As we reported earlier in the week, Bill Gates was afforded the unique opportunity to address world leaders this week at the G-20 summit in France on the issue of global poverty. And during the meeting he delivered to them a detailed report entitled Innovation with Impact: Financing 21st Century Development which outlines where progress is being made as well as where problems still exist.
Press reports and public reaction among development advocates have been generally well received. And most significantly the final communique coming out of the event mentioned Gates recommendations prominently.
Overall Gates wished to emphasize to leaders increasingly concerned about protecting their own economies that now is not the time to step away from international commitments. As he states in the report’s narrative.
[Large donor nations] must take steps to meet their aid commitments and spend their aid strategically. If the countries that have made promises stick to them, it will generate an additional $80 billion annually starting in 2015. Over the years, Official Development Assistance (ODA) has had a huge impact, and it will continue to play a pivotal role in development, alongside all the new resources I write about. Well-designed aid reduces poverty right now, and accelerates poor countries’ progress toward the moment when they will no longer need it. There’s a lot of pressure on aid budgets given economic conditions, but aid is a very small part of government expenditures. The world will not balance its books by cutting back on aid, but it will do irreparable damage to global stability, to the growth potential of the global economy, and to the livelihoods of millions of the poorest people.
Much of the report emphasizes the use of innovation to continue the positive trends of the last 50 years to continue to elevate more nations out of poverty. And as one would expect, very often these innovations are concentrated in agriculture, anti-poverty programs, and public health. But in order to move those forward he also addressed the surprising issue of financing these ventures with unique private funds as well as tax systems.
In the report, I include some tax proposals G20 countries should consider that could help them meet their aid commitments and eventually expand them. [And] finally I talk about ways to get the private sector much more involved in development. As a businessman, I believe the free market fuels growth. Unfortunately, the market often fails to address the needs of the poorest, but there are relatively simple things we can do to encourage private investment in development.
For example, G20 countries could facilitate an infrastructure fund—with sovereign wealth funds as the backbone—that generates both development impact and financial returns. I also make recommendations about tapping into the goodwill of diaspora communities by issuing bonds, lowering the cost of remittances, and creating pull mechanisms to incentivize private investments in development.
The accompanying graphic outlines some of his proposed financing recommendations. (Source: Innovation with Impact)
But the report did not lack for some critics even among development advocates and writers. Some still feel there is a structural problem in the analysis and recommendations when there is not sufficient discussion or attention to capital flight from the poorest nations.
Still Gates was gratified by the apparent warm response his proposals received in the final communique.
“I am pleased that many of the recommendations in my report are reflected in the communiqué – including the need for developed countries to meet their aid commitments and explore innovative financing options, and the need to promote triangular partnerships that draw on the expertise and experience of big emerging economies in key areas like health and agriculture.”
Source: GatesNotes Blog
Gates also said he was encouraged by the G20’s new multi-year Action Plan to address food security, and welcomed the first steps of implementation led by the French presidency. However he warned that it was critical to continue to turn rhetorical commitments into resources and results.