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France, Spain call for global finance tax to help world's poor

 

 

BY STEVEN EDWARDS, POSTMEDIA NEWS SEPTEMBER 20, 2010 

 

 

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Spanish President José Luis Rodríguez Zapatero addresses the Millennium Development Goals Summit at the United Nations headquarters in New York, September 20, 2010.

Photograph by: Emmanuel Dunand, AFP/Getty Images

UNITED NATIONS — France and Spain pressed Monday for a tax on global capitalism, each telling the opening day of the UN's development-review summit that the recession has made "innovative financing" essential to help the world's poor.

The tax should be imposed on all financial transactions, insisted French President Nicolas Sarkozy and Spanish Prime Minister Jose Luis Rodriguez Zapatero during their speeches before leaders and representatives of almost 140 countries.

They spoke after UN Secretary General Ban Ki-moon called on the world's rich countries to "not balance budgets on the backs of the poor."

Canadian activists said Ban's request applies directly to the Canadian government's intention to freeze foreign aid next fiscal year as a deficit-reducing measure.

While the leaders of several developed countries have pressed the idea of launching a global finance tax before, speaking about it anew at such a widely attended summit gives it added weight.

The idea has also garnered growing attention as numerous developed countries, such as Canada, have announced plans to limit upcoming foreign aid transfers against the backdrop of the global recession.

"We can decide right here; why wait?" said Sarkozy. "Finance has globalized, so why should we not ask finance to participate in stabilizing the world by taking a tax on each financial transaction?"

Zapatero said alternative financing was needed that is "not as vulnerable" as rich-country budgets during a recession.

"My government is committed to defending the new tax, and making it a reality . . ." he said. "It appears sensible, just, and logical that we ask (for this) minimum effort to take millions of people out of misery."

Zapatero's government cut its development aid in the face of the financial crisis. By contrast, Canada's aid budget for the new fiscal year is — at $5.165 billion — at a record level ahead of the announced freeze next year.

The three-day conference aims to review the world's progress in achieving eight development goals meant to halve levels of poverty and dramatically increase living standards among the world's poor by 2015.

Amid the global economic recovery, new aid pledges are likely to be scarce, but Sarkozy said France would boost its contribution to the Geneva-based Global Fund to fight HIV/AIDS, tuberculosis and malaria in poor countries.

He said France would, over three years, give an additional 20 per cent of the current annual payment of $391 million, and challenged countries to make a similar gesture.

Insiders have suggested that Prime Minister Stephen Harper, who was scheduled to arrive Tuesday to deliver Canada's address, will announce an increase in Canada's contribution to the Global Fund.

But Canada joins the United States in being cool to the idea of launching a financial transaction tax.

In his address, Ban acknowledged there has been progress in trying to achieve the so-called Millennium Development Goals (MDGs), which emerged from pledges world governments made at the Millennium Summit in 2000.

But he called the advances "fragile," and argued that the "clock is ticking" if countries are to remain "true" to the initial goals.

"Being true means supporting the vulnerable despite the economic crisis," he said. "We should not balance budgets on the backs of the poor. We must not draw back from official development assistance — a lifeline of billions, for billions."

Ban will also this week call on rich countries to spend $169 billion on a UN plan he says will save the lives of 15.6 million women and children by improving their access to health care.

Progress of the MDG target of achieving a 75 per cent reduction in the number of maternal deaths during pregnancy is among the slowest, statistics show.

With so many countries attending the summit, proposals for achieving the MDGs varied widely. Bolivian President Evo Morales, who is vehemently anti-capitalist, said all the world's resources should be nationalized so the "dividends they generate will remain" in the respective countries.

Bhutanese Prime Minister Jigme Thinley proposed adding "happiness" as a ninth MDG.

"Since happiness is the ultimate desire of every citizen, it must be the purpose of development to create enabling conditions for happiness," he said.

U.S. President Barack Obama is scheduled to address the summit Wednesday, using the occasion to reaffirm Washington's commitment to the Millennium goals, say aides.

They add that the Obama administration is determined to eventually boost the U.S. aid budget to $52 billion from about $25 billion.

But Obama also faces taxpayer frustration over the U.S. economy and unemployment ahead of congressional elections November 2.

As such, he is expected to try to show that U.S. aid dollars are being well spent by using his address to press for new strategies that would see recipient countries commit to becoming more accountable and increasing efforts against corruption.

France has been among the leading advocates of looking to new sources of financing for development, and was the first country to introduce a tax on airline tickets to pay for aid.

In addition to Spain, countries such as Japan, South Korea, Brazil and Norway also support the idea, while Britain under the former Labour government was for it.

Business leaders say imposing such a new tax would dry up world financial flows and, therefore, end up slowing efforts to achieve worldwide economic development.

Aid groups said Monday that a World Bank announcement it would increase spending on education by $750 million was not enough.

The International Monetary Fund, meanwhile, said leaders would fail to slash poverty unless both rich and poor countries implement policies that restore global growth.

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