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Africa: Innovative Global Financing
Jun 8, 2009 (090608)
(Reposted from sources cited below)
"Innovative financing ... is no longer in the experimental stage.
It has already produced over $2 billion dollars in three years. But
there is still an enormous need for financing: to ensure primary
education for all, improve maternal health, combat hunger and the
great pandemics, guarantee environmentally-friendly development,
etc. We know that $175 billion is needed every year at the global
level to finance climate mitigation policy. We all know that $35
billion is needed to achieve the Millennium Development Goals in
the health sector alone." - Bernard Kouchner, Minister of Foreign
and European Affairs, France
In the course of his May 28 speech to the Leading Group on
Innovative Financing for Development, to be chaired by France
over the next year, Kouchner went so far as to pledge support for
experimentation with a financial transactions tax, a proposal that
was quickly dismissed by French Finance Minister Christine Lagarde.
But it is still true that the momentum for new forms of funding,
for health, education, and climate change, continues to build, a
recognition that financing for such global public goods should not
depend on the political fortunes of official aid budgets.
This AfricaFocus Bulletin contains the speech by Minister Kouchner,
a press release on the parallel meeting of the High Level Taskforce
on Innovative Financing for Health Systems, and excerpts from the
conclusions of the Leading Group's ministerial meeting.
For more information:
Leading Group on Innovative Financing for Development (previously
called Leading Group on Solidarity Levies to Fund Development)
High Level Taskforce on Innovative International Financing
for Health Systems
Stamp Out Poverty: Campaigning for new sources of development finance
Stamp Out Poverty: Financing climate change mitigation and
adaptation in developing countries
For previous AfricaFocus Bulletins on related issues, visit
++++++++++++++++++++++end editor's note+++++++++++++++++++++++
Sixth ministerial meeting of the Leading Group on Solidarity Levies
to Fund Development - Speech by Bernard Kouchner, Minister of
Foreign and European Affairs
Paris Conference opening speech by M Kouchner
Paris, 28 May 2009
Leading Group on Innovative Financing for Development
(...) We are gathered here because we are deeply concerned about a
single question: do we wish to continue to talk indefinitely about
the Millennium Development Goals? Or do we wish one day to be able
to talk about the Millennium "achievements"?
We are gathered here because we all share the same conviction,
which the Secretary-General mentioned in passing: it is possible to
change the world by force of will, by unwavering will, and with
imagination! Innovative financing has passed its test. It is no
longer in the experimental stage. It has already produced over $2
billion dollars in three years.
But there is still an enormous need for financing: to ensure
primary education for all, improve maternal health, combat hunger
and the great pandemics, guarantee environmentally-friendly
development, etc. We know that $175 billion is needed every year at
the global level to finance climate mitigation policy. We all know
that $35 billion is needed to achieve the Millennium Development
Goals in the health sector alone.
These needs are not met by conventional financing. Times are
difficult, as we know, so we need to show imagination by taking
advantage, if I dare put it this way, of this difficult period
which has badly affected our countries.
We need a change of vision today: in the face of the financial
crisis, it is in our interest to supplement the traditional aid
flows which nevertheless reached a record level of $119 billion in
2008. We also need to be able to take advantage of the world's
growing interdependence, of globalization, of this globalization
that some fear and others hope for, and so it is in our interest to
pool the resources of States and private actors.
Innovative financing is indispensable. I am convinced that we need
to set out to gain new participants, new sectors and new
instruments. It is important for an ever-growing number of States
to join us in such initiatives as the tax on plane tickets. This
innovation has already been put in place, productively, in 13
countries. It funds the paediatric treatment of HIV-AIDS in 100,000
children a year through UNITAID's programmes - thank you Philippe
[Douste-Blazy, the UN Secretary-General's special adviser in charge
of innovative financing]. This is very good indeed, but obviously
it is not enough.
We also need to go for new sectors. We must keep in mind that
innovative financing has so far focused on health goals - I'm not
criticizing this, and it has been a great success! But this must
encourage us to broaden the field of action, particularly to
include education and climate change.
We need to gain new mechanisms which bring intervention from
countries in the North and South. Paradoxically, the financial
crisis, as I said, gives us the opportunity to upset concepts that
used to be certain! In this context, innovative financing can also
contribute to better regulation of the economy. It is a valuable
tool in globalization, a globalization which, it has often been
said, would be more just and more humane. France, a pioneer in
introducing many innovative instruments, wishes today to continue
to propose to her partners new ambitions to help the poorest. It
remains imperative to persuade everyone of the utility of
innovative financing and to explore mechanisms appropriate for
global needs, for the developing world, based on the principle of
economic rationality. These two worlds, development and economic
rationality, are not contradictory. We need today to foster bold
and ambitious thinking which can make the most of the growing
financial interdependence of international markets.
The future Chilean presidency of the Leading Group, which I welcome
here, faces an impressive workload! It will take over at a decisive
time characterized by our resolve to reject resignation.
The need for scaling up - as it is referred to in the language of
the UN - innovative financing is now on the international community
agenda, this too being a UN expression. It was recognized by the
United Nations at the Doha Conference. It was recognized by the
European Union in the latest Council conclusions. Now we must act.
To this end, I would like to invite you in the coming hours, days
and months, invite us collectively, to give practical effect to our
commitment by taking several decisions. Because we cannot be
content with just goals, generous though they may be. It is the
Leading Group's role to mobilize the international community for
these issues; it is also our duty, it seems to me, to give them a
way forward by taking decisions.
What are these practical steps? This is not an exhaustive list:
- Firstly, for each member country next year to implement one
innovative financing mechanism from among the range of mechanisms
proposed during these two working days;
- Secondly, for existing initiatives to be adopted by new countries
to increase the resources for development, and there is no shortage
of projects. I have mentioned the plane ticket tax financing
UNITAID, IFFIm, the so-called "D.tax" mechanism, the voluntary
solidarity levies set up by the Millennium Foundation, the
"Advanced Market Commitments" and so on.
- Thirdly, that we should extend our work to include the fight
against tax evasion which deprives the developing countries of
considerable resources, a step the Leading Group took in response
to the Norwegian presidency, and I thank it for that:
- Fourthly, that we stipulate the need to reduce the costs of
migrants' transfers and encourage these to be used as effectively
as possible. Do not believe that innovating financing is separate
from taking political positions - it is directly at the heart of
politics. If we talk about the need to reduce or eliminate tax
havens, if we talk about migrations, it is because it is absolutely
necessary. If we fail to address these issues, we would be being
very superficial and would remain so;
- Fifthly, let us begin a debate on climate change, in particular
on allocating for development, on a voluntary basis, part of the
revenue from bids for carbon credits. It wouldn't be understood why
we want to reduce greenhouse gas emissions - which we will succeed
in doing - if the countries most in need of these reductions do not
benefit from them;
- Lastly, in a personal capacity, I would like to see the Leading
Group explore new forms of levy, no doubt on a voluntary basis
initially, given the success of innovative taxation mechanisms.
Such projects for taxation like the one on non-monetary financial
transactions presuppose broad adherence and will be effective only
if several States, obviously those where the main currencies
circulate, decide to coordinate their implementation of them on all
markets. And to do this, banks and their clients - and the task is
enormous - have to be convinced. I have already proposed this
repeatedly, and each time the finance ministers have all said "it's
not possible." Well, I will tell you, "nothing is impossible!"
Nothing, especially not that. Because you all know perfectly well
it will be achieved one day even if it begins on a voluntary basis
like the ethical funds, for example. Banks at some point in time
will propose it to their clients, and a tiny part of financial
transactions will be released for development. I promise you, and
our country, France, is ready to assist a pioneer group of States
in applying this type of tax which was already adopted in our
parliament in 2001. So it is possible to implement such a measure,
which could perhaps be applied to the European market initially.
Let us think about all this in practical terms, not to say it's
difficult; obviously everything is difficult but once you do it, it
becomes less difficult. I am convinced that a working group must be
Ladies and gentlemen, we need today to make the best of the growing
interdependence of financial markets by using non-onerous
mechanisms to tax, as I said earlier, a tiny fraction of the
transactions which take place every day. This will probably happen
on a voluntary basis to begin with because financing development
must become a moral imperative. These amounts would then be paid to
a fund receiving public and private resources so that human-scale
projects selected by a group representative of the private and
public sectors and NGOs, and selected for their innovativeness and
efficacy, on the model of the ethical funds in particular, are
These goals will, I hope, appear in the progress table at our next
session. We will be helped in this by the major international
meetings where the Leading Group will advocate for innovative
financing: at the G8 very soon in Italy, at the UN General Assembly
in New York next September where we will renew the Declaration [on
Action] Against Hunger and Poverty. At the meeting in September,
the UN Secretary-General will receive a report on innovative
financing that may also be inspired by the work we are doing with
our British friends. The conclusions of our work will, I hope,
inspire this report.
High Level Taskforce calls for new ways of raising additional money
to fund health in poor countries
Paris, Friday 29 May 2009: The Taskforce on Innovative
International Financing, co-chaired by UK Prime Minister Gordon
Brown and World Bank President Robert Zoellick, today made
recommendations to raise additional funds as 100 million of the
world's most vulnerable people remain trapped in poverty as a
result of the food crisis that preceded the economic downturn.
Bernard Kouchner, French Foreign Minister and host to the Taskforce
speaking at the meeting said: "It is now vital that, rather than
turning off the aid tap, we look for the means to increase its
flow. The cost of not raising the additional funds is dire 4
million children and more than half a million adults could die each
year all from preventable illnesses."
The Taskforce met in Paris during the meeting of the Leading Group
on Innovative Financing to Fund Development. The chairs of the
Taskforce and the Leading Group warmly welcomed their shared
objectives and noted the benefits of working together.
Taskforce members recommended that the additional funds required to
strengthen health systems in poor countries can be raised by
expanding existing mechanisms and complementing these with
additional new approaches. These recommendations included
encouraging more countries to consider introducing the solidarity
levy on airline tickets and expanding the use of the International
Financing Facility for Immunisation.
Remarkable progress has been made during the past decade with a
significant decline in child mortality, measles, tetanus, iodine
deficiency and malaria, as well as dramatic increases in access to
antiretroviral treatment for HIV all of which have saved millions
of lives and improved the quality of life of millions more.
But this encouraging trend could quickly be reversed without new
ways of funding and running efficient national primary health-care
systems throughout the 49 poorest countries in the developing
The Taskforce's recommendations were informed by the work of two
Working Groups and a series of successful consultations with
governments, civil society organisations and the private sector
over the last few months. These proposals could mobilise up to $10
billion (US) per year to 2015 which, together with existing
commitments, could fill the financing gap to reach the health
Millennium Development Goals (MDGs). To mobilise these funds and
make better use of existing funds the Taskforce recommended the
following set of innovative financing options that countries and
other stakeholders can choose to support:
- Expansion of the mandatory solidarity levy on airline tickets and
tickets and explore the technical viability of other solidarity
levies on tobacco and currency transactions;
- Expansion of the use of the International Financing Facility for
Immunisation and other approaches to ensure predictability;
- Provision of public catalytic funding for large-scale private
giving initiatives such as De-Tax and voluntary solidarity
- Establish or expand existing funds for results-based
- Strengthen the capacity of governments to secure better
performance and investment from private, faith-based community, NGO
and other non state actors in the health sector;
- Make the allocation of existing and additional funds in
countries more efficient, by filling gaps in costed and agreed
national health strategies;
The Taskforce requests OECD/DAC undertake a review of current
technical assistance by international and bi-lateral agencies, with
a view to focusing it on strengthening national and local
institutional capacity in priority areas such as public
administration and accountability, financing, service delivery
arrangements and the non- state sectors;
- Establish a health systems funding platform for the Global Fund,
GAVI Alliance, the World Bank and others to coordinate, mobilize,
streamline and channel the flow of existing and new international
resources to support national health strategies;
- Monitor how well we are doing an annual forum will be held for
countries and partners, building on the IHP+ Ministerial Review.
The Facts why funds are needed now:
Halfway to 2015, numerous countries are lagging behind in
reaching the health MDGs
Worldwide a child dies every three seconds, a mother dies in
pregnancy or childbirth every minute and 7,000 people are infected
with HIV every day
More than half a million women die from preventable
complications in pregnancy and childbirth every year. Over 300
million suffer from preventable illness and disability
Current donor funding is not sufficiently predictable or
sufficiently large to support reaching the health MDGs
For more information on the Taskforce and interviews with
firstname.lastname@example.org or call +44(0)7802 296 737 or+44(0)207223 4512
About the Taskforce
- The Taskforce will make recommendations on the mix of innovative
international financing mechanisms needed to deliver the extra
- The Taskforce will promote international support for these
recommendations to ensure they are implemented.
- The Taskforce's first meeting was held in Doha in November 2008.
The second meeting was held in Downing Street, London on 13 March
2009 and this is the third meeting in Paris.
- There have been a number of civil society consultation events -
London in March 2009; Johannesburg May 2009 and Abuja in May 2009.
A number of meetings have been held with the private sector,
Government Ministers and MEPs.
- Prime Minister Gordon Brown (United Kingdom) (co-chair)
- Robert Zoellick (President of the World Bank) (co-chair)
- President Ellen Johnson-Sirleaf (Liberia)
- Prime Minister Jens Stoltenberg (Norway)
- Tedros Adhanom Ghebreyesus (Health Minister, Ethiopia)
- Bernard Kouchner (Foreign Minister, France)
- Giulio Tremonti (Finance Minister, Italy)
- Heidemarie Wieczorek-Zeul (UNSG Special Envoy for Finance for
Development Conference & Development Minister, Germany)
- Stephen Smith (Foreign Affairs Minister, Australia)
- Margaret Chan (Director-General of the World Health
- Gra‡a Machel (President and Founder, Foundation for Community
- Shigeru Omi (Special Assistant to Minister of Foreign Affairs,
Government of Japan)
- Bert Koenders (Development Cooperation Minister, Netherlands)
Phillippe Douste-Blazy the UN Secretary-General Special Envoy on
Innovative Financing serves as Special Envoy to the Taskforce.
For more information on the work of the Taskforce and to see copies
of Working Group reports please visit
Final Conclusions of the Presidency
Sixth Plenary Meeting of the Leading Group on Innovative Financing
[Excerpts: for full text see
In three years' time, innovative financing mechanisms for
development have raised well over two billion dollars in additional
funds for development. In the health sector, such funds have helped
vaccinate over 100 million children a year and provide paediatric
AIDS treatment for 100,000 children a year.
Stable, predictable and complementary to traditional ODA, these
additional resources for development rely on four types of
mechanisms (mandatory contributions, voluntary contributions, loan
guarantees and market mechanisms) and generate new partnerships
(between the North and the South; between States, NGOS and
international organizations; between the public and private
sector), with the support of civil society.
With its 58 member countries, international organizations, NGOs and
companies, the Leading Group on Innovative Financing for
Development has discussed and explored new resources, new sectors
for action and new instruments for development.
3. Innovative financing for development uses four main types of
mechanisms: taxes on global activities which are either taxed
little or not at all (air-ticket solidarity levy or international
financial transaction levies), pre-financing mechanisms based on
financial markets with public guarantees (the International Finance
Facility for Immunization or IFFIm) or relying on States (advanced
market commitments or AMCs), market mechanisms (CO2 emission
auctions) and voluntary contributions by the private sector
facilitated or channelled by the public authorities (migrants'
remittances, voluntary solidarity contributions).
7. This international mobilisation has been generated by the
strides the Group's successive presidencies have made in the area
of innovative financing mechanisms. Bringing together northern and
southern countries at various levels of development, this Group
established in 2006 is a singular structure for generating ideas,
rallying support and sharing best practices. It stemmed from the
High-Level Meeting of World Leaders Against Hunger and Poverty
initiative supported by Brazil, Chile, France and Spain which
produced a quadripartite report that was submitted to the United
Nations Secretary-General in 2004. ... Brazil, Norway, South Korea,
Senegal and Guinea have successively presided the Leading Group.
8. The French Presidency aims at a scaling up of innovative
financing mechanisms, three years after the founding conference.
- They are first and foremost new resources for development. The
International Drug Purchasing Facility UNITAID, which is mainly
funded by the air-ticket solidarity levy applied in 13 countries,
reduces the cost of high-quality drugs to treat HIV/AIDS, malaria
and tuberculosis in developing countries. [additional mechanisms
listed in full text] ...
- They are resources that can be channelled towards other sectors
beyond health. The global context for better integration of
climatic challenges is prompting member countries to put forward
new innovative proposals concerning in particular adaptation to the
effects of climate change. Regarding education, requirements with
a view to achieving MDG 2 are still considerable. Migrants'
remittances, which were integrated from the outset in our Group's
work, can also contribute effectively to development when their
transfer is facilitated and targeted towards productive investment.
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