UK Chancellor (finansminister) Gordon Browns plan to increase aid for poor countries received a hefty boost Tuesday when France and Britain agreed to raise billions of dollars for health and education by floating bonds on the worlds financial markets, reports the World Bank press review.
At a two-day Ministerial Conference on Innovative Development Financing Mechanisms in Paris, more than 100 countries agreed to look at new ways of funding development in the hope of meeting the UN goals of halving the number of people living on less than one US dollar (6,20 DKR) a day by 2015, cutting infant mortality by two-thirds and providing primary education for every child.
After weeks of behind-the-scenes haggling, Paris and London struck a compromise deal Tuesday in which France backed Britains International Finance Facility (IFF) in return for British support for a levy on air travel.
British sources said France had been won round to the concept of an IFF – a scheme to “frontload” development aid over the next decade – by the success of a pilot scheme (IFFm), which has successfully raised cash for immunization.
The two countries will establish a joint working group to implement the IFF to be financed by the contributions from airline transportation and possibly from other forms of taxation. The working group is expected to compile a report before the annual meetings of the International Monetary Fund and World Bank in September.
Under the terms of the Anglo-French agreement, France will contribute to the IFFm an average of 100 million US dollar (620 mio. DKR) a year over 20 years and Britain will use part of the one billion British pounds a year raised by the governments air passenger duty to provide a long-term stream of finance for the IFF and the IFFm.
In addition, Britain said it expected its spending of 1,5 billion pound a year for fighting HIV/AIDS “to continue over the long term” and supported the proposal of the French President, Jacques Chirac, for an international drug-purchasing facility – a scheme for bulk-buying medicines for poor countries at low cost.
Meanwhile, countries around the world were urged Tuesday to embrace the French proposal for a new tax on airline tickets as a way of boosting funds to fight poverty, hunger and disease in developing nations.
President Jacques Chirac pushed the initiative at the Paris conference while his surcharge on air tickets – to come into force in France from July – won approval from UN Secretary General Kofi Annan, who was also attending the event.
That, and other practical ideas to increase development aid, “have great potential” to meet the Millennium Development Goals that aim to reduce the plight of the world’s poorer states, Annan said. Annan urged other countries to follow suit.
From July 1, the French law will levy one euro (7,46 DKR) per domestic and European flight and 4 euro on long-haul flights. Business and first class travelers will be charged 10 euro, rising to 40 euro on international flights.
In their support for the scheme to purchase drugs to combat diseases such as AIDS in advance, France and Great Britain hoped that would encourage pharmaceutical firms and makers of generic drugs to increase production, stimulate competition thereby lowering prices.
To date, eight countries have announced that they took part in the airline tax initiative. In addition to France and Chile which already adopted the legislation, and the UK which already has a similar tax, Brazil, Norway, Niger, Madagascar and Mauritius announced Tuesday that they would immediately create a tax on airplane tickets.
Kilde: www.worldbank.org
