Peru and the Bill Gates affair


Bill Gates’ use of Peru as an illustrative example has sparked a controversy in the country.

Speaking with Spain’s El País, the Microsoft founder and chief visionary (and benefactor) of the Gates Foundation urged international aid agencies and NGOs to focus more on the poorest countries in the world, and less on regions like Latin America. He said that, “The important thing is that all lives have equal value, and that we can change many more things in poor countries than when you help a country like Peru, with medium income, which has resources and could be as wealthy as a European country.”

Peruvian columnists and politicians jumped on the comments. Some singled out the figure Gates cited elsewhere in the interview for Peru’s per capita income; he said it was $10,000, which is income per person adjusted for the price of goods, while the unadjusted figure is about $5,600. Using either measure, however, Peru ranks in the 80s in GDP per capita, wealthier than about half the countries in the world.

So no, Bill Gates was not wrong. Through a decade of extraordinary growth, Peru has become a middle-income country with the resources to solve most of its own basic problems. That said, to date, it has not done so.

There are non-profits in every corner of Peru filling in the gaps left by Peru’s governments and private sector, providing basic healthcare and education in remote corners of the country, or trying to bring clean water to asentamientos humanos and poor villages. So while Peru does not need the sort of massive, systemic aid that the poorest countries in the world require, there is plenty of work to be done.

Gates also fails to consider the question of shared responsibility for collective problems. There are issues in Peru that have a global impact, and therefore, the global community ought to share in the burden of resolving them.

Take for example, the U.S. government’s international aid body, USAID. In Fiscal Year 2010, USAID spent $87.6 million in Peru. Of that total, more than $32 million was spent on “alternative development:” resources and information designed to encourage coca growers to take up other pursuits. It makes sense, and is eminently fair, that the US government is footing a large part of the bill, since the cocaine trade is as damaging to the United States as it is to Peru.

Of the USAID budget, another nearly $14 million is destined for environmental programs. Again, this is fair. The Amazon rainforest is an important resource for the whole planet; if it stopped converting carbon into oxygen, the whole world would suffer the effects of climate change. Would it make sense, then, for Peru alone to pay for the preservation of its share of this forest? Of course not.

For the Gates Foundation, yes, it makes sense to spend the vast majority of its budget on projects in poor countries that cannot fund basic health, education and infrastructure. However, Gates is doing a disservice by suggesting that there is not a legitimate need for international aid in Peru.
Does Peru still need foreign aid? We look at the question that Bill Gates raised.