Bill Gates is perhaps better known as one of the richest men in the world and a great philanthropist, but what people often underestimate is his in-depth knowledge and understanding of just about any subject matter you can throw at him. Gates talks about aid, how his Foundation works, what we can learn from China and gives his insights into whether we should be worried about technology taking over our jobs.
We have seen a change in emphasis recently, with the G20, for example, focusing on their new ‘Marshall Plan’ and the UK’s DfID driving development through private sector engagement, while your Foundation puts an emphasis on overcoming the most basic of needs. Are you seeing a shift in priorities in terms of the aid agenda?
Well, the end goal is always to have economies develop. There are middle-income countries that are completely self-sufficient in that their tax collection is funding their health, education and other human development indices.
There are public goods that only the public sector can provide. I think the two biggest impacts that aid has had is that it has funded new tools – like vaccines or in agriculture; and two, it helps these governments build the delivery systems such as a good primary healthcare system. So, yes, you want to enable the private sector, a thriving private sector is far larger than the government.
In terms of the Foundation, though, do you see yourselves retaining focus on similar issues or areas as you have done over the past 15 years or so?
Yeah, we always fine tune it a little bit, but our biggest focus by far has been health, and will be health. Health for us also includes access to contraception and nutrition, as well as tackling the big infectious diseases.
The second biggest area for us is agriculture; but it is a lot smaller – about a sixth of the size of our health spending. Agriculture has been an exciting one for us and that’s where the boundary between the public sector and the private sector is a little more fluid than it is in health.
When you build a primary healthcare centre, there’s no return in terms of pure payment. Whereas in agriculture, you enable the smallholder to get higher yields, leading to cash crops that are super valuable.
Then we have a few smaller areas like financial services, water and sanitation where we are investing around over $100m a year. When polio is eradicated, we will be able to ship money out of polio into other activities. If we had infinite bandwidth and money, we’d also go into education infrastructure and justice – but we don’t.
I believe you credited your polio work in Nigeria as one of the reasons why Ebola didn’t spread there, while it did in those three other West African countries.
That’s absolutely right. With polio, the training is to map all the elements and group them together in what is known as the Emergency Operational Centre. You hire teams of people to go out in the community and find cases. You take those biological samples and learn what you can from them. So what you do with an epidemic outbreak, and what you do for polio eradication are absolutely one and the same.
Dr Faisal Shuaib, who was running the Emergency Operational Centre in the North of Nigeria, moved down south with his polio team to prevent the Ebola outbreak and we funded the programme. The beauty of the system is that even though the polio eradication programme has been ongoing since 1989, it was OK to interrupt it for two or three months to tackle Ebola.
So, it’s a great use of those people’s capacity. Through their skill and a little bit of luck, Nigeria, whose population is over six times the combined population of the three highly affected countries, had very few cases.
Before working in a particular country, do look at its governance history?
In terms of vaccines, we’re going to go everywhere. We’ll find partners to go to Somalia, DRC, CAR – name the place. Whereas for our agricultural work, we take cases where the government is organised enough for us to go in.
Some of what we do is global public good, like making sure a new vaccine gets invented – that benefits everyone. In fact, take sleeping sickness – human African trypanosomiasis, HAT. Most of the cases now are in DRC.
We have three new tools to fight it; a brilliant diagnostic; a brilliant drug, and a brilliant new trap for the fleas that spread it. We are working with NGOs, who are good at getting in there, including MSF [Doctors without Borders] and several others as well.
The single biggest country in the world that we spend money on is India. It has 1.3bn people but per person, we spend a lot less there than we do here in Africa. So, in terms of our delivery programmes, Africa constitutes well over half of what we do. It would be a lot larger than India if you took Africa as a whole. But, in terms of countries, Nigeria is the biggest in Africa, as you would expect. Overall, India, Nigeria, Ethiopia, would be the top three.
Africans want their leaders to deliver and not rely on aid, how do you perceive this?
I wish every election in Africa was about who can run the healthcare system best for everyone; who can run the agriculture system best for everyone. Indexes, such as the Ease of Doing Business Index, or the Corruption Perception Index, don’t always immediately cause change but they help a lot. We do report cards on primary healthcare systems called the Primary Health Care Performance Initiative (PHCPI).
We also work with the African Union to do report cards on agriculture, which is part of their Comprehensive Africa Agriculture Development Programme (CAADP) process. So ranking tables help a politician who may not know the domain.
Some people fear that the Gates Foundation might be a Trojan horse for big US agro and GMO crops? How would you respond?
The debate in Africa now is really not about the private sector at all, it’s about publicly-funded seeds that happen to use GMO-type techniques to create disease resistance, to improve productivity and use less water. There are some traits, like Bt, that were invented so long ago they are in the public domain now; all the intellectual property related to them is more than 20 years old, so it’s all public domain stuff.
There are public crops like maize that Kenya and Tanzania could use that substantially raise maize productivity. There are cassava constructs that avoid diseases that are a huge problem; there are banana constructs that put vitamins, micro-nutrients, including iron and vitamin A actually into the banana as a natural part, and there’s a form of rice that has vitamin A fortifications, called Golden Rice.
It is not necessary to go into the private sector aspect at all to ask whether or not African countries will decide to take advantage of public domain crops that have used the latest science, so that their farmers can feed their people better and have more output. That to me, is pretty obvious but it’s going to be their decision. It’s going to be the scientists in the country who look at whatever certain Europeans say, whatever certain Americans say, wherever they want to gather evidence.
There have been some large-scale experiments, like feeding Americans GMO foods for 20 years, and there’s been zero negative effects. But these are sovereign decisions in the end; it’s not about the private sector. It’s a bit strange for anybody to think we have ulterior motives in giving away tens of billions of dollars! I’m sorry, but there’s no ulterior motive you could ever have relative to Africa that would enable you to recoup that money. So, it can’t be the case. If we’re crazy, it must be for some other reason than pure greed.
Shouldn’t the Gates Foundation invest in a medical research centre of global excellence, so we can produce these medicines in Africa?
Well, why don’t you make all your cars in Africa? And all your tractors in Africa? There are things that can be made in Africa – in fact, we’re funding a new factory for livestock vaccines in Ethiopia and we think that would make sense in several other places in Africa.
Some products are very scale economics and you need gigantic factories. So, most of the vaccines bought by Gavi [an international organisation dedicated to increasing access to immunisation for children in poor countries], are made in India in huge global supply batteries. If you decided to replicate that, the price of the vaccines would be much higher and you could save less lives. You have to decide is it a job creation thing or is it really trying to save those lives?
You have often cited Gavi as a great success. Can you talk us through how Gavi works and the business model behind it to make vaccines available and affordable?
Well, it’s fairly straightforward. The poorest countries should not have to contribute to the R&D costs of the vaccines they buy. So, they should get these essentially, at cost of goods (COGS), or marginal-cost type pricing. If there is a vaccine, like the malaria vaccine, that only the developing world needs, hopefully, donor governments and foundations will fund that research and have the expertise on how to manage that type of research.
When it comes to actually buying the vaccines, to get them out to the kids, they shouldn’t have to pay back to the R&D. But even the COGS-based price for new vaccines, like parvovirus, pneumococcus, are so high that they weren’t going to be introduced into African countries without donor funding.
So, they negotiated with pharma to be able to get these vaccines at the COGS price. But even so, the developing countries, the 73 Gavi-eligible countries, were only asked to pay in 25 cents, [per dose] instead – for the most expensive of these vaccines, pneumococcus – about $3 per dose. Rotavirus HPB which is just being rolled out right now, is around $2.50.
And that’s where donors and philanthropy comes in for the rest of the cost?
Yes, all the rest is funded, paid for by Gavi. This includes ourselves, the UK, Norway, Germany, France and the US – it’s a good group. We contribute 20%; the UK is actually the biggest, we’re the second biggest and the US is the third biggest.
Generally, pharma doesn’t have enough capacity to make this break-even stuff. So, we have to make volume commitments to pharma to get the price down. Pentavalent’s a great example; when we first worked with pharma on that, it cost around $3 a dose. Now it’s less than a dollar a dose. And there’s a tendency that manufacturing shifts over time from the original inventors – Pfizer and GSK – to developing country vaccine manufacturers, the biggest of which is the Serum Institute of India.
So yeah, we’ve got the price of that down dramatically. And the health benefits of those vaccines are really dramatic. You’re saving lives for less than a dollar and you’re saving a lot of morbidity. It’s the best buy there is in health. Thank goodness that in health, the first 10% gets you the first 80% of benefit. If it were linear, then health in Africa wouldn’t be affordable but as it is, we can go after these big diseases.
How do you measure innovation? By the number of patents?
I agree it’s hard to express this in numbers. But in terms of biological and digital innovation, the US is so far ahead. It’s great for the world because these innovative products are often very cheap and therefore you don’t have to wait a generation before they become beneficial to the developing world.
Both in biology and digital, the US in terms of company size, patents, number of people working, quality of universities – any metric would show a dramatic gap. However, if you extrapolate the Chinese improvement over maybe a 15-year period, then they start to get into that league.
What are your views in terms of industrialisation from an African perspective, especially as there is an argument that in future, robots will take over industry-oriented jobs?
This is the “Will there be jobs in the future?” question. And the answer is that the tools of efficiency, which we’ve always had, things like tractors, are developing at a faster pace today than ever and now we call it robotics.
It is a qualitative change in terms of how intelligent the devices will be but we still live in a world of shortage. If you ask do we have enough food, or enough healthcare workers or enough people to do operations, or to take care of handicapped children, the answer is no. Even in the US, we want our class sizes to be smaller; we want more people to reach out to old people. So, we are not yet in the age of excess, where you say, “Jesus, what the heck should everybody do?” We still need skills and contributions.
Africa, of course, is in the world of incredible shortage, where you only have so many good professors; so many good doctors; so many good people who understand how to start businesses and so on. Way off in the future, the robotics will take things over.
It does mean the nature of the job market will be shifting somewhat. So, the peak jobs in manufacturing in an economy like the UK, during the industrial revolution, got to 50%. In China, it got up to 30%. And it will never get up to 30% in any large-sized economy again because manufacturing is so efficient.
Chinese manufacturing automation has destroyed jobs. There are less jobs in China today, even if you add back in all the ones that went to Vietnam and Indonesia and the very, very few that went to Africa, unfortunately. So, manufacturing, as a specific slice of the job market, will be less.
Nevertheless, there is still enough there for some African countries to try and take labour input into exports and see if they can’t add value that way. It is the classic Taiwan, Korea, China, paradigm. There’s a book, How Asia Works, that I’ve given to some African leaders.
Ethiopia, you could say, is on a China, Vietnam-type model, where you improve agricultural productivity, you take that extra labour, you try to put it into manufacturing – ideally, for export manufacturing – and that’s how you move your way up to be middle income. Then you have to have really good education, really good logistics to the seaport and some degree of scale. So, the continued technical innovation will change the nature of jobs and it won’t make the manufacturing cycle that big.
But in Africa, the need for jobs, for teachers, for business experts, is going to way exceed supply over the next two generations, despite the best advances that AI can throw at us. Another aspect of manufacturing is energy, something that you’ve invested in alongside other philanthropists and business leaders.
We need a source of energy that’s cheap and green and 24 hours a day and we don’t have it today. And Africa’s a great example of that, where the amount of electricity per person in Sub-Saharan Africa has actually gone down over the last 20 years. The population growth has been greater than the availability of electricity.
But you’re not seeing major developments in the energy sector?
Well, there will be breakthroughs, scientific breakthroughs. I have a nuclear power company called TerraPower that’s working with the Chinese; and I have a fund called the Breakthrough Energy Venture Fund that’s funding a lot of the stages.
These are at an early enough stage that it will probably be 10 years before we know which of these innovations really works. In the meantime, car batteries will get cheaper, solar energy will get cheaper, but we need either storage for the solar energy or we need some other large source, like nuclear fission in order to really get that tri-factor of cheap, green and reliable.