‘Tiny Tax’ On Wholesale Currency Transactions Could Help Reach MDGs, Finance Global Fund

In a Financial Times opinion piece, Rep. Pete Stark (D-Calif.) observes that “the global recession has made reaching [the Millennium Development Goals] and financing the Global Fund more difficult.” According to Stark, “a new approach” is needed.  

“There is a solution. The world’s largest financial institutions regularly buy and sell massive amounts of world currencies seeking to make quick profits. A tiny tax on these transactions, many of which are purely speculative, would raise billions of dollars to invest in key domestic and global priorities, such as fighting disease, climate change mitigation and adaptation, and protecting our children from poverty. It would also curtail some of the irresponsible behaviour that contributes to global economic instability and market volatility,” writes Stark, who is the chairman of the House Ways and Means Health Subcommittee and the founder of a bank in California.

“Sixty nations, including France, Britain, and Japan, have publicly supported taxing currency transactions as a way to fund global development,” according to Stark, who notes legislation he introduced in Congress to implement such a tax. “The imposition of a small tax is a minor inconvenience to a large financial institution, but is a major step toward meeting our commitments to our children and to impoverished communities around the world. … This is an idea whose time has come,” he writes (9/23).

Focus On Success, Rebrand, And Create Wealth To Better Frame The Fight Against Poverty

New York Times opinion columnist Nicholas Kristof offers “three suggestions for how the humanitarian world might do better in framing the fight against poverty”: “boast more,” focus on “wealth creation” rather than only poverty reduction, and “punchier marketing.”

“Humanitarians have tended to guilt-trip people and governments into generosity by peddling emaciated children with flies on their eyes. But relentless negativity leaves the inaccurate impression that Africa is an abyss of failure and hopelessness. And who wants to invest in a failure? In fact, here’s the record: antipoverty work saves around 32,000 children’s lives each day.”

Kristof also writes that wealthy countries should widen their markets to include exports from poor countries to “encourage prosperity creation.” He also examines rebranding antipoverty work as a security issue, which may be the “most effective way” to bolster resources for global health programs (9/22).

U.S., Other Nations ‘Have To Deliver’ On MDG Commitments

“It was disappointing that President Obama made no hard commitment to increase development aid when he addressed the United Nations conference on Wednesday,” states a New York Times editorial that praises other aspects of the speech. The Times adds that while the global recession hindered progress on the Millennium Development Goals (MDGs), “rich nations – including the United States – have not contributed the money needed to make this a reality.” The editorial notes that U.S. funding for the MDGs falls “far short” of the “0.7 percent of gross domestic product endorsed by world leaders in 2002.”

“Still there was a lot in Mr. Obama’s speech that made good sense to us,” including an emphasis on the U.S. “using all of its tools – including trade and export credits” – to help poor countries, holding countries accountable for corruption, and “a promising new policy to bring coherence to the often incoherent American foreign aid and development system.”

Adding that only five countries have contributed 0.7 percent of their GDPs toward achieving the MDGs, the editorial concludes: “On Wednesday, world leaders again urged developed countries to meet this aid target by 2015. Talk is cheap. They have to deliver” (9/22).