Is Bill Gates treating India like a guinea pig?

Did efforts at a cashless economy start in 2009 or 2012? Bill Gates says so. German commentator Norbert Häring alleges that the war on cash is driven by US security agencies and commercial interests

Photo by Remy Steinegger/World Economic Forum
Photo by Remy Steinegger/World Economic Forum

Norbert Häring

Did efforts at a cashless economy start in 2009 or 2012? Bill Gates says so. In another sensational post, the German commentator alleges that the war on cash is driven by US security agencies and commercial interests. Here are edited excerpts from his post. The entire post can be read here.


Microsoft’s Bill Gates is one of the richest and most influential people on earth. He announced in 2015 that his Bill & Melinda Gates Foundation was aiming at achieving full digitalisation of the payment systems of India and other populous developing countries by 2018. This “financial inclusion” program for India dates back to well before Narendra Modi came to power. It was elevated to official US policy by Executive Order in 2012, because the President saw vital US security interests are at stake.


Speaking for the Bill & Melinda Gates Foundation at the “Financial Inclusion Forum” in Washington, organised by the Treasury Department and USAID on December 1, 2015, Bill Gates said (min 17): “Full digitalisation of the economy may happen in developing countries faster than anywhere else. It is certainly our goal to make it happen in the next three years in the large developing countries. We have very significant efforts in Nigeria, Pakistan and India, (and) a dozen other countries, where we work with the central banks to make sure that the right kind of transaction switch is available…(min 20)…We worked directly with the central bank there (India) over the last three years and they created a new type of authorisation called the payments bank, and those customers will be able to use their mobile phones to perform basic financial transactions. And 11 entities applied, including all the mobile phone providers, and were granted that payment bank status.”


Nachiket Mor

"Financial Inclusion" was defined by PayPal-CEO Dan Schulman in an interview during the forum as: “Financial Inclusion is a buzz word for bringing people into the system.”


The cooperation of the Gates foundation and the Reserve Bank of India (RBI) is and has been a very tight one. Nachiket Mor, a “Yale World Fellow”, is head of the Gates Foundation India. He is also a board member of the RBI, with responsibility for financial supervision. He chaired the RBI Committee on the Licensing of Payment Banks and a financial inclusion committee that the RBI convened in 2013.


Gates' quotes stood in a context where he stressed that a government’s assistance to the poor and needy should not be delivered by the “incredibly inefficient” method of providing cash or grain to the recipient. “Digitalisation helps targeting”, he said, if payments are done via mobile banking. He praised Mexico (min 18), whose Finance Minister, Luis Videgaray Caso, was present, announcing: “We are going to use government income support programs as financial inclusion tools”, as tools to bring everybody into the system. The idea endorsed by Gates and the financial inclusion “community” at the forum was to steer poor people into participating in the digital payment system by making it a condition for receiving any or certain forms of support.


A Global ID to Track and Serve Everybody

“It is a wonderful thing to go in and create a broad identification system. Again India is an interesting example of this. There, the Aadhaar system, which is a 12-digit-identification that is correlated to biometric measures, is becoming pervasive throughout the country. This will be the foundation for how we bring that switch to every mobile phone in India. We are expecting to use these IDs, so that when you show up for any government service, say you walk into a primary health clinic, we will be able to use this ID to bring up your health record very quickly. If you move from one part of the country to another, you will be well tracked and served.”


Gates mentioned that such a unified biometric ID is also being developed in Pakistan and Africa, presumably with the help of the Gates Foundation, which is working closely with the central banks of Pakistan and Nigeria, Unified IDs of the same type introduced in three of the most populous countries of the world should take the Gates Foundation quite a big step closer his dream of a globally unified biometric ID to “track and serve” everybody on earth.


Gates Foundation in Service of the US-Government

In 2012, the Gates Foundation and USAID formed the “Better Than Cash Alliance”, together with the Omidyar Network (PayPal), Citi, Visa, Mastercard and the like. In the same year, President Obama issued an executive order installing the “President’s Global Development Council” (GDC) at USAID, which he tasked with advising him on how to increase American power by means of development policy. The document starts with the unusually frank statement of purpose:


“To help protect national security and further American economic, (..) and strategic interests in the world, it is the policy of the Federal Government to promote and elevate development as a core pillar of American power and chart a course for development, diplomacy, and defense to reinforce and complement one another. As stated in the 2010 National Security Strategy and the Presidential Policy Directive on Global Development, the successful pursuit of development is essential to advancing our national security objectives.”


Bill Gates gave an example of the link between worldwide digitalisation of payments (via the large US payment companies) and US security interests in his speech in 2015. Talking about the problem that overly strict rules for payment providers might do the opposite of the intended (min 23): “If financial flows go into a digital system that the US is not connected to, it becomes much harder to find those transactions that you want to be aware of or you want to block.”


PayPal blocks Canadian newspaper

A recent example of what payments the US might want to track and block abroad was a case in Canada, that made it into the news, because it affected the media. A Canadian community newspaper wanted to enter a feel-good story about a family of Syrian refugees in an awards competition and sent a fee to the organiser of the competition. As the purpose of the payment it gave the name of the article, which included the word Syrians.


This prompted PayPal to freeze the account of the media organisation and to send a letter stating: "You may be buying or selling goods or services that are regulated or prohibited by the U.S. government," This was an intra-Canadian payment, mind you. The note also requested a "complete and detailed explanation of the transaction" and said that "We would like to learn more about your business and/or some of your recent transactions."


PayPal and the Paypal-related Omidyar Network have been a long standing ally of Bill Gates in pushing for “bringing the people into the system” via the Better Than Cash Alliance and a variety of other such groups.


Payments will drive consumption

On the panel at the Financial Inclusion Forum, Bill Gates and the other panelists were asked what they think about people’s privacy concerns. Gates remarks on tracking and serving and tracking and blocking made his answer unsurprising, but still interesting. He said (min 38) that: “In many countries people are more willing to give up privacy in relation to the government than is the case in the US. I think we are not the model of how things will look.”


His co-panelist, Jamie Dimon of JP Morgan Chase struck a slightly different note when he said (min 38) that “ We have huge amounts of data. We are working with the Gates foundation on how to use them.”


Similiarly, in a recent report on the digitalisation of the Indian payment system, Boston Consulting Group and Google urged payment providers to “Mine customer data to build additional revenue streams.” They promise that mining customer data will help them to manipulate consumers into buying more. “Payments will drive consumption – and not the other way around.” On the steering board of the study were Visa and Vodafone (M-Pesa).


Governments also have a very keen interest in gathering all the payments data of their citizens they can get. These days, the government of Kenya, Bill Gates' poster-child for financial inclusion, is trying to force mobile phone providers to give them the opportunity to monitor all phone calls and mobile payments. They are telling the phone companies to let a contracted (private) company hook up to all routers.


(Häring’s note: +++ Kenya is a country that, in line with Gates’ remarks, has no data protection laws to speak of, making digitalisation much easier. The contractor or the phone provider might want to do anything with this data themselves, before it even finds its way to the government.)


Natarajan Chandrasekaran


The World Economic Forum has a program called Disruptive Innovation in Financial Services, supported by the Bill & Melinda Gates Foundation. This “long-term, multi-stakeholder” program “will seek to define the role of financial institutions in the creation and operation of a global standard for digital identity.”


This is work that intersects with the military- and security-apparatus-driven Global ID Summits of the US government and the financial inclusion via biometric identification drive, which can also be traced back to the US government.


The WEF also has a project called “Promoting Global Financial Inclusion” aimed at “accelerating financial inclusion through public-private collaboration at national, regional, and global levels”. Strategic partners of the WEF forum contributed to the effort, particularly with regards to India, e.g. by drawing up studies that praised the benefits of financial inclusion for customers and governments (Google, Boston Consulting Group) or for the financial sector and tech companies (McKinsey). The Chairperson of the IT Industry at the World Economic Forum, Davos for 2015 and 2016 Natarajan Chandrasekaran is on the board of the Reserve Bank of India, thus being in a very privileged position for helping to achieve the goals of the WEF for India.


Financial Inclusion and the War on Cash

Dan Schulmann, CEO of Paypal, had a prominent role at the 2015 financial inclusion summit, where he talked mostly about getting the poor out of poverty and the difference between making a profit and profiteering. The Paypal-related foundation, Omidyar Network is a key member of the various financial inclusion and Better Than Cash lobby groups and Paypal is a Strategic WEF Partner.


Asked in an interview about the need and the cost of having a physical presence in the countries where he is trying to do business with the poor he said: "The world is quickly moving digital and we are a leader in that, but there is still a long way to go. Until it goes fully digital, there will be a need to have a way to transfer money from the digital form into a cash form,” which he regards as a costly nuisance, adding: “The major competitor we have is cash. Right now, 85% of the world’s transactions are done in cash. That is really what we are trying to attack right now.”


Queen Máxima of the Netherlands, the UN.’s Special Advocate for Inclusive Finance for Development, said on a panel with Jack Lew: “The enemy is cash”, adding that this was a quote from Lew’s predecessor as Treasury Secretary (Tim Geithner). The third person who said it on that day was Strive Masiyiwa, Chairman and Founder of Econet, a large African Mobile Phone company with a payment platform: “Our major competitor is cash. Cash is what we seek to eliminate.”

Norbert Häring is a business journalist with a focus on monetary issues, based in Germany. He tweets at @norberthaering

This article first appeared on the writer’s blog on February 21, 2017

This is an opinion piece and the views expressed above are the author’s own. National Herald neither endorses nor is responsible for the same.

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Published: 22 Feb 2017, 8:58 PM