In comparison with inland provinces, and coastal regions in the southeast in particular, Tibet remains an underdeveloped region, where there are still 210,000 people living in poverty, representing 9.8 percent of rural residents. 

At the end of 1993, the national poverty relief program started with the goal of solving the food and clothing problems for the existing 80 million poor people throughout China in the remainder time of the 20th century. Tibet's poverty relief program followed soon after, which required that governments at every level of the region pour all the financial, material and man power necessary in helping the 480,000 poor Tibetans get out of poverty in six years. The campaign worked smoothly with the combined efforts of the government and ordinary people. From 1994 to the end of 1997, the population in poverty dropped from 480,000 to 210,000, while the number of poor counties was reduced from 22 to nine.

Demographically, the poor population of Tibet is concentrated in three areas of the region - the northern foothills of the Himalayas, central section of Tibet where farming and pastoral areas meet, and the Hengduan Mountain Range in eastern Tibet. Because of the harsh environment for living and production, these areas are notorious for primitive living conditions, with the per capita net income of local rural residents being less than 500 yuan per year, far from enough for basic necessities.

This poverty relief campaign was designed to help the poor population by improving the living and production environment so as to create better conditions in which they could change their lives by their own efforts. Public projects were financially supported by government and participated in by the local people with labor work, which included improving and rebuilding farmland, grassland and irrigation facilities, developing forestry, fruit growing and processing, animal husbandry, and a Tibetan-style handicraft industry. Building primary and middle schools and opening technical training classes were also regarded as important measures.

International aid programs
Since 1981, UNDP has provided US$ 4 million for the construction of the Yangbajain geothermal power plant. In 1989, UN's WFP provided financial aid for comprehensive agricultural development projects geared to drought resistance and prevention and improving irrigation conditions in the four counties of the Lhasa River valley, all of which has already been used. The UNICEF provided US$ 3.22 million in aid for ten projects including health centers for women and children. In 1995 the UNDP decided to provide US$ 822,000 in aid to four counties of Nyalam, Tingri, Dinggye and Gyirong in the Qomolangma Nature Reserve in western Tibet for projects involving agriculture, housing, school, wind power and household handicraft production.

Pillar industries
Tibet's pillar industries involve mining, farming, animal husbandry, traditional handicraft, forestry and tourism industries.