Bill Gates Almost Right on World Poverty
by Andres Oppenheimer
The talk of the day at this year's
Was it an outburst of exaggerated optimism by the richest man on earth? Or are there solid grounds to be that upbeat about the future?
In a public letter published shortly before the opening of the Davos gathering, Gates said that the 35 countries that are classified as low-income by the
"The belief that the world is getting worse, that we can't solve extreme poverty and disease, isn't just mistaken. It is harmful," Gates wrote. "By almost any measure, the world is better than it has ever been. In two decades it will be better still."
But almost simultaneously,
In its report titled "Working for the Few," it said that the 85 richest people on earth own as much as the bottom half of the world's population, or 3.5 billion people. Inequality is rising, and "the extreme levels of wealth concentration occurring today" threaten to exclude hundreds of millions from the benefits of modernity, it said.
Likewise, a
So who is right? I posed that question to Marcelo Giugale, the head of the
Giugale told me that, technically, Gates is right. In GDP per-capita terms, the percentage of poor has been declining rapidly over the past three decades, since China and India adopted market economies.
"Extreme poverty, or people who earn less than $1.25 a day, will probably disappear in statistically meaningful ways by 2030, sooner than in 2035," Giugale said. "That should be the easy part."
But the real question is how meaningful that will be. "If we just lift people from poverty by making them earn $1.26 cents a day, it won't be a tremendous achievement," Giugale said.
"We are seeing a huge accumulation of people who are "around" the poverty level, just a bit above the poverty line," he said. "We call them 'vulnerable,' and it looks like we are going to be living in a world with many 'vulnerable' people."
The good news, Giugale argues, is that technology is making wonders to help fight poverty.
For the first time in history, we can identify the poor, and focus on each poor person's specific needs. Until recently, there were 400 million people in India who in many cases didn't even have birth certificates, and about 10 percent of the children in Latin America are not properly registered in national databases, he said.
Thanks to biometric eye-scanning technologies and other similar techniques, increasingly more governments can now devise tailor-made social policies. Instead of offering subsidized gasoline or free college education for all, as is done in many Latin American countries today, they can pinpoint exactly who needs subsidies, and who can pay. "Individualization is the name of the game," Giugale said.
My opinion: While some countries are falling behind because of populist leaders who are more interested in accumulating powers than in their people's well-being, there is no question that the world is better off than before.
The percentage of the world's population living in extreme poverty is falling - from 43 percent of the population in 1990 to 20 percent today, according to
Now, the big challenge will be to put more technology - which today is used mainly for the rich - at the service of the poor.
It would be great if more countries could follow Giugale's recommendation and use technologies to individualize the poor instead of subsidizing the rich.
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"Bill Gates Almost Right on World Poverty"