2014 Gates Annual Letter: Myths About Foreign Aid

Converging on a massive breakthrough for humanity

If you are reading SeekerBlog chances are you have already read the 2014 annual letter. If not I hope you will go there now. You will learn that 2014 foreign aid is not your father’s foreign aid. Especially not the way the Gates Foundation does data-driven aid. Bill and Melinda Gates are designing and building a new road for the traditional aid agencies. More and more, those agencies are following the Foundation’s lead.

The above graphic comes from a new Lancet paper. In the chapter on the Aid Dependence myth, Bill writes:

The bottom line: 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.

In the chapter on the Aid Breeds Dependency myth, Bill writes (emphasis mine):

Second, the “aid breeds dependency” argument misses all the countries that have graduated from being aid recipients, and focuses only on the most difficult remaining cases. Here is a quick list of former major recipients that have grown so much that they receive hardly any aid today: Botswana, Morocco, Brazil, Mexico, Chile, Costa Rica, Peru, Thailand, Mauritius, Singapore, and Malaysia. South Korea received enormous amounts of aid after the Korean War, and is now a net donor. China is also a net aid donor and funds a lot of science to help developing countries. India receives 0.09 percent of its GDP in aid, down from 1 percent in 1991

Conclusion:

If you read the news every day, it’s easy to get the impression that the world is getting worse. There is nothing inherently wrong with focusing on bad news, of course—as long as you get it in context. Melinda and I are disgusted by the fact that more than six million children died last year. But we are motivated by the fact that this number is the lowest ever recorded. We want to make sure it keeps going down.

We hope you will help get the word out on all these myths. Help your friends put the bad news in context. Tell political leaders that you care about saving lives and that you support foreign aid. If you’re looking to donate a few dollars, you should know that organizations working in health and development offer a phenomenal return on your money. The next time you’re in an online forum and someone claims that saving children causes overpopulation, you can explain the facts. You can help bring about a new global belief that every life has equal value.

In the rich world it’s easy to lose perspective on how much progress is being achieved. Good news is not “news” for the media that most people consume. It’s also easy to stop learning. I’m thinking of the way aid was managed during the Cold War, where the focus was buying political concessions or alignments of nations. In many cases this kind of aid was paid to the nominal government, enabling the leaders to fund their Swiss bank accounts and to pay off their cronies. In particular, when a big proportion of the nation’s income was aid the leaders did not have to fund themselves through taxation. Hence these leaders did not need to listen to their population. I sincerely hope that epoch of foreign aid is behind us.

Summary – the three myths:

  1. Poor countries are doomed to stay poor
  2. Foreign aid is a big waste (including corruption, aid dependence)
  3. Saving lives leads to overpopulation