Ethnic wealth gap feeds Tibet discontent

By Lindsay Beck

BEIJING (Reuters) - China's leaders have long feared the impact of the country's yawning wealth gap on social stability. When protests in Tibet, its poorest region, flared into riots, their nightmare looked very real.

The March 14 riot in Lhasa, the capital of the region Communist troops entered in 1950, was over issues of autonomy and ethnic identity, not the price of bread.

But analysts say the two are intertwined as Tibetans feel marginalized by a Beijing-led development drive that Tibet scholar Andrew Fischer calls "ethnically exclusionary".

"They're pouring in an enormous amount of subsidies so it's no surprise that they're creating growth," said Fischer, a development economist at the London School of Economics.

"It's just that this massive amount of economic growth and wealth is creating a huge gap and a very strong ethnic bias in the development in the sense that it privileges those with Chinese fluency or Chinese connections," he said.

The economy of Tibet, a remote region of mountains and grasslands dubbed the "roof of the world", has been growing at more than 12 percent annually over the past five years.

But the urban-rural wealth gap, already a worry across China is even more pronounced in Tibet.

Inflation, at 11-year highs in China, is also most acute in the country's low income regions, economists say.

"Tibet, although it's been significantly improved by Chinese investment, is still essentially a country of poor people," said Simon Littlewood, president of consulting firm Asia Now.

Only about 15 percent of the population has any secondary education, compared to more than 60 percent in the rest of China. In a country whose leaders pride themselves on having virtually wiped out illiteracy, rates in Tibet hover above 40 percent.

"Rightly or wrongly, the Han Chinese are often perceived within the region as having benefited more from China's economic growth in recent years than ethnic minorities," Glenn Maguire and Patrick Bennett of Societe Generale wrote in a research note.

UNDERCLASS

As Tibetans from rural areas, which subsist largely on herding and farming, gravitate toward cities in search of work, analysts say they risk becoming part of an underclass lacking the skills to participate in the industrialization drive.

"They may lack the skills to compete for jobs in the booming service sectors, and that's why many jobs in the service sector are taken by migrants from other Chinese regions like Gansu," said Wang Wenchang, a professor at the Central University of Nationalities in Beijing.

That sense of marginalization has been compounded by the opening of a railway to the region in 2006, which critics say is accelerating an influx of Han Chinese.