Life-saving goals agreed - but who will pay?
193 countries have just made a landmark agreement on new targets – the ‘Sustainable Development Goals’ (SDGs) - to save lives across the world. UN Secretary-General Ban Ki-moon praised the agreement, calling it “an historic turning point for our world.” As country leaders meet to adopt the SDGs at a summit in New York in September, we need them to focus on means of financing such as the Robin Hood Tax to make these aspirations a reality.
Just how ambitious are the SDGs? Well, there are 17 targets compared to the 8 Millennium Development Goals (MDGs) they will supersede. The MDGs helped reduce extreme poverty in every developing region, including sub-Saharan Africa, in the last 2 decades. But progress has been far from uniform, with huge disparities across and within countries. That’s why world leaders have pledged that the SDGs will “leave no-one behind,” addressing more systemic issues like inequality and climate change as well as traditional development areas like healthcare, education, clean water and sanitation.
A huge challenge lies ahead: the SDGs are estimated to cost 3.5 to 5 trillion dollars a year. As much of this as possible needs to be public not private money, to ensure the needs of the world’s poorest are prioritised over profit. The pledge (in goal 13) to mobilise $100 billion annually to help developing countries deal with the impacts of climate change is particularly timely in advance of the critical climate conference in Paris in December, where agreements to control global warming are set to be made.
But to date, ambition around financing has been poor with public financing urgently needing to be scaled up if the pledge to “leave no-one behind” is to be more than a pipe dream. So how to find the money? Here are three ways:
1. Rich countries have to meet their official development assistance (ODA) commitments. ODA remains one of the major sources of financing for development, with the UK being one of only a handful of countries to have met the important UN commitment of allocating 0.7% of GDP to international aid. If other rich countries did the same, tens of billions in extra revenue could be raised. But it’s not all about aid…
2. Poor countries need to be able to generate their own resources through taxation - after all, 80% of money used to finance development in poor countries is generated in the countries themselves. But poor countries lose $100 billion every year through unpaid taxes and a further $138 billion when global corporations demand special tax arrangements as a condition of operating in their countries - this far outweighs the amount of money they receive in aid. This is why a principal demand of many campaigners is for a ‘Global Tax Body’ to finally bring some fairness to the international tax system. NGOs are looking to capitalise on the growing momentum to change the way tax rules are set at the SDGs summit in September.
3. Crucially, countries need to be able to tap into new, innovative and predictable sources of financing such as international levies and taxes to redistribute money from the winners of globalisation to those who have lost out. In recent years, a group of countries led by France instituted a small levy on airline tickets (just 1 euro on flights in Europe), raising more than $2.5 billion towards vital HIV, TB and malaria treatments, saving millions of lives. Solidarity levies such as this pave the way for initiatives of greater ambition.
In this regard, a Robin Hood Tax has huge potential to generate many billions of dollars in new revenue to combat poverty. The financial sector is currently one of the least taxed economic sectors and continues to make excessive profits – it is only fair that it is harnessed and funds raised spent both to protect livelihoods and save lives in the world’s poorest countries. The Robin Hood Tax is happening: 11 countries in Europe are about to implement a joint Financial Transactions Tax (FTT) which will raise up to $40bn in revenues every year. Prominent economists and politicians back the campaign.
Popular, innovative and efficient: the Robin Hood Tax is an idea whose time has come!
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