The 15 Year Big Bet

In the new 2015 Gates Letter, Bill Gates outlines his goals for the World over the next 15 years, while looking back at the success of the last 15 years of the Bill and Melinda Gates Foundation.  The overall goal is to improve the lives of people who live in poor countries at a faster rate than has ever occurred in human history, to do so they will concentrate on four pillars; health, farming, banking, and education.

Global Health

In the last 15 years the Bill and Melinda Gates Foundation has spent over 31.5 Billion, but they didn’t just drop money out of helicopters, the spending has been targeted.  In healthcare the Gates Foundation has focused on eliminated preventable diseases, improving sanitation and building networks. The networks built in the previous 15 years set the groundwork for faster action in the coming years.  When they started, Bill Gates remarked that there was no one you could right a check to for any amount to purchase vaccines in bulk, and even if you could, you couldn’t get it to the people who needed it.  They had to build a stable demand in order to get manufacturing costs down to allow for worldwide distribution and build a trusted medical network throughout the 3rd world.  Last year medicine’s through this network reached 800 million people. Global childhood deaths in 1990 were 1 in 10 or 12 million children under the age of 5, today they are 1 in 5. It took 25 years to cut the number in half, and Gates believes it can be done again in 15 years.  In addition to reducing childhood deaths, deaths of mothers during childbirth is also way to high and can be reduced by 2/3 over the coming decades by providing better access to hospitals for women.

Disease eradication plays a huge part in the big picture. In human history only one disease has ever been eradicated,and that was the scourge of smallpox.  At its height, it cost $23 million per year to eliminate this disease with an effort stretching from 1958 to 1979,  Inflation adjusted this would be in the billions. Part of the big bet is that we will eradicate 4 diseases in the next 15 years, starting with Polio and Guinea Worm disease.

Currently the world is spending over $1.1 billion a year to fight Polio. In 2014 only 358 cases were reported, so you could see it at $3 Million per case.  Once Polio is eradicated from every corner of the world, Mankind will be free from it forever, and the cost of the global campaign will wind down allowing those dollars to be spent elsewhere (Malaria?). When the campaign started over 300,000 children per year were paralyzed by the Polio virus. One of the major challenges in the final fight against Polio is violence in remaining endemic countries. Health workers have been killed by thugs who believe immunizations for Polio are a covert Western plot to sterilize Muslims.  This violence is completely unacceptable, and has extended the fight against Polio.

In 2014 Only 126 cases of Guinea worm disease in humans were reported.  For the first time in history every person with the affliction has been quarantined and the worms will not be able to re-enter waterways, ending their life cycle. The initiative spearheaded by the Carter Center starting in 1986 has reduced the numbers from over 3.5 million infections to under 200. It is very possible that THIS YEAR will be the second year in human history that a disease has been completely interrupted on Earth.

Farming:

The United States of America has the most sophisticated and efficient farming practices in the history of the world.  While the US made great strides in agriculture over the last 150 years, much of the world has not.  In the mid 1800s the primary occupation in this country was farming, today under 15% of our population consists of farmers.  With efficient farming, people do not have to spend all of their time working to feed themselves, allowing other job in the economy to take off.  Current crop yields in many parts of Africa and Asia are only 1/5 of that in the US.

Another major advantage the US has is navigable waterways and a sophisticated highway system. These features allow us to transport foods much easier than in Africa. Infrastructure improvements will be necessary for lowering the cost of food distribution on the continent.

Banking:

Access to bank accounts changes everything.  Since it is not economical to build traditional brick and mortar banks all over the 3rd world, mobile banking is already revolutionizing the lives of people in the world’s poorest countries.  Mobile banking allows transactions to occur immediately and safely, and in cash versus barter, reducing inefficiency.  Mobile banking also greatly increases the ability of people to save their surpluses.  Savings is the first key to building wealth, and a widespread campaign to increase banking in the poorest countries will result in a long term improvement for the people.

Education:

Connecting the flexibility of the online education available in the US to the rest of the world will greatly improve education and availability of jobs.  The widespread use and tailoring of education programs to prepare students for actual careers is also necessary. One of the major challenges to educational advancement in the poorest countries in the world is closing the gender gap. Young girls do not have the access to schooling that boys do and also have more responsibilities such as gathering water, preparing food and washing dishes, which take time away from being able to go to school.

What Does The Big Bet Have To Do With You?

Perhaps you think these initiatives are great, but what will they do for you?  Most of these projects are focused on the 3rd world.  In the big picture, when parents don’t have to worry that their children will die from diseases, when pregnancy isn’t life threatening for women, when men and women aren’t debilitated by parasites, when people can work in occupations other than subsistence farming, when people can save money, the world will change. When third world countries advance, they will consume less aide, they will produce more goods and services, and be able to participate in the global economy to a much stronger degree. This may provide us with a larger variety of goods, a reduced cost of goods, and new and innovative products and services.

Most diseases that are being fought in Africa have been eliminated from the US for over a generation, but that is no guarantee they can’t come back.  Eradicating diseases from the Earth is a guarantee, and without that it is possible we could see outbreaks in this country again.

Gates Foundation:

The Gates Foundation has a current endowment of $41.5 Billion.  Over the last 15 years they have spent over $31 Billion on projects and are currently spending around $4 Billion per year including the Warren Buffet Gift.

Although Bill Gates has given more the charity than any other human alive today, through sound investments he is still the richest man in the world with a net worth of over $80 Billion.  He has pledge to give away 99% of his money during his lifetime and shortly after, as has close friend Warren Buffet, the 2nd richest man in the world with a net worth of $73 Billion.   The thing is, they can’t do it alone.  When compared to the entire economy, they don’t have enough money to do it all, there are still vital roles for us as individuals to play in this.

There are over 100 million households in the US. If only the upper 50% gave $100 to any cause throughout the year, this would amount to $5 Billion, well over what Bill and Warren give each year.  The US Government has a total budget over over $3 Trillion.  The Big Bet can not be achieved by two men alone.  It takes wealthy individuals, governments, corporations, and individual average citizens to work together to achieve goals as lofty as this.

Big Bet Actionable Steps:

What I like most about the Gates Foundation is that lofty goals are set, a plan is made to achieve them, and action is taken.  Here are some action steps we can take to make a difference as well.

 

Do you think it is possible to change the world to the extent The Bill and Melinda Gates Foundation is planning in a 15 year time frame?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. Check out the Action Economics archives section for all past posts.

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