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InnovationWithImpact:Financing21stCenturyDevelopmentAreportbyBillGatestoG20leaders,CannesSummit,November2011InnovationWithImpact:Financing21stCenturyDevelopment[3]ExecutiveSummaryLeadershipfromtheG20iscriticallyimportantrightnow.Theglobaleconomicsituationisasfragileasithasbeenatanytimeinthepast50years.AsleadersoftheG20,youfaceadifficultchallenge:Howdoyouresolvetheimmediatecrisiswhilecontinuingtomakesmartinvestmentsinlong-termgrowthandimprovedlivingconditions?Duringmylifetime,innovationsinbusiness,science,andtechnologyhaveenergizedtheglobalmarketeconomyinunprecedentedways.Theworldeconomyis500percentbiggerthanin1960.Wholegroupsofcountriesthathadbeenatthemarginshavebecomekeydriversofgrowth.Theirsuccessiswidelyviewedasamiracle.Thisprogresshasbenefitedeveryone,notjusttherichest.YoucanseeprogressintherisingGrossDomesticProduct(GDP)ofmanycountriesaroundtheworld.Youcanalsoseeitinfallingpovertyratesandotherquality-of-lifeindicatorscapturedintheMillenniumDevelopmentGoals(MDGs),establishedbyworldleadersin2000andagreedtobyallG20nations.Inthepast50years,abillionpeopleweresavedfromstarvationbyadvancesinagriculture.Healthhasimprovedinstunningways,thankstoinnovationslikevaccines.In1960,20millionchildrenundertheageof5died.In2010,fewerthan8millionchildrenunder5died.Theworldpopulationmorethandoubledduringthistime,whichmeanstherateofdeathhasbeencutbyover80percent.Aidgenerosityhasplayedanimportantroleinthesesuccesses.Despitethecurrenteconomiccrisis,Iamoptimisticthatwecanbuildonthegenerosityandinnovationsthatworkedinthepast.Thegroupofcountriesabletocontributeresourcestodevelopmentislargerthaneverbefore.Thenumberofpeoplewhocanspurinnovationsismuchgreaterthaninthepast.Forthesereasons,Iamconvincedwecancreateaneweraindevelopment.InthisreportItalkaboutthelong-terminvestmentsandpartnershipsIbelievewillkeepusonthepathofeconomicgrowthandincreasingequity.Ibeginthereportbydescribingtheparamountimportanceofinnovation.Keyinnovationslikenewseedsandvaccines—andnewwaystodeliverthemtothepoorest—canmultiplytheimpactoftheresourceswe’realreadydevotingtodevelopment.We’vemadeabigdifference,butwecanimprovethebasictoolsofdevelopmentbymakingthemcheaper,easiertouse,andmoreefficient—orbyinventingwhollynewtools.Oneofthenewestresourcesfordevelopment—andpotentiallyoneofthemosttransformative—israpidlygrowingcountries’capacityforinnovation.CountrieslikeBrazil,China,India,andMexicoareinagreatpositiontoworkcloselywithpoorcountriesbecausetheyhaverecentexperienceinreducingpoverty,aswellasenormoustechnicalcapabilities.Thisuniquecombinationgivesthemboththeinsightsandtheskillstocreate201510519601965197019751980198519901995200020052010201520202025millionsofchilddeathsScalingupbasichealthinterventionswillprevent27millionchilddeathsby2025Vaccines+malariapreventionandtreatment+diarrheaandpneumoniatreatment+goodnewborncarepracticesAidHasHelpedReduceChildDeathsDramatically,andCanContinuetoDoSoSources:JohnsHopkinsBloombergSchoolofPublicHealth,Bill&MelindaGatesFoundationestimates[4]InnovationWithImpact:Financing21stCenturyDevelopmentbreakthroughtoolsfordevelopment.Iamparticularlyexcitedaboutthepossibilityof“triangularpartnerships”amongrapidlygrowingcountries,traditionaldonors,andpoorcountries,becausetheyexploitthecomparativeadvantagesofmanydifferentcountries.Ultimately,developingcountries’domesticresourceswillbethelargestsourceoffundsfordevelopment.Tomaximizetheimpactoftheseresources,poorcountriesmustraisemorerevenue;spenditonprioritieslikeagricultureandhealth,whichmanyhavecommittedtodo;and,followingtheleadofG20countriesthatpioneeredimpactevaluation,measurethecost-effectivenessoftheirprograms.OneimportantwayG20countriescanhelppoorcountriesraisemorerevenueisbypassinglegallybindingtransparencyrequirementsforminingandoilcompanieslistedontheirstockexchanges,toensurethatnaturalresourcesarewell-managed.Meanwhile,traditionaldonorsmusttakestepstomeettheiraidcommitmentsandspendtheiraidstrategically.Ifthecountriesthathavemadepromisessticktothem,itwillgenerateanadditional$80billionannuallystartingin2015.Overtheyears,OfficialDevelopmentAssistance(ODA)hashadahugeimpact,anditwillcontinuetoplayapivotalroleindevelopment,alongsideallthenewresourcesIwriteabout.Well-designedaidreducespovertyrightnow,andacceleratespoorcountries’progresstowardthemomentwhentheywillnolongerneedit.There’salotofpressureonaidbudgetsgiveneconomicconditions,butaidisaverysmallpartofgovernmentexpenditures.Theworldwillnotbalanceitsbooksbycuttingbackonaid,butitwilldoirreparabledamagetoglobalstability,tothegrowthpotentialoftheglobaleconomy,andtothelivelihoodsofmillionsofthepoorestpeople.Inthereport,IincludesometaxproposalsG20countriesshouldconsiderthatcouldhelpthemmeettheiraidcommitmentsandeventuallyexpandthem.Finally,Italkaboutwaystogettheprivatesectormuchmoreinvolvedindevelopment.Asabusinessman,Ibelievethefreemarketfuelsgrowth.Unfortunately,themarketoftenfailstoaddresstheneedsofthepoorest,buttherearerelativelysimplethingswecandotoencourageprivateinvestmentindevelopment.Forexample,G20countriescouldfacilitateaninfrastructu