In Washington Friday, G20 finance ministers are holding a daylong meeting to discuss the world economy, Japan’s nuclear crisis, China’s currency and other issues. The ministers are here as part of the World Bank / IMF spring meetings.
Many NGOs and other groups are calling on them to also take up the issue of a Financial Transaction Tax [FTT], which they say it would help fund development programs, including HIV/AIDS. Funding for these programs has been cut back as nations tighten spending.
“It’s basically a tax in financial transactions that take place in a country. So, you’re looking at a small amount that’s taxed on things like stock…bonds, on shares, on whatever financial transactions there are,” said Lynette Mabote of the AIDS and Rights Alliance for Southern Africa (ARASA), based in Cape Town. It’s a regional organization working within SADC, the Southern African Development Community.
“What happens with that money is it gets put in a kitty to basically make up a good lump sum,” she said, “The reason why we are calling for it is that we are realizing that because of the world economic crisis and the failure to meet some of the commitments as set by countries, especially to the Global Fund replenishment…this would be another innovative mechanism to try and raise money for health in general in Third World countries.”
The Global Fund to Fight AIDS, Tuberculosis and Malaria distributes millions of dollars every year to HIV/AIDS programs around the world.
The FTT would range between 0.005 and 0.5 percent. Mabote called it “a blip on the system if you really were to look at it in big terms. A lot of countries already have taxations of this nature.” The money raised would be over and above what countries have officially allocated to health and development.
“Depending on which financial transaction would be targeted, we’re looking at raising in the next five years about three billion U.S. dollars, which would help quite a lot in maintaining current programs that are running and supported by PEPFAR as well as the Global fund,” she said.
PEPFAR is the President’s Emergency Plan for AIDS Relief, which began under President Bush and continues under President Obama.
Currently, there’s no specific recommendation for setting up a special fund to collect the FTT revenue and distribute it. That decision would be made if and when G20 countries agree to impose it.