Tag Archives: Bill Gates

Finally, Something We Can Agree on with Bill Gates!

Peruvian workers and activist protest against the 2015 IMF/World Bank Annual Meetings in Lima, Peru, Oct 9, 2015.

Peruvian workers and activist protest against the 2015 IMF/World Bank Annual Meetings in Lima, Peru, Oct 9, 2015.

New Orleans   There’s an old saying that the sun shines on an old dog’s, how shall I say this, hind quarters, eventually, and that’s about how often we agree wholeheartedly with mega-billionaire Bill Gates, but when it does shine on his rear end, we should all have the grace to acknowledge it.

While we’re just trying to make it to the weekend, Gates laid out his weekend plans to the Wall Street Journal where he is attending the spring meetings of the World Bank Group and the International Monetary Fund. Yes, I know, I’d rather join you on a worm dig as well, and believe me, we’re definitely not invited. But, on this rare occasion Gates is publicly arguing a position that ACORN International and I have advocated for years, including in the Social Policy Press book I edited, Global Grassroots, so instead of having to cringe at Gates and his foundation’s unending efforts to break teacher unions, promote charter schools, and redirect all health aid to a few diseases rather than generally, we are totally on the same page.

The issue may seem narrow, but it actually involves whether or not billions of dollars in foreign aid can be given to countries that desperately need the money to advance health, education, and opportunity to poor families living in precarious positions. The problem is that the World Bank and the IMF, creatures from the last century, classify countries based on average income in determining whether they are poor or middle-income, and it matters. Several years ago in Gatineau, Canada we met with the well-respected Canadian International Development Agency (CIDA) seeking support for the work ACORN was doing in mega-slums in various countries in Latin America. The program officers could not have been nicer or more supportive, but they were clear with us that the standards followed by the conservative government at the time mandated that any new allocations of CIDA support could only occur in countries that the IMF and World Bank classified as poor. In Latin America that mean that only Nicaragua and Bolivia were eligible. La Matanza outside of Buenos Aires, San Juan de Lurigancho in Lima, and the Neza outside of Mexico City were three of the ten largest slums in the world, but Argentina, Peru, and Mexico were all classified as middle-income countries, so we were out of luck.

Gates correctly makes the point that, “Today, more than 70% of the world’s poorest people – those living on less than $1.90 per day – live in countries defined as middle income, according to the World Bank.” How absurd! He also references another study that, “Countries with huge pockets of poverty like Nigeria, India, Pakistan, Ghana and Vietnam could lose as much as 40% of their development assistance in the next few years….,” all because of this out of date classification system and its deadly consequences.

Of course now that he’s more of a politician than a philanthropist, he throws out some red meat for the conservatives about how we can make these countries better at collecting taxes, which seems a little like trying to get water out of a stone, but, whatever, he’s right that the IMF and World Bank – and all of the countries griping the purse strings – need to get with the 21st century and get over their post-World War II thinking about countries and look at what is really has to be done to reduce poverty, rather than some bright light test that fails to help the poor. They may not have been willing to listen to us, but Gates’ voice needs to be heard, and they might just listen to him, and that would be a good thing for a change.


Will Private-Public Partnerships Lead to Fewer Families Unbanked?

Screen Shot 2015-12-07 at 10.09.22 AMNew Orleans    Jacob Lew, the US Treasure Secretary, standing with his partners, including Bill Gates representing the Gates Foundation, announced a public-private partnership that would include Treasury, Gates, JP Morgan Chase, PayPal, and others in trying to bring financial services to the “unbanked.” Lew indicated that globally 2 billion people relied on cash and that 20% of US households “continue to use alternatives like check cashers or auto title loans.” Although specifics were hard to find, he trumpeted ten initiatives to attack this problem.  Highlighted according to the story in  The New York Times would be a public-private partnership emphasizing the bringing basic banking services to the Mississippi Delta region, which has long trailed the country in access to financial services.

If this seems like puff and spin and been there, done that, it may be because this is not the Treasury Department’s first time in this rodeo. The real question might be what will be different this time to prevent the failures of the past.

The Treasury Department also launched a similar pilot program in 2008 and 2009 focusing on a number of different areas of the country from Fresno to Brownsville and from the Appalachian area of eastern Kentucky to the counties of the Mississippi Delta.They had private partners then too, though perhaps without the deep pockets summoned this time.

Looking at their report evaluating the pilot is instructive.Taking the Mississippi Delta as an example they note that in 20 odd counties where they focused there were 132,000 without accounts.  Statewide 16.4% of Mississippians are unbanked and the number doubles to 33.6% — more than one out of three – when we look at the stats for African Americans.  The 2008-2009 pilot program in the Delta focused on financial literacy and education. They claimed more than 4000 attended various classes along these lines. But, when it came to the question of whether more people became banked, the results were disappointing.The report said,

“While the CFAP partners believe that accounts were opened as a result of the initiative, consistent data was not gathered nor reported to the Treasury, so no accounts are documented.”

There’s no question that being unbanked cost lower income families big bucks, but looking at the bank offerings on the last pilot, the banks weren’t bending much to allow new families to come in so it was going to cost lower income families severely to be banked as well with some partners still charging almost $10 per month to service the account and up to $35 for bounced checks.

Speaking plainly, for many banks, especially big banks, promoting financial literacy and financial education is a rationale and head fake covering the abandonment of the banks of lower income communities and customers.  Such efforts are little more than marketing and publicity for most banks and an attempt to inexpensively cream the best of the unbanked into their system while continuing to run from the market.  Secretary Lew must not have gotten very good advice on lending either since small loans to customers has become both an urban and rural legend for the banked.  Nothing in this announcement seemed to set a different course.

These private-public partnerships, so critical to the neo-liberal project, verge too quickly into subsidies for private business expansion, rather than services to low and moderate income families.  Reports seem to indicate that most of the initiatives will involve more worshiping at the altar of technological utopia as well.  PayPal and Village Capital for example have signed on to offer technical fixes for transfers to Mexico.Given that the remittance channels between the US and Mexico are one of the few that have seen significant decreases in cost, I have to wonder if this is really about them trying to penetrate the market, rather than provide real services to the unbanked.

Hope springs eternal, and we can wait and see, but given the failure of these projects in the past and the blatant self-interests of the partners colliding with the targeted constituencies and their sensitivities to price and service, it is hard to see any reason this latest initiative will succeed or be substantially different than the failures of the past.

When it comes to banking and the low-and-moderate income community, they’re just not that into us.