Global Policy Forum

G20 Urged to Tax Financial Deals to Fight Poverty and AIDS

By Nick Mathiason

August 27, 2009

G20 finance ministers meeting in London next Friday will face concerted pressure to introduce a tax on financial transactions as a coalition of anti-poverty campaigners aim to force the issue onto the agenda.

An unprecedented coalition of health charities and development campaigners will ratchet up pressure on the G20 in the wake of comments made today by Financial Services Authority chairman, Lord Turner supporting a Tobin-style tax on foreign exchange transactions.

Pressure on the G20 grew as senior officials at the United Nations also threw their weight behind a currency transactions levy. Philippe Douste-Blazy, the former French foreign minister now the UN's secretary-general's special adviser on innovative financing for development, told the Guardian: "I hope one head of state will propose this tax. I don't know who it will be. I think it's a good idea for two reasons.

"Firstly, this economic crisis is going to have serious consequences on developing countries. The price of commodities will fall because investment from western countries will decrease and aid commitments will not come through. And second, this is a crisis of ethics, a problem of cynicism with the system. We can't continue like this. We have to redefine the system."

His intervention is crucial because he was the architect of a groundbreaking tax in France that skims a tiny sum from airline ticket sales to buy cheap medicines for those suffering from AIDS malaria or tuberculosis. The scheme now extends to 30 countries with more set to follow. In two years it has raised $1bn.

Next week's G20 finance meeting will be followed by a co-ordinated push by campaigners to persuade leaders of the world's 20 most powerful countries meeting at Pittsburgh in four weeks to adopt a currency transaction levy.

It comes as evidence of increasing international support for a currency transaction tax to help poor countries affected by the global economic crisis grows. In May, the French foreign minister, Bernard Kouchner, announced the formation of an international working party that includes fellow G20 country Brazil to study how to implement currency transaction levies for development and health. It was the first time such a high level public endorsement of the proposal was made by a country.

"The bankers got the poorest countries in the world into this crisis. Now they have the chance of getting them out of the mess they created," said David Hillman, co-ordinator of Stamp Out Poverty, a longstanding campaigner for a currency transaction levy. "This has specifically united campaign groups focused on child health, maternal health and combating HIV/AIDS in the world's poorest countries.

"This is an unprecedented coming together of health organizations critically aware that G8 commitments, such as universal access to HIV/AIDS treatment by 2010, won't be achieved and in fact are going into reverse. If you stop the supply of life-prolonging drugs to someone, you are effectively killing them. So this is a matter of life and death. That's why such a strong coalition is rapidly building around this idea."

Anton Kerr, policy manager at the International HIV/AIDS Alliance, said: "The G8 has just over a year to meet their Gleneagles commitment to universal access to HIV treatment. The current economic crisis is putting achievements made to date on the health development goals at risk, and is having a significant impact on the health of the poorest and most vulnerable. There is a need to explore innovative options to raise additional resources so we don't lose ground.

"In response, civil society organizations working on HIV, TB, malaria, child and maternal health from across the globe are campaigning for the establishment of a currency transaction levy for health. Now is the time, while minds are focused on fixing the global financial system."

Calls for a tax on banks were made by Turner as a way of tempering excessive bonus culture which has reappeared in the City despite the affects of the financial crisis on the wider economy.



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