social impacts of these closures, trade unions and communists came together in a united front to demand support for them. ‘Workers knew only beedi-making, and it was not easy to find alternative jobs for such a large number of them’, wrote GK Panikkar, who later became the chairman of Dinesh Beedi from 1969 to 1996. ‘The economy of the district was shaken’, he said.³⁰ It was at this point that the unionised workers decided to organise a cooperative for beedi production.

The formation of this workers’ cooperative became not only a solution to the crisis created by factory closures and an antidote to capital flight, but also an expression of the dignity of labour and the spirit of collective action. ‘The emergence of Dinesh Beedi was not as simple as many think’, said KP Sahadevan, who led the united front and helped establish the cooperative. ‘It was the result of the continuous struggle waged by the working class and by the overall militancy of the period’.³¹

The idea to form Dinesh Beedi was inspired by the Indian Coffee Workers’ Cooperative Society, formed in 1958 under the initiative of AK Gopalan. That earlier experience gave confidence that such worker-run schemes could work, which – alongside support from Kerala’s communist ministry – helped turn the beedi workers’ idea into reality nearly a decade later.

Capital for Dinesh Beedi came from the workers themselves. They fixed a share value of INR 20 in 1969, but many of them could not afford to buy their shares since the daily wage at that time was less than INR 3. To solve this problem, the state government provided INR 19 as a loan to each prospective worker-owner. Workers repaid the loan through instalments that were deducted from their wages. Though the project could not initially accommodate the 12,000 workers who lost their jobs, the 3,000 workers who first joined were accompanied by another 1,000 workers within a month. In other words, a third of the unemployed beedi workers entered the cooperative. The class-conscious beedi workers of northern Malabar made it clear that no divisions would be allowed between those who entered the cooperative as worker-owners and those who did not, and they educated all workers, whether employed in the cooperative or not, about how the cooperative worked.

From the onset, Dinesh Beedi faced a number of challenges. For instance, it had to struggle to gain a foothold against customers’ longstanding loyalty to older private brands. In the early period, the cooperative was stuck with unsold beedi packets, and it seemed like the new venture would not succeed, despite the workers’ efforts to produce high-quality beedi. At this point, through collective discussion, the workers decided to launch a mass campaign to promote Dinesh Beedi at every shop, requesting that they purchase their brand. This mass campaign gradually made Dinesh Beedi the preferred brand among Kerala’s working class and peasantry. Within a few years, Dinesh Beedi emerged as one of the most popular beedi brands in India and the largest beedi producer in southern India. The cooperative, which had started with 3,000 workers in 1969, employed 42,000 workers by the 1980s, becoming one of the largest worker cooperatives in Asia. As a result, they were able to pay themselves higher wages and social security than was provided in the private sector.

However, the point of a cooperative is not just to survive in the capitalist system but to use its democratic structure to expand the social horizons of its workers. Dinesh Beedi’s worker-owners both created a dignified work culture and eliminated the private contract system, which did not honour established workers’ rights – one of the main complaints during the agitations of the 1950s and 1960s. It was also among the first firms to provide its workers with paid time off, bonuses, and bereavement benefits. At the workplace, Dinesh Beedi encouraged both trade unionism and political discussion, such as through a ‘read aloud’ programme in which a designated worker read important literary works or texts on contemporary affairs to the other workers. It also organised arts and sports clubs in villages to provide workers, their families, and the community at large with necessary leisure activities. These reforms had a profound impact on the beedi industry, and some of them were even adopted by private firms. Dinesh Beedi became a symbol of resistance and of workers’ unity and dignity.

In the 1990s, a crisis in the beedi industry threatened Dinesh Beedi’s existence. The crisis stemmed from several developments, including the emergence of new private-sector beedi firms that paid wages below the government-mandated minimum and offered higher margins to retailers; a shift among younger consumers from beedis to cigarettes; and government anti-tobacco campaigns. Dinesh Beedi supported the government campaigns, which gained momentum as public awareness of tobacco’s health risks grew. Because of this new consciousness, the cooperative stopped hiring new workers after 1993 and consumer demand declined year after year. Dinesh Beedi workers’ hours were reduced, and many left the cooperative to seek employment elsewhere.

In this context, Dinesh Beedi’s worker-owners began to discuss diversifying production in order to save the cooperative. To support this initiative, Kerala’s Industries Minister Susheela Gopalan, a leader of the communist movement, held a state-wide workshop on diversification on 30 August 1996 in which many scientists provided their inputs to the cooperative’s worker-owners. Soon after, Dinesh Beedi launched a set of pilot products such as coconut milk (1997) and curry powder (1998). In the late 1990s, Dinesh Beedi expanded into five new ventures:

1. Dinesh Foods manufactures and retails spice powders, coconut milk, virgin coconut oil, coconut milk ice cream, fruit squash, fruit jam, syrup, and pickles, mostly employing former beedi workers. The cooperative has four manufacturing units in Kannur district, ensuring round-the-year employment for its workers.
2. Cafe Dinesh operates cooperative restaurants and catering services in Kannur, Payyannur, Pinarayi, and Thalassery. Dinesh Foods’ products are available at these outlets.
3. Dinesh Information Technology Systems (DITS), established in 1999, provides IT support for the cooperative sector in Kerala, including the cooperative banking sector. In 2001, DITS established the Dinesh Software Park in Kannur.
4. Dinesh Auditorium in Kannur rents out a large hall with capacity for 1,000 people and is available for conferences and weddings.
5. Dinesh Apparel, created in 2007 in Kannur and Kasaragod, produces clothes for local and export markets. It employs more than 400 people.

By diversifying into Kerala Dinesh, as it became more popularly known by the early 2000s, the cooperative was able to thrive and reduce its reliance on a harmful product. Democratic decision-making and a belief in prioritising workers’ interests have led to the creation of a cooperative ecosystem that continues to capture the imagination of workers across the world.

Vanshika Babbar (Young Socialist Artists), Dinesh Foods, 2025.

A Small Village Builds Its Own Labour Cooperative

Sarga T. K.

Kodom Belur, a village panchayat located in a remote part of Kerala’s northern Kasaragod district, had long been marked by deep socioeconomic disparities rooted in feudal landlordism. The material conditions of its people were shaped both by the land reforms of the decades following Kerala’s formation in 1956 and by remittances from migrants to the Persian Gulf, which gave rise to a new wealthy class. Yet large sections of the population did not benefit from either the land reforms or the remittances and remained unemployed, socially bereft, and frustrated by rampant corruption in publicly funded projects. Construction labourers were often denied their rightful wages while contractors seized public funds without completing projects.

Construction is a demand-driven sector. The need for infrastructure depends on the level of economic development, and the quality of physical infrastructure is unevenly distributed across regions. Construction work does not always take place where labour is available, nor is the need for labour constant. Workers go from one job site to another based on the availability of contracts, with the amount of labour and capital required dependent upon the size and value of each project. At each stage of construction, different skill sets are needed and new workers are brought in, giving capital investors the upper hand throughout the entire construction process. In large-scale projects, multiple layers of subcontracting further increase workers’ vulnerability. Altogether, the structural characteristics of construction activity create ample conditions for labour exploitation.

In 1996, Kerala’s Left Democratic Front government launched the People’s Campaign for Decentralised Planning, which built an impressive process to decentralise planning by drawing large sections of Kerala’s population into discussions about the problems and unmet potential in the state. These efforts galvanised the people of Kodom Belur to organise against exploitative construction companies and boycott the privately contracted public works in the area. They built an action group that began executing public contracts independently. However, technical backwardness, limited capital, pressure from private builders, and obstruction by corrupt officials – especially in the Public Works Department – undermined their efforts to assert popular control over these projects.

In 1997, a local elected leader and the panchayat standing committee chairman for Kodom Belur, AC Mathew, galvanised the members of the action group to organise themselves into the Hosdurg Labour Contract Cooperative Society. The society aimed to pool its members’ skilled labour and raise capital through their own savings so that they could bid for public works. In 2004, the society was renamed Udayapuram Labour Contract Cooperative Society. The society has grown from 221 initial members to 2,981 today, including 235 permanent Class A members (those with full voting rights and long-term participation in the cooperative), about one-quarter of whom belong to the Scheduled Tribes category. The Udayapuram Society secures construction contracts from the Kerala Public Works Department, local self-governing bodies, and other government departments. It is owned and maintained by its members and receives funding from the National Cooperative Development Corporation, district cooperative banks (now Kerala Bank), and the Kerala Financial Corporation.

The cooperative’s model is rooted in mutual aid and ultimately aims to improve the quality of life of its members. Before the creation of the Udayapuram Society, construction work was largely carried out by private builders. It was through the Udayapuram Society that labourers were able to overcome wage exploitation and dependency on private contractors.

The increased volume of work has gradually led to better socioeconomic conditions for its members. From 2011 onwards, the society began to undertake large-scale construction projects. It also diversified its activities to include agriculture and other industries in order to stabilise growth and make better use of available human resources. By creating productive job opportunities, the society became an engine of growth in the regional economy.

Junaina Muhammad (Young Socialist Artists), Kudumbashree, 2025.

Kudumbashree

Subin Dennis

One of the most striking things about Kudumbashree is its sheer size: 4.8 million women – about one-third of adult women in Kerala – are members of this network.³² Although Kudumbashree (which means ‘prosperity of the family’ in Malayalam) began in May 1998 as a state-initiated programme to eradicate poverty among women, it has since become a transformative force in Kerala’s social and political life. ‘Partly a movement and partly a government programme’, as V. K. Ramachandran describes it, today Kudumbashree is engaged in a wide range of activities, from microfinance and collective farming to manufacturing apparel and running restaurants.³³ It has become a ubiquitous presence in Kerala society.

Though Kudumbashree is not organised under the laws that govern cooperatives in Kerala, it is imbued with a cooperative spirit – the basic units of the Kudumbashree community network are controlled and run by its members in a democratic manner based on the ‘one member, one vote’ rule.³⁴ The community network has a three-tier structure:

1. The lowest tier is the Neighbourhood Group or NHG (Ayalkkoottam in Malayalam), consisting of ten to twenty members. All adult women in the neighbourhood are eligible to become members, and there is a focus on including women from economically and socially disadvantaged sections of the population.
2. The second tier is the Area Development Society (ADS), which is formed by federating all the NHGs in a ward of the relevant local self-government institution (LSGI, also known as local body or local government), such as a panchayat or municipality.
3. The third tier is the Community Development Society (CDS), which is formed by federating all the area development societies in the local body.

The Kudumbashree community network is supported by a government structure called the Kudumbashree Mission (officially the State Poverty Eradication Mission). The mission is led by a governing body chaired by the state minister for local self-governments, an executive committee chaired by the additional chief secretary of the department of local self-government, and a government official who serves as executive director. There are fourteen district Kudumbashree missions (one for each district in Kerala) under the state mission.

Origins

Previous local experiments in community development served as precursors to Kudumbashree.³⁵ One such experiment was the Community-Based Nutrition Programme, initiated by the United Nations Children’s Fund (UNICEF) in the town of Alappuzha in 1991 to improve the health and nutritional status of women and children. The programme established women’s community development societies at three levels: NHGs, ADSs, and CDSs. A similar project was implemented in Malappuram district from 1994 onwards with a five-tier structure (NHGs, ADSs, CDSs, block-level CDSs, and district-level CDSs), though it was eventually reduced to three, like the one in Alappuzha. Thrift and credit societies, which mobilised the small savings of poor women members of the community development societies and provided loans to their members, became an integral part of the community organisation.

The early 1990s were also a time when the Kerala Sasthra Sahitya Parishad (Kerala Forum for Science Literature, or KSSP, Kerala’s biggest people’s science movement) was leading new experiments in a participatory model of planning for local development. The formation of NHGs, which participated in resource mapping and planning at the local level, was part of these experiments. The most prominent among them was implemented by KSSP at the Kalliasseri village panchayat in Kannur district in 1993, where nearly two hundred NHGs were formed.

In 1996, the Left Democratic Front government came to power in Kerala and launched the People’s Campaign for Decentralised Planning (also known as the People’s Plan Campaign) that same year. The campaign led to a much greater devolution of funds and powers to local governments, and NHGs were formed to strengthen the process of decentralised planning.³⁶ As part of the campaign, the state government also made it mandatory for local governments to earmark 10% of their annual plan funds exclusively for various projects that targeted the social advancement of women.

All of these processes and experiments informed the creation of Kudumbashree.

In 1997, a special government task force recommended forming the State Poverty Eradication Mission (the Kudumbashree Mission). The mission was announced in the 1997–1998 Kerala state budget and inaugurated on 17 May 1998. Its aim was to eradicate absolute poverty through concerted community action under the leadership of local governments.³⁷

Today, Kudumbashree’s major programmes include microfinance, income-generating economic activities such as agriculture and microenterprises, and the implementation of various welfare and development initiatives of local governments.

All members of Kudumbashree are part of its thrift and credit programme. Members of Kudumbashree neighbourhood groups meet once a week and make small contributions to a thrift fund, which is then used to give small loans to members who need them. Most neighbourhood groups are also linked to banks, which provide loans to the groups. The groups then use these loan amounts for livelihood activities such as collective farming and setting up microenterprises.³⁸

Collective Farming

One of Kudumbashree’s most noteworthy initiatives is collective farming.³⁹ Groups of four to ten NHGs members who are interested in farming are organised into Joint Liability Groups, also known as sangha krishi (collective farming) groups, which identify land (often land that is lying fallow) suited for cultivation in their village and surrounding areas. With the help of the panchayat and the Kudumbashree District Mission, they take the land on lease from landowners and cultivate it. Group members also pool their own land and cultivate it. Active sangha krishi groups are linked with banks, and loans are made available to them with subsidy on interest. The Kudumbashree Mission also supports the collectives by providing them with farm machinery, seeds, fertilisers, and pesticides at subsidised prices. The state agriculture department provides periodic training and technical support. Funds from various central government initiatives are also used to support the collective farming efforts. Ten thousand skilled women farmers from the sangha krishi groups have been designated as ‘master farmers’ who function as resource persons who provide training to the rest of the sangha krishi group members.

As of 30 June 2025, the number of women farmers who are part of the Kudumbashree sangha krishi groups in Kerala has reached 439,255. There are 96,177 sangha krishi groups, which have brought 21,457 hectares of land under cultivation.⁴⁰ The main crops they grow are rice, vegetables, tubers, and bananas. The produce is first used for consumption among the women farmers’ families, and the surplus is then sold in village markets. Kudumbashree’s collective farming efforts have strengthened the food security of members’ families, and improved their incomes and living standards.

Local Governments

The Kudumbashree community network plays a crucial role in the development initiatives of the local governments under decentralised planning in Kerala. While local governments are responsible for planning and implementing programmes for economic development, social justice, and poverty alleviation, Kudumbashree’s core mission is poverty eradication.⁴¹ From the beginning, this shared focus has meant that Kudumbashree NHGs, ADSs, and CDSs work in tandem with the local governments.

Kudumbashree acts as the implementation agency for several poverty eradication schemes and development initiatives of the state government. For instance, the Destitute-Free Kerala programme, aimed at eradicating extreme poverty in the state, is implemented by Kudumbashree, and the beneficiaries of the programme are identified by Kudumbashree members. The programme is intended to provide food, medical treatment, clothing, welfare pensions, schooling, land, and housing to those identified as destitute.⁴²

As part of the planning process, Kerala’s local governments establish working groups for key development sectors such as health, education, poverty reduction, development of women and children, and social security, and it is mandatory that at least one Kudumbashree CDS member be included in every such working group.⁴³ These working groups are tasked with surveying existing resources, analysing local conditions, exploring development potential, and identifying people’s needs. Moreover, people’s development needs are assessed at ward-level assemblies (known as grama sabhas in villages and ward sabhas in towns and cities). Kudumbashree members are the most active section of such assemblies and play a crucial role in keeping the assemblies vibrant.

In February 2020, Kerala’s left government announced that it was opening one thousand restaurants, to be run by Kudumbashree, where food would be provided at subsidised rates.⁴⁴ During the COVID-19 lockdowns that year, Kudumbashree began setting up these restaurants, christening them ‘people’s restaurants’. During these months, Kudumbashree – along with local governments and employees’ unions – was also involved in running community kitchens across the state. As of 1 March 2025, there were 1,198 people’s restaurants functioning in the state, run by 5,104 Kudumbashree members.⁴⁵

Microenterprises

Microenterprises set up by Kudumbashree units are involved in a wide range of sectors, including the production of packaged foods, apparel, sanitary napkins, umbrellas, bags, pottery, floor mats, soaps, and toiletries. There are Kudumbashree initiatives that brand and market agricultural products produced by tribal farmers in various districts in the state to ensure that the producers receive higher incomes. The Home Shop network, which takes the products of Kudumbashree microenterprises directly to households, has been established in all fourteen districts in the state. There are also units that engage in rearing livestock and poultry and running fish farms.

Kudumbashree units run restaurants and canteens across the state; manage parking at railway stations; process coconut oil, cashew, and tamarind; and make snacks, pickles, and pappadam (a thin, crisp lentil-based snack). They run fitness centres, women’s hostels, daycare centres for children, driving schools, coir (coconut fibre) units, book binding units, printing centres, medical labs, tailoring units, and supermarkets. There are also units that manufacture LED bulbs and electronic products.

There are Kudumbashree all-women construction teams consisting of supervisors, masons, plumbers, and electricians who have been trained by the Kudumbashree Mission with the support of various other agencies. Kudumbashree also has a Haritha Karma Sena (Green Task Force) which collects plastic waste from houses and businesses, transports the waste to shredding units for recycling, and assists in household biowaste management. Amrutham Nutrimix, the cereal-based powder given to children aged six months to three years at Kerala’s childcare centres, is also manufactured by 241 Kudumbashree units in the state.⁴⁶

As of 1 March 2025, there were a total of 157,097 Kudumbashree microenterprises in the state, run by 318,265 Kudumbashree members.⁴⁷ Out of these, 69,484 enterprises were in the production sector, 49,381 in the service sector, and 35,646 in the trade sector.⁴⁸

Impact

Kudumbashree has transformed the lives of its members, helping them improve their living standards, gain income-generating work outside their homes, strengthen their confidence and self-esteem, and increase their visibility in the public sphere. Kudumbashree members have also become a major presence in the activities and leadership of local governments in the state.

According to a 2015 sample survey carried out across Kerala by the Laurie Baker Centre for Habitat Studies, Thiruvananthapuram (henceforth LBC Survey), 54.1% of Kudumbashree members were engaged in some form of income-generating economic activity.⁴⁹ This was double the work participation rate of adult women in the state (26.3%). The LBC Survey also showed that before joining Kudumbashree, 66.1% of its members were engaged solely in household work and were not involved in any income-generating activity outside their homes or in studies. This dropped to 37% after they joined Kudumbashree.⁵⁰

Another sample survey conducted by Ambika Devi R in 2008–2009 as part of her PhD work at the University of Kerala showed that Kudumbashree helped nearly 50% of its members gain access to income-generating activities.⁵¹ As part of this survey, Kudumbashree members were asked how much control they had over their income, the options being ‘to a great extent’, ‘to some extent’, and ‘no control’. As much as 88.8% of the women reported that they had control over their income ‘to a great extent’ after they joined Kudumbashree. The percentage of women who had the same level of control over their income before they joined Kudumbashree was much lower: 66.7%.⁵² A 2016 survey in Ernakulam district by Taramol KG as part of her PhD work at Bharathiar University showed that the incomes of Kudumbashree members increased significantly after they became part of the community network.⁵³

Households with Kudumbashree members have also reported an increase in their acquisition of consumer durables and household assets as a result of their improved incomes. The 2015 LBC Survey showed that the percentage of Kudumbashree members living in kutcha houses (made of less durable materials such as mud, leaves, straw, and grass) was 6.7 percent, down from 22.9 percent before they joined Kudumbashree.⁵⁴ Furthermore, Kudumbashree members reported that their improved incomes helped them provide higher education to their children, secure better healthcare, and improve their houses or construct new ones.

A substantial proportion of the women who joined Kudumbashree (27.4%, according to Ambika Devi’s study; 36%, according to the LBC Survey) have reported that their public speaking skills have improved since they joined the network. A significant proportion of women (38.4%, according to the LBC Survey) gained the confidence and skills to demand services or facilities from government offices.⁵⁵ Similar gains have been made in their confidence to participate and express their views in meetings, and to take part in local government functions. The collective nature of Kudumbashree activities also helped improve the spirit and practice of mutual help among Kudumbashree members.⁵⁶

As mentioned earlier, Kudumbashree members are among the most active sections in the activities of local governments in Kerala. This has directly translated into greater representation of Kudumbashree members among elected representatives to local self-government institutions (LSGIs): of the 21,854 people elected as LSGI members in Kerala in the 2020 local government elections, 7,058 were active members of Kudumbashree.⁵⁷

To sum up, Kudumbashree has become a vital element of Kerala’s social and political life. It has helped women – particularly those from economically and socially disadvantaged backgrounds – improve their living conditions. Kudumbashree has enhanced their status within their families and enabled them to participate more effectively in the public sphere, including the political arena. Unsurprisingly, it has been referred to as one of the ‘greatest gender justice and poverty reduction programmes in the world’.⁵⁸

Notes

Women who migrated to the Wangjia community participate in local activities at the community centre in Tongren City, Guizhou Province, April 2021.

These photographs were made during a trip to Guizhou Province visiting people and sites linked to China’s targeted poverty alleviation programme. The drawn lines extending on top of the images remind us of architectural sketches. Socialism, after all, is about the constant work of construction. This visual language speaks to the name of the series of publications on socialist construction that this study inaugurates.

Contents

• Part I: Introduction
• Part II: Historical Context
• Part III: Poverty Alleviation Theory and Practice
• Part IV: Targeted Poverty Alleviation
• Part V: Case Studies
• Part VI: Challenges and Horizons
• Epilogue

Grandma Peng Lanhua in her two-hundred-year-old home, renovated and serviced with electricity, running water, and satellite television in the village of Danyang, Guizhou Province, April 2021.

Part I: Introduction ⤴

The Greatest Anti-Poverty Achievement in History

On 25 February 2021, the Chinese government announced that extreme poverty had been abolished in China, a country of 1.4 billion people. This historic victory is a culmination of a seven-decade-long process that began with the Chinese Revolution of 1949. The early decades of socialist construction laid the foundation that was deepened during the reform and opening-up period. During this time, 850 million Chinese people were lifted and lifted themselves out of poverty; that is to say, 70 percent of the world’s total poverty reduction took place in China. In the most recent ‘targeted’ phase that began in 2013, the Chinese government spent 1.6 trillion yuan (US$246 billion) to build 1.1 million kilometres of rural roads, bring internet access to 98 percent of the country’s poor villages, renovate homes for 25.68 million people, and build new homes for 9.6 million others. Since 2013, millions of people, state-owned and private enterprises, and broad sectors of society have been mobilised to ensure that – despite the pandemic – China’s remaining 98.99 million people from 832 counties and 128,000 villages exit absolute poverty.^[1]

In 2019, as China entered the last stages of its poverty eradication scheme, UN Secretary General Antonio Guterres said, ‘Every time I visit China, I am stunned by the speed of change and progress. You have created one of the most dynamic economies in the world, while helping more than 800 million people to lift themselves out of poverty – the greatest anti-poverty achievement in history’.^[2]

While China has been fighting poverty, the rest of the world, especially the Global South, has experienced a downward turn. United Nations agencies report a great reversal in poverty elimination outside of China: in 2020, over 71 million people – most of whom are in sub-Saharan Africa and southern Asia – slipped back into poverty, marking the first global poverty increase since 1998.^[3] It is estimated that the economic crisis accelerated by the pandemic will drive a total of 251 million people into extreme poverty by 2030, bringing the total number to over one billion.^[4] That China was successful in combatting poverty in a time of such reversal is neither a miracle nor a coincidence, but rather a testament to its socialist commitment. This stands in contrast to capitalist societies’ indifference to the needs of the poor and the working classes, whose conditions have only worsened during the pandemic.

This study looks into the process through which China was able to eradicate extreme poverty as a fundamental step in constructing socialism. Based on a range of Chinese and English sources, the study is divided into five key parts: historical context, poverty alleviation theory and practice, targeted poverty alleviation, case studies, and the challenges and horizons ahead. Tricontinental: Institute for Social Research also conducted interviews with leading Chinese and international experts and made field visits to poverty alleviation sites in Guizhou Province, where the last nine counties lifted out of poverty are located. There, we visited poor villages, industrial projects, and relocation sites. We spoke with peasants, Party cadres, business owners, workers, youth, women, and elders who have been directly impacted by and have participated in the fight against poverty. Woven throughout the text, their stories are just a few among the millions who have contributed to this historic process.

A mural of Mao Zedong displayed in a rural village and local ‘red tourism’ attraction in Wanshan District, Guizhou Province, April 2021.

Part II: Historical Context ⤴

Meeting the People’s Increasing Needs for a Better Life

He Ying is a relocated member of the Wangjia community, where she became a Party leader. Her mother is sixty-nine years old, just three years younger than the Chinese revolution. Her lifetime traces the multigenerational struggle against poverty that the country has undertaken. Days before the official proclamation of the People’s Republic of China (PRC) on 1 October 1949, Chairman Mao Zedong said: ‘The Chinese people, comprising one quarter of humankind, have now stood up’.^[5] China’s national liberation came after what is referred to as a ‘century of humiliation’ at the hands of European colonial powers, a bloody civil war with Nationalist forces, and fourteen years of resistance against Japanese fascism that claimed up to thirty-five million Chinese lives.^[6] Internally, the Nationalist Party, warlords, and feudal landlords prioritised their class interests over the well-being of the people and the country.

During this period, China would go from being the biggest global economy to one of the world’s poorest countries. Accounting for one-third of the global economy in the beginning of the nineteenth century, the country’s GDP would fall to less than 5 percent by the PRC’s founding. In 1950, only two Asian and eight African countries had lower per capita GDPs than China: Myanmar, Mongolia, Botswana, Burundi, Ethiopia, Guinea, Guinea Bissau, Lesotho, Malawi, and Tanzania.^[7] In other words, the PRC was the eleventh poorest nation in the world upon its founding. When the communists came into power, they were faced with the challenge of reversing the country’s long term economic and social decline, beginning with meeting the basic needs of the country’s impoverished peasants and working class.

From 1949 to 1976, under Mao’s leadership, the Chinese government focused on improving the quality of life for its population, which had grown from 542 to 937 million people.^[8] In the first years of this period, poverty was addressed by transforming private ownership of the means of production into public hands and redistributing land from landlords and warlords to poor peasants. Poverty, after all, is an issue of class struggle. By 1956, 90 percent of the country’s peasants had land to till, 100 million peasants were organised in agricultural cooperatives, and private industry was effectively abolished. People’s Communes organised collective ownership of the land and means of production and distributed collective wealth, enabling the agricultural surplus to be invested into industrial development and social welfare.^[9]

In the twenty-nine-year pre-reform period (1949-1978), China’s life expectancy increased by thirty-two years. In other words, for every year after the Revolution, more than one year was added to the life of an average Chinese person. In 1949, the country’s population was 80 percent illiterate, which in less than three decades was reduced to 16.4 percent in urban areas and 34.7 percent in rural areas; the enrolment of school-age children increased from 20 to 90 percent; and the number of hospitals tripled. The decentralisation of the health and education systems from elite urban centres to poor rural areas was key. This process included establishing middle schools for workers and peasants and dispatching millions of barefoot doctors to the countryside. Significant advances were made in women’s participation in society, from abolishing patriarchal marriage customs to increasing access to education, health care, and childcare.^[10] From 1952 to 1977, the average annual industrial output growth rate was 11.3 percent.^[11] In terms of productive capacity and technological development, China went from not being able to manufacture a car domestically in 1949 to launching its first satellite into outer space in 1970. The Dongfanghong satellite (meaning ‘The East is Red’) played the eponymous revolutionary song on loop while in orbit for twenty-eight days.^[12] The industrial, economic, and social gains in the transition to socialism under Mao formed the foundation of the post-1978 period.

By the 1970s, it became clear that China’s economy required an infusion of technology and capital, and that it needed to break its isolation from the world market. As China’s leader Deng Xiaoping later wrote, ‘Pauperism is not socialism, still less communism’.^[13] The government introduced a range of economic reforms, including opening the economy to the world market, but – because China remained a socialist country – the public sector remained dominant and free of foreign control.

During this period, China’s economy grew at a sustained pace never before seen in human history. Between 1978 and 2017, China’s economy expanded at an average rate of 9.5 percent per year, growing in size by almost thirty-five times.^[14] Economic growth, however, is not an end in itself, but a means to improve the lives of the people. Between 1978 and 2011, the number of people living in absolute poverty dropped from 770 million (80 percent of the population) to 122 million (9.1 percent), measured by setting the poverty line at 2,300 yuan per year.^[15]

Pursuing rapid economic growth, however, came with great environmental and social costs. Mass migration to the cities heightened the rural-urban disparity, and the focus on eastern coastal industries left the western and central regions heavily underdeveloped. According to the World Bank, China’s Gini coefficient (a measure of inequality based on income) increased from 29 percent in 1981, peaking at 49 percent in 2007, and falling to 47 percent in 2012^[16]. Socially, this period produced unequal access to public services such as pensions, social insurance, education, and health care. Environmentally, rapid development took a toll on the country’s air, water, and land.

It is not surprising that addressing inequality became a principal task under President Xi (2013-present). At the nineteenth National Congress of the CPC in 2017, the twice-a-decade event that determines the national policy goals and election of top leadership, Xi spoke of the new era of socialism and, with it, the evolution of the principal contradiction faced by Chinese society:

As socialism with Chinese characteristics has entered a new era, the principal contradiction facing Chinese society has evolved. What we now face is the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life. China has seen the basic needs of over a billion people met, has basically made it possible for people to live decent lives, and will soon bring the building of a moderately prosperous society to a successful completion. The needs to be met for the people to live better lives are increasingly broad. Not only have their material and cultural needs grown; their demands for democracy, rule of law, fairness and justice, security, and a better environment are increasing. At the same time, China’s overall productive forces have significantly improved and in many areas our production capacity leads the world. The more prominent problem is that our development is unbalanced and inadequate. This has become the main constraining factor in meeting the people’s increasing needs for a better life.^[17]

The reform and opening-up period is therefore seen as the pre-condition for building a modern socialist country. It is during this period when two of the three official strategic goals were achieved, ensuring that the people are have a decent standard of life and that their basic needs are met. Continuing the work of poverty alleviation and ensuring that poor people enter a ‘moderately prosperous society’ (xiaokang) in the rest of the country is a final step in this period. In the years since Xi’s speech, China has mobilised its people – specifically the poor themselves – as well as the government and the market to eliminate extreme poverty, marking a key phase in the transition to socialism.

Peasant workers till the land in an organic bamboo fungus company, which was established to help lift Longmenao, a village that is officially registered as poor, out of poverty in Wanshan District, Guizhou Province, April 2021.

Part III: Poverty Alleviation Theory and Practice ⤴

One Income, Two Assurances, and Three Guarantees

China’s elimination of extreme poverty comes a decade ahead of the UN’s 2030 Agenda for Sustainable Development, which set ‘eradicating poverty in all its forms and dimensions, including extreme poverty’ as its principal target.^[18] While millions of Chinese people emerged from poverty during the phase of rapid economic growth, economics itself cannot explain this achievement.

For this study, we spoke with Justin Lin Yifu, former chief economist of the World Bank (the first from the Global South) and founder of New Structural Economics. Lin is also a standing committee member of the Chinese People’s Political Consultative Congress National Committee and a professor at Peking University. Lin classifies two primary approaches to poverty reduction, which he calls ‘blood transfusion’ and ‘blood generation’. The former – a preferred model in Western economies – is characterised by humanitarian aid or welfare mechanisms to guarantee that basic needs are met. Meanwhile, the latter describes development-oriented poverty alleviation that creates employment and increases the incomes of the poor. These two approaches alone, however, were unable to eliminate poverty in the poorest pockets of China. According to Lin, ‘In areas that are short of natural resources, far away from the market, and have poor transportation and infrastructure, such as the “Three Regions and Three Prefectures”,^[19] targeted assistance is needed’.

The comprehensive concept of targeted poverty alleviation – officially implemented in 2015, concluding at the end of 2020 – was developed and innovated based on decades of domestic and international experiences. ‘China’s poverty alleviation’, Lin summarises, ‘is a growth-driven, government-led strategy that combines social support and the peasants’ own effort, features the “blood generating” or development-oriented pattern, and guarantees basic needs through social security’. Stressing the role of government leadership, he says: ‘In contrast to the rest of the world, the Chinese government has played a crucial part. Poverty eradication would not have been achieved merely through the role of the market had the government not paid great attention to the issue of the poor people’. In other words, a combination of the ‘visible’ and ‘invisible hand’, together with the mobilisation of broad sectors of society, was the hallmark of China’s poverty alleviation in this ‘targeted’ phase.

China’s Targeted Poverty Alleviation (TPA) programme can be summarised by one slogan: one income, two assurances, and three guarantees. Regarding income, the international poverty line is set by the World Bank at US$1.90 per day, measured in 2011 prices and based on the average poverty line of the world’s fifteen poorest countries. China’s poverty line was last raised to 2,300 yuan per year in 2011 (set at 2010 prices), which represents US$2.30 per day when adjusted to Purchasing Power Parity (PPP), exceeding the World Bank standard. Adjusted to 2020 prices, the annual minimum income is 4,000 yuan, while the per capita income under the targeted alleviation programme of 10,740 yuan per year is much higher.^[20]

Understanding that poverty cannot be addressed by income distribution alone, China’s programme takes on a multidimensional approach. First theorised by Nobel Laureate Amartya Sen, the concept of multidimensional poverty looks at the intersecting and complex factors associated with poverty that are not accounted for just by measuring income. Elaborating upon Sen’s work, the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative adopted the Multidimensional Poverty Index (MPI) in 2010, measuring ten indicators across the three dimensions of health, education, and basic infrastructural services. Their 2020 report, launched a decade after MPI’s adoption and a decade before the Sustainable Development Goals’ (SDG) deadline, found that 1.3 billion people, or 22 percent of the world’s population, live in multidimensional poverty.^[21] In comparison, according to the US$1.90-a-day poverty line, 689 million people – or 9.2 percent of the global population – lived in extreme poverty in 2017, prior to the pandemic.^[22]

In addition to a minimum income, China’s poverty alleviation programme ensures that five other indicators are met: the ‘two assurances’ of food and clothing and the ‘three guarantees’ of basic medical services, safe housing with drinking water and electricity, and free and compulsory education, which in China is for nine years. We spoke with Wang Sangui, dean of the National Poverty Alleviation Research Institute of Renmin University about the relationship between China’s indicators and the MPI framework: ‘Multidimensional Poverty is only seen as a research approach’, he said, ‘and so far has not been adopted by any country to measure the size of the poor populations at the national level because of its great complexity’. However, by including the five key indicators, he adds, ‘In fact, China has followed a multidimensional approach in poverty eradication’. As an expert advisor to the State Council Leading Group Office of Poverty Alleviation and Development, Wang helped develop the standards for China’s programme. ‘How do you classify drinking water as safe? First, the basic requirement is that there must be no shortages in water supply. Second, the source of water must not be too far, no more than twenty minutes round-trip for water retrieval. Last, the water quality must be safe, without any harmful substances. We require test reports that confirm the water quality is safe. Only then can we say that the standard is met’.

First Secretary Liu Yuanxue speaks with a local villager during routine home visits in the village of Danyang, Wanshan District, Guizhou Province, April 2021.

Part IV: Targeted Poverty Alleviation ⤴

Don’t Use a Grenade to Blast a Flea

Targeted poverty alleviation, also known as precise poverty alleviation, was introduced for the first time during President Xi’s visit to Shibadong village in Hunan Province in November 2013. ‘Don’t use a grenade to blast a flea’, Xi advised the local government on how to address the root causes of poverty. Instead, he said, act as an embroiderer approaching an intricate design. This approach was implemented as the government strategy in 2015, guided by four questions: Who should be lifted out of poverty? Who carries out the work? What measures need to be taken to address poverty? How can evaluations be done to ensure that people remain out of poverty?

Defining Poverty: Who Gets Lifted?

Knowing who the poor are in a country of 1.4 billion people is an enormous undertaking. Recognising the limitations of a sampled-data statistical method, China moved towards a household identification system, which means getting to know every single poor person in the country, their conditions, and their needs. This was done through a combination of sending people to the villages, practising grassroots democracy, and deploying digital technologies. In 2014, 800,000 Party cadres were organised to visit and survey every household across the country, identifying 89.62 million poor people in 29.48 million households and 128,000 villages. More than two million people were then tasked to verify the data, later removing inaccurately identified cases and adding new ones.^[23]

While income is the primary deciding factor, housing, education, and health are also taken into consideration when listing a ‘poverty-stricken household’. Village committees, township governments, and the villagers themselves are mobilised to assess the status of each household. Public democratic appraisal meetings, for example, are held to facilitate discussions among community members about each family’s situation and whether they should be removed from or added to the poverty registration list.^[24] This on-the-ground process was paired with the creation of an advanced information and management system, touching on all parts of the poverty alleviation process across the country. Big data is used to monitor the situation of each of the nearly 100 million individuals, facilitate information flow between governmental departments, and identify important poverty trends and causes.^[25] Mobilising the people and gaining public support are at the heart of the effort to carry out this work.

Mobilisation: Who Does the Lifting? ⤴

Move Amongst the People as a Fish Swims in the Sea

There is no organisation without the organisers. As of June 2021, the CPC has more than 95.1 million members – 27.45 million of whom are women – and 4.9 million primary level Party organisations, which includes villagers’ committees, public institutions, government-affiliated organs and enterprises, and social organisations.^[27] If the CPC were a country, it would be the sixteenth most populous in the world.

The targeted phase of poverty alleviation required building relationships and trust between the Party and the people in the countryside as well as strengthening Party organisation at the grassroots level. Party secretaries are assigned to oversee the task of poverty alleviation across five levels of government, from the province, city, county, and township, down to the village. Most notably, three million carefully selected cadres were dispatched to poor villages, forming 255,000 teams that reside there.^[28] Living in humble conditions for generally one to three years at a time, the teams worked alongside poor peasants, local officials, and volunteers until each household was lifted out of poverty. In this process, many cadres were unable to return home to visit families for long stretches of time; some fell ill in the harsh natural conditions of rural areas and more than 1,800 Party members and officials lost their lives in the fight against poverty.^[29] The first teams were dispatched in 2013; by 2015, all poor villages had a resident team, and every poor household had an assigned cadre to help in the process of being lifted, and more importantly, of lifting themselves out of poverty.^[30] At the end of 2020, the goal of eliminating extreme poverty was reached.

Liu Yuanxu, a forty-seven-year-old man with a daughter in her senior year of high school, is among the Party secretaries who were sent in 2018 to Danyang, a village of 2,855 people in the southwestern province of Guizhou. Liu describes arriving in Danyang, where he does not speak the local dialect, and where 137 of the village’s 805 households were designated as poor. He was one of 52 cadres assigned to the village, each with different responsibilities. He told us about his day-to-day work:

I was responsible for five poor households, but it is now for four, since one person died. Back then I visited every family on an electric bike and took care of everything for them. I kept in touch with the young people on WeChat and the elders by phone. They could call me for anything. I went to every villager group to investigate who was nice and who was difficult. I’ve resolved problems through drinks and talks with the villagers who now have a very good relationship with me. Now the government maintains a register of poor households, marginal households, and key households. Digital tools help the government know when people get sick or if those who can work are employed. We also visit the villagers every month to better understand the reality of their situation.

Unlike models that rely heavily on non-governmental organisations and international assistance, China’s poverty alleviation programme draws its strength from mobilising its citizens. Cadres like Liu are an essential bridge between implementing government policy and understanding the concrete conditions and demands of the people. The more than ten million cadres and officials who have mobilised in the countryside have been essential in building public support for and confidence in the Party and the government.

In 2020, Harvard University published a study, Understanding CCP Resilience: Surveying Chinese Public Opinion Through Time, for which they interviewed 31,000 urban and rural residents between 2003 and 2016 about their support for the CPC.^[31] During this period, Chinese citizens’ satisfaction with their government increased across the board from 86.1 percent to 93.1 percent. The greatest increase in government satisfaction was seen in the rural township-level areas, which increased from 43.6 percent approval to 70.2 percent approval, particularly among lowest-income residents and those from the poorer inland areas. This growing support stems from the increased accessibility and quality of health care, education, and social services, as well as from the improved responsiveness and effectiveness of local government officials. Though the study ended in 2016 before the campaign’s completion, the poverty alleviation programme and the government’s effective response to COVID-19 have continued to build public support.^[32]

Shortly after Wuhan emerged from the COVID-19 lockdown, York University Professor Cary Woo led a survey of 19,816 people across 31 provinces and administrative regions. Published in the Washington Post, the study found that 49 percent of respondents became more trusting of the government following its response to the pandemic, and overall trust increased to 98 percent at the national level and 91 percent at the township level.^[33] Eliminating poverty and containing the pandemic can be seen as two major victories of China and its people in 2020.

United Front for Poverty Alleviation

Beyond cultivating Party and public support, the poverty alleviation campaign mobilised broad sectors of society to participate in a united front. ‘We should mobilise the energies of our whole Party, our whole country, and our whole society and continue to implement targeted poverty reduction and alleviation measures’, President Xi said in his speech at the Nineteenth National Congress. ‘We will pay particular attention to helping people increase confidence in their own ability to lift themselves out of poverty’.

The objective of achieving common prosperity with the expectation that those who get rich – particularly in the industrialised eastern coastal areas – will uplift the rest is a core element of this approach, and one that lies at the heart of Deng’s often misinterpreted quote, ‘let a few get rich first’. The poverty alleviation campaign followed this principle and used a mass mobilisation strategy reminiscent of the Mao-era to establish East-West cooperation. From 2015 to 2020, nine eastern provincial-level administrative units representing 343 counties invested 100.5 billion yuan in government and social assistance for the western regions, mobilised more than 22,000 local enterprises to invest an additional 1.1 trillion yuan, and exchanged 131,000 officials and technical personnel.^[34]

In 2013, the city of Tongren in the southwestern Guizhou Province, where He Ying relocated and where Liu Yuanxue’s village is situated, was paired with Suzhou, the economic centre of the eastern coastal province of Jiangsu. The collaboration included economic, infrastructural, educational, and technical exchanges. From April 2017 to 2020, Suzhou provided 1.71 billion yuan in financial aid and 240 million yuan in social assistance to implement 1,240 projects. In addition, 285 eastern enterprises developed projects in Tongren, investing 26.41 billion yuan and generating employment for 44,400 people in the poverty alleviation programme. In the process, 19 industrial and agricultural parks were created and targeted projects boosted local tourism by 30 percent. To deepen the political and educational exchange, 5,345 Party cadres, government officials, and technical personnel were transferred from Suzhou to Tongren, including Tongren’s deputy mayor Zha Yingdong, who moved from Jiangsu to Guizhou to lead the poverty alleviation work.^[35]

Beyond East-West cooperation, public and private enterprises, educational institutions, the military, and civil society also made significant contributions. The central departments invested 42.76 billion yuan, which helped bring in 106.64 billion yuan in capital and train 3.69 million grassroots technicians and officials.^[36] Meanwhile, 94 state-owned enterprises invested more than 13.5 billion yuan in 246 counties, implementing nearly 10,000 assistance projects. Of the country’s 2,301 national social organisations, 686 established formal poverty alleviation projects, raising charitable funds and offering voluntary services.^[37] Through the Ten Thousand Enterprises Helping Ten Thousand Villages campaign, 127,000 private companies participated in supporting 139,100 poor villages that benefited 18 million people.^[38] The military helped 924,000 people in 4,100 poor villages and contributed to the construction of schools, hospitals, and special industrial projects. The Ministry of Education organised 44 colleges and universities to be part of the campaign, carrying out research projects and dispatching expert and training teams in agriculture, health, urban and rural planning, and education, among other fields.

One such collaboration was the Hebian experiment,^[39] which brought university experts and students to Hebian village in Yunnan Province, a community that is predominantly made up people of Yao ethnicity. Led by Li Xiaoyun, chair professor at China Agricultural University, the team helped research, raise funds, and develop tourism, educational, and agricultural projects to increase and diversify income for the community. In our interview with Li, he commented on the mass mobilisation that took place:

It is very difficult for people outside of China to understand the poverty alleviation campaign of the last eight years, and particularly how it was organised – especially the remarkable mobilisation. The most difficult question that my friend asked me was, ‘How was the government able to convince everyone to contribute resources and to go to the poor areas?’ This is what we always try to articulate through our very simple statement. This is China’s special political institution. Chinese society is different from Western societies, because it is based on the collective and not on the individual. This is reflected in how the society is organised. The government works with social organisations, where the political and social networks merge into a whole – into a leading force, organised vertically and horizontally, which enables everybody to join this social campaign.

In short, the poverty alleviation programme touched virtually every corner of society. The victory against extreme poverty, therefore, cannot be seen as a singular programme under a singular mandate by the Party and the government. Rather, it should be seen as a mass mobilisation across multiple sectors of Chinese society using diverse and decentralised methodologies at a breadth and scale that is unprecedented in human history.

Resettled residents work in a clothing factory established in the Wangjia community, Tongren City, Guizhou Province, April 2021.

Methodology: How Did China Alleviate Poverty? ⤴

Industry

The introduction of e-commerce in rural areas was a key part of the poverty alleviation programme. Between 2016 and 2020, online businesses in poor counties grew from 1.32 million to 3.11 million, which helped increase rural households’ income while connecting the countryside to online markets.^[40] One such platform is Yishizhifu, launched in Tongren in June 2020, which trains peasants to produce short videos by setting up over twenty filming studios in poor communities in the city and surrounding villages. Users can upload their videos onto the mobile application and receive points for views that can later be exchanged for products available on the platform. For every minute of video watched, ten credits are awarded and distributed: six to the video producer, one to the viewer, two to the studio, and one to the Yishizhifu platform. Goods such as clothing, household appliances, agricultural products, farming equipment, and even cars are secured through partnerships with state and private enterprises. These businesses donate goods to the platform either to receive tax credits, offload excess stock, or use the platform as a source of free advertising. In this example and countless others, industrial development – facilitated by e-commerce and internet access – is a means of connecting the countryside with the city, generating employment and supplementary income, and building cultural confidence among peasants and the poor.

The targeted poverty alleviation strategy developed five core methods to lift poor people – or, rather, help them uplift themselves – out of poverty: industry, relocation, ecological compensation, education, and social assistance. The first of the five core methods is to develop local production. With that goal in mind, public and private sectors got involved to provide poor people with access to financing (loans, subsidies, and microcredit), technical training, equipment, and markets. Through the TPA programme, industrial poverty alleviation policies impacted 98 percent of poor households and established 300,000 industrial bases for agricultural production as well as animal breeding and processing across each of the 832 poor counties. Over 22 million poor people are employed in these bases, plus another 13 million in rural enterprises. Poverty alleviation workshops (small-scale centres of production organised on idle land or in people’s homes) contributed to nearly tripling the per capita income of poor households from 2015 to 2019, reaching 9,808 yuan per year.^[41] This in turn has helped develop new poverty alleviation models linked to tourism and the green economy.

A local food vendor and user of the Yishizhifu short video platform showcases her cooking in the village of Danyang, Wanshan District, Guizhou Province, April 2021.

Relocation

For families who are living in extremely remote areas or exposed to frequent natural disasters, it is near impossible to break the cycle of poverty without moving to more habitable environments. A total of 9.6 million people – roughly 10 percent of the people lifted from poverty – moved from rural to newly built urban communities. New housing was constructed along with 6,100 kindergartens, elementary, and middle schools; 12,000 hospitals and community health centres; and 3,400 elder-care facilities; and 40,000 cultural centres and venues were built or expanded.

The main challenge when transitioning from the countryside to cities is finding employment for the relocated families. To address the challenge of finding employment for the relocated families, the government developed training programmes and new industries. As a result, 73.7 percent of all of relocated people who are able to work have found jobs and 94.1 percent of relocated families with members who can work have found employment.

Ecological Compensation

Ecological conservation and restoration, particularly in designated poor areas, have been among the key methods to address poverty, primarily through job creation in the ecological sector. Since 2013, 4.97 million hectares of farmlands in poor regions have been restored as forests or grasslands. In the process, 1.1 million poor people have been employed as forest rangers, while 23,000 poverty alleviation cooperatives and teams for afforestation (the creation of new forests) have been formed.^[44] This is part of China’s continual greening efforts over the past two decades. According to the UN’s Food and Agriculture Organisation (FAO), China was ranked as a global leader in reforestation and accounted for 25 percent of the total growth in leaf area between 1990 and 2020.^[45] The greening efforts have been taken up not only through government efforts, but also through private sector initiatives like Alipay.

Education

Education has been central in breaking the cycle of intergenerational poverty. To fulfil the TPA programme’s guarantee of education, great efforts were made to ensure that the 200,000 school dropouts from poor families (as of 2013) had adequate support to return to school. By 2020, 99.8 percent of China’s elementary and secondary schools met the basic educational requirements, with 95.3 percent of schools connected to the internet and equipped with multimedia classrooms. Large governmental funding programmes have offered educational assistance to 640 million people and improved nutrition in schools, reaching 40 million students every year.^[48]

Developing quality educators was also prioritised: 950,000 teachers were recruited through the Special Post Programme to teach in impoverished areas upon graduation. The National Training Programme added an additional 17 million rural teachers to the less-developed central and western regions, 190,000 of them dispatched specifically to remote poor and ethnic minority areas. In line with the socialist tradition, these efforts ensure that young people receive first-hand knowledge of life in the countryside, at the same time cultivating the next generation of educators.

These gains in education were reflected not only in villages, but across the country. In the seventh national census of 2020, the average years of education increased from 9.08 to 9.91 years, while the number of people with tertiary education nearly doubled from 8,930 to 15,467 per 100,000 from 2010 to 2020.^[49] The profile of those who are able to access tertiary education has also shifted. According to Tsinghua University’s Chinese College Student Survey, from 2011 to 2018, over 70 percent of all first-year students in Chinese universities were the first in their families to attend university, and nearly 70 percent of these students are from rural areas.^[50] In the World Economic Forum’s Global Gender Gap Report 2020, China ranked first in women’s enrolment in tertiary education, as well as in the proportion of women professional and technical workers.^[51] The education reforms of the past decade tackled the multidimensional factors of poverty, the urban-rural divide, and gender.

Students on their short walk home from school in the Wangjia community, Tongren City, Guizhou Province, April 2021.

Social Assistance

The final of the five key methodologies employed to alleviate poverty focused on providing social assistance. China’s first social safety net traces its history back to Shanghai’s Urban Minimum Living Guarantee System (dibao) in 1993, which was extended to all urban areas in 1999 and to rural China in 2007.^[52] Under this programme, any household whose per capita income was lower than the local poverty line had the right to apply for social assistance. This is considered the largest cash social assistance programme in the world.^[53] Dibao was complemented with other programmes for education, healthcare, housing, disabilities, and temporary assistance, while a pension system was established for people in rural areas in 2009 and in urban areas in 2011.

The rural subsistence allowance grew from 2,068 yuan to 5,962 yuan per year from 2012 to 2020;^[54] 9.36 million people have been covered either by these funds or by extreme poverty relief funds, and 60.98 million people receive a basic pension. These programmes cover virtually all rural and unemployed urban residents.^[55]

However, China’s social system is under great strain. Faced with declining birth rates of 1.3 children per woman according to the last census and an aging society, China recorded its first social insurance deficit last year. The number of elders (people above 60 years-old) is expected to reach 300 million by 2025, and the Chinese population is expected to start shrinking by 2050. China is currently undergoing reforms in the urban worker pension system to address the pension deficit, which could reach 8 trillion yuan within the next decade.^[56]

Recognising that disease and poor health are key factors causing rural poverty, improving health care in the countryside has been key to the TPA programme. To improve health provision in poor areas, 1,007 leading hospitals were paired with 1,172 county-level hospitals, which sent 118,000 health workers to establish 53,000 projects across the country. These doctors treated 55 million out-patients and performed 1.9 million surgeries. Meanwhile, 60,000 medical students received free training in return for working in rural medical institutions upon graduation.^[57]

Evaluation: How Is Poverty Alleviation Measured? ⤴

To carry out a programme on this scale requires a sophisticated system of checks and balances at every level and in every region. Since 2016, an assessment has been carried out yearly at the national level, led by the State Council Poverty Alleviation Office, the Central Organisation Department, and member units of the State Council Leading Group on Poverty Alleviation and Development.^[59] Their task is to evaluate the effectiveness of poverty reduction in a given area, including confirming the accuracy of household information, the adequacy of measures taken, and the appropriate use of funds, among other factors. The assessment is carried out in three principal ways: inter-provincial cross-assessment, third-party assessment, and social monitoring.

Inter-provincial cross-assessment: There were twenty-two provinces in central and western China that signed the agreement to cross-examine each other’s work, progress, and the credibility of their reported results.^[60] Each province sends dozens of Party cadres to perform on-site evaluations to see whether the households were correctly added or removed from the poverty registration list, if adequate assistance was provided, what problems were encountered, and what lessons were learned.

Third-party assessment: The Leading Group Office of Poverty Alleviation and Development entrusted relevant scientific research institutions and social organisations to verify that a county is indeed poverty-free once it is declared so by the local authorities. These teams conducted surveys and field verifications to evaluate the reliability of the data. The third-party assessment agencies were determined through a public bidding process. ^[61] Over the course of the programme, a total of 22 third-party agencies surveyed 531 counties, over 3,200 villages, and 116,000 households in the field.^[62]

Social monitoring: Beyond official evaluations and third-party evaluation processes, the poverty alleviation work was also assessed through random checks performed by cadres. For example, visits were made to poor households to see if the families’ situations were accurately reported, such as by verifying income sources.^[63]

Evaluation results: The systematic evaluation processes revealed issues in the poverty alleviation programme, including the failure to meet the annual poverty reduction goals, mismanagement of funds, falsification of data, inaccuracy in adding and removing poor families from the registration list, and other disciplinary violations.^[64] Among these problems is corruption, which the Party under President Xi’s leadership has openly addressed and criticised. In 2018, the Central Commission for Discipline Inspection (CCDI), China’s top disciplinary body, established a campaign to fight corruption in the poverty alleviation programme. Since assuming office in 2013, Xi has made anti-corruption a high priority, targeting not only the ‘fleas’, but also the ‘tigers’. From 2012 to the first half of 2020, over 3.2 million officials were punished for corruption-related offenses.^[65] From January to November 2020, the government found that one third of the 161,500 processed corruption cases – including 18 high-level officials – were linked to poverty alleviation.^[66] In the process of constructing socialism, combatting corruption is part of the ongoing work of the class struggle that holds accountable those who are illegally profiting from public coffers. Unsurprisingly, the anti-corruption campaign has enjoyed widespread popular support, building confidence in both the Party and the government to stay true to their mandate of serving the people.

Part V: Case Studies ⤴

Danyang Village

Spanning 18.9 square kilometres and encompassing a population of 2,850 people (825 households), Danyang is one of the largest villages in the Wanshan district of Tongren City, Guizhou Province in southwest China. Poverty in Danyang stemmed from a variety of factors, including water shortages, low crop yields, diseases, disabilities, and a lack of education for children. Since many young adults left the village for cities to find jobs, children and elders were often left behind.

In August 2018, the forty-seven-year-old district government official Liu Yuanxue was sent to Danyang village as a first secretary (a local leadership position in the Party) to focus on poverty alleviation and Party building work. Since 2013, more than three million first party secretaries and 255,000 teams were dispatched across the country to work as part of the TPA programme for at least two years.

When Liu arrived, there were still 137 poor households (443 people) of the 825 households in the village. The village Party organisation (with fifty-eight members, including one poor member, five female members, and seventeen members over sixty years old) was listed as one of tens of thousands of Party organisations that needed to be strengthened.

According to Liu, a total of fifty-two Party cadres were dispatched from township and district-level governments to assist poor households in Danyang. They are expected to visit each family four times per week and address problems ranging from housing to employment to health care. ‘The Party organisation should take the lead so that their employment and social issues can be addressed’, Liu said.

In Danyang, villagers used to work on their own plots of land, but in 2017, the village founded the cooperative to develop industries ranging from vegetable and fruit production to pig farming and even e-commerce. ‘The rural industry will grow faster and better only after peasants are mobilised and small scattered rural lands are combined into big-scale farming’, Liu told us. ‘We should also guarantee that everyone from the village can benefit from development’.

For example, in 2017, 48 peasants in Danyang signed a 10-year contract with the co-op to lease their 100 mu (equivalent to 6.7 hectares) of land to build vegetable greenhouses. The peasants charged an annual rental fee of 800 yuan per mu and the cooperative hired 10 peasants to manage the greenhouses. By 2020, a total of 242,000 yuan in dividends was paid to the villagers. In 2019, with an investment of 4.8 million from government subsidies and company loans, the rural cooperative also established a 13-mu pig farm by collaborating with Wens Foodstuffs Group Co., Ltd. The company provides technology and pig stock while the cooperative provides land and employees. Around 6,000 pigs will be raised every year. Between 2014 and 2018, 132 households totalling 431 people were lifted out of poverty. The last five poor households, totalling 11 people, were lifted out of poverty in 2019.

Wangjia Resettlement Area

With 663 mu (44.2 hectares) of land, the Wangjia community is the largest relocation area in Tongren. Since 2016, a total of 4,322 households (18,379 people) have been relocated from rural villages in Sinan, Shiqian, and Yinjiang counties. Sixty-five percent of the community belongs to eighteen non-Han ethnic groups (the majority of Chinese people are of Han ethnicity). The community is served by a team of eleven cadres who are responsible for all areas of life, work, and Party building, most of whom are elected by the residents every five years.

After relocation, each resident receives 1,500 yuan in living subsidies and an additional 3,000 yuan in compensation if their previous house was demolished. Of those monies, each person pays 2,000 yuan to receive a twenty-square-metre apartment, equalling 100 yuan per square metre (lower than the commercial housing price of 4,000 yuan per square meter in Tongren). The water, electricity, and gas fees are exempted for six months.

The government also built three kindergartens, one elementary school, and one middle school with quality facilities and teachers that have the capacity to educate approximately 2,800 students. Villagers who used to spend forty minutes by bus to get to a hospital or at least one or two hours on foot to get to school are now a five-minute walk from community health centres and schools.

But not everyone can adapt easily to city life after relocation, especially elders who spent almost their entire lives in villages. The community Party branch launched the ‘six firsts’ projects to facilitate the adjustment to city life, teaching newly relocated residents skills from how to use crosswalks and elevators to how to shop at the supermarket. Local students are organised as ‘volunteer grandchildren’ to take care of elders, who are in turn incentivised with credits that can be exchanged for rice to participate in these activities. Serving the people is a value and a practice cultivated amongst the young and the old alike.

To create new employment, the local government renovated a three-story office building into what is called a poverty alleviation mini factory to develop industry. The mini factory created 600 jobs at six firms in the community, including an embroidery workshop, clothing factories, and an artificial intelligence project under China’s leading tech giant Alibaba. The community also encourages rural women to find jobs or start their own businesses, generating income for their families while building their confidence and sense of independence. For example, the local Women’s Federation helps train women and sell their homemade handicrafts.

One factory owner, Gong Changquan, grew up in a county nearby and left home in 1997 to work in the southeastern Guangdong and Fujian provinces. In 2017, at the encouragement of the local government, he returned home to contribute to poverty alleviation. In June 2019, the forty-three-year-old Gong, with an investment of 1.8 million yuan of his own money and 200,000 yuan in government funding, set up a 1,500-square-metre factory, which during peak season can produce daily around 5,000 pieces of clothing to fulfil both domestic and international orders. His rental fees were also waived by the government for three years.

Gong hired sixty-seven workers from the community and pays each worker 2,000 to 3,000 yuan per month after two months’ training.

As of May 2021, over 98 percent of the 7,000 working-age people in the Wangjia community are employed. The remaining 2 percent includes those who care for children and people with disabilities. There has only been one family – a couple with disabilities – that decided to move back to their village from the relocation area.

Greenhouses were introduced to stimulate the local agricultural industry in the village of Danyang, Wanshan District, Guizhou Province, April 2021.

Part V: Challenges and Horizons ⤴

Challenges and the Road Ahead

Overcoming extreme poverty in China is an achievement of a size and scale that has never been seen in history. Rather than being the end point, it is one phase in the construction of socialism that must be deepened and expanded. To ensure prosperity in the countryside, the Chinese government has put forth a programme for rural revitalisation to consolidate and expand on the achievements in poverty alleviation. Modernising agricultural production, protecting national food security, developing high-standard arable land, and closing the urban-rural gap are key among the goals of rural revitalisation.^[67]

China is on track to become a high-income country by 2025 at the end of the fourteenth Five-Year Plan period (a high-income country is defined by the World Bank as one that has a gross national income per capita of over US$12,696 by 2020 standards).^[68] China’s per capita GDP passed the US$10,000 threshold for the first time in 2019, which it maintained in 2020 despite the pandemic.^[69] Put into context, that is a tenfold increase in the last twenty years, when the country’s per capita GDP was less than US$1,000. As it emerges into high-income status and builds a moderately prosperous society (xiaokang), China is faced with a new era of challenges. Not only is the country faced with ensuring that the people lifted out of poverty remain out of poverty; it also seeks to move beyond a focus on mere survival (in other words, moving beyond extreme poverty) and towards creating a better standard of life for all.

The country’s focus has now moved from extreme poverty to relative poverty, ensuring that more people can participate and benefit from social and economic life. Addressing relative poverty was a key focus of the Fourth Plenary Session of the Nineteenth Central Committee of the Communist Party of China in 2019, for whom improving social assistance and public services such as access to child and elderly care, education, employment, medical services, and housing are key to this long-term goal and ongoing process of eliminating poverty.^[70]

What are the implications for the rest of the world as China moves into the next historic phase of poverty elimination? The historic defeat of extreme poverty and the COVID-19 pandemic does not provide a model that can be directly implanted onto other countries, each of which has a specific history and distinct path to shape. Rather, China’s experience offers lessons and inspiration for the world, particularly for countries in the Global South. The task of uplifting the world’s poor is a key pillar of China’s proposal to build a ‘shared future for humanity’.^[71] This vision, advocated by President Xi, imagines a future that is based on multilateralism and shared prosperity in the face of Western hegemony.

In its international relations, China has demonstrated its priority to build bridges over militaristic interventions, medical internationalism over privatisation, and infrastructural investments and financial aid that do not come with strings attached. China offers a vision for the Global South that five hundred years of Western imperialism and capitalism has failed to provide. According to the World Bank, the landmark Belt and Road Initiative will directly help uplift 7.6 million people in participating countries out of extreme poverty and another 32 million out of moderate poverty. China is promoting hundreds of other projects based on multilateral cooperation in trade, infrastructure, green industry, education, agriculture, health care, and people-to-people exchanges that encourage the development of countries and people in the Global South.^[72]

‘Poverty alleviation is the single best story that China can tell because it is so rich and so ubiquitous in terms of its importance in the world’, Robert Lawrence Kuhn, an expert on China and the creator of the documentary Voices from the Frontline: China’s War on Poverty (2020), said in a conversation Tricontinental: Institute for Social Research. However, Western-controlled media has stifled these stories and prevented them from reaching much of the world. In one of many such examples, Kuhn’s documentary, jointly produced by PBS (US) and CGTN (China), was taken off-air for ‘not meeting accepted standards of editorial integrity’, Kuhn explained. ‘We had 4,000 broadcasts on PBS, and the irony was that the one production that caused a lot of problems was on poverty alleviation, which was the topic that was the most neutral and beneficial to the world. It is a sign of the times. It is not a superficial problem but a very serious one’.

This study aims to bring forth some of these stories, both from those who were lifted – and lifted themselves – out of poverty and from those who helped do the lifting. It seeks to shine a light on some of the complexities, theories, and practices involved in this historic feat. Building a world in which poverty is eradicated is an essential part of constructing socialism. To be able to study, have a house, be well fed, and enjoy culture are aspirations shared by the working classes and poor across the world. It is part of the process of becoming human.

From the countryside to Tongren City, Guizhou Province, April 2021.

Epilogue

Deputy Secretary He Ying picks up her youngest son from school in the Wangjia community, Tongren City, Guizhou Province, April 2021.

Acknowledgements

This study was led by Tings Chak (翟庭君), Li Jianhua (李建华), and Lilian Zhang (张丽萍).

Xiang Wang (photography) and Daniela Ruggeri (illustration).

Endnotes

[1] ‘Xi Declares “Complete Victory” in Eradicating Absolute Poverty in China’, Xinhua, 26 February 2021, http://www.xinhuanet.com/english/2021-02/26/c_139767705.htm.

[2] United Nations Secretary-General, ‘Helping 800 Million People Escape Poverty Was Greatest Such Effort in History, Says Secretary-General, on Seventieth Anniversary of China’s Founding’, United Nations Press, 26 September 2019, https://www.un.org/press/en/2019/sgsm19779.doc.htm.

[3] United Nations, Department of Economic and Social Affairs, The Sustainable Development Goals Report 2020, July 2020,

https://unstats.un.org/sdgs/report/2020/The-Sustainable-Development-Goals-Report-2020.pdf; United Nations Development Program, Assessing Impact of COVID-19 on the Sustainable Development Goals, December 2020, https://sdgintegration.undp.org/sites/default/files/Flagship_1.pdf.

[4] United Nations Development Program, Impact of Covid-19 on the Sustainable Development Goals, December 2020, https://sdgintegration.undp.org/accelerating-development-progressduring-covid-19.

[5] Mao Zedong, ‘The Chinese People Have Stood Up!’ (21 September 1949) in Selected Works of Mao Tse-Tung: Volume V (Beijing: Foreign Languages Press, 1961).

https://www.marxists.org/reference/archive/mao/selected-works/volume-5/mswv5_01.htm.

[6] Zhao Hong, ‘China’s Contribution and Loss in War of Resistance Against Japanese Aggression’, CGTN, 13 August 2020, https://news.cgtn.com/news/2020-08-13/Graphics-China-s-role-in-World-War-II-SV53wLu7N6/index.html.

[7] John Ross, China’s Great Road: Lessons for Marxist Theory and Socialist Practices (New York: 1804 Books, 2021), 86.

[8] Communist Party Member Net 共产党员网, ‘Dang zai 1949 nian zhi 1976 nian de lishi xing juda chengjiu’ 党在1949年至1976年的历史性巨大成就 [The Party’s historic great achievements between 1949 and 1976], 28 July 2016, http://fuwu.12371.cn/2016/07/28/ARTI1469667222557643.shtml.

[9] Wang Sangui, Poverty Alleviation in Contemporary China, trans. Zhu Lili (Beijing: China Renmin University Press, 2019), 51.

[10] Phoenix News 凤凰网, ‘1949–1947 nian: Maozedong shidai zui you jiazhi de lishi yihan’ 1949―1976年：毛泽东时代最有价值的历史遗产, [1949-1976: The most valuable heritage of the Mao Zedong Era], 28 December 2009, http://news.ifeng.com/history/zhiqing/comments/200912/1228_6852_1490175_1.shtml.

[11] Maurice Meisner, Mao’s China and After: A History of the People’s Republic (New York: Free Press, 1986), 437.

[12] Meng Yaping, ‘Fantastic Feats of China’s Space Odyssey’, CGTN, 19 April 2017, https://news.cgtn.com/news/3d45544f79557a4d/share_p.html.

[13] Deng Xiaoping, ‘Building a Socialism with a Specifically Chinese Character’ (30 June 1984) in Selected Works of Deng Xiaoping, Volume III (1982-1992) (Beijing: Foreign Languages Press, 1994), http://en.people.cn/dengxp/vol3/text/c1220.html.

[14] Ross, China’s Great Road, 57.

[15] The State Council Information Office of the People’s Republic of China, Poverty Alleviation: China’s Experience and Contribution (Beijing: Foreign Languages Press, April 2021), http://www.xinhuanet.com/english/2021-04/06/c_139860414.htm.

[16] Singh, Anoop, Malhar S. Nabar, and Papa M. N’Diaye, China’s Economy in Transition: From External to Internal Rebalancing (International Monetary Fund, 7 November 2013), https://www.elibrary.imf.org/view/books/071/20454-9781484303931-en/20454-9781484303931-en-book.xml?language=en&redirect=true.

[17] Xi Jinping, ‘Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era’, China Daily, 18 October 2017, https://www.chinadaily.com.cn/china/19thcpcnationalcongress/2017-11/04/content_34115212.htm.

[18] United Nations, Department of Economic and Social Affairs, ‘Poverty eradication’, Sustainable Development, accessed 30 June 2021, https://sdgs.un.org/topics/poverty-eradication.

[19] ‘Three Regions’ refers to the Tibet Autonomous Region; the Tibetan areas of Qinghai, Sichuan, Gansu, and Yunnan provinces; and Hetian, Aksu, Kashi, and Kizilsu Kyrgyz in the south of Xinjiang Autonomous Region. ‘Three Prefectures’ refers to Liangshan prefecture in Sichuan, Nujiang prefecture in Yunnan, and Linxia prefecture in Gansu.

[20] CCTV中国中央电视台, ‘Zhongguo xianxing fupin biaozhun diyu shijie biaozhun? Guojia xiangcun zhenxing ju zheyang huiying’ 中国现行扶贫标准低于世界标准？国家乡村振兴局这样回应 [Is China’s current standard for poverty alleviation lower than the global standard? A response from the National Revitalisation Bureau], 6 April 2021, https://news.cctv.com/2021/04/06/ARTIKemhGKDmE36ukw0ypKPO210406.shtml.

[21] United Nations Development Programme and Oxford Poverty and Human Development Initiative, Charting Pathways Out of Multidimensional Poverty: Achieving the SDGs, July 2020, http://hdr.undp.org/sites/default/files/2020_mpi_report_en.pdf.

[22] World Bank, Poverty and Shared Prosperity 2020: Reversals of Fortune, 2020, https://openknowledge.worldbank.org/bitstream/handle/10986/34496/9781464816024_Ch1.pdf.

[23] New China Research, Chinese Poverty Alleviation Studies: A Political Economy Perspective (Xinhua News Agency, 22 February 2021), http://www.xinhuanet.com/english/special/2021jpxbg.pdf.

[24] Zhang Zhanbin et al., Poverty Alleviation: Experience and Insights of the Communist Party of China (Beijing: The Contemporary World Press, 2020), 139.

[25] New China Research, Chinese Poverty Alleviation Studies, 60.

[26] New China Research, Chinese Poverty Alleviation Studies, 77.

[27] ‘CPC membership grows to over 95 million’, CGTN, 30 June 2021, https://news.cgtn.com/news/2021-06-30/CPC-membership-grows-to-over-95-million-11vF0GvladG/index.html.

[28] The State Council Information of the People’s Republic of China, Poverty Alleviation: China’s Experience and Contribution (Beijing: Foreign Languages Press, 2021), 35.

[29] The State Council, Poverty Alleviation, 48.

[30] The State Council, Poverty Alleviation, 35.

[31] Cunningham, Edward, Tony Saich, and Jesse Turiel, Understanding CCP Resilience: Surveying Chinese Public Opinion Through Time (Ash Center for Democratic Governance and Innovation, Harvard Kennedy School, July 2020): 2-6, https://ash.harvard.edu/files/ash/files/final_policy_brief_7.6.2020.pdf.

[32] To learn more about how China handled the pandemic, read Tricontinental: Institute for Social Research’s study, China and CoronaShock: https://dev.thetricontinental.org/studies-2-coronavirus/.

[33] Cary Wu, ‘Did the Pandemic Shake Chinese Citizens’ Trust in Their Government? We Surveyed Nearly 20,000 People to Find Out’, Washington Post, 5 May 2021, https://www.washingtonpost.com/politics/2021/05/05/did-pandemic-shake-chinese-citizens-trust-their-government/.

[34] The State Council, Poverty Alleviation, 56.

[35] Jiangsu University江苏大学, ‘Woxiao xiaoyou zha yingdong huoping quanguo tuopin gongjian xianjin geren’ 我校校友查颖冬获评全国脱贫攻坚先进个人 [Alumnus Zha Yingdong was awarded National Advanced Individual in the battle against poverty], 28 February 2021, https://mp.weixin.qq.com/s/wYjpAkhsQdzNx9NVa_XKDw.

[36] The State Council, Poverty Alleviation, 57.

[37] Poverty Alleviation Network Exhibition 脱贫攻坚网络展, ‘Shehui dongyuan’ 社会动员 [Social mobilisation], accessed 3 May 2021, http://fpzg.cpad.gov.cn/429463/430986/431007/index.html.

[38] The State Council, Poverty Alleviation, 57.

[39] China Development Brief, ‘Hebian Village, a University Professor’s Experiment with Poverty Alleviation’, trans. Serena Chang et al., 25 December 2017, https://chinadevelopmentbrief.cn/reports/hebian-village-a-university-professors-experiment-with-poverty-alleviation/.

[40] The State Council, Poverty Alleviation, 38.

[41] The State Council of the People’s Republic of China中华人民共和国国务院, ‘Guowuyuan xinwenban jiu chanye fupin jinzhan chengxiao juxing fabuhui’ 国务院新闻办就产业扶贫进展成效举行发布会 [State Council Information Office held a news conference on the progress and achievements of industrial poverty alleviation], 16 December 2020, http://www.gov.cn/xinwen/2020-12/16/content_5569989.htm.

[42] Qiuping, Lyu, Qu Guangyu, and Wang Di, ‘China Focus: Relocated Villagers Leave Poverty on Clifftop’, Xinhua, 14 May 2020, http://www.xinhuanet.com/english/2020-05/14/c_139056868.htm.

[43] Kong Wenzheng, ‘Alibaba-linked Ant Forest Wins Top UN Green Award’, China Daily Global, 2 October 2019), http://www.chinadaily.com.cn/global/2019-10/02/content_37513688.htm.

[44] The State Council, Poverty Alleviation, 40.

[45] Food and Agriculture Organisation of the United Nations, Global Forest Resources Assessment 2020: Main Report, 2020, http://www.fao.org/3/ca9825en/ca9825en.pdf.

[46] Bu Shi and Geng Zhibin, ‘In Tibet: The Road to Modern Education’, CGTN, 22 March 2019, https://news.cgtn.com/news/3d3d514d3149544e33457a6333566d54/index.html.

[47] The State Council Information Office of the People’s Republic of China, Tibet Since 1951: Liberation, Development and Prosperity, May 2021, http://www.xinhuanet.com/english/2021-05/21/c_139959978.htm.

[48] The State Council, Poverty Alleviation, 41-42.

[49] National Bureau of Statistics of China, ‘Main Data of the Seventh National Population Census’, 11 May 2021, http://www.stats.gov.cn/english/PressRelease/202105/t20210510_1817185.html.

[50] Xing Wen, ‘First-generation College Attendees Can Face Varying Degrees of Success’, China Daily, 20 May 2020, https://www.chinadaily.com.cn/a/202005/20/WS5ec49a58a310a8b241157060.html.

[51] Crotti, Robert, T. Geiger, V. Ratcheva, and S. Zahidi, Global Gender Gap Report 2020 (World Economic Forum, December 2020), http://www3.weforum.org/docs/WEF_GGGR_2020.pdf.

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