Posted by: John Elliott | March 27, 2011

Gates and Buffett show rich Indians how to help the poor

It’s easy to be cynical about people like Bill Gates and Warren Buffett doling out millions and even billions of dollars to poor and needy communities world-wide, having made their fortunes working the world markets – one in information technology and the other in finance. It’s also easy to be cynical about Indian businessmen lining up, as they have done in these past few days, at the Gates’ and Buffett’s beckoning, to consider doling out some of their sometimes ill-gotten gains for good works.

Gates and his wife Melinda have been in India this past week, along with Buffett who amazingly was visiting for the first time. They toured health projects (below) that they are funding in Bihar, India’s poorest state which has very high maternal mortality rates, and then met about 70 top industrialists from family companies to advocate philanthropy and discuss the sort of “giving pledges” that they encourage in the US.

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The founder of Microsoft, and the world’s second richest man, Gates has set up the $37bn Bill and Melinda Gates Foundation with his wife to focus primarily on health care and on other development issues such as education. Buffett, 80, the third richest and probably the world’s most famous financial investor through his $200bn Berkshire Hathaway group, pledged in 2006 to give 99% of his shares and wealth to charitable causes. Much of that has gone to the Gates Foundation. Out of $17.5bn donations that the foundation has made so far, $1.25bn has come to India with $800m going to Bihar.

Apart from Tata, India’s biggest group, which is majority-owned by charitable trusts, and one or two other smaller examples, India’s wealthy old-style business families have traditionally built prestigious temples and sometimes schools, often in their home towns, but little else.

The new mega-rich, who have emerged in information technology, real estate and elsewhere since the economy opened up 20 years ago, have not yet grasped the idea of giving outside their own geographical areas or business sectors, though some have made high profile donations to their universities (notably Harvard and Yale). Several talk about wanting to create wealth first for themselves and their families. The mostsignificant exception is Azim Premji of the Wipro IT group, who in 2010 made a $2bn donation for education and social projects that possibly reflected the charitable traditions of his Ismaili Muslim faith.

In addition to Premji, the 70 industrialists at the Gates-Buffett meeting included the heads of top family-controlled businesses such as the suddenly-rich and amazingly-expanding GMR airport and infrastructure company that announced Rs1,540 crore ($340m) a few days ago for an in-house charity, real estate developer DLF, Bajaj (two wheelers), Godrej (diversified manufacturing), Bharat Forge (engineering), HCL (software), and Dabur (pharmaceuticals).

Bill and Melinda Gates with Azim Premji (centre left) and Warren Buffett in Delhi

This has started a new debate. Ajay Piramal, who runs a large pharmaceuticals group, thought the event set an example and encouraged discussion. “People are looking for role models,” he said in Mumbai’s DNA newspaper. “Now I’ve started talking about the [charitable] work we do, which I haven’t really done earlier”.

Most important in all this, I guess, is the motivation of the ‘givers’, and how effectively their money is used. I’ve heard how the Gates Foundation reflects its huge wealth by being top heavy, over-staffed, bureaucratic and dominated by its US-headquarters, and by paying US-level salaries that disturb developing countries’ pay structures.

There are even allegations, partly stemming from advocacy of genetically modified seeds, that the Gates have wider business oriented motives – “Monsanto in Gates clothing” as a US lobbyist puts it. Critics say the foundation has been unsympathetic to local problems, such as overcoming the rural poor’s instinctive resistance to vaccines, assuming that they react to philanthropic funds in the same ordered way that big companies react to investment. Much of that was certainly true when the Gates couple began their work 12-15 years ago, and some is still valid as the ranks of support staff have shown this week.

But on Tuesday afternoon I listened to Melinda Gates, first in a rural health seminar and then in a ten-minute one-on-one interview, and I came away with my scepticism giving way to a realisation that she and her husband really are helping to stimulate change in India and elsewhere. I asked her about head office domination, and she demurely replied that “Bill and I do make all the decisions,” but added “we are taking a lot more input than we used to”. I think that meant listening more and delegating some authority – the India office is to include health experts as well as policy and administrative staff.

I asked how, given their world-wide focus, they choose where to go with funds, and what to do – and why they came to in India with its buoyant economy, 8-9% growth and massive corruption.

India was an obvious place I was told because half the 1.2bn population is extremely poor, because of a crying need for better health care, and because of technological expertise in producing low cost health products such as vaccines. The aim, working with government agencies and other organisations, is to “do things that society has a hard time doing” and acting as a “catalytic wedge where governments can’t or won’t experiment”.

Asking for an example, I was surprised by the simple answer: “You won’t see a government trying for 18 months to teach women not to let their babies get cold”, which the foundation has done. That is the beginning of the focus on “everyone’s right to a healthy and full life”; helping babies in the poorest areas survive the first 30 days of their life by being warm – and vaccinated.

The foundation began in India with a $338m HIV prevention campaign, which is now being handed over to the government having achieved some success with a decrease in the rates of sexually transmitted diseases among those most at risk. There has also been work on polio eradication that has contributed to a dramatic drop in new cases, and there are plans for a diarrhoea oral vaccine for children. In Bihar, the foundation has been particularly successful because of co-operation from the state government, which in the past six years has been turning round decades of economic and social decline. The target is to cut mortality rates for mothers and children under five by 40% by 2014.

One has to respect the Gates for devoting this part of their lives to making life better for the world’s poorest and most deprived. It does not cost them anything of course because, as Buffett said, handing over largesse “has not changed my life in any shape or form“ – he was “giving away something that has no value to me but has value to other people”. Also, Berkshire Hathaway did not lose anything either when his shares were transferred to charitable foundations.

Buffett also had an instant answer when asked about the ethics of India’s hordes of black money being given to charities: “A child receiving a vaccine is not going to question the source of the money”. Premji whimsically thought that some people “might want to give away unofficial money”.

Whatever the source, the poor are definitely benefiting, and the Gates’s-Buffett combine is driving change in places like Bihar as well as Africa and elsewhere. Let’s hope the Indian businessmen who have enjoyed parading in their philanthropic shadow this week ensure their money reaches places that need it.


Responses

  1. There are many Indians in India and abroad who have helped the society. Of course that’s unlike Bill Gates because the way in they have helped the society no one ever will. Dr P Mohamed Ali also has done a lot towards the society http://bit.ly/1u8CZcO and for this people have offered him immense support http://bit.ly/17piUIN

  2. A shorter version of this post is on The Independent newspaper’s Foreign Desk blog page at http://blogs.independent.co.uk/2011/03/27/gates-and-buffett-show-rich-indians-how-to-help-the-poor/– Comments there include the following – and there are more below:

    K.V. Sadasivan

    • Gates and Buffet are dangerous Globalists who came[the former does more often] to India to influence the Government at the Centre and those at the States.Gates who had openly suggested that vaccination can be used for DEPOPULATION, is having his “Foundation” to use vaccination to Depopulate and other concoctions made by the Pharma Cos in whose shares he and Buffet have invested to sterilize Indians,under the pretext of Healthcare.

    During this visit Buffet demanded that the Indian Insurance sector be opened up,as he has started selling policies of an Indian Co.

    After their visit, India softened up to Monsanto’s intense pressure, by allowing 100% FDI in the Farm Sector.A Bill regarding seeds is modified so that Monsanto can claim patents on Indian seeds grown for Millennia.

    Some philanthropists showing the UPA Government in India what they SHOULD do for the US MNCs!!!
    Please google for:-“Bill And Melinda Gates Foundation depopulation vaccines vaccination sterilization healthcare globalists Pharma shares Merck”.

    Azim Premji and some Rothschilds Globalist Indian Oligarchs have started Foundations for charity in Education.This is a mere copycat of Carnegie and Rockefeller and how they controlled the US Education,and Children and usurped the power of the US Government,starting from the beginning of the 20th Century.Please google for “Outcome-based education”.[this is used to convert the Children the future Citizens of a Nation into COLLECTIVIST zombies]

    RajX

    When talking about Premjis donation, the author attributes his generosity to the “charitable traditions of his Ismaili Muslim faith”. Is the author implying that Hinduism, the faith of the majority in India, does not have any “charitable traditions”? If so, he is attributing religious/cultural reasons for the lack of big giving among Indian business elite. It sounds similar to the “Hindu growth rate” theory which was used to explain the lack of economic growth in India when the country was protectionist. Maybe Mr.Elliot didn’t mean it that way but it sounds like that.

    What Gates and Buffet are doing has admirably substance and i also hope that Indian money bags as well as money bags all over the world emulate them. I am sure there will be a lot of money left over for giving developmental aid even after they setup substantial trust funds for their kids.

  3. Jimmo….

    Shoot! I didn’t know we could look to Oscar Wilde for solutions to poverty. Nevertheless he was a great literary figure and nothing you say will make me change my mind about that.

    Yikes! Reaganomics is alive!!! Sorry I meant backdoor Reaganomics.

    It would be great if the Gates’, Buffets’ and others giving could be measured in terms of systemic benefits i.e. healthcare to critical populations, literacy and education etc. If these were the measure of such spending rather than purely the dollar figures I think we would do better by any standard. Because with basic healthcare, literacy and education we can expect that at least some beneficiaries of such giving will make gains in skills, employability and to think for themselves.

    Hate to be philosophical about it, but some of the comments above are begging for it… there is never any good which is purely good, some flaw will always inhere to it to the good and vice versa. I am sorry but that doesn’t mean we throw the baby out with the bath water!

    As for Biswajit’s comment, it’s better to have more Posco shareholders in India if it means less poverty and more opportunity. Let the Posco beneficiaries or their children figure things out for themselves. Melinda and Bill figured it out for themselves, notwithstanding the cynics cavilling at them and I hope they continue to do so.

  4. Cure caste, corruption and develop a national language whereby every person can understand when the prime minister speaks or important information need to conveyed to the public

  5. A shorter version of this post is on The Independent newspaper’s Foreign Desk blog page at http://blogs.independent.co.uk/2011/03/27/gates-and-buffett-show-rich-indians-how-to-help-the-poor/– Comments there include:

    cjanderson0

    • Sometimes paying for the right people, good people, makes you a lot more effective as a deliverer of foreign aid. God knows how many hundreds of millions of dollars have been wasted in the past due to poor organization. How much better would government be if historically it had paid competetive prices to secure the elite intellectuals of the time for public service?

    Oscar Weird

    • ‘A rich man can no more get into heaven than a camel through the eye of a needle.’ It’s nice to see them trying, though.

    Weeble13

    • its their ‘karma’ :~

    srcgreen01

    • While I applaud both Warren Buffet’s and Bill Gates’s intentions, the dynamics of charitable giving are very different in India and in the west. There are any number of Indians who run charitable hospitals, clinics, schools, who get wells dug in villages and provide water for thirsty pilgrims in temple towns, etc. The thing is that drawing attention to one’s charitableness is considered showing off in Indian culture, so whatever people do, they do quietly. Many ordinary middle class people take care of their servants’ children’s education without feeling overly pious about it or writing up their deed on Facebook. Indian media is used to this domestic cultural trait of not tooting your own trumpet. However, the western media expects its philanthropists to talk about themselves and their work, and when western reporters find silence or reticence, they think that charity doesn’t exist and that western role models need to be “brought in” as examples.

    Second, there are certain areas where the state is expected to provide services – such as education. For all their flaws and uneven reach, state-provided curricula and schools are far preferable to the uncertain ebbs and flows of charitable organizations, not to mention the chaotic diversity they bring to standards. Charity must supplement governmental work here and not become a mindless opponent, a fifth columnist, if you will, for corporate interests looking to dismantle government regulation and control. We all have seen how well deregulation played out with the finance sector in the United States. With all these caveats in mind, I welcome Buffet’s entry into the charity sector in India.

    FirstAdvisor

    • This kind of strategy can work in China, where some of the wealthy still do have a social conscience. The idea of trying the technique in India, where no Indian cares about anything but himself, is hilariously funny. Gates and Buffet are obviously just going through the motions, to avoid hurting any Indian feelings after their trip to China. After all, half the people at Davos every year are Indian or Chinese now, and the Indians will come up to you and another man while you’re in the middle of a conversation, trying to close a deal. Only the gods know how they would act if they were trying to be rude.

    Nikhil Shenai in reply to FirstAdvisor
    • Have you met all 1 billion Indians then?

    You should read srcgreen01’s post, then you might see that the Indians who get on with things will not make a splash and offend your tender sensibilities. You gonna be ok?

    James Duffy

    • At least you mentioned ‘There are even allegations, partly stemming from advocacy of genetically modified seeds, that the Gates have wider business oriented motives – “Monsanto in Gates clothing” as a US lobbyist puts it’ – there are plenty of other suspicions regarding the behaviour of the B and M foundation, would you care to include them in your story just to balance it off a little…

    Weeble13

    • Emergency food/medical programme for street starving?
    • Permaculture program for rural and city eco sound development?
    • ..the second programme might be tricky for billionaries who made their money screwing mother earth :~

    johnbarrettrose

    • I have always loved the anecdote about John D. Rockefeller being approached by a new millionaire who began telling the famous one about what he had done to make his million bucks (an enormous sum in those far off days). Rockefeller bore the diatribe with patience until the new one began to explain how he would make his second million bucks, when John D. said, “Listen Sir, you’re rich now; so why not do something useful with your life?”

    Weeble13

    • If you go there and see people rotting on the street, railway stations, you see manic free enterprise development gone mad displacing indigenous people…if you have any humanity you will get water and feed the starving and ill elder on the street. I did that having made a couple of hundred thousands cash…which was huge wealth compared to what i had before. If I had billions I would do what I suggest above…assuming I didn’t go totally insane/evil in the process of making it :~
    Bles.

    Endgames

    • All this charity give-aways in India etc are a good thing, but reading between the lines this is all ultimately to big businesses advantage, healthy citizens= healthy workers = More money for their big profits.

    Why does’nt gates do something over here the in the UK like donate a couple of billion bucks towards helping Youth unemployed through vocational academic scholarships etc……but no it’s never going to happen is it, it’s just that ultimately him and all his other billionaire friends think that the West is history.

    johnbarrettrose in reply to Endgames

    • He has helped out in Britain and STILL you’re standing with your hands out.
    • Flag

    Endgames in reply to johnbarrettrose

    • WHEN ?

    johnbarrettrose in reply to Endgames
    • Now. Bill & Melinda Gates Foundation UK

    Endgames in reply to johnbarrettrose

    • You seem to be a big bill gates fan, are you on his payroll as his personal PR man in the UK.?

    John Elliott

    • Hi Jimmo – “this Elliot fellow”, as you put it, is writing from India, having lived here many years, in case you think I’m giving a jaundiced UK-based view. See ‘About this Blog’ on http://ridingtheelephant.wordp… for details. To make that clearer, I’ve added a Delhi dateline.

    Jimmo

    • What is it with this Elliot fellow and India? Let me remind him of Oscar Wilde’s sentiment on the not so long ago spectacle of charity in Victorian England:

    “The majority of people spoil their lives by an unhealthy and exaggerated altruism – are forced, indeed, so to spoil them. They find themselves surrounded by hideous poverty, by hideous ugliness, by hideous starvation. It is inevitable that they should be strongly moved by all this. The emotions of man are stirred more quickly than man’s intelligence; and, as I pointed out some time ago in an article on the function of criticism, it is much more easy to have sympathy with suffering than it is to have sympathy with thought. Accordingly, with admirable, though misdirected intentions, they very seriously and very sentimentally set themselves to the task of remedying the evils that they see. But their remedies do not cure the disease: they merely prolong it. Indeed, their remedies are part of the disease.

    They try to solve the problem of poverty, for instance, by keeping the poor alive; or, in the case of a very advanced school, by amusing the poor.

    But this is not a solution: it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible. And the altruistic virtues have really prevented the carrying out of this aim. Just as the worst slave-owners were those who were kind to their slaves, and so prevented the horror of the system being realised by those who suffered from it, and understood by those who contemplated it, so, in the present state of things in England, the people who do most harm are the people who try to do most good; and at last we have had the spectacle of men who have really studied the problem and know the life – educated men who live in the East End – coming forward and imploring the community to restrain its altruistic impulses of charity, benevolence, and the like. They do so on the ground that such charity degrades and demoralises. They are perfectly right. Charity creates a multitude of sins.”

    Let’s not forget that Britain’s good fortunes (and that of Europe generally) owe much to the securing of vast resourced colonial frontiers. India in contrast, will have to find its own particular road to economic security bedevilled as it is in the NW with America’s own problems in Afghanistan and Pakistan as well as it’s own internal devils of post Cold War Islamic extremism. To suggest that charity, Western style, which has never existed as we find with Wilde’s early sentiments, will somehow uplift this very challenged venture is possibly stupid enough to warrant the writer going off and redoing his homework.

  6. They have answered rightly to not the big mouth Indian riches but also to BBC and many other media of the rich countries what is needed to be done.Simply writing about poor or filming them in Mumbai wont change a single life,they better should check their inner soul while writing did they made any change or just showed someone low mada them happy.If they cant change a life then they should not or more correctly they dont have the right to say that India is doing so much for CWG while people in Mumbai are homeless or living in misery.It sounds like riding a SUV and talking about global warming.

  7. Warren Buffet is supposed to hold 5 % of Posco shares . He is the largest single shareholder outside of Korea. He will be doing a great service if he asks his company to be a responsible investor. They should not set up the steel plant by displacing people and disrupting their smooth agrarian lives .

    All his charity will be offset by the activites of Posco!


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