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G20: The buzz about Bill

Question one:  What’s getting the biggest buzz around the G20 leaders’ summit this week?  
Answer: OK, its Greek debt. But next in line is the presentation on development finance from Bill Gates.

In the midst of much doom and gloom about the world economy, Gates says that much progress has been made in tackling global poverty, malnutrition and child mortality. He urges G20 leaders to continue to keep their promises to support development despite domestic challenges, suggesting that a tax on financial transactions – the so-called Tobin tax – could raise an additional $48 billion per year to ensure that countries deliver on their aid commitments.

Question two: What’s the single word that best captures Gates’ thinking on development?
Answer: Innovation.

Gates believes that we simply haven’t recognised the power of innovation, nor the need for it. The increase in agricultural yields caused by new rice varieties and the increase in the life expectancy of many due to new vaccines are some examples of the transformative power of innovation. But Gates also thinks it is the solution to longer-term challenges such as climate change. Yes, we can get to where we need to get to in 2020 with existing technologies – i.e. a reduction of 20% in CO2 emissions – but the ONLY way we can get to 2050, when we need a reduction of 80%, is through doing things totally differently, through innovation. Gates urges the group of the world’s biggest nations to use the power of innovation to ‘shift the trajectory of development’.

Question three:  What sort of delivery mechanism is most likely to succeed?  Answer: Innovative partnerships – and in particular, according to Gates, triangular partnerships.

Developing new seeds or vaccines and getting these to the people who desperately need them requires new ways of working together. The time when development assistance was a one-way stream from North to South is behind us. Knowledge is generated and shared through a new architecture where innovative partnerships between international and domestic actors play a critical role.

Gates sees particular potential in strengthening triangular partnerships between rapidly growing economies (e.g. China, Brazil, India), traditional donors and low-income countries, highlighting complementary expertise that nations in different stages of development can bring.  He emphasises the role of the private sector as a critical source of innovation as well as finance for development. And he calls on the G20 nations to help mobilise alternative pools of finance (such as sovereign wealth funds and diaspora capital) and create environments conducive to entrepreneurial innovation and engagement in development challenges.

This all resonates well with the key conclusions of an ongoing ODI research project on Development Progress (supported, coincidentally, by the Gates Foundation). Evidence from 24 countries shows strong progress in various sectors of development across the world.

We find four hallmarks of success:

  1. Smart leadership: Effective leaders create space for innovation and experimentation and allow for creativity to emerge at all levels of society, including the grassroots.
  2. Smart policies: Policies that facilitate rather than control economic activity (and yes, innovation) work best.  And the way policies emerge is almost as important as what they contain. Policies based on consultation and experimentation are often the most successful.
  3. Smart delivery: Effective delivery moves closer to the people and focuses on results. In some countries innovative financing of health service delivery has been critical to producing better outcomes.
  4. Smart friends: Progress is strongest when partnerships are anchored in solid national and sectoral strategies, owned by developing countries. These partnerships are about much more than just aid and include the transfer of knowledge and ideas. They include an ever growing and diverse set of actors, private or public, and often work best in a triangular relationship, including South-South support.

Gates’ call to action comes at an opportune time, because in just three weeks 5,000 people will head to Busan for the High Level Forum on Aid Effectiveness. Delegates need to digest his message, and have open minds and more flexible approaches to meeting their aid pledges as they seek to become smarter friends of development. 

Liesbet Steer is a Senior Research Associate at ODI and project leader for the Development Progress Studies (www.developmentprogress.org), which is funded by the Bill & Melinda Gates Foundation.