29/1/2014

Mythbusters - Bill and Melinda Gates 2014 Annual Letter

The Annual Letter from Bill and Melinda Gates every year is something to look forward to.

This year they tackle the myths regarding foreign aid. The most striking feature is the optimism. In a world fixated with problems and challenges, they provide a long term view and understanding that the world will be better place (with a few caveats) in the coming decades.

This understanding and optimism is an important attitude to have in your work especially around social change.

Myth 1: Poor countries will be poor for ever

A few countries will be held back by war, politics (North Korea, barring a big change there), or geography (landlocked nations in central Africa). And inequality will still be a problem: There will be poor people in every region.

But most of them will live in countries that are self-sufficient. Every nation in South America, Asia, and Central America (with the possible exception of Haiti), and most in coastal Africa, will have joined the ranks of today’s middle-income nations. More than 70 percent of countries will have a higher per-person income than China does today. Nearly 90 percent will have a higher income than India does today.

It will be a remarkable achievement. When I was born, most countries in the world were poor. In the next two decades, desperately poor countries will become the exception rather than the rule. Billions of people will have been lifted out of extreme poverty. The idea that this will happen within my lifetime is simply amazing to me.

Myth 2: Foreign aid is a big waste

Amount of Aid

Here are the actual numbers. For Norway, the most generous nation in the world, it’s less than 3 percent. For the United States, it’s less than 1 percent.

One percent of the U.S. budget is about $30 billion a year. Of that, roughly $11 billion is spent on health: vaccines, bed nets, family planning, drugs to keep people with HIV alive, and so on. (The other $19 billion goes to things like building schools, roads, and irrigation systems.)

Corruption

There is a double standard at work here. I’ve heard people calling on the government to shut down some aid program if one dollar of corruption is found. On the other hand, four of the past seven governors of Illinois have gone to prison for corruption, and to my knowledge no one has demanded that Illinois schools be shut down or its highways closed.

Aid dependence

Critics are right to say there is no definitive proof that aid drives economic growth. But you could say the same thing about almost any other factor in the economy. It is very hard to know exactly which investments will spark economic growth, especially in the near term. However, we do know that aid drives improvements in health, agriculture, and infrastructure that correlate strongly with growth in the long run. Health aid saves lives and allows children to develop mentally and physically, which will pay off within a generation. Studies show that these children become healthier adults who work more productively. If you’re arguing against that kind of aid, you’ve got to argue that saving lives doesn’t matter to economic growth, or that saving lives simply doesn’t matter.

Bottomline

Health aid is a phenomenal investment. When I look at how many fewer children are dying than 30 years ago, and how many people are living longer and healthier lives, I get quite optimistic about the future. The foundation worked with a group of eminent economists and global health experts to look at what’s possible in the years ahead. As they wrote last month in the medical journal The Lancet, with the right investments and changes in policies, by 2035, every country will have child-mortality rates that are as low as the rate in America or the U.K. in 1980.

Myth 3: Saving lives lead to overpopulation

When children survive in greater numbers, parents decide to have smaller families. Consider Thailand. Around 1960, child mortality started going down. Then, around 1970, after the government invested in a strong family planning program, birth rates started to drop. In the course of just two decades, Thai women went from having an average of six children to an average of two. Today, child mortality in Thailand is almost as low as it is in the United States, and Thai women have an average of 1.6 children.

If you look at the graph below of Brazil, you’ll see the same thing: As the child mortality rate declined, so did the birth rate. I’ve also charted the population growth rate, to show that the country’s population grew more slowly as more children survived. If you graphed most South American countries, the lines would look similar.


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