In partnership with the Islamic Development Bank, IDB, the Bill & Melinda Gates Foundation has helped launch a new $2.5 billion (Dh9.2 billion) sharia-compliant fund focused on tackling extreme poverty in the Islamic world. This remarkable new partnership is a first for the Bill & Melinda Gates Foundation that sees the relationship with the IDB as a way to make its giving more institutionalised and more sustainable.
The Bill & Melinda Gates Foundation is based on the massive fortune of Bill Gates, the founder of Microsoft, who has been the richest man in the “Forbes” list of billionaires for several years. In 2010 he decided to give away 95 per cent of his wealth, based on the principle that all lives have equal value, and with the focus on tackling global disease and extreme poverty.
To achieve this, he and his wife Melinda set up the Bill & Melinda Gates Foundation in 2000. It is the world’s richest charitable institution with a total endowment of $42.9 billion. It had paid out an astonishing $33.5 billion by the end of 2014 and had made grants totalling $3.9 billion in 2104, up from $3.6 billion in 2013.
While the Muslim world includes some of the world’s richest countries, it also has some of the world’s poorest, such as Burkina Faso, Chad, and Mali. There are some with a combination of great wealth and poverty, such as Egypt and Indonesia, and others that are racked by serious violence, such as Yemen, Somalia and Syria.
The Bill & Melinda Gates Foundation sees its new venture with the IDB as a way to get its grants and skills into territories that it would not be able to reach without a strong partner in the region, and also to use the relationship to make the venture more enduring than just making grants would allow.
“The Lives and Livelihoods Fund is sustainable and catalytic in the region for two main reasons,” Hassan Al Damluji, Head of Middle East Relations at the Bill & Melinda Gates Foundation told Weekend Review during a recent visit to the Gulf.
“Firstly, because we are engaging Gulf donors who will be around for the long term and are sustainable, unlike the Foundation, which is a family fortune and is thus finite. Secondly, it is catalytic because the fund encourages investment from the poor countries themselves. The Lives and Livelihoods Fund will give aid linked to the loans that the recipient countries will take, so they are still on the hook for their own development.”
The idea is for the IDB to work through its normal applications for loans from 31 low-income countries from the 56 IDB member nations, and these include some of the poorest nations in the world. The IDB will bring potential projects to the Lives and Livelihoods Fund and mix between 10 and 30 per cent of the grant money if the project meets the Fund’s criteria and maintains a good spread of recipient countries.
The Fund will finance projects in four areas: infectious disease control and eradication; primary healthcare, including improved maternal, neonatal and child health; agriculture and food security to help the poorest to grow more, feed their families and earn a basic living, and basic infrastructure, including off-grid power, small water and sanitation projects and digital payment systems.
“The link between all these areas is that they are all significant drivers of inequity in our world,” said Al Damluji. “The one criterion we use is to find what issues predominantly affect the poorest people in the world, because they do not have the same equality of opportunity as wealthier people.”
The aim, he said, was to help as many people as possible, regardless of race, country or religion. “We look for global solutions and what makes a real difference. Infectious diseases are absolutely in that category. For example, cancer affects everyone — rich and poor — equally, so we do not look at that, whereas malaria and diarrhoea can kill small children. The wealthier people have access to vaccines, but infectious diseases are the biggest killers of the poor of the world.”
And for that reason, primary health care is quite important. “In a lot of countries, there may be a big hospital in the capital for the elite, but the village health care centre in remote regions makes real difference to the poor,” said Al Damluji.
The Fund’s focus in agriculture is small farmers. “They are growing food that is consumed locally, and are not growing crops for export, such as coffee,” he said.
“In infrastructure, we would look at projects in areas such as remote energy sources. We do not want to build power stations in capital cities, but we do want to get power to communities that are not on the grid, through solar energy or other solutions. Sanitation is also acutely important in stopping the spread of infectious disease,” he said.
The Lives and Livelihoods Fund will be housed in and administered by the IDB, which helps make the venture sustainable. The IDB has put in $2 billion of regular capital, and the remaining $500 million of grant money will come from donors over five years. The Bill & Melinda Gates Foundation was the first, followed by the Islamic Solidarity Fund for Development (a big waqf with mostly Saudi contributors).
“We expect three similar donors within the next year to get to the $500 million target, but we don’t need to raise the rest before we kick off. The charter has been signed and the fund is now a legal entity,” said Al Damluji.
“From our side, we are contributing in three major areas as we help them to be more effective and build them as an institution. First, we will together define the criteria for which projects to finance, looking at what sectors these projects will be in and what is the right mix for the grant. Second, we and the other major donors will meet twice a year as an impact committee, which will act as a governance board. And third, we are there as a permanent friend so as the IDB starts to utilise the fund, we can act as adviser.”
“The projects need to make sense and have an impact, which does not necessarily mean profit,” Al Damluji said.
“The outcomes will be based on measures such as reducing infant and maternal mortality, improved farmer productivity, more communities having access to power, or more people with access to basic banking services. The governments want to know if the project will boost their economies. However, they need to believe that the improved health of their people, productivity of farmers and other such factors will boost their economies over time. This is not like a toll road that generates immediate returns. That’s why you need this kind of grant to make sense. These projects won’t be huge cash cows, but we know there’s good evidence that when your people’s health improves, your economy benefits.”
The Muslim world
“The Lives and Livelihoods Fund is the biggest thing we are doing in the Middle East and it fits in with how we like to work,” said Al Damluji. “The Bill & Melinda Gates Foundation is all about partnership. We have built a couple of global instruments in the past where we have partnered with UN organisations and countries to build a fund that can attack these problems with scale.”
Al Damluji cites the example of the Gavi Alliance, which has expanded the scope of childhood immunisation by procuring all of the world’s vaccine needs for the 72 poorest countries, thereby guaranteeing low price and adequate supply.
“But this is the first fund of ours that will be based in the Middle East. It will have a bank of all the shareholders that are not OECD countries and not traditional donors. Given the Middle East donors it is entirely appropriate to make this Fund focused on some of the Muslim countries,” said Al Damluji.
The Bill & Melinda Gates Foundation is clear that it cannot save the world on its own. “Even though we are a well-resourced foundation, the needs of the global poor way outstrip our ability to fund them. So, even if you have a large sum of money, you have to work in partnership, which is at the core of what we do,” said Al Damluji.