The North-South Institute



Buffett’s gift shines light on charity vs. rights

July 6, 2006


The Toronto Star

Warren Buffett’s recent donation of $31 billion to the Bill and Melinda Gates Foundation has fed many hopes and expectations. How are we to regard the creation by these extremely rich families of the world’s largest foundation, with resources of more than $62 billion at their disposal?

On one level, their philanthropy must, of course, be warmly welcomed. Much of the proceeds will help in fighting HIV/AIDS, tuberculosis, and malaria in the world’s poorest countries. A number of other worthwhile causes will undoubtedly be supported for the downtrodden and dispossessed.

On another level, however, this display of generosity raises some serious questions about the way we think about issues such as altruism vs. public action, and charity vs. human rights.

  • First, private altruism by the rich does not get governments off the hook. Rich countries like Canada have scandalously resisted reaching the aid target of 0.7 per cent of gross national income. Even though aid levels in rich countries have risen significantly in the past two years, they are still less than 0.3 per cent of GNI and are unlikely to reach even 0.35 per cent by 2010.

Furthermore, even though aid levels have reached almost $100 billion, expenditure on arms now exceeds 10 times that amount. Where is our sense of priorities?

  • Second, in any case, for the poorest countries and the poorest people in any country, escaping poverty is not a matter for charity and altruism. It is an issue of social justice. To live free of hunger, want and fear is the human right of all individuals. It is not something that should be left to the generosity of some wealthy individuals.

Rich countries’ governments should precisely be doing more not out of charity, but from a sense of international obligation toward a more decent and socially just world.

  • Third, foreign aid, whether provided by governments or private charities, will not resolve growing world inequalities. Instead, it is time to revisit the economic policies of the past two decades urged upon countries by the International Monetary Fund and the World Bank.

“Market-friendly” policies of liberalization, deregulation, privatization — all globalization — have tended to favour the rich, leaving most of the poor behind. Economic policies have effectively disempowered the poor, whose best hopes are increasingly pinned to the possibility of moving to places where they may earn higher incomes.

  • Fourth, poor countries should do much more to mobilize their own resources and reduce chronic dependence on foreign donors and borrowing.

The rapid growth and poverty reduction in Asian countries, including now China and India, spring from their own efforts rather than foreign aid or foreign borrowing.

Indeed, some East Asian countries learned a nasty lesson during the 1990s when they overindulged in short-term foreign borrowing, plunging them into a deep but short-lived debt crisis. Moreover, relying more on their own resources has enabled the Asian countries to follow policies that worked better for them, rather than the dictates of foreign donors or creditors.

Many countries in sub-Saharan Africa, on the other hand, are overwhelmingly dependent on foreign aid, and also on the wishes and priorities of the donors. Although usually well-intentioned, donors typically assume they know what is best. But history shows they often make mistakes or bad choices, the consequences of which are borne by the recipient population. Neither private altruism nor foreign aid, no matter how generous or effective, will resolve deep-seated problems of the world’s increasing inequality.

We must not relegate such issues to charity. Rather, our actions must be based on the human rights of the poor and disempowered to a life of dignity, free of deprivation.

We can begin by challenging the “market-friendly” policies propagated by the IMF and World Bank. Instead we should encourage economic policies that directly benefit the poor.

Finally, poor countries and communities should increase their own resource mobilization efforts, underpinning made-at-home development strategies, rather than perpetuating their dependence on external assistance.