Partner to China-Africa Partnerships





The Bill & Melinda Gates Foundation, one of the largest foundations in the world, has made over 600 million dollars of direct investments in Ethiopia, where it opened an office half a decade ago, and is a partner of multilateral agencies Ethiopia gets funding from. Its priority areas in Ethiopia are agriculture, health, and nutrition, with a plan to diversify in education and financial services that target low-income groups. FORTUNE’S OP-ED EDITOR, CHRISTIAN TESFAYE, sat down with Mark Suzman, the Foundation’s president for Global Policy & Advocacy and chief strategy officer, on the efforts is to reinforce China-Africa relations in the areas of agriculture, health and nutrition.

Suzman joined the foundation in 2007 as director of Global Development Policy, Advocacy, and Special Initiatives before attaining his current positions in 2012 and 2016.

 

Fortune: You have had a chance to meet with the Prime Minister Abiy Ahmed (PhD) on your visit to Ethiopia.

Mark Suzman: Yes, he had just hosted a dinner with South Sudanese leaders. I was honoured that he had the time to meet on such a busy day.

Q. What did you discuss?

This was the first opportunity for us to meet with him since he took office. Given our engagement in Ethiopia, particularly in the areas of health and agriculture for much of the last decade, we first wanted to gate a sense of the new Prime Minister’s priorities, and how he perceives the Foundation as a supporting partner. I was extremely encouraged with the discussion, where he spoke positively about the partnerships we have in both sectors and talked about his enthusiasm and desire for us to deepen and widen those partnerships going forward.

Q. One of the priority areas of the Foundation is the China-Africa relationship that you want to support and strengthen. Did that come up in the discussion?

We do not like to think of ourselves as soft power, but a Foundation committed to what we think are universal human values and a mission to serve the needs of the poorest.



We know he will likely be going to the FoCAC [Forum on China Africa Cooperation] in early September. We are hoping that Bill Gates may go there as well. So there is an opportunity for Abiy and Gates to meet either there or at the UN General Assembly. But our wide set of discussions were actually around agriculture.

Q. Given the Foundations focus on sectors such as agriculture, health and nutrition in Ethiopia, is it not easier to work or broaden your work with the World Bank or the World Health Organisation (WHO) that already have a foundation and proven experience in those areas, instead of with partners such as China?

It is not an either-or for us. We work extensively with both the World Bank and the WHO. But you can never have too many partners on such priorities that affect almost everybody. The potential of the China partnership is that, of all the countries, the nation is probably the world’s best example of small-holder driven, agriculture productivity-led, economic growth and opportunity. One of the main key areas in agriculture is the potential to help developing countries such as Ethiopia learn from China’s experience directly. That includes examples of learning from China technologically.

We have a partnership with the Chinese Academy of Agricultural Science where they have deep technical expertise in rice development. And we have helped develop a partnership to try and use some of that technological expertise for growing more effectively in West Africa, the world’s largest rice-importing region.

Similarly, we have a partnership with the Chinese Minister of Agriculture that has been working here in small-scale mechanisation. This is small mechanical tools to help with Teffproduction. It improves the productivity of small-holder farmers. We have just done a phase one of that successfully, and we are hoping to expand to phase two. The kind of example we see in both cases is the application of this unique Chinese expertise that can work here in Ethiopia, or more broadly in Africa.

In the health sector, our hope is that there may be some real opportunities in areas such as pharmaceuticals, or vaccine development or production. An example would be malaria. China has a very good track record in the last three decades of significantly reducing malaria deaths – its almost eliminated. China is also the place where Artemisinin, the main treatment for malaria, is derived from. We have been in discussions with their national health commissioner at their health Ministry and Ministry of Commerce, where they are setting up a new aid agency, about opportunities to provide malaria prevention treatments.

It is not that we think that China is a better example or a better partner than the World Bank, the World Health Organisation (WHO) or some other UN agency. But we do think that there are some specific areas where China could be a very strong partner with unique strengths.

Q. Policymaking in Ethiopia and China is similar in that it is highly centralised and long-term. This can be easier for aid agencies to deal with because they know where the government stands. But given the current macroeconomic predicament, why do you think that Ethiopia is facing such problems while China did not?

Every time we use our capital, it has to have a social benefit.



That is a little bit of an overstatement. It is sometimes easy to see some of the short-term challenges that Ethiopia does face, such as the forex crunch, and miss what a successful decade-and-a-half of development Ethiopia has gone through. Ethiopia has met all of the major Millennium development Goals – few Africans countries have done that. Halving extreme poverty, reducing child mortality by two-thirds, and reducing maternal mortality by three-quarters – it’s a very impressive track record, and done side by side high, consistent economic growth.

When you have that long-term economic growth, there are benefits, but it creates strains and stresses in a society, which is exactly what Ethiopia is facing now. There is having to provide jobs and opportunities for young people coming out of universities and trade issues. China faced these challenges. Ethiopia is busy looking over how it could join the World Trade Organisation. China went through a very complicated process in the late 1990s. I actually think that model of planning with clear metrics and measurable outcomes is one that is still serving Ethiopia well.

The GTP II, and the target to become a lower middle-income country by 2025, are ambitious targets. But Ethiopia has proved successful thus far than many other developing countries in meeting targets or even exceeding them. Our role and hope as a partner are to see if we can continue seeing that happen in agriculture and health.

Q. Most partners like yourselves put significant focus on the education sector since they believe that is the best way of lifting a country out of poverty. The Foundation does not engage in this area.

It is not so much that we do not engage in it. When we engage in an area, we want to be very confident that the advice we are giving to a government like Ethiopia is going to lead to tangible outcomes. In the areas of agriculture and health, we are confident that in the areas our focus, from vaccine delivery to agricultural productivity, we know the right interventions. And we can see the results as the track record is there.

One of the challenges of education – our primary focus in the United States – is that it is much more challenging to figure out what the right interventions are to improve learning outcomes. It is relatively easy to improve enrollment. And a lot of the energy of the government in Ethiopia is to get universal primary education. It is much more challenging to think through what the right tools are to get a strong education outcome.

Our hesitancy is not the importance of education. We believe fundamentally that investing in the sector as Ethiopia is trying to do is one of the cornerstones of building human capital. But we do not go in as directly into it because we are not quite sure what to advice to improve. We have recently launched a relatively modest education program this year. We are trying to work in both Africa and India to identify some clear and best practices on things like teacher training, and curriculum reform. We also plan on experimenting with education technology now that cell phone penetration has reached the level it has. There are essential tools for pupils and teachers that we hope might help.

Q. It is claimed that foreign aid to countries not yet democratically mature perpetuates autocracy. Why does the Foundation not include to its priority areas that can enhance democratic processes?

Those are choices that all sorts of development agencies can make. Our mission is a very simple one. It is carved on our building in Seattle, which says, “Every life has equal value,” and every person deserves the chance to a healthy and productive life.

Every person means regardless of the origin of country or region. We believe if there are strong partnerships leading to outcomes that reduce child mortality and poverty, and provide more resources for young mothers to invest in the nutrition or education for their children, that is a good thing. And we are willing to work wherever, and with whoever helps us get those outcomes as long as transparency, measurability and accountability are adhered to.

We feel that in our work here and in other places, that is the ultimate metric of success: lives saved.

Q. The Foundation has since invested around 600 million dollars in grants. This has been to governmental and non-governmental organisations working here or conducting research. Given the recurrent criticism of lack of institutional capacity, especially in government institutions, is it not advisable to administer the grants yourself?

Those figures are direct investments to Ethiopia. We also have made quite significant indirect investments particularly by our partnerships with the Gavi, the Vaccine Alliance, and the Global Fund to Fight AIDS, Tuberculosis & Malaria, and Ethiopia has been a significant recipient of resources there.

What we look at is the best way to get outcomes. For the long term, this is having sustainable, strong capacity in governmental agencies to deliver. Sometimes there could be policies that enable the private sector to deliver. It does not directly have to be civil societies or others. But it is about the ecosystem – what the right linkage of partners that can assure our engagement is sustainable.

So our initial investments in health, including last mile delivery, was focused on working out those capacity challenges. As that capacity is increased, which has in Ethiopia, our support moves upstream. We are helping the Health Ministry in data collection and analysis and policies.

Similarly, in agriculture, the original work we did at the request of the late Prime Minister Meles Zenawi was to diagnose the gaps in the capacity of agriculture development. The Ministry of Agriculture had some core strengths as well as gaps, and that is what led to the recommendation to create an Agricultural Transformation Agency (ATA), which we were the initial supporters and funders of. The goal of the ATA is exactly that – to lean in specific areas where you can either prove a model or build some capacity.

We are trying to figure out what the best combination is. Can you get both short-term delivery and results, or can you build long-term capacity so that in the end Ethiopia is able to meet its own needs? It is the long-term vision we all share.

Q. Where does Ethiopia stand when it comes to institutional capacity in relation to the other African countries the Foundation has a presence in?

We do not like doing rankings. Everywhere we work there are strong committed partners that are trying to achieve results. But if you look at outcomes, Ethiopia has one of the best track records in the continent and indeed the world. We have invested in the data to help improve and ensure that those outcomes are real. Ethiopia has been a model that other countries can learn from, which is not to say that there is no room for significant improvement. But there is continuous, steady improvement every year.

One of the valuable things for us here is the commitment of the government to operate towards those benchmarks and metrics. We have found the government to be very responsive to technical advice and support. This is one of the reasons we have offices here, as we do in Nigeria and South Africa.

Q. The Foundation only has offices in three African countries. What parameters do you consider when choosing to engage?

One is where the most need is. We are not an implementing agency, so the reason we put resources into organisations such as Gavi is that it works in every country of Africa. Those are things we cannot do as a foundation, but our resources can ensure that treatments or vaccines can reach virtually everywhere. Those agencies, in turn, work with multilateral agencies such as UNICEF or the WHO. We are trying to make sure that resources are going to those that most need it, and if we cannot provide it directly, we look for intermediaries that can provide that.

Another thing we look at is areas we feel we have a comparative advantage on. Some of that would be in the application of research and development in production and extension services. And then we look at countries and partners that share similar goals. In this case, Ethiopia is a country with an ambitious agriculture agenda where significant resources have been allocated at.

Yet another area we hope we can able to engage in is financial services for the poor. We work extensively in Tanzania, Kenya and Nigeria. But a more open telecom and commercial banking sector are necessary. With some of the reforms that are being considered, there may be openings in that space. So for those sorts of areas we choose to work in environments where we have receptive partners and where we think we can improve a model. In this case, we have been talking to the African Development Bank about lessons that they may take such as better regulatory policies to strengthen and expand financial services for the poor.

Q. Bill Gates, one of the founders of the Foundation, was at the World Economic Forum in Switzerland. This was around the time that President Donald Trump made an unflattering remark about African countries, Haiti and El Salvador. Gates said that in “the balance of hard power versus soft power, the US uniquely has a ratio emphasising hard power and I’d hate to see it go even further.” Can it be said that the Foundation is one of those soft powers?

We do not like to think of ourselves as soft power, but a Foundation committed to what we think are universal human values and a mission to serve the needs of the poorest. In the specific case of the United States, we believe that the nation has historically been a strong partner and supporter of those values. In the Global Fund to Fight Aids, Tuberculosis & Malaria, the US was a founding partner and the largest funder.

What Gates was partly referring to was that President Donald Trump has now twice in his budget proposals recommended significant cuts to American aid in areas we believe have been successful. We believe that it is wrong for the US’ national interest and the world we want to live in. We need to be outspoken about that. It has been encouraging that Congress has twice declined to pass the President’s budget and reinstated the full support. There is still a support in the US for broader engagement, and we hope this continues.

Q. How much has the current administration affected you?

What is known as the “Mexico City Policy” restricts US funding for family planning, which is one of our priorities? It concerns us and could have a negative impact. Outside of that, most of the traditional American partnerships that we have with organisations such as the Global Fund, and Gavi or in areas such as child health or agriculture continue strongly. But certainly, our preference would be a relaxation the Mexico City Policy.

Q. There has been a China office for over a decade, and an Ethiopian one since 2012 while grants have been available to the latter since 2000. The Foundation has had a chance to be an observer of the development efforts of both Ethiopia and China. Have you found any credence to the claim that Ethiopia is Africa’s China? Would that be a good thing?

One thing the two countries do share, which we strongly support, is a commitment to eradicating extreme poverty. China plans to eliminate extreme poverty by 2020. There are still around 42 million people that still live on less than a dollar a day, which is probably more people than in Ethiopia.

We see a similar commitment by the Ethiopian government over the last couple of decades. There are other countries both in Africa and outside just as committed. But the ability to follow through, course correct when changes are necessary, follow technical advice and implement are models that both China and Ethiopia have.

The two countries saw the greatest progress in reducing child mortality between 2000 and 2015. If it is the metrics that matter, there are countries that have shown impressive programs, ranging from Nepal to Ghana, but China and Ethiopia are the better once.

Q. The current administration is undertaking reforms, including in the economic front. Would you prefer to see more reforms in the areas that the Foundation focuses on in Ethiopia or plans to focus on in the future?

We have throughout the years been consistently insisting that the private sector can play a bigger role in helping drive development outcomes. There has been a slight hesitance here in sectors such as agriculture. Some of the reforms can provide some openings there. We would like to see if we can ensure that those openings will ultimately benefit those in need.

Q. You also support Chinese private players engagement in Africa.

We want public and private sector engagement. One of the things we are setting up is a joint fund, which has been announced and is in the process of launching, where we are putting up 100 million dollars and China the rest, for a total of 200 million dollars. It will look at health and agriculture investments that have social benefits.

Every time we use our capital, it has to have a social benefit. They are not there to make a profit but provide benefits for the poorest. We have had a very good response from China on this and are cautiously optimistic.

 

*This article was modified on July 4, 2018, to correct Mark Suzman’s title from “Global Development Policy,  Advocacy & Special Initiatives president and chief strategy officer” to say “president for Global Policy & Advocacy and chief strategy officer.”



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