Introduction
Neoliberalism is the dominant approach to development in the contemporary world. The approach not only deeply root in the government policies, but also spread through the different sector of the society, even the development agencies. Private sector no longer not stay in the market, but also highly affect the development practice. McGoey (2015) stated that the increasing role of private sector in global development showed the unstoppable trend of neoliberalism.
Therefore, in the following paragraph, I argue that neoliberalism has been highly influential on development practice. The influence is showed obviously in the current work of the largest private foundation — Bill & Melinda Gates Foundation (BMGF). Gates foundation which found by Bill Gates, one of the World’s richest men, is the most powerful philanthropic organization(Klonsky, 2010; McGoey, 2015).
This article has three parts to figure out the argument. In the first part, it is going to explain the detail of neoliberalism and how it differs from earlier approaches to development. Secondly, it is going to generally characterize the work of the BMGF. Finally, it will specifically outline the influence of neoliberalism within the specific recent BMGF’s project and some criticisms.
Rising of neoliberalism
In the post-world war 2 era, the global policies approach is quite different from nowadays that government played a key role to regulate the market and repairing market failures. Interventionists claimed that market is not perfect. The government only not have to maintain the macroeconomic stability and provide basic public services, but also take a more aggressive role to mobilize resources into productive investment (Wade, 2004). Government tended to use governmental resources in guiding the economic growth, boosting consumer demand, and creating working opportunities for their citizens. Improving public health, social welfare, education, labor protection and working environment were common policies for development. Moreover, government keen to regulate the banking and financing system for reducing frequency and extent of financial crises (Peet and Hartwick, 2009; Hursh and Henderson, 2011).
However, the interventionist approach was been heavily criticized in the context of economic crisis in late 1960. Liberal economists argued that interventionism led to unproductive industrial investments. High-cost, low-quality industrial output finally damages the economic. The price distortion finally caused heavy inflation (Peet and Hartwick, 2009). The crisis provided opportunities for conservative politics elites, such as Reagan and Thatcher, to reform those failed economic policies. Reagan and Thatcher allowed the idea of Milton Friedman, Friedrich von Hayek, and the Chicago school, to promote laissez-faire and market-oriented policies to deal with the crisis (Peet and Hartwick, 2009; Hursh and Henderson, 2011).
Neoliberlists stated that “in a necessarily imperfect world, imperfect market mechanisms would do better in practice than imperfect planning mechanisms (Peet and Hartwick, 2009:49)”. They believed that market is the most efficient way of resources allocation. Therefore, the government should not distort the market. The government should only focus on enabling the functioning of the market, and even adopt the market norms to increase its own performance. The government should scale down the spending on social service. Private companies would provide public goods and allocate services via market mechanisms more efficiently (Wade, 2004; Hursh and Henderson, 2011).
Deregulation, privatization, and liberalization is the common neoliberal strategies for development. Williamson (2000) concluded that there are some core important policies. Firstly, different from interventionism, the government should stop intervening the market as the market is the best way to allocate the resource. Therefore, lowering the marginal tax rate and broadening the tax base are recommended. The market regulations and worker protection should be loosened. Also, the government should cut down the public expenditure and reduce socialist redistribution as it is not efficient. Moreover, reducing tariff and elimination of barriers to foreign direct investment are also important to building the competitive market economy.
The neoliberal approach is further promoted and imposed around the world by the condition financial aids of World Bank and IMF. Thus, the neoliberal policies is now a dominant approach in international economic policy circle (Miraftab, 2004; Peet and Hartwick, 2009).
Gates Foundation
As government gradually step back to support development in neoliberal approach, market-led development is getting a much larger role. A number of private flows are now much larger than official flows. the steady rise of private money from developed countries to developing countries makes those private actors are becoming much more influential than before (Adelman, 2015). Bill & Melinda Gates foundation (BMGF) is one of the most outstanding examples.
BMGF help improves development in four main areas — global health, global development, education in U.S and advocacy. As a private foundation, Gates Foundation does not provide service directly. It donates and grants to various partner organizations worldwide, for example, GAVI Alliance, PATH, and UNICEF (Bill & Melinda Gates foundation, 2016). It is the largest single donor to the UN health agency and also about one-tenth of the budget of WTO is come from Gates Foundation (McGoey, 2015). According to Bill & Melinda Gates foundation (2016), there were about $4.2 billion dollars to support different programs in more than 100 countries in 2015. The tremendously amount of financial power makes BMGF become one of the most influential organizations in the world. BMGF is not only a passive donor, but also heavily promote public-private partnership as it Is the main member in several influential global public-private health partnerships, for example, the global alliance for vaccines and immunization, global fund to fight HIV/aids, tuberculosis and malaria and Health 8 (McCoy et al., 2009; Global Justice Now, 2016).
And also, BMGF do not run like a traditional development agency, but run like an enterprise. It set up as two parts — the Bill & Melinda Gates Foundation and the Bill & Melinda Gates Foundation Trust (Bill & Melinda Gates foundation, 2016). The trust holds the donation from Warren Buffett and Bill Gates to invest in profitable companies, for example, the mining company Barrick Gold, agribusiness company Archer Daniels Midland, chemicals company Dow chemicals and Coca-cola (Global Justice Now, 2016). That investment is not necessarily for development, but for profit to maintain the development work of foundations. As the foundations spend about 5 percent of its endowment fund every year, an amount must return on its investments. So, Damon (2007) alarmed that BMGF increasingly blurred the line between non-profit organization and business. It makes private sector increasingly affect the social sector.
BMGF is totally following and promoting the ideology of neoliberalism. It is not only because BMGF run in a business model, but also the foundations keen to promote privatization. Public-private partnership is one of the popular forms of privatization, when government diminished the input in the social development and try to seek solutions in the market. It shows that BMGF seems distrust public sector (Miraftab, 2004; McCoy et al., 2009; Hursh and Henderson, 2011). And also, it treats social problem mainly as a technical problem. Thus, BMGF promotes a unpolitical top-down technical solution to solve those problems, such as the vaccine, but ignore the social and economic backgrounds (Hursh and Henderson,2011).
GAVI and neoliberal approach
In order to understand the working strategies of BMGF more deeply, it is going to focus on its biggest project — the partnership with Global Alliance for Vaccines and Immunization (GAVI).
GAVI was formed in 2000 with five-year US$ 750 million pledge from the BMGF (GAVI,2016). BMGF sits as one of four permanent members in GAVI along with WHO, UNICEF and the World Bank (Global Justice Now, 2016). Other than those permanent members, GAVI links up with international development agencies, national governments, private sectors and civil society, for example, pharmaceutical industry, donor governments and representatives from developing countries in order to improve childhood immunization coverage. In order to achieve the target, GAVI focus on vaccine support by public-private partnership model and business model (Storeng, 2014; GAVI,2016).
In latest GAVI’s India project — Missions Indradhanush, GAVI partnered with India government, WHO, and UNICEF aims at full immunization of the age of two and pregnant women with the seven vaccines which covered by India’s Universal Immunization Program, especially for those migrant populations (GAVI,2015). The target of the project is to reach 90% of all infants within five years. GAVI (2015) claimed that the most important step is to generate demand for vaccine in communities. On one hand, it integrated those communities into a micro-plans for routine immunization. In the meantime, it went into those communities to educate and promote the advantage of the vaccine. Afterward, GAVI helped to scale up the national vaccine industry for meeting the demand via financial support. GAVI hailed that the project helped Indian migrants is looking much healthier.
Some characteristics in this project show the influence of neoliberalism clearly. Firstly, GAVI heavily emphasizes reducing diseases via using vaccine (Hursh, and Henderson, 2011; Adelman and Spantchak, 2013; Storeng, 2014). It clearly shows that BMGF takes the social health problem as a personal, market, or even technical problem which highly fit the ideology of neoliberalism (Hursh, 2010).
Secondly, GAVI uses a business model to deliver vaccine rather than simply subsidize the injection. GAVI facilitate the market by shaping the market for vaccines by gathering the demand from developing countries for new vaccines. In the meantime, it provides long-term, predictable financing support the vaccine industries to meet this demand (GAVI, 2016). GAVI stated that the project helps attract increasing number of suppliers go into markets to compete. It makes the price of vaccine drop and developing countries can pay for them themselves finally (GAVI, 2016). The model obviously shows that GAVI believes in facilitating, enabling the function of the market is the best way to allocate resources, but not the public sector (Storeng, 2014).
Thirdly, GAVI is pushing privatization, when it highly apply public-private partnership as the main strategies for delivering services (Miraftab, 2004). GAVI link up BMGF with the wide range of social and private sector which helps to leverage the financial and professional resources (GAVI,2016). It is the common neoliberal strategies to reduce government’s input.
Marketization, privatization, and technocratic approach are the key features of working strategies of GAVI and BMGF. GAVI claimed that the unique approach is the solution to the severe global health problem (GAVI, 2016). However, the neoliberal approach is facing heavy criticism. As BMGF and GAVI highly rely on a technology solution to solve the global health problem, but ignore the structural and political side of the problem. Scholars argued that social health problem is highly related to poverty. The social, political, and economic inequalities in developing countries cause failed access to basic needs, such as food, water, and shelter. Without reducing the poverty problem, the health problem will not likely to solve (McCoy et al., 2009; Hursh, and Henderson, 2011). Miraftab (2004) even alarmed that the increasing engagement of private sector in public sector is always like the “Trojan Horse”, may make things even worse. There is an imbalanced relationship as the powerful private sector dominant in the partnership. it makes the partnerships might arrive with the promise of benefit, but only further deprive the poor from their own resources.
Conclusion
Undoubtedly, Gates foundation is a important development actor in the world. In the trend of neoliberalism, the government reduces expenditure in social welfare and development, private sector shares the responsibility (McGoey, 2015). it makes the power of private foundation rising, such as BMGF.
BMGF is also highly influenced by neoliberal ideology as it not only apply the business model to run a charity foundation, but also apply the market-led approach on development. Enabling market and partner with the public sector to bypass government are its most important strategies. Also, Gates Foundation turned the social problem into an apolitical personal, technical, market issue. all of them show the neoliberal nature of BMGF.
The neoliberal approach is really good for development? scholars have a big question about the poor able to change their situation only by the apolitical technocratic approach, but the power and resource inequalities have not changed. (Marten and Witte, 2008; Hursh, 2010)
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