NOTE: Michael Edwards is a former Ford Foundation director.
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Why business won't save the world
Michael Edwards
The Guardian, 28 February 2010
http://www.guardian.co.uk/commentisfree/cifamerica/2010/feb/26/philanthropy-international-aid-and-development

*It's time to pour the generosity of 'philanthro-capitalists' into development funds under democratic control

Bill and Melinda Gates have been rightly praised for donating another $10bn for vaccine development and immunisation in poor countries earlier this month. Much less attention has been paid to their advocacy of genetically modified foods at the recent World Economic Forum in Davos as part of a second "green revolution" in Africa, criticised by many as unnecessarily risky for farmers though highly-profitable for corporations like Monsanto.

Yet more and more foreign aid is coming from private donors like these, often with a background in business that demands more control and short-term returns on investment. What should be done with the "philanthro-capitalists", who have sincere intentions but no public accountability for the choices that they make, choices that affect the lives of millions?

In a world desperate for resources it makes no sense to reject billions of dollars in new money, but serious questions are raised by privatising the search for solutions to global problems. For one thing, who decides which problems get attention? Investing in new vaccines against malaria is great, but there's no vaccine against poverty, inequality, violence or corruption, areas in which there are no "short-term returns on investment", only a long, hard slog through politics and social change. Does that mean only the easiest causes will be funded?

Research from the Centre for Global Development in Washington DC already shows that national health systems in Africa have been damaged by too much of a focus on getting drugs to people with HIV - a vital problem that's for sure, but not one that should monopolise foreign aid. As history shows, the path to real development lies through building strong local institutions broad-based capacities for innovation, not innovative projects that can never be sustained.

The philanthro-capitalists' desire for data and control also directs the lion's share of resources to the biggest and most accessible NGOs that can absorb large amounts of foreign funding, not the social movements that can pressure their own governments to perform in the public interest and mobilise large numbers of people to defend their rights.

Even more troubling, corporate philanthropy deflects attention away from the need to change core business practices so that developing countries can capture more of the value added by economic development removing patent protection from Monsanto and other companies, for example, who aim to monopolise the market for new seeds, or plugging the tax hole left by corporate tax avoidance that costs the South almost $400bn a year in lost income, far more than they receive in foreign aid.

Allocating resources is always full of trade-offs and contradictions, but resolving them shouldn't be ceded to outside technocrats or the whims of billionaires. It's time to pour the generosity of the rich and famous into national development funds under democratic control, supplemented by international taxes on bank profits and currency transactions. Accountability, not accountancy, is the way forward for foreign aid.

Ӣ Small Change: Why business won't save the world is published by Berrett Koehler
http://www.bkconnection.com/ProdDetails.asp?ID=9781605093772