Monday, March 01, 2010

How best to spend 10 billion dollars

During the recent World Economic Forum at Davos, Switzerland, Bill Gates announced that his foundation would give $10 billion dollars for vaccine research and distribution. This had a couple of reporters from the Wall Street Journal thinking if there were other, more efficient ways to spend that kind of money to solve the world's problems.

From the WSJ article, writers Ben Wright and Yasmine Chinwala asked a few business and charity leaders what they would do with 10 billion dollars. Our snippet only contains portions of the first three answers.

Percy Barnevik, former chief executive of ABB and chairman of Hand in Hand International.

Stimulate job-creation in developing countries.

"One billion people in the world survive on less than a dollar a day. They are the so-called "bottom billion." Many are so poor because they don't have jobs. The only way to eliminate extreme poverty at reasonable cost and within a reasonable timeframe is by giving this "bottom billion" the means to unleash their entrepreneurship.

Top row, from left: Sir Ronald Cohen, Dame Barbara Stocking, Tido Von Schoen-Angerer and Percy Barnevik. Second row: Nic Frances, Mo Ibrahim, Stanley Fink and Dr. Judith Rodin.

Research suggests that, at a conservative global average, it costs $200 to create a single job in a developing nation. To eradicate extreme poverty among the "bottom billion" requires 250 million productive new jobs, which would cost $50 billion in total or $5 billion a year over 10 years. This is less than 5% of the $110 billion that is currently spent each year on aid.

Such a huge impact can be achieved with so little money because of the leverage of help to self-help. Give a poor person $200 and he can spend that $200 on food or clothes. Spend that $200 training and coaching them and they might be able to earn $2,000 a year, year after year."

Mo Ibrahim, mobile-communi ca tions entrepreneur and founder of the Mo Ibrahim Foundation.

Establish a statistics office in Africa.

"Africa's needs and potential are vast, while means are scarce. This necessitates efficiency, which is dependent on an ability to define aims, and to measure them, in order to assess results. In short, good governance.

This does not happen at the moment. The lack of comprehensive and reliable statistics inhibits all stakeholders, whether civil society, governments or donors.

So, I would use the $10 billion to fund the development of national or regional statistics offices. They would improve data collection and dissemination to ensure public access to, and sophisticated application of, these data."

Nic Frances, author of "The End of Charity" and founder of Sydney-based Cool nrg, which develops emission-reduction projects.

Develop carbon-capture toilets.

"I am convinced that charity alone cannot provide the solution to mankind's biggest problems. We can continue to tinker around with the 1% of GDP from charitable donations and international aid or we can harness market economics to properly tackle poverty and environmental sustainability.

Sanitation is one of the most pressing issues in Africa. The technology exists to build toilets that capture methane and use the gas as a cooking fuel. Theoretically, these toilets could earn carbon credits twice over—once for capturing the methane and once for providing a sustainable fuel.

At the point at which installing these toilets becomes cheaper than the carbon credits they earn there will be companies running around Africa begging villages to allow them to build toilets in exchange for the carbon credits. A problem that the world has been unable to solve in 60 years of good charitable intentions will be solved more or less overnight."

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