Last week’s newsmakers: Davos and the Gates Annual Letter

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2015 Gates letterLast week, the Bill & Melinda Gates Foundation released their 2015 Annual Letter and the World Economic Forum (WEF) held their 2015 meeting in Davos. (WEF has posted session recordings on their YouTube channel.)

The main message from the Gates letter is, as with last year, an attempt to counter the prevailing perception that as Fareed Zakaria said (when introducing his interview with Bill and Melinda Gates at the World Economic Forum), “the world is going to hell in a hand basket.”

Last year, the Gates busted three myths: poor countries are doomed to stay poor, foreign aid is a big waste, and saving lives leads to overpopulation. This year, the Gates are making this bet: “The lives of people in poor countries will improve faster in the next 15 years than at any other time in history. And their lives will improve more than anyone else’s.” They see this coming through these 4 pathways:

  1. HEALTH: Child deaths will go down, and more diseases will be wiped out
  2. FARMING: Africa will be able to feed itself
  3. BANKING: Mobile banking will help the poor transform their lives
  4. EDUCATION: Better software will revolutionize learning

Of equal importance is their conclusion that to win this bet, they must secure the active participation of “global citizens” to push the UN to adopt ambitious Sustainable Development Goals (SDGs) and hold their governments accountable for achieving the existing MDGs and future SDGs. For our American audience, a great way to get involved, to help build the political will to end poverty, is to join or create a local RESULTS group (our parent organization). Bill Gates explains in an interview on Wired,

The idea is getting people to use their voice to say their governments should continue to be generous on aid. We’re dealing with tight budgets. Even countries that have been generous, like the Netherlands or Australia, have made cuts to their aid budgets. And within the universe of NGOs, some are agricultural, some are environmental, some are health, you can pick one of those that you want to dive down into and get involved with.

In their Davos interview with CCN’s Fareed Zakaria (and in the letter), the Gates cover a check list of development best practices learned over the last few years. At 14:01, Zakaria asks them about their prediction that Africa will be able to feed itself by 2030. They answer that the key elements are,

  • Access to the latest seeds, create varieties that are appropriate for Africa, e.g., drought-resistant maize.
  • Training on plant techniques, crop rotation, no-till farming, proper use of fertilizer, etc.
  • Access to markets and market information, bank accounts, and skills building via mobile phone devices.

We would add that farmers need appropriate financing to afford those seeds, mobile devices, etc. Indeed, creating agricultural value chains that reach those at the bottom of the pyramid is essential to ending extreme poverty. An efficiently designed platform that provides institutional linkages to the market, access to adequate financing tailored to their crop and production cycle, and training and technical support as a tool for risk mitigation will be transformative.

Melinda Gates also touched on the importance of focusing microfinance and other financial inclusion efforts on women. She explained that women reinvest 90% of income in their families, so helping women has a greater multiplying effect than helping men. Further, she described women’s empowerment as coming about in three areas — health, decision making, economic opportunity — and that education is fundamental to those three areas.

Reactions to the Gates Letter

The Washington Post published an article by Chris Blattman, “Grading the 2015 Bill and Melinda Gates letter on poverty alleviation.” He gives the letter a B (last year’s letter received an A-) for these 3 reasons:

  1. Over-claiming: Making big steps sound like monumental leaps
  2. Providing solutions that will work best in the countries that will probably grow anyway
  3. Downplaying the harder barriers these breakthroughs won’t solve

Concerning point 2, he asks pointedly how are we going to help countries that don’t have functioning health systems?

If new vaccines are delivered, my guess is that the countries that have strong health care systems will roll them out quickly. In that case, yes, more money will translate into vaccinated children in China and Indonesia and Brazil. But countries that don’t have functioning health systems?

The answer is that we need to seek opportunities for partnerships within existing structures. Microfinance is a functioning system and it is reaching more than 200 million people and, by extension, their families. Working with Freedom from Hunger in our Financing Healthier Lives program, we have shown that microfinance is an effective platform for increasing access to healthcare services for the extreme poor. Our partnership with MFIs and NGOs supporting self-help groups to implement integrated health and financial services is a compelling message for breaking down walls between health and microfinance sectors.