Innovative Financial Solutions

Tuesday, July 13, 2010

I believe that for once and for all it is essential that we apply the mechanisms that will enable us to address the problem of the quality of life for the less fortunate segments of the world’s population, together with increased responsibility of national governments in financing international development and cooperation.

In the last few years there have been significant proposals and initiatives in that regard:

United Nations, New York, September 20, 2004. At the initiative of President Luiz Inácio Lula da Silva, he met with Secretary General Kofi Annan, Chilean President Ricardo Lagos, French President Jacques Chirac and Spanish President José Luis Rodríguez Zapatero to increase, as warranted, financing for development ".

Likewise in September, the Report of the Technical Group on Innovative Financing Mechanisms to Finance the Fight against Hunger and Poverty was released. It proposes taxing financial transactions and addresses the arms trade, international financing facilities, special drawing rights, international reserve assets issued by the International Monetary Fund, tax evasion and tax havens, increasing the impact of remittances, voluntary contributions through credit cards and socially-responsible investment.

On September 14, 2005 the aforementioned heads of state and government endorsed the Declaration on Innovative Sources of Financing for Development: "we support pursuing the creation of international levies as an element in the development financing system". These include financial transactions, currency exchanges, immigrant remittances, taxes on airline tickets...

On September 19, 2006 French President Jacques Chirac proposed creating UNITAID for the “allocation to the purchase or production of pharmaceutical drugs of a tiny part of the immense wealth generated by the acceleration of trade.” Part of UNITAID funds come from a solidarity contribution levied on airline tickets.

At the Doha meeting in September, 2008 UBUNTU presented a proposal to create a global Currency Transaction Tax. But once again, the shortcomings of the Doha Summit were as obvious as the former ones in Monterrey, etc. In that regard, especially relevant was Stamp Out Poverty Campaign Coordinator David Hillman’s presentation on November 29, 2008: Innovative Financing to Serve Development: from Monterrey to Doha, Towards a Scaling Up.

French Foreign Affairs Minister Bernard Kouchner published an article on "Innovative Financing" in "El País" on September 17, 2009 in which he proposes different means for obtaining funds to meet the growing needs of development which, as was to be expected, are not being met by the States.

Also noteworthy is the Pilot Group on International Solidarity Contributions for Development’s Dakar Declaration on innovative sources of financing.

On March 4-5, 2010 a meeting was held in Paris on "Innovative Financial Solutions for Development" to exchange experiences with respect to new mechanisms for generating resources. French Foreign Affairs Minister Bernard Kouchner and the Minister for the Economy, Industry and Technology Christine Legarde attended the meeting, underscoring the importance of the Tax on Financial Transactions initiated in 2008 in the context of the Pilot Group on Innovative Financing for Development. Also present were many private sector representatives of banks and financial institutions. There was a general consensus concerning the need to impose levies on the financial system.

Finally I would like to highlight the review published in the February-March, 2010 "UBUNTU Newsletter" entitled "An Imperative and Fair Need: New Funds to Finance Development".