By Betsy Pisik
Washington TimesJanuary 31, 2001
The United Nations yesterday issued a sweeping list of proposals to help the world's poorest nations cope with the effects of globalization, including an idea for a global tax on international currency transactions.
A 0.1 percent tax on $1.5 trillion worth of "speculative" currency transactions could yield $150 billion a year that could be used to stabilize volatile markets, said the report, compiled in collaboration with the World Bank, the International Monetary Fund, the World Trade Organization and others.
Officials who drafted the report showed little enthusiasm yesterday for the measure, one of dozens that may wind up in a non-binding agreement nations will negotiate in March 2002.
"We have not recommended any such thing," Nitin Desai, the UN undersecretary-general for economic and social affairs, said of the global tax, which is presented in paragraph 113 of the 64-page report and touted in its press kit.
Instead, he said, "It's one of the areas where the report is not clearly making an explicit recommendation but simply saying that someone has said, `Think about it.' "
He declined to elaborate on how such a tax would be collected, administered or disbursed. Nor would he say whether UN Secretary-General Kofi Annan would endorse such a measure.
Reinhard Munzberg, the UN representative for the International Monetary Fund, and Enrique Rueda-Sabater, a World Bank senior manager, also pointedly refused to endorse the suggestion, which apparently was offered by nongovernmental organizations and unnamed member states.
A panel of high-profile financial analysts, including former Treasury Secretary Robert Rubin and former Mexican President Ernesto Zedillo, is to release its own recommendations next month.
The UN officials no doubt are stung by reactions to earlier ideas for world taxes.
Last year, the authors of the UN Development Program's annual Human Development Report suggested a special tax on Internet commerce and messages. The suggestion - presented in less than a sentence - overshadowed the massive evaluation of human rights.
Secretary-General Boutros Boutros-Ghali derailed his hopes for a second term, in part, by suggesting in the mid-1990s that the United Nations raise funds by taxing international airline tickets. Largely because of that, the US Congress made payment of $100 million in UN funds contingent on the organization's promise not to try to levy its own taxes.
"Among [private nonprofit organizations] there is a strong sympathy for a measure of this kind," said Danish Ambassador Jorgen Bojer. He said his own government was mildly interested in the idea but had decided it was not worth the political effort to pursue it.
The report released yesterday suggests scores of ways for the industrialized world to lower trade barriers, encourage debt forgiveness, and direct capital and investment dollars to the poorest nations.
Developing countries are advised in the report to improve access to micro credit loans, provide better regulation of financial markets, and reform tax and banking measures.
The officials note that official development assistance continues to shrink well below a long-standing target of 0.7 percent of developed countries' gross national product (GNP). The median in 1999 was only 0.25 of GNP, while the bulk of nearly $200 billion in private investment last year went to 20 nations.
Meanwhile, the world's poorest nations slid deeper into debt. Total debt equaled the total GNP in 1998 for the world's poorest countries.
World trade more than tripled to $5.4 trillion between 1995 and 1998, while exports from the least-developed nations accounted for $26 billion, a $2 billion increase in the same period.
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