Bill Gates asks G20 to boost development efforts

2nd November 2011, Comments 0 comments

Microsoft chairman Bill Gates is asking the Group of 20 nations to step up development efforts to ease poverty, saying this is an important investment despite economic woes in wealthy countries.

"Development isn't just good for people in poor countries; it's good for all of us," Gates wrote in a Washington Post essay Wednesday.

Gates, whose foundation has spent billions on aid efforts around the globe, is to submit a report to the G20 group of advanced and emerging economies at a two-day summit that opens Thursday in the southern French city of Cannes.

With countries accounting for 85 percent of global output to seek measures to try to prevent the global economy sliding back into a recession, Gates recognised that governments are under pressure to cut back on spending.

"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," Gates said.

The report, a copy of which was seen by AFP, suggests creative ways for the world to continue investing in development despite fiscal constraints.

He said the G20 should seek to encourage more private sector funding for needy nations as well.

"The private sector hasn't always invested as much in development as it should because the market incentives haven't always been clear, but there are ways to encourage involvement," he wrote.

In the report to the G20, Gates makes half a dozen recommendations for mobilising tens of billions of dollars annually from private sources to help fund development.

"The African Diaspora alone is sitting on an estimated $50 billion in savings that could be invested in bonds," he wrote, noting that Israel and India had successfully tapped their emigre communities to fund development.

Gates added that if transaction costs on remittances worldwide were cut from an average of 10 percent to five percent it "would save $15 billion".

He also suggested sovereign wealth funds sitting on trillions of dollars, could set aside a portion for key infrastructure projects in poor countries.

"An infrastructure fund financed by just one percent of SWF assets would start at $40 billion or more, and could reach $100 billion or more with projected SWF growth over this decade," Gates wrote.

Poor countries also need to raise more tax revenue, noted the report.

And it said G20 countries should impose "transparency requirements for mining and oil companies listed on their stock exchanges, to ensure that natural resources are well-managed."

Traditional donors must also take steps to meet their aid commitments and if they stick to them it will generate an additional $80 billion annually starting in 2015, the report noted.

Weighing in on the idea of a financial transaction tax, Gates noted that a number of countries already have some form of such a levy.

If large European countries go forward with such a tax, as France and Germany have promised, it could raise $9 billion, Gates said.

He pleaded countries that go ahead with such a tax, along with other proposed taxes on fuel, not use all of the proceeds as general revenue.

"It is critical that a portion of the money raised be reserved for investments in development," wrote Gates.

Gates said he was honoured to have been asked by the G20 to make suggestions about development.

"With its diverse and dynamic membership, the G20 is in a phenomenal position to help us all think about development in new ways," he wrote.

Gates was optimistic about the ability to resolve the crisis and make progress on reducing poverty.

© 2011 AFP

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