Bill Gates: it’s time to cut foreign aid

Well, he didn’t quite say that in so many words. Bill and Melinda Gates are right, though, that poor countries are not doomed to remain poor. Poor people are not destined to remain poor.

They have cited a number of poor countries that no longer need foreign aid: Turkey, Botswana, Mexico, Brazil, China, Chile and Malaysia among others. Gates is quite certain that many more will move out of poverty.

Whether one thinks that foreign aid is efficacious in reducing poverty – and I’m skeptical – the implications of Gates’ findings are clear. The total amount of aid required from the world’s donor countries will shrink over time. As countries move away from poverty, the aid tap can be slowly closed.

Countries should start planning to wind back their aid budgets. By 2035 there should be no more need for foreign aid except in a few States such as North Korea.

This is the key implication behind the Gates letter. Whether or not foreign aid has been an important or marginal contributor to a major reduction in world poverty over the past 50 years, no one can really hold that it should continue in the absence of world poverty.

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47 Responses to Bill Gates: it’s time to cut foreign aid

  1. 2dogs

    The best form of foreign aid is to give developing countries exemptions on import tariffs.

  2. Elizabeth (Lizzie) B.

    Capitalism rises all boats. Good to see it in action. Thanks for noticing, Bill.

  3. Percy

    No to Aid (except maybe some disaster relief) and yes to Free Trade. Provided the country has a government worth feeding then the road to prosperity will be paved in time.

  4. Abraham

    Lizzie …

    Capitalism rises all boats. Good to see it in action. Thanks for noticing, Bill.

    Such talk will get you a one-way pass on Hammy’s Gulag Express. Re-education is required.

  5. Rabz

    How much Australian ‘Aid’ extorted from taxpayers has ended up personally enriching various tinpot tyrants, despots and slimy corrupt ‘officials’ in various third world cesspits over the years?

    I’d reckon the vast majority of it.

    The other elephant in the room here is climate hysteria. This preposterous horsesh*t has been directly responsible not only for the prevention of development in third world countries, but has also directly reduced living standards in some of the poorest nations on earth. A classic example were the food shortages (leading to starvation deaths) that arose in hellholes like Haiti due to the misallocation of cropland to the production of biofuels.

    The presence of western NGOs in these countries is also a source of much malevolent wrongheadedness. These entitled socialist parasites have a vested interest in the perpetuation of poverty in the third world and will actively impede the implementation of commercial projects and transparent governance systems that would help increase living standards.

    Third world countries need democratic systems, the rule of law, property rights and access to cheap abundant energy. The drive and resourcefulness of the people will do the rest.

    So politicians – stop wasting our money, you arrogant, know-nothing dunderheads.

  6. Elizabeth (Lizzie) B.

    Third world countries need democratic systems, the rule of law, property rights and access to cheap abundant energy. The drive and resourcefulness of the people will do the rest.

    +1 to that, Rabz.

  7. Bruce of Newcastle

    Indonesia doesn’t need the $600 million a year we give them in aid.

    But as the Romans well knew and expertly practised, giving “aid” is a relatively cheap diplomatic option in your armoury. Also known as bribery. China is doing this all over the world with quite practical results, such as when Cambodia snookered a critical press release from ASEAN on Chinese provocations.

    Would the relationship with Indo be even worse without the money we give them? Probably.

  8. rickw

    I have worked in a number of 3rd world countries, currently in PNG.

    - On average, 50% of foriegn aid $ is unaccounted for, this is certainly the case in PNG. This is a complete disgrace.

    - To a very large extent, attitudes and culture are THE predicator of wealth, the increase in wealth noted in some third world countries probably has more to do with “westernisation” of the locals then anything else. The defining example of this for me is the two young guys in Africa who set up their own wind turbines and electricity distribution for a cluster of houses, progress!, only to have the entire setup destroyed by their neighbours because they didn’t have the same.

    - I would not have ONE CENT of Australian taxpayers money sent overseas by the Australian Government. Fundamentally Foreign Aid is wealth redistribution and in my opinion it rides roughshod of the Australian Governments duty to the Australian People.

    - Back to PNG, I have been visiting and working in PNG for 15 years. THE defining change in the country has not come through foriegn aid, rather, the numerous LNG projects underway and nearing completion. Capitalism changed the country, not Foreign Aid.

  9. Token

    How much Australian ‘Aid’ extorted from taxpayers has ended up personally enriching various tinpot tyrants, despots and slimy corrupt ‘officials’ in various third world cesspits over the years?

    Ah yes, the real 1% in this world who oppress and kill thousands each year, a class created and nurtured by the left since WW2.

  10. brc

    Gates letter is interesting, to me it has several messages:

    1) aid works, but governments are terrible at aid. A pitch for them to just give his foundation the money, because they handle it better and are more effective.
    2) capitalism is required and fixes poverty – but he knows the audience and never mentions it by name
    3) a strong message from Melinda to stop the green eugenicist wishes. Stop wishing and hoping for brown people to die in service of the agw cult.

  11. boy on a bike

    poor countries are not doomed to remain poor. Poor people are not destined to remain poor.

    Unless the Greens get their way.

  12. .

    1. Capitalism, free trade and private aid is good.

    2. Socialism, import substitution and governmental aid is bad.

    There is so much evidence to support this (Bauer, decades of developmental economics) that Abbott is being overtly anti progress if he does not support 1. over 2.

  13. There will always be poor countries as far as the left are concerned. When you define poverty as 50% of median income (as the OECD does), then eliminating poverty is impossible no matter how much incomes grow.

  14. Token

    There will always be poor countries as far as the left are concerned.

    If there wasn’t, they would not be able to use fear and hate as a tool to grab power at the expense of the society they destroy.

  15. .

    Yobbo
    #1163575, posted on January 23, 2014 at 9:01 am
    There will always be poor countries as far as the left are concerned. When you define poverty as 50% of median income (as the OECD does), then eliminating poverty is impossible no matter how much incomes grow

    This is as fraudulent as the Henderson Poverty Index.

  16. Ant

    By the year 2035 the US might be asking for foreign aid if they keep going the way the are.

    And, if foreign aid is trending down, what are organisations such as World Vision going to do? Spruik Climate Change?

    Oh, too late.

  17. Jessie

    rickw – well said.

    The use of a global under5 mortality (not morbidity program success) in 2nd link to Gate’s is somewhat a misnomer. A greater array of vaccinations, technology and logistics transport has enabled emergency and/or direct delivery to cover 0-5year olds with great efficiency. Measuring these outputs.

    Tribal/subsistence farmer groups may require and have fewer children due to less deaths as a result of local aid/investment/medical aid arriving and being directly propelled at vast groups. How does this impact on >5yo survival rates AND less need for girls to continue occupying prime exchange rate positions for property (aka fertility) expansion and/or exchange with neighbouring tribe. Young men miss out on marriage choices unless direct in line to the ‘communal property leaders’.
    A study of that would be of more use in development.
    To have/be allowed freedom of thought and speech in addition to rule of law, individual property rights etc.

    Mexico amended their communal property laws in many rural subsistence areas. Gates should discuss these variables in child mortality/UN Millennium Goals. Perhaps it is not PC?

  18. Samuel J:

    Bill Gates: it’s time to cut foreign aid

    What Bill Gates actually said:

    But broadly speaking, [foreign] aid is a fantastic investment, and we should be doing more. It saves and improves lives very effectively, laying the groundwork for the kind of long-term economic progress I described in myth #1 (which in turn helps countries stop depending on aid). It is ironic that the foundation has a reputation for a hard-nosed focus on results, and yet many people are cynical about the government aid programs we partner with.

    Nice reading comprehension there Samuel J.

  19. Baldrick

    Indonesia’s current 3 year plan to strengthen and modernise its armed forces will set them back a cool $16.7 billion.

    Our $500 million in foreign aid doesn’t seem quite adequate.

  20. boy on a bike

    The other elephant in the room here is climate hysteria. This preposterous horsesh*t has been directly responsible not only for the prevention of development in third world countries, but has also directly reduced living standards in some of the poorest nations on earth. A classic example were the food shortages (leading to starvation deaths) that arose in hellholes like Haiti due to the misallocation of cropland to the production of biofuels.

    It’s worth remembering that a similar thing caused the Irish famine. Ireland grew a lot of grain for export plus spuds for local consumption. Grain was the cash crop. Huge amounts of grain were exported during the famine. Substitute “wicked English landlords growing grain for profit” with “wicked greenpreneurs growing biofuels for profit (driven by taxpayer funded subsidies)”. I wonder if the modern green wants to be associated with what the spuddlies now term a holocaust?

  21. Token

    Nice reading comprehension there Samuel J

    Interesting Desipis you believe “we should be doing more” to spending money.

    If Bill Gates has proven anything, it is that reform of the logistics and delivery mechanisms of aid is more critical than more money.

  22. Token

    Interesting Desipis you believe “we should be doing more” to means spending more money.

  23. brc

    Bill gates states that poverty should be mostly done by 2035, if aid levels are maintained now. His pitch is that, out the investment in now, and this thing should be done in 20 years.

    This posts headline is wrong in that regard. It should say ‘end foreign aid on 2035′

  24. Token

    Substitute “wicked English landlords growing grain for profit” with “wicked greenpreneurs growing biofuels for profit (driven by taxpayer funded subsidies)”. I wonder if the modern green wants to be associated with what the spuddlies now term a holocaust?

    Yes, heartless bureaucrats implementing government legislation has caused millions to starve.

    Strangely people who should know better still blindly support government and choose to be blind to the threats that come from the tyranny of the state. Tim Wilson discusses this in his article in The Oz today.

    Similarly, it’s only with this history that Australians can understand the social contract that gives government legitimacy is coupled with human rights to put a brake on its excesses.

    Without this background, the national curriculum risks debasing human rights, whitewashes their classical liberal origins in favour of treaties, strips them of their sanctity and consistency and presents them as a modern legal gift of government.

    There are numerous cascading problems in approaching human rights this way. First, whatever human rights government gives, they can also take away.

  25. Chris

    Interesting Desipis you believe “we should be doing more” to means spending more money.

    If you listen to the full interview it’s pretty clear that Gates is talking about spending more money and criticising people who think that foreign aid should be cut because they believe its wasteful, when in his opinion its very effective and helps those countries work their way out poverty.

  26. Rabz

    when in his opinion its very effective and helps those countries work their way out poverty

    Then his opinion in this instance is wrong, wrong, wrong.

  27. Ant

    If anyone thinks we should be doing more, aka spending more money, then that’s just swell.

    Throw in however much of your money as you want. Not a single person on this planet will resist, believe me. You’ll even earn honest and heartfelt praise.

    So, what is stopping you?

  28. H B Bear

    Alex has a more realistic view on the effectiveness of Third World aid.

  29. Jessie

    It is ironic that the foundation has a reputation for a hard-nosed focus on results, and yet many people are cynical about the government aid programs we partner with.

    ref: 2014 Gates Annual Letter: 3 Myths that block progress for the Poor

    O/T A result of internal aid

    Compare 23/1 Tim Wilson’s Opinion piece on foundations of liberal democracy with this Opinion piece .. an example of internal [aid] cynicism in Australia…………..

    OPINION: It might be time to swallow our bulging national pride

  30. Jessie

    Thanks for following on with this Foreign Aid discussion Samuel J, and to the various bloggers’ informative posts.

    Gates 2014 Annual Letter: 3 Myths that block progress to the poor

    Aid Dependence Another argument from critics is that aid holds back normal economic development, keeping countries dependent on generosity from outsiders.
    This argument makes several mistakes. First, it lumps different kinds of aid together. It doesn’t differentiate aid that is sent directly to governments from funding that is used for research into new tools like vaccines and seeds. bold added

    True, nor does it differentiate between academic publications on the subject of aid, as seen clearly in the CAGW debate. Open discussion between scientists and others was not had until recently. Open debate on CAGW became available on volunteer blogs, science was discussed, many participated and learned, others lost their careers and jobs. The debate included questioning of productive agricultural output (forest carbon plans/palm oil etc) and purported flow-on effects to nutrition/under 5 mortality and need of supply of low cost electricity (coal/hydro/nuclear) to the poor.

    Gates states..

    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.’

    The debt owed to the so called skeptics in furthering the Aid debate which was a monopoly should be acknowledged. People from all walks of life, across the globe, participated in these online forums. Purported seal level rises of Pacific nations coral islands, Green terrorism against genetically modified food research programs, understanding of the benefits electricity (a washing machine) brings to women lives, education to girls and boys, and so on and on were presented to readers. All freely available from well respected scientists and commentators. Volunteers.

    Corruption
    More and more, technology will help in the fight against corruption. The Internet is making it easier for citizens to know what their government should be delivering—like how much money their health clinic should get—so they can hold officials accountable. As public knowledge goes up, corruption goes down, and more money goes where it’s supposed to.

    True, those who the most benefit to pursue technology and myths are often the few that were educated as a result of continuing to post secondary/tertiary schooling, elected perhaps under democratic principles to government, entrenched in public service or predominantly always having the position on local Aid programs. Access to electricity and technology under private ownership helps to dispel that monopoly and control. Monopoly and control is not necessarily always government, but local leader groups of men and women.

    Myth3: Saving Lives leads to Overpopulation The dig at imperialism re Mozambique and Portugal child survival rates pre and post colonialism under heading Myth3. This discussion is misleading and plays to emotion. Followed up with a discussion on the dilemmas of contraception and child spacing which is pertinent.

    Explainer: How Does Foreign Aid Work?
    Many low- and middle-income countries will develop enough to pay for this convergence themselves. Others will need continued generosity from donors, including investments in health-related R&D. Governments will also have to set the right policies. For example middle-income countries should look at taxing tobacco, and at cutting fossil-fuel subsidies to free up funding for health.

    If tobacco is to be taxed as Gates suggests, should not subsistence farmers of poppies, marijuana, kava, coca etc. And the technology inc internet that goes into the logistics of moving these crops? By 2035 (new date) when the Millennium Development Goals are reached they could have included a tax on alcohol to achieve the 2035 aim. That is the downstream approach from the up-streamers to ensure program funding continues for donor countries.

  31. Token

    Many low- and middle-income countries will develop enough to pay for this convergence themselves. Others will need continued generosity from donors, including investments in health-related R&D.

    It is strange that Gates is quiet on the concept of micro-loans which seemed to be delivering amazing results at a village level with a level of accountability that inhibited the natural corruption which coalesces when aid is given without necessary controls.

  32. Jessie

    Gates talks from his birth-year 1955 on the global poverty and development improvements he has witnessed as a result of aid programs.

    Here is a selective sample pre 1955: Death and childbirth (mortality) as taught digitally in US, with religion thrown in to the science.

    Death in Early America
    Childbirth in Early America

  33. Grumbles

    Government aid is ridiculous. It is essentially saying, “we cannot trust people to donate money to worthy causes so we will take it from them and distribute it ourselves, because we know better.”

    I am yet to see any kind of rebuttal to this point that doesn’t reveal the inner totalitarian of the poster.

  34. Jessie

    IPA on POVERTY have provided this overview History’s Greatest Achievement from American Enterprise Institute

    Chart of the greatest and most remarkable achievement in human history, and one you probably never heard about

    It turns out that between 1970 and 2010 the worst poverty in the world – people who live on one dollar a day or less – that has decreased by 80 percent (see chart above). You never hear about that.

    It’s the greatest achievement in human history, and you never hear about it.

    80 percent of the world’s worst poverty has been eradicated in less than 40 years. That has never, ever happened before.

    So what did that? What accounts for that? United Nations? US foreign aid? The International Monetary Fund? Central planning? No.

    It was globalization, free trade, the boom in international entrepreneurship. In short, it was the free enterprise system, American style, which is our gift to the world.

  35. Token

    Government aid is ridiculous. It is essentially saying, “we cannot trust people to donate money to worthy causes so we will take it from them and distribute it ourselves, because we know better.”

    If Bill Gates “trusted” government aid he would dismantle the Bill & Melinda Gates foundation and give the US government one huge tax cheque. He’d also get his mate Warren Buffett to do the same with the Buffet foundation (which if I recall he asked Gates to help him manage).

    Don’t be holding your breath waiting for that to occur.

    What a suprise men who fund the lunar left like Gates & Buffett don’t practice what they preach!

  36. boy on a bike

    Depends on how you define “aid”

    I can’t remember the exact numbers, but when I looked at an actionaid report a few years ago, it showed that they spent something like $800,000 on fundraising one year.

    They managed to raise $700,000.

    So – do you include the $700,000 they raised in the “foreign aid” bucket, even though it was all spent on koala suited muppets hanging around street corners in Sydney?

  37. Rabz

    boab – I’m presuming taxpayers stumped up the ‘missing’ hundred thousand?

  38. Boy on a bike

    Taxpayers stumped up about 7 mil extra.

  39. Jannie

    That is a bit of a misleading headline. Well totally misleading. I hate Bill Gates for being the Darth Vader of the Evil Empire, but since I have an iphone I am thinking maybe he wasn’t all that bad after all. But thats not what Gates said. Is the headline a form of irony, or sarcasm?

  40. Fisky

    Notice how the steepest falls in poverty occured at the height of the Washington Consensus. Left-wing cranks like John Kwiggan must be very angry about that.

  41. Grumbles

    Jannie the headline is pointing out that most of Bill’s points were spot on the money! Then he somehow draws the opposite conclusion, like only a hypocritical totalitarian could. I mean in the face of all those facts coupled with the success of private philanthropy how could you argue for State Enforced Aid?

    Token, well summed up, no one is surprised by the hypocrisy, it is so expected it has become accepted.

  42. Johno

    As countries move away from poverty, the aid tap can be slowly closed.

    Samuel, you seem to be labouring under the misconception that foreign aid is about reducing poverty.

    Even if done properly, it is one of he least effective ways of reducing poverty. It’s all about Lefties feeling good about themselves, spending other people’s money on their pet causes.

    If it serves a role in delivering on a foreign policy objective, we should keep it. If not, scrap it.

  43. .

    Fisky
    #1164189, posted on January 23, 2014 at 5:34 pm
    Notice how the steepest falls in poverty occured at the height of the Washington Consensus. Left-wing cranks like John Kwiggan must be very angry about that.

    munty assured me only cranks support that. “Real” “economists” apparently support poverty.

  44. Yohan

    Samuel you are attributing ideas to Bill Gates that he does not have. I have read quite a few of Bill Gates pronouncements on aid often over the years since he started his philanthropy, and he is purely a left wing progressive on economics and aid to 3rd world countries.

    Recently there was that Black female academic that has a book out and cited many studies showing how aid has harmed the economies of Africa. All sensible, basic economics 101 type stuff.

    Bill Gate criticized her and basically said, NO, continuous aid to poor African countries is great.

  45. Infidel Tiger

    Bill Gate criticized her and basically said, NO, continuous aid to poor African countries is great.

    No African to live without Windows Vista by 2020.

  46. Yohan

    The ‘aid to africa’ movement started because of the famine in Ethiopia in the early 80′s. What most don’t know is, the famine was not caused so much by drought, but by communist agricultural economic policies that were implemented by the then government. It caused agricultural production to drop across the entire country, causing widespread famine and starvation.

    A lot of the starving african child footage you see on TV today still comes from that era.

  47. Hugh

    This is a good place to resurrect my favourite aphorism:

    Give a man a fish and you feed him for a day …
    Teach him how to fish, & you feed him for a lifetime …
    Just get the government off his back and he’ll have a profitable business exporting fish up and running inside a year.

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