Bill Gates talks hurdle rates and aid in 'America First' era on visit to Washington

WASHINGTON — Bill Gates is in the U.S. capital this week making the case for continued U.S. engagement abroad. On Tuesday, he spoke at the U.S. Chamber of Commerce about the current politics of aid and what it will take to help countries become more self-reliant.

Gates, the chair of the Bill & Melinda Gates Foundation, praised Congress for rejecting the Trump administration’s attempts to cut the U.S. aid budget, which at $30 billion is less than 1 percent of the federal budget, and a smaller percentage of gross domestic product than several European countries, he said.

“Fortunately the Congress took that proposal, which would have been cutting people off from those HIV medicines, and they decided to maintain the foreign aid levels,” he said. “So we're pleased with that. There are many millions of people who are alive because of that work. So uplifting them, the poorer countries, particularly in Africa where you've got the highest population growth, making them self-sufficient, that continues.”

Gates has met with President Donald Trump personally to try to make the case for aid a few times, and Fox News anchor Chris Wallace, who was interviewing Gates, asked him what the administration has failed to understand.

In the past, aid goals have been tangible, and you could easily paint a picture of what was at stake, Gates said. With the AIDS epidemic, for example, medicines available in the U.S. were not available in Africa and it forced people to ask if a person’s country of birth should determine whether they live or die, he said. People, and politicians, could see the suffering and the need for U.S. engagement — whereas today, perhaps they don’t see the benefits of aid as often.

“[People] don't get to go out and see it and see how it’s helping these countries,” Gates said. “So when you get an administration that hasn’t had the time to go over there and see those programs, it’s great that the Congress, that has been involved in PEPFAR from the beginning, is able to bring that kind of sense of what's happening there [and] why it should matter to us in that long-term perspective.”

While it takes decades to improve the situation in the poorest countries, and there can be setbacks and instability, the benefits are worth it, he said. There has been significant progress, he noted, particularly on issues such as childhood mortality. The number of children under the age of 5 who die each year has been halved since 1990 and is on track to be reduced to one-fourth of what it was then, Gates said.

“This is [a] very successful endeavor. It’s not just feeling bad and writing checks and some of it is wasted. This is really as measured and even more impactful than the normal hurdle rate you'd have for private sector type investment,” Gates said. “So it is disappointing when it feels like the U.S. is being short term and the U.S. is only thinking about its interests in a very narrow way and not being the leader that says ‘we're going to help these countries ... so they can take care of themselves.’”

Part of the problem is that today when people read about Africa, they learn it is still the poorest continent — but the fact that poverty is declining and health is improving over time in the continent’s countries “doesn’t really come through in the headline-type format,” he said.

In countries that are successfully building economies and becoming more self-reliant, there are a combination of factors that are important, starting with reasonable governance that drives health, nutrition, education, and infrastructure — and those investments lead to growing private sector activity.

Key to achieving much-needed economic development is a focus on raising agricultural productivity, he said. Countries that have graduated from aid and are now donors themselves, such as South Korea, did so in part by tripling agriculture outputs and creating a labor pool to feed a manufacturing sector. Africa will also have to dramatically improve its agricultural outputs both to feed its growing population and to fuel economic growth.

Gates said that, even in an America First ideology, there should be room for investment in aid — which is in the country’s best interest for a variety of reasons, from national security to an obligation to respond to humanitarian need.

“I feel even in that narrow framework of ‘I only care how U.S. citizens do,’ even in that framework, these institutions, these alliances, these investments in innovation are overwhelmingly smart things to do,” Gates said.