Next four years will be tough: Bill Gates

Agencies

Washington: Microsoft Corp founder Bill Gates foresees another three-to-four "very tough" years for the US economy.

Gates, making those comments at the annual Technology, Entertainment, Design conference in California on Wednesday, called on governments to keep investing in education and healthcare.

Gates' comments on the economy came as U.S. Gross Domestic Product shrank by a 3.8 percent annual rate in the fourth quarter, according to government data. It was the severest economic contraction in 27 years.

The drop followed a 0.5 percent pace of decline in the third quarter. Those were the first back-to-back quarterly contractions in output since the last quarter of 1990 and the first quarter of 1991.

"No doubt, we've got three or four years here that are going to be very tough," Gates told the eclectic gathering of industry executives and business leaders. "We're going through a period ... where a 50-year credit expansion has moved to contraction.

"You're going to have a number of years where aggregate demand is low," he said.

Gates, named by Forbes magazine in September as the richest person in the United States for the 15th straight year, renewed his pledge to keep his foundation focused on health issues.

The foundation had spent slightly more than 5 percent of its assets each year, or $3.3 billion, to support vaccines, AIDS care, malaria research and other programs.

The foundation planned to increase that spending to $3.8 billion, or about 7 percent of assets, in 2009, said Gates, who retired in June from the software firm he created with childhood friend Paul Allen.

Gates said that in the past 50 years, the number of children dying in the first year of life had dropped by half to fewer than 10 million, while the number of children born increased to 135 million from 110 million annually.

"Each one of those lives matters a lot," he said. "The next breakthrough is to cut that 10 million in half again and I think that's doable in less than 20 years."

That was a realistic target because most deaths had been due to just a few ailments: diarrhea, pneumonia and malaria, he argued.

Gates said his foundation was helping develop a malaria vaccine he hoped would prove an effective remedy.

"Our foundation has backed a vaccine that goes into Stage 3 trials that starts in the next couple of months and that should save over the two-thirds of the lives affected," he said.