How can we fund the fight against poverty within the context of the global economic crisis?
Where can we find the capital to fund the Millennium Development Goals?
These are all questions being asked at the UN’s summit on development goals in New York, where the talk is of new ways of generating money for aid.
French President Nicholas Sarkozy gave the rallying call. He said: “Innovative finance, taxing financial transactions, these are things we can make a decision on NOW. Why wait?”
He was followed by the Spanish Prime Minister, who also called for an international financial tax.
Jose Luis Rodriguez Zapatero said: “We should set up an international financial tax to help us finance the Millennium Development Goals.”
France is one of the biggest supporters of so-called innovative financing and was the first country to introduce an air travel tax to help pay for aid .
The idea has since spread to South Korea, Chile, Madagascar, Mauritius and Niger.
It was first mooted by French President Jacques Chirac in 2005. At the time he said: “The next EU summit will mark a new stage in the financing of development – with the launch of the first international air passenger tax. I have asked the government to set the wheels in motion and it should be up and running next year.”
The international air passenger tax ranges from one euro to 40 depending on the cost of your seat and how far you are going. It generates 160 million euros a year for France’s aid budget.
But a tax on financial transactions might prove more difficult to impose. The EU’s 27 members gave it the green light at their summit last June – but with the condition that the G20 agreed.
Shortly afterwards the idea was rejected by countries including Australia and Canada when the G20 met in Toronto.