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UK and France pushing a new way of thinking on global poverty

By Gerard Errera
THE GUARDIAN, LONDON
Saturday, Mar 05, 2005, Page 9

This year must be a watershed in the fight against poverty. In order to "make poverty history," both France and the UK are pushing bold new ideas. But to appreciate them, one needs to understand the terms of the current debate.

Five years ago, the UN general assembly adopted a set of targets for poverty reduction and human development to be achieved by 2015, the so-called Millennium Development Goals (MDGs). But with the resources available, they are beyond reach, especially in sub-Saharan Africa.

The need for a radical increase in aid to poor countries is beyond dispute. Nor is there much dispute about the amount required -- US$50 billion a year in additional aid would be enough to meet the goals in 2015, a paltry sum compared with a global gross national product of US$40 trillion.

Today, the debate is about where the money should come from. On this, both France and the UK are eager to innovate.

First, developed countries should aim at devoting 0.7 percent of their GDP to Official Development Assistance. France has set itself this target for 2012. The UK is in a position to reach it by the same date. But we need to do more.

Development cannot wait, and needs have to be satisfied now. The sooner aid comes to recipient countries, the more effective it will be. Aid also has to be more stable and predictable. "Stop and go" policies hamper development.

So new means are needed for finance development, with France and the UK at the forefront of this search. The UK has proposed creating an International Finance Facility (IFF). This is a bold new idea which would permit an immediate increase in the financial transfers to poor countries, thus stabilizing human development programs in the long term.

Our two countries, together with the Bill and Melinda Gates Foundation, are working on a pilot IFF scheme to promote vaccine immunization in poor countries.

France has, for some time, strongly advocated the creation of global taxes to finance the fight against poverty. This would not require the creation of any new international bureaucracy, and would be based on voluntary cooperation between sovereign states. Its main advantage would be to secure stable, immediately available financing for the MDGs.

Last year, in a joint endeavor between emerging and developed countries, Brazil, Chile, France and Spain looked at several options for global taxes. The report they co-authored concluded in favor of the economic feasibility of international taxes.

Building on this emerging consensus, French President Jacques Chirac, in his Davos speech in January, suggested a very small levy (about one ten-thousandth) on international financial transactions and some taxes on air transport.

Admittedly, international taxation is controversial. However, the public outpouring of generosity throughout the world following the Asian tsunami points to a shift in world opinion. A contribution of ?1 (US$1.91) or ?2 on every plane ticket in the world would produce almost enough revenue to finance the worldwide fight against AIDS.

Who could refuse such an effort? Who could refuse to stem the "silent tsunamis" which happen every day in Africa? As Chirac said, "The disproportion between the modest efforts needed and the benefits everyone would reap from them is striking."

The proposals made by France and the UK, while different, are complementary and reinforce each other. The IFF would ensure that government aid money would be made available sooner. The French proposals would contribute to the same goal while avoiding increasing the developing countries' debt.

Chirac has pledged his full support for the British proposals. Both Prime Minister Tony Blair and German Chancellor Gerhard Schroeder have welcomed the French proposals.

Aid is not, of course, the only component of a development strategy. Debt relief, to which we remain fully committed, is also essential. We recognize that, ultimately, greater integration of poor countries in world trade through better access to our markets is an essential driver of growth and poverty reduction.

But aid is indispensable. We are one-third of the way to the target date for the achievement of the MDGs. Decisions made this year will determine the shape of the aid development system for the years to come. Now is the moment to act.

We are fortunate that the UK holds the chair of the G8 during this crucial period. It got off to a good start at the G7 meeting of finance ministers in London: With the backing of his European partners, UK Chancellor of the Exchequer Gordon Brown succeeded in putting development at the top of the agenda. It is our common duty to see that it stays there.

Gerard Errera is the French ambassador to the UK.
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