Global Policy Forum

Nations Call for Tax to Help Fight Poverty


By Edith M. Lederer

Associated Press
June 28, 2005

France, Germany, Brazil and Chile have called for a tax on airline tickets to help finance the global fight against poverty. Such a tax makes sense because airlines benefit from globalization and pay low tax rates, and airline passengers "are rarely among the poorest citizens," Thierry Breton, France's economic minister, told a U.N. ministerial meeting on Monday. He said the tax could be different for domestic and international travel and for economy and business seats, and it could also vary depending on a country's wealth. The proceeds would go through existing institutions "to avoid needless bureaucracy" and could be used to finance urgent programs such as vaccination campaigns or AIDS treatment.

For example, Breton said, a tax of about $6 per passenger, with a $24 surcharge for business class, would generate about $12 billion a year. That's about one-fourth the estimated annual funding shortfall for meeting U.N. development goals. Those goals include cutting extreme poverty by half, providing universal primary education and stemming the AIDS pandemic by 2015, he said. "In view of the need for immediate action and for proof that this is a workable approach, France, Brazil, Chile and Germany are therefore calling for the rapid implementation of a pilot solidarity levy based on airline tickets," Breton said.

The plight of the more than 2 billion people living on less than $2 a day will be discussed at the July 6-8 summit of the Group of Eight richest nations and at the U.N. summit in September. "Many countries in both the northern and the southern hemisphere have already pledged support while others are planning to support us in the near future," Breton said.

Britain's International Development Secretary Hilary Benn warned that at the present rate, "poverty will not be halved until 2150 -135 years too late" and "primary education for all will not be achieved until 2130 - 115 years too late." Since the 1960s, the United Nations has called for rich countries to increase aid to 0.7 percent of their national incomes. All 25 European Unions nations have recently pledged to reach that target by 2015.

Andrew Natsios, the U.S. aid chief, defended the U.S. expenditure of about 0.17 percent of GDP on development aid last year, saying wealthy countries need to focus not just on money but on the other half of the bargain reached at the 2002 summit in Monterrey, Mexico. He was referring to demands on developing countries to end corruption and promote good governance, the rule of law, peace and democracy. At the Monterrey summit, he said, President Bush pledged to increase development assistance by 50 percent by 2006 - a commitment the U.S. achieved three years early in 2003.

In 2000, the United States spent $10 billion in development assistance, and last year it spent $19 billion, including $3.2 billion for Africa. This year, "we should be close to $24 billion ... which means a 140 percent increase in five years," Natsios said.

"If we ever reached 0.7 percent, we would be the dominant force in all aid," the head of the U.S. Agency for International Development said separately in remarks to reporters. That "would be imperial development by the United States. Do you know what 0.7 percent is? It's $91 billion. We couldn't spend $91 billion if we wanted to."




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