Global Policy Forum

By Larry Elliott

The chancellor, Gordon Brown, will today urge the west to learn lessons from the war against terrorism by agreeing to double aid to $100bn (£69m) a year to fund "a new deal for the global economy".

Mr Brown, speaking at the New York Federal Reserve, will say the west should be prepared to look at taxes on foreign exchange transactions and arms deals as a possible way of raising money for aid, and will propose the creation of a new international fund dedicated to meeting the United Nations' development targets for 2015.

In a show of support for those campaigners who have blamed the growing gap between rich and poor for rising international tension, the chancellor will say that badly managed globalisation will lead to the marginalisation of millions of people.

To prove Britain's commitment to increasing finance for development, the chancellor's first hard pledge for the next three-year spending round starting in 2003 has been to agree with the international development secretary, Clare Short, that aid will rise as a proportion of GDP. Although on a rising trend, at 0.31% of GDP, Britain's aid budget currently falls well short of the UN target of 0.7%.

The chancellor believes that the mood has changed in the west since the attacks on New York and Washington on September 11, with rich countries now more willing to find ways of tackling the root causes of terrorism. The timing of the speech just days after the collapse of the Taliban is intended to demonstrate the government's commitment to tackling both the causes and symptoms of terrorism.

Developed countries must be prepared, Mr Brown will argue, to step in with financial help if developing countries pledge to tackle corruption and put poverty reduction at the heart of economic policy.

"Some people say the issue is whether we have globalisation or not. In fact, the issue is whether we manage globalisation well or badly, fairly or un fairly. Managed badly, globalisation will leave whole economies and millions of people in the developing world marginalised. Managed wisely, globalisation can and will lift millions out of poverty and manage to get them on to the high road to a just and inclusive global economy. So the question is not whether we move forward with globalisation but how."

The chancellor has accepted the findings of a report prepared for the UN by the former Mexican president, Ernesto Zedillo, which concluded that the 2015 targets - universal primary education, halving poverty and cutting infant mortality by two thirds - would not be met unless aid was increased by $50bn a year.

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