Is Bill Gates Correct in the View that Foreign Aid Truly Matters - Essay Example

College: Is Bill Gates Correct in the View that Foreign Aid Truly Matters? Foreign Aid Truly Matters Bill Gates has researched on the issue of foreign aid being issued to the developing countries and is against the myth that foreign aid does not work to improve the livelihood of the citizens in the countries that receive it. He views the myth as an excuse by political leaders to campaign for their countries to become self-sufficient since these countries would cut back on the cost of providing foreign aid.1 This remark puts him off solely because a country like America only contributes 1% of its annual budget to foreign aid and Norway which gives the highest contribution gives 3% of its annual budget and yet these are funds destined to keep people alive (and yet U.S. agencies value the life of a single American at more than a few million dollars).2 Gates blames the media for negative publicity on matters concerning foreign aid, he refers to one British newspaper that gave its readers the impression that foreign aid is just but a waste of resources. In one of their articles, it was written that more than half of British voters advocated for slashes in overseas aid money. He viewed this as a distortion of the actual truth of what goes on in countries that receive aid. As much as Gates knows that no program comes without its flaws, he has opted to look at the positive aspect of aid. He goes on to add that foreign aid is just but a tool in the fight against disease and poverty. Developed countries need to make certain changes in their policies like opening up their markets and cutting agronomic subsidisations. The developing countries also have a role to play in this, they need to allocate more money to health matters and progress for their own folks. In Gate’s view, it effectively saves and improves lives.4 ‘By 2035, there will be almost no poor countries left in the world.’ Bill Gates. Through his foundation, the Gates Foundation, they invent vaccines that help to improve the health of children and in turn lighten the burden on the countries’ healthcare and social system. Having healthier children apart from the life factor is beneficial in that it allows children to grow physically and mentally and they become productive adults in future. Gates and his wife Melinda, have opted to focus on agriculture and healthcare because these are the two fields that they have more of a hands on familiarity. These are also the two fields that lay a foundation for long-term economic evolution. The Amount of Aid The belief that foreign aid is a large portion of rich countries’ annual budget is a misguided notion. A substantial number of citizens in the United States believe that the government spends a gross of 25% of the annual budget in support of foreign aid. They think that this value is too large and it should be cut down to 10%. But in real sense, about 1% of the annual budget goes to foreign aid and Norway offers about 3% which is the highest percentage recorded in the world over. Gates took the initiative to calculate the amount of money spent on health-related issues by donors since 1980 and divided this rough estimate by the number of children deaths prevented in that span. He got a figure of about 5,000$ per child, it may seem like a large figure but it is not in comparison to what the American government values the life of a single citizen. When it comes to child mortality, a significant drop has been achieved since 1980 (the flagging off of the Child Survival Revolution) which played a major role in distribution of vaccines worldwide and increasing the accessibility of oral rehydration therapy. This translates to 100 million child deaths obviated. However, this projected calculation is an overstatement of the cost per life saved since he included a lot of aid that was not fated to include children. Poor Countries are not bound to Stay Poor He strongly disputes the notion that poor countries are bound to stay that way and that foreign aid in no way plays a role to better their situation. He gives the example of Turkey, Chile, Malaysia and Gabon which have made significant strides over the past few decades. He has noted that a middle class level has been created over the past few years as poorer countries make strides to attain development and economic stability. “In the past 50 years, this type of class did not exist but now it is inclusive of more than half of the world’s population” Bill Gates. Mr Gates takes a look at the time he was born in 1955 when the world was divided into two economic classes, the first world and the third world. Almost everyone in the first world was a scholar and the majority of people in the third world were uneducated, poor and died young. It was believed that that was the state of things and they were bound to stay that way. The 1960 statistics showed that the larger portion of the world economy was based in the west. Taking the example of the United States where the average income per capita was 15000 dollars a year and countries like China and Botswana were at 928$and 383$ respectively(these are figures from the Penn World Table). The current state of Mexico right now is an improvement from then, with a huge portion of its citizens living at a middle class level. The air is cleaner; there are modern bridges, high-rise buildings and tarmac roads. He is charmed by the transformation that has taken place around the world; the picture of insufficiency has been redrawn. China and Botswana have also reflected growth with China’s income per capita growing eight fold and Botswana’s depicting a thirty fold escalation.4 Saving Lives The matter of aid all boils down to the aspect of saving lives. But analysing this critical subject in terms of figures of population against the resources that the planet has to offer, foreign aid is seen to be working against these figures. This dictates that saving lives is viewed as a promotion of overpopulation which will in turn cause the earth to run out of its resources at a faster rate. Luckily, this is not the harsh state of things as Hans Rosling-a data analyst, explains; as child mortality decreases, there is a corresponding decrease in birth rates and countries that have elevated death rates have the highest birth rates. The Type of Aid But Gates provides a solution to this issue; he says that it all depends on the type of aid given. For instance, he invents seeds that give a heartier produce in extreme weather conditions, such as those in sub-Sahara Africa. This in turn helps the farmers to become more productive and a boost in the agricultural sector of a country has perhaps the most significant impact on a developing country’s economy.2 Or providing aid to rid the world’s population of certain illnesses such as polio. As at now, only three countries worldwide have never been polio free: Nigeria, Pakistan and Afghanistan. The Global Health Community aims at ridding the planet of polio by the year 2018. If this goal is attained, about $2 billion that is spent fighting the ailment will be saved per annum. Overpopulation If the probability that a child will live is put into play, women in a country with a high mortality rate will tend to have more children so as to try and beat the odds. It is the fear of losing infants to starvation or illness that pushes them to have more children. Moreover, low death and birth rates create stronger work force because it alters the age structure of the population and ultimately there is a prominence of persons in their prime working years. Even if the contrary was the case, it goes against moral principles to let children decease now so that they do not waste with hunger later on.3 Aid Dependence On the flipside to foreign aid, critics argue that countries tend to become reliant on aid and this in turn holds back what would have been a normal economic improvement in such countries. In the past three decades or so, developed countries have made more or less sustained progress and as such have come to an era of tightening budgets.5 Critics blame aid dependent countries for sucking in more and more aid with little to show for it in return.6From these, aid dependence can be computed as: receiving aid above the required level or receiving more than what can be well utilized, when the aid received leads to the need of more aid or when the aid programmes are controlled by the donor party. An example of Tanzania in Africa whose aid percentage has doubled over the years from 20% to 40% is evidence of a dependent nation since her time growth over the past two decades has been on an average of zero. This is a typical case of ineffective aid. If the aid that Tanzania is receiving is not reflected in her growth, then of what use is it? Another case is when the recipients let the donors take charge of the aid (this is usually the case when large amounts are involved or depending on the nature of the aid). However, ownership of the aid by the recipient is the ingredient to sustainable growth.7 Aid dependence can also be viewed as the indefinite need of aid by a country so as to maintain its growth rate at a particular level.7 Therefore in the absence of aid; the country will fail to attain certain objectives. For example: if without aid a country is projected to grow at a rate of 2% but with aid it is at a higher value of say 3.5%, then such a country is said to be dependent on aid. Corruption Yet another obstacle that faces the campaign for foreign aid is the issue of corruption. When funds meant for health related issues are embezzled, it costs lives. It is difficult to eliminate this vice since it is common to all governments worldwide and even in small-scale businesses. But this does not mean that it should be ignored or that provision of aid should be scrapped. A good example is the Global Fund; it was only after an internal audit that the management was able to uncover the mischief that was prevalent at the grass root level. Gates and Melinda help to fund the organization and they go on to defend the organization. They say that if the corruption was taking place at a large-scale level, then it would be pointless for them to continue funding the organization. The actual problem is the exaggeration on the extent that corruption has a toll on aid programmes in developing countries. Without ignoring the fact that corruption does exist, Gates sees it as a small price to pay in relation to the importance of the aid. Dismissing aid on corruption allegations would be petty since not even in the case of Illinois which has had seven of its governors serve time for corruption charges been penalised by having its income withdrawn.3 Gates is glad that the Global Fund took the initiative to carry out an internal audit- which is what all aid-related organizations should be doing. Technology is yet another arsenal that can be used to tackle this vice. The internet for example, is making it possible for citizens to know what to expect from their government financially in the health sector. That way, it is easier for them to question and hold the officials in those positions accountable for any misappropriation.4 Poor Countries are bound to Stay Poor If monetary contributions are all that it takes to end poverty, then the world would be on a road to ending poverty for eternity. However, this is far from the true state of affairs. The idea of large inputs of donation to poor countries especially in Africa has yielded futile results since the 1950s. As per the World Bank calculations, the number of poverty stricken people fell by 700 million from the year 1981 to 2010. But surprisingly enough, more than a quarter of the nations in sub-Saharan Africa are worseoff now than they were in the past five decades as much as foreign aid has been contributed to such areas. Substantial aid flows have done so little in altering the poverty trajectory in these countries because the problem lies in economic institutions which set rules on what the native people can and cannot do, their incentives and opportunities. These institutions serve to block the peoples’ aspirations. They therefore cannot wrench themselves out of insufficiency because the basic capability to do so is deprived of them.8 Foreign Aid as a Tool in Exploitation of the Agricultural Sector Foreign aid that is intended to boost rural development is actually satisfying the investment cavity left by an internal scheme of unsatisfactory returns to production in agriculture. The aid is therefore secretly funding other sectors of the economy at the expense of the intended cause. This is mostly the case in developing countries that are involved in agricultural exports, Cameroon for example (Claudio S.) Donors know that overall development can only be realised through initial highlighting on rural development. It is therefore the peasants who continuously foot the bills of progress. As the finances are directed to urban projects such as import industries, this results in affluence in the urbanities at the expense of the rural peasants who are the source of the wealth.9 Conclusion Bill Gates has justifiably argued and out ruled the myths that cloud the idea of foreign aid. As much as critics try to justify their stand on the need to abolish foreign aid programs on the basis of the challenges the programs face. I fully support his stand which is based on the importance of conserving human life which no one can put a price on. In no doubt, the world has grown over time and is better off currently than it has ever been. This is reflected in the number of countries that were recipients of aid but are now self-sufficient. As tough as the conquest to eliminate poverty would be, it is possible to deal with extreme cases of poverty especially in the developing countries. The media plays a major role in championing for the promotion of foreign aid. It is a shame that the British media is keen to point out flaws in programmes that offer aid and yet Britain is not ranked among the top contributors in foreign aid. It is disappointing that the media relies on rumours to get information especially since it is concerns a matter of life and death. Yet another exaggerated issue is that of corruption. Never has it been the case that funds allocated for food aid or any other type of aid mysteriously disappeared, at most it is a 2% margin that is lost to corrupt officials. This is something that can be reduced or even eliminated through internal audits in the government and financial institutions that handle the moneys. With the evident progress that aid has contributed to, it would be justifiable to call for the developed economies to raise the fraction that they contribute to foreign aid. If this is done, the 2018 goal of ridding the world of polio by the Global Health Community will be attained before the set timeline. However, the allocation of funds should be monitored to prevent occurrences like the one in Cameroon where funds meant to elevate the agriculture are used for imports instead. The recipients of financial aid should be given a chance to manage these funds to prevent an influx on one sector of the economy. This influx is what is later on termed as aid dependency. Word Cited Bill Gates. Poor Countries are Doomed to Stay Poor, 2014. Q&A, Bill Gates Talks about the 3 Myths of Global Aid, Retrieved from, http://time.com/1381/bill-gates-talks-about-the-three-myths-of-global-aid/ Morgan C, Bill Gates Says the World is Getting Vastly Better While Crushing Myths about Foreign Aid, Retrieved from, http://m.fastcoexist.com/3025108/bill-gates-says-the-world-is-getting-better-while-crushing-myths-about-foreign-aid Myths about Foreign Aid, 2014 Gates Annual Letter, Retrieved from, http://annualletter.gatesfoundation.org/ Cassen, R and Associates. Does Aid Work? Report to an Intergovernmental Task Force. Oxford, Oxford Clarendon Press, 1986. Riddell, R Foreign Aid Reconsidered, London, James Curry Mutasa, Felician & Howard White. Aid Dependence in Tanzania. IFM Journal of Finance and Management 2(2), 109–127, 1994. Why Foreign Aid Fails. The Spectator, Retrieved from, http://www.spectator.co.uk/features/9121361/why-aid-fails/ Claudio S. Foreign Aid and its Role in Maintaining the Exploitation of the Agricultural Sector. White, Howard. Adjustment in Africa: a review article. Development and Change 27(4) 785–815, 1996. Read More