Davos07: Gates, Wolfowitz, and the world

Next session is on scaling innovation in foreign aid with Bill Gates, Paul Wolfowitz, Liberian President Ellen Johnson Sirleaf, the first woman president elected in Africa, Bill Easterly ex of the World Bank, and Fareed Zakaria of Newsweek, as moderator.

Gates says that the amount spent on invested in foreign aid over the last n years is equivalent to the amount invested by venture capital: about $500 billion. He talks about aid and charity from the perspective of investment. He says that that saved about 100 million lives and that works out to $23,000 per life. Is that a lot? We spend a lot more to save lives in the West, he says. He also says that revolutions save lives.

Wolfowitz says the VC model works in some areas but not others. He says a small percentage of that U.S. aid went to Mobutu in Zaire and did more than just failed as an investment; it destroyed the country. But education is an example of strong investment; he points to South Korea. He also says the best-practices of good use of aid is consistent with the VC model. Wolfowitz says there is good news in Africa that doesn’t make news: a third of countries with a third of the population growing economically at 4 percent a year, a rate Europe would envy. Zakaria adds that that’s because in part of of high commodity prices.

Easterly says that when VC companies screw up, they die. Aid agencies don’t die. He goes on to criticize aid effort.

Gates gives a wonderfully passionate screed against that, arguing that it is wrong to judge aid based on GDP. Saving lives may not raise GDP but Gates says that saving lives in itself is of value. Asked about a Foreign Affairs story that warned of attention going heavily to sexy diseases, Gates says he is delighted that these diseases have become sexy.

  • Nice to see Easterly on the panel. Now go read his book (and the two by Stiglitz as well). Both worked at the World Bank and saw first hand how corruption, western arrogance and differing interests between the developed and developing worlds all conspired to make the aid efforts ineffective.

    Why isn’t Wolfowitz in jail instead of being featured on a panel? At least he should be shunned.

    Gates’s philanthropy I’ve criticized before. In short:
    1. It’s anti-democratic – he gets to decide where his money goes not some international (or national) body.
    2. His programs are aimed at providing help to the poor and sick, not to reforming social structures so that these people won’t need aid in the future. It’s the Mother Teresa syndrome: help the poor but don’t fight poverty.

    Easterly had a lot to say about these efforts (even before Gates) in his most recent book.

  • My question to Mr. Wolfowitz and Mr. Gates:

    We keep learning that the cost to effectively eliminate all major global problems is substantially less than military budgets. As business people we know the ROI of infrastructure improvements is vastly greater than military spending ROI.

    How can we refocus Government spending accordingly – ie spend on health, poverty, water, and infrastructure improvements instead of military with it’s relatively low ROI. This is true even when you factor in that military action can effect positive changes but they come at such a huge cost.

  • Re: Mr Feinman, point 2 concerning Gates – wouldn’t such philanthropy infringe on a state’s sovereignty 99% of the time, and truly make Gates’ aid “anti-democratic?”

    Mr. Hunkins, same question to you: perhaps military spending is a waste. But it gives a people a sense of security, and the gov’t is defined nowadays by theorists as the construct with a monopoly on violence. That might be laughable to some degree, but it might also be far more basic than “infrastructure.”

    If you can’t take the fact people are organized into nations and states seriously, then you can’t see the problems that arise regarding the giving of aid.

  • Jeff,

    Other than as a demagogue, interloper and groupie… why are you there?


    – Amanda

  • TCR

    A close friend in college was a Brit raised in Lagos. His father ran the main port in Lagos, Nigeria. We were in school together from 1979-1983. He told me then that the way to make money in Nigeria and Africa was to get involved in importing AID money….a huge racket, he said.

    AID has always been corrupt. Those that need food and medicine do not get it. The U.S. will never have an impact on this until we decide to get rid of the warlords, which requires a law enforcement, not a combat, approach.

    We have the means to solve this, even without Gates. When the fuck will we do it?