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Bill and Melinda Gates Are Paying Off Nigeria's $76M Debt to Japan
- quotemstr 9y agoMoral hazard?
- rabidonrails 9y agoI think this is more related to Gates trying to eradicate polio and showing that he's even willing to incentivize countries that can handle the distribution to do so themselves.
- quotemstr 9y agoNevertheless, third parties paying off debt encourages the acquisition of more debt.
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- lnino 9y agoAlso note that this is the debt of the government, not of the population. There is no guarantee that it will have any objective benefit to the population. Being a third-worlder and having worked for the government and knowing how it works fairly well, I'd rather throw the money from an helicopter than give it to the government. It won't do much good but giving money to the government is almost certain to make people worse off.
- jzwinck 9y agoProbably not. First this is a highly unusual event, not something other debtors could reasonably expect for themselves. Second, the money was used to fight polio, a terrible disease. Moral hazard would be Nigerians driving Ferraris purchased by Melinda and Bill. This is not that. If the Gates want to eliminate such diseases, they must be elated to see effective programs spending their money to do it.
- kevin_thibedeau 9y ago> Moral hazard would be Nigerians driving Ferraris purchased by Melinda and Bill. The Nigerian kleptocrats have effectively externalized their healthcare costs so that they can buy their Ferraris or more likely a fleet of pimped out G-wagens.
- tim333 9y agoI doubt many people will rush out and make iffy loans on the assumption that Bill Gates will pay them off.
- nohat 9y agoNormally moral hazard is a concern for charitable activity, but in this case it would be a good thing because it isn't really encouraging negative behavior. If countries intentionally go into debt to eradicate critical diseases with the intention of getting the debt forgiven or paid by someone else, that would be just fine.
- rabidonrails 9y agoThis is awesome and it's inspiring to see the Gates' making huge moves in philanthropy. It makes me wonder what the philanthropy would look like if other business leaders like Warren Buffet were also to run major charitable institutions.
- mhb 9y agoRegarding Buffett, specifically, it would look an awful lot like the Bill & Melinda Gates Foundation: https://www.gatesfoundation.org/Who-We-Are/General-Information/Leadership/Executive-Leadership-Team/Warren-Buffett https://www.gatesfoundation.org/Who-We-Are/General-Informati...
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- 62197217 9y agoBelieve Buffett donates to the Gates foundation. Here he donated ~$3 billion last year https://www.reuters.com/article/us-buffett-charities/buffett-donates-3-17-billion-to-gates-charity-four-others-idUSKBN19V2QY https://www.reuters.com/article/us-buffett-charities/buffett...
- closure 9y agoBuffett is a trustee of their foundation and pledged most of his money to it a decade ago. https://www.gatesfoundation.org/Who-We-Are/General-Information/Leadership/Executive-Leadership-Team/Warren-Buffett https://www.gatesfoundation.org/Who-We-Are/General-Informati...
- asdjasldkjkljd 9y agoThe Gates' are fucking destroying what's left of polio, even its debt.
- unabridged 9y agoThe problem is a charity paying off your debt does not make your credit better. While its slightly better than a writeoff/forgiveness because the creditor isn't as angry, it still shows they can't pay back loans. Is a future creditor going to count on a charity showing up to pay them off?
- davidiach 9y agoInteresting perspective, haven't thought of it this way before. It does still provide some benefit to the country though, they can use that money for something else instead of having to pay it back to Japan.
- mhandley 9y agoThe article isn't clear, but I'd guess from the small outbreak in 2016 after being Polio-free in 2014/15 that the concern is that polio still isn't completely eliminated in Nigeria. Presumably it will need ongoing monitoring for several more years to ensure it is completely gone. Having to pay back the debt could jeopardise that ongong effort. In which case, this seems a good investment.
- rincebrain 9y agoA 3y interval without cases in any member countries is what's required for the WHO to call a region "polio-free". [1] [1] - http://www.searo.who.int/immunization/topics/polio/eradication/sea-polio-free/en/ http://www.searo.who.int/immunization/topics/polio/eradicati...
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- zhjansbnas 9y agoAbility to repay is one of the top credit factors. Having the existing debt paid off improves ability to repay any future debt. If anything, the prospect of Bill Gates going around randomly paying debts makes issuing debt more appealing.
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- pselbert 9y agoOn the face of it $76m seems like a staggering amount of money. Then we learn that the foundation dedicates $3b a year, and this seems like a drop in the bucket. Amazing what massively focused resources can accomplish.
- yipopov 9y agoAlso a drop in the bucket compared with Nigeria's oil revenue. Why do they need charity to pay off the loan? This is clearly the Gates just engaging in corruption while making it look like they're "helping out".
- labster 9y agoYes, truly how terrible they are to spend money encouraging the eradication of polio.
- comicjk 9y agoNot to mention, polio spreads! If you can eradicate polio in a country for a paltry $100 million, it's in other countries' interest to do so, even if some of the money gets stolen. This is the difference between traditional charity evaluation (which seeks honest management) vs effective altruism (which seeks good done per dollar).
- simplemath__ 9y agoexactly! People can't look past the egregious* waste of money to see that it isnt a waste at all, even if Nigeria should have repaid the debt or Japan should have forgiven it. None of that matters! The result matters! Eradicating polio matters!
- yipopov 9y ago>Yes, truly how terrible they are to spend money encouraging the eradication of polio. Yes, that was what the loan was for. Even if it all went to its intended purpose, that doesn't excuse apparently not budgeting for any repayment. I expect that money is currently lining someone's pocket in Lagos. I'd have been more impressed if they spent the money directly to tackle the next challenge and letting the politicians answer personally to Japan regarding the whereabouts of their money. Instead they are encouraging more loans and more corruption.
- danjoc 9y agoWhy does the 6th largest oil exporter in the world need a $76M loan paid? Edit: Downvotes? Legitimate question guys. Can someone explain how that works?
- danbruc 9y agoWikipedia gives 2.231 million barrels exported per day for Nigeria in 2013. At $50 per barrel this amounts 40 billion Dollar per year. I have no idea what the profit margins are but at 10 % this yields only 4 billion Dollar in profits per year which seems rather little to me, especially given that it is the 6th largest oil exporter. So 76 million Dollar would be 1.9 % of the annual profits from oil exports, not much but also not negligible. But I think I must have committed an error somewhere, those 4 billion Dollar just look too tiny to me.
- harmlessposter 9y agothey probably consume a significant amount internally which will not show up in exports.
- andymcsherry 9y ago$40B / year actually seems to be a high estimate for revenue: http://www.worldstopexports.com/worlds-top-oil-exports-country/ http://www.worldstopexports.com/worlds-top-oil-exports-count... This has $27B in 2016, which is a 73% drop from 2012. You're probably right that it's a significant chunk of money for them, especially when they've recently lost 3/4s of their market share.
- danjoc 9y agoAccording to this, http://www.thisdaylive.com/index.php/2016/06/18/wsj-nigerias-cost-of-oil-production-now-worlds-3rd-most-expensive/ http://www.thisdaylive.com/index.php/2016/06/18/wsj-nigerias... Nigeria charges $4.11 per barrel in taxes. So I guess they get that $4B in tax revenue. 1.9% of oil tax revenue is not negligible, but I would think Nigeria would have more national pride than accept. Like Bolivia with Bill Gate's chickens. Anyway, by GDP, Nigeria is 27, https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
- simplemath__ 9y agoTo all the commenters too busy being aghast at giving money to a government to read the article: >Nigeria’s debt to Japan is the result of Overseas Development Assistance (ODA) provided by the Japanese government in 2014 for increased polio eradication. efforts. >The country has made great strides in its efforts to eliminate the disease thanks to this funding. >Nigeria did not record a wild case of polio from July 2014 to August 2016, when two cases were reported. Presumably, the Gates Foundation wants to encourage state partnerships from nations like Japan in the service of eradicating solved diseases, regardless of a recipient nation's ability or willingness to settle incurred debts. Money well spent.
- diego_moita 9y agoThis is the correct perspective. It seems that, Reddit style, many people here comment just the titles, don't read the articles. Polio is on the way to complete eradication all over the world. AFAIK the only place where it remains endemic is Baluchistan in Pakistan where the warlords are suspicious of vaccination agents. Victory on polio is a fantastic story that doesn't get the attention it deserves.
- tyrust 9y ago>Reddit style Just as much HN style, where top comments frequently bring up old discussions completely unrelated to the article's content (e.g. js article -> js is a mess, blockchain article -> blockchain is a bubble, megacorp article -> this is why i never use megacorp's products)
- jackaroe78 9y agommm source please
- nvr219 9y agommm mmm mmm
- noobermin 9y ago
- remir 9y agoI'm I the only one who thinks that Japan kinda looks bad here? I mean, Bill's foundation is already dedicating $3B a year on development assistance, couldn't Japan just say to Nigeria: "You don't have to pay us back. Consider it a donation". How could they reasonably expect Nigeria to pay them back $76M?
- tehlike 9y agoOr, this encourages japan more.
- sumedh 9y ago> How could they reasonably expect Nigeria to pay them back $76M Oil revenue?
- remir 9y agoIf they make so much cash with oil, then why does Japan and Bill Gates have to spend billions to help them fight polio?
- sumedh 9y agoYou should ask this question to the Nigerian Govt.
- fleitz 9y agoEveryone has debt, it's a tool, not a sign of poverty/inability to repay.
- rubyn00bie 9y agoThe amount of money isn’t really the issue, it’s the infrastructure for getting this revenue back towards public funds. That is to say corruption and a lack of internal organizations probably prevent a good portion of revenue from coming back to the people... And/or that they’ve already obligated themselves to other humanitarian efforts. Oh yeah and don’t forget existing debt obligations which are likely to be many factors larger... Also, more importantly, you should probably google before shit posting as they roughly make ~$48bn of their GDP from oil.
- perseusprime11 9y agoIt is amazing to see how Bill Gates immersed himself in his nonprofit work. I hope he stays rich so he can do more of these.
- labster 9y agoHaving read Slashdot 15 years ago, a part of me is shocked to hear anyone wish that Bill Gates stays rich. But don't worry, Bill will be just fine.
- petermcneeley 9y agoIndeed. Apparently his wealth increased 13% last year. He would have to give at much higher rates to actually reduce his total wealth. Perhaps the perception is that if he was giving his money away then his net wealth would go down?
- MaxBarraclough 9y agoGates is playing the long game, investing and spending, not just flooding his chosen causes with cash to spend this year.
- hiram112 9y agoGates is worshipped by most millennials, including the techies. For those of us who've been around for a while - as your reference to Slashdot points out - this can be surprising considering just how hated he was a decade or two ago when Microsoft was in a much different position than they are now. I still have a negative opinion of him, and feel his business practices were extremely negative to the world. But I will give credit to his ability to white-wash his image via numerous PR campaigns (Reddit AMAs, lots of other blatant social manipulation in the media). He and his marketing team have played the long game, and have been brilliant.
- jsmeaton 9y agoMicrosoft did some shitty things. But really, the main thing people worry about was bundling a browser with the OS for free 20 years ago. Take a look at some of the shit companies are getting away with these days without a quarter of the hate. You think spending billions of his own money every single year is about cleaning up his image over the anti-trust case? Give me a break.
- ftoo 9y agoNigeria loses tens of billions of dollars a year to corruption, especially in their oil industry, especially among politicians. If I was Nigerian, I would find this sort of charity to be very embarrassing.
- JumpCrisscross 9y ago> If I was Nigerian, I would find this sort of charity to be very embarrassing Fortunately, there are those willing to trade feeling embarrassed for making progesss towards eradicating polio.
- dkarl 9y agoIf I were Nigerian, I think I would be both profoundly embarrassed by the need for this charity and extremely enthusiastic about taking it.
- adventured 9y agoNigeria has a $2,000 GDP per capita. Embarrassment over assistance on polio eradication is not a luxury they have. Any help there is fortunately going to be largely welcomed by Nigeria.
- Retric 9y agoIn PPP terms it's over 5,000$. Still poor, but not as bad as you might think.
- ikeyany 9y agoIf you were Nigerian you'd probably feel anger (or apathy) at the corruption that led you here.
- InclinedPlane 9y agoAnd? OK, that's very terrible indeed, but should it prevent working towards eradicating polio by whatever means necessary? Meanwhile, America isn't a shining example, we just passed a tax cut for the rich at a huge cost to the health of the poor. And the government is seriously considering whether to take away health coverage for poor kids despite the cbo saying it would actually cost more money to do so.
- somberi 9y agoA book by Jeffrey Sachs, The End of Poverty, argues in favor of this approach where, wealthy individuals or nations help write off debt of poorer countries. The cost of servicing this debt is often crushing enough that no meaningful uplifit is possible from their current poverty. https://en.wikipedia.org/wiki/The_End_of_Poverty https://en.wikipedia.org/wiki/The_End_of_Poverty
- ramblerman 9y agoGiven these regimes often are unstable politically and/or corrupt, what prevents new debt being made and filling the pockets of the leaders? In the Jeffrey Sachs model.
- nikanj 9y agoLining the pockets of leaders and their friends is a cost-of-doing business in democracies. Yes, an economy would do better without that, but it very much does happen in all well-developed economies.
- TeMPOraL 9y agoReminds me of the thing my mother sometimes said, when complaining that terms in democracies are too short, leading to each government not being able to finish anything before having it undone by the next one. She quoted some historical figure from old times (Ancient Rome, I think?) - that a politician will always want to line the pockets of his and his friends (in the past it involved oppressing local population with taxes), but the amount of wealth lost to it is limited, and after that the politician will not care for money that much - so it's better to keep the politician for longer than to replace him, because the new one will start the pocket-lining process anew. I can't find the exact quote now, unfortunately.
- pizza234 9y ago> it very much does happen in all well-developed economies. This type of statement is a logical fallacy (I'd like to know if it's formalized, and if so, what's the name), and I think it's one of the most common: "There is X in any country". Of course there is X in any country, but can be a radically different quantity and quality of X between two countries.
- sbjustin 9y agoI hope they'll bail us out when it comes back to the US due to the lack of vaccinations. -In no way meant to belittle what they did. I think what they do is awesome. Just being sarcastic about vaccinations in the US.
- swebs 9y agoThe US has a 93% polio vaccination rate. What are you talking about? https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6334a1.htm https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6334a1.htm
- microtherion 9y agoTheir couch is going to be considerably more comfy with $76M worth of spare change dug out from under the pillows.
- cpg 9y agoIt's like their are their Nigerian Prince. Thank you.
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- RickJWag 9y agoAwesome. I used to think very badly of Bill Gates. (New corporate PCs often came bundled with Word. The newest PCs wouldn't be compatible with older ones, so everyone had to constantly upgrade. It was a huge scam.) But it's nice he's giving his money away. I look forward to hearing about more acts of charity in the years ahead.
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- BenjiWiebe 9y agoI agree. I get the feeling maybe he's trying to make up for having brought Microsoft/Windows into the world. :)
- gigatexal 9y agoI am so glad the Gates foundation is doing so much good in the world. Kudos to them.
- roadbeats 9y agoIn return to handing Nigeria's agriculture industry to Monsanto; [1] https://www.theguardian.com/global-development/poverty-matters/2010/sep/29/gates-foundation-gm-monsanto https://www.theguardian.com/global-development/poverty-matte... [2] https://www.ecowatch.com/5-million-nigerians-oppose-monsantos-plans-to-introduce-gmo-cotton-and-1882200020.html https://www.ecowatch.com/5-million-nigerians-oppose-monsanto...
- RobertRoberts 9y agoDoes anyone really think Bill Gates is a superior moral person with no ulterior motive at all? And if you think so, can you provide proof, or just assumption? History almost universally shows that the rich and powerful manipulate both the people and their image for their own good, not for the well being of the peasants.
- croon 9y ago> Does anyone really think Bill Gates is a superior moral person with no ulterior motive at all? And if you think so, can you provide proof, or just assumption? > History almost universally shows that the rich and powerful manipulate both the people and their image for their own good, not for the well being of the peasants. I never have any heroes, because they can all fall from grace. In Bills case I'm sure he did some unsavory things in the name of making that money at Microsoft, both in terms of industry and business. However, "morals" is a construct. I don't mean that in a nihilist way, but merely in a "how do we even measure that?". What we can do is judge him from his actions. Actions are proof of what he's doing. If that is our metric, then he is morally superior to a whole lot of especially rich people. There are a lot of very rich people in the world. Some are sitting on their money. Some are using their money for lobbying and propaganda in order to accrue more money. Some are using their money for public good. Bill Gates currently falls very much into the latter. If you want to criticize rich people, maybe don't start with the people actually doing something good, who've also pledged most of their money away.
- tux1968 9y ago
- momofarm 9y agoSo will Nigeria use Microsoft's solution after being "bought" by Bill and Melinda Gates Foundation? (lol)
- banku_brougham 9y agoA. Nigeria GDP is ~$500B US, sovereign debt is $67B, for debt/GDP ratio of 13%. Nigeria can afford to repay this loan. B. If we fail to eradicate polio, it will be back again someday. The rich world should pay for this with all urgency. Kudos to the Gates. https://atlas.media.mit.edu/en/profile/country/nga/ https://atlas.media.mit.edu/en/profile/country/nga/ https://dmo.gov.ng/ https://dmo.gov.ng/
- Broken_Hippo 9y agoThat doesn't actually tell anyone if they can afford it. What sorts of things does the money go to? Salaries? Food for folks? Other obligations and contracts? Infrastructure? Health care? How much do they have leftover afterwards - can they meet their obligations? How much of that GDP is the government able to capture as a tax? How efficient is tax collection and what is the rate? The second, though. Fair point.
- fjsolwmv 9y agoYeah the missing number there is population (for GDP per capita) 1% of American GDP hurts a lot less per capita than Nigerian GDP
- bsn54 9y ago1) Vaaciness = Depop.ulation=au.tism=ga.tes found.ation
- dmichulke 9y agoCan't they just help more directly to eradicate polio instead of paying a corrupt government to do it? Payments like these can be interpreted as buying a state's benevolence (aka corruption), something that Soros is regularly accused of. I'm sure there are quite a few NGOs that are more efficient in fighting polio than the Nigerian government. Likewise, should we pay Kim Jong Un to feed hungry North Koreans if it were possible to send them food directly?
- confounded 9y agoJudging from the statistics quoted in the article, the government has almost eradicated polio in Nigeria. Pretty effective, no? (P.S. Cheque’s in the post, right, George?)
- dmichulke 9y agoThat's why I wrote 'efficient' while you answered 'effective' :)
- hinfaits 9y agoIt seems like Japan (not a corrupt government) helped eradicate polio in the country Nigeria in exchange for some amount of debt from Nigeria. I'd think the Gates' foundation would have paid Japan directly avoiding all of the problems you mentioned.
- uhnuhnuhn 9y ago> Can't they just help more directly to eradicate polio instead of paying a corrupt government to do it? That's not how any of this works. You don't just go to a foreign country with its established health care system (and national sovereignty) and start building seperate health care structures through your NGO without government approval and ownership. What you do instead is build broad alliances between the government, international donors and implementing agencies (which may include foreign NGOs). Financial and programming oversight is performed jointly by all partners. This particular Japanese loan was part of broader international funding for Nigeria's National Polio Eradication Programme. The money was channeled to UNICEF and WHO to procure Polio vaccine and to improve related health care services in the country. The involvement and leadership of the Nigerian government is crucial to make sure you have political legitimacy and to create sustainable policy change and improvements in the national health care system.
- skc 9y agoThe current richest person in Africa (with a net worth of just under 13 billion US dollars) comes from Nigeria. I hope he's taking notes.
- blocked_again 9y agoI bet he is making more than notes when he is paying his taxes.
- skc 9y agoDangote has been in business long enough to know exactly where his taxes go.
- throwwwwaway9 9y ago...has interests in commodities in Nigeria and other African countries, including Benin, Ethiopia, Senegal, Cameroon, Ghana, South Africa, Togo, Tanzania, and Zambia. In some countries, suitcases or wire transfers to secret accounts beat lawyers when it comes to saving in taxes. But then, now you have your fortune, now you don't.
- shaftoe 9y agoHe died recently and I'm helping his lawyer transfer his money out of the country. I'll email the lawyer and see if he might be willing to donate some of the royal estate to a humanitarian cause like this.
- anc84 9y agoIf you need some help getting inherited money out of Nigeria, I have lots of experience in e-mail-based initiation of intermediate.
- zakoud 9y agoI think the richest person in Africa is probably the king of Morocco (~150bn)
- knowThySelfx 9y agoWell, nothing is free.
- beegeezuz 9y agoThese two (Bill and Melinda) seem so dodgy to me. Something is off about this whole good-samaritan-donator story.
- jxramos 9y ago> "No new cases of the wild poliovirus were reported in 2017 and there were only four cases reported in 2016, according to the Global Polio Eradication Initiative." Other than verified infections, is any health organization able to sample this virus out in the wild as a discrete virus? Even in the US is polio just circulating impotently about us unable to hook-on from all the vaccinated individuals?
- clark-kent 9y agoThe problem here is that the Nigerian Government don't see this as a priority. I was just in Nigeria a month ago, the government just allocated $1 billion to fight Boko Haram, the terrorist group that has already been defeated in Nigeria and chased out to other neighboring countries. The gist is that corrupt politicians in the Senate want to quietly siphon that $1 Billion into their foreign bank accounts. The embarrassing thing is not that the government can't pay back the loan, its that they won't make something like this a priority. Politicians are too busy looting the government funds and enriching their family & friends.