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Bill Gates: Foreign Aid 2.0

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Microsoft Co-founder and Chairman Bill Gates has a revolutionary new model for foreign aid that, by his own admission, will be an "incredibly effective way to combat hunger and extreme poverty."

This "has nothing to do with the old aid model of donors and recipients," Gates said at a speech in Washington this week to promote the Global Agricultural and Food Security Program, at which he presented foreign aid version 2.0.

Except version 2.0 looks exactly like every other version of foreign aid that has been unveiled with much hoopla over the past 50 years and then failed. Version 2.0 is about aid donors and recipients.

As in every previous version, smart First World donors shake their heads in dismay at the ignorance and inefficiency of the dumb Third World farmer. "If you could get African production even at two-thirds of European or U.S. production, you'd be talking about tripling their productivity," Gates said, in lockstep with the failed foreign aid mindset of the past.

To achieve this goal, Gates wants a top-down centralized effort, involving all the big players that have always been involved. "No one can do it alone -- it demands the full participation of donor countries and national governments," he asserts, as if the World Bank, African Development Bank, United Nations Development Program, and countless other multilateral efforts haven't also been beating the same drum.

Or as if the World Bank wasn't already involved -- in fact, Gates's project is being hosted by the World Bank, with money from the same-old same-old: the U.S. ($67 million), Canada ($230 m), Spain ($95m), and South Korea ($50m).

Gates claims that "this is about catalyzing a business opportunity with enlightened investments."

Except he isn't talking about real investors or real businesses -- he's talking about one more round of handouts from aid agencies to farmers who have been cajoled into running their businesses differently in order to qualify for his lucre. They'll take the new round of money, but it won`t lead to anything. Past versions of foreign aid 2.0 all failed and so will Gates's Global Agricultural and Food Security Program.

Africa has not lacked foreign cash or smart foreign white men with ideas -- Africa has received $1-trillion in aid over the last 50 years.

The result? Africa became a graveyard for failed development projects. Today, its per capita incomes are actually lower than before Gates and his predecessors came carrying their gifts. Africans do have lacks, however -- they lack the property rights to protect their homes and businesses from expropriation, and the institutions based on property rights that provide stability for innovation and investment.

Africans lack the rule of law they need to protect their investments from thugs, dictators and crony capitalists. They need equality before the law to ensure justice is served and not reserved for the well connected. They need access to markets without having to bribe officials for the right to make a living. And they need the tools - the right to know, freedom of the press, and free and fair elections -- so they can hold their lawmakers accountable.

Foreign aid -- including that practiced by Gates -- erodes each of these institutions by freeing African governments from their people. It breaks down the tax system and all the natural checks and balances that taxpayers can use to hold their governments to account.

After version 2.0 goes by the boards, I suggest Gates try, as version 3.0, something never tried before. Instead of spending money in the Third World, thinking he can raise the IQ of Africans, he should spend it at home, by convincing Western lawmakers to drop their protectionist policies that keep Third World goods and services out of Western markets.

Gates's Microsoft built its success in part by tapping into Indian programmers and service providers, in the process also enriching India and Indians. Had Microsoft instead provided India and other Third World countries with feel-good foreign aid programs, he would have helped neither them nor his own company.

Patricia Adams is executive director of Toronto-based Probe International.

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