GFDD and FUNGLODE convene a panel on an “Innovative Financing for the Post-2015 Agenda: The Implications of a Financial Transaction Tax”

The first UN International Conference on Financing for Development was held in Monterrey, Mexico, in 2002. Fifty Heads of State and over 200 Ministers participated, as well as the private sector, civil society, trade, economic and monetary organizations.

As part of the follow up to this first Conference, on October 7 and 8, the UN was the scenario of a High Level Dialogue on Financing and Development.

This two-day event, held at UN
headquarters in New York, included a series of plenary meetings chaired by the President of the General Assembly, in which the Ministers and high-level officials made formal statements. In addition, three interactive multi-stakeholder round tables took place, as well as panels, such as the one organized by FUNGLODE/GFDD in coordination with the Mission of the Dominican Republic to the United Nations and UBUNTU. This panel took place on October 7th in the afternoon, and the discussion
centered on “Innovative Financing for the Post-2015 Agenda: The Implications of a Financial Transaction Tax.”

His Excellency, Mr. Luis Lithgow, Alternate Ambassador of the Dominican Mission offered the welcoming remarks, and referred to the General
Assembly’s Resolution which established the new framework of financing for development, declaring that it was an important issue for the Dominican Republic, since it has contributed tremendously to its progress to get to this point, and that it is continually being monitored and promoted.

GFDD Executive Director, Natasha Despotovic, who was the first speaker at the side panel event, which included the participation of an effective mix of NGOs, governments and the UNDP,
called for greater private funding, in the form of Financial Transaction Taxes (FTT) on global financial transactions as a way of mobilizing resources towards achieving the Millennium Development Goals (MDGs) and towards paving the way for a post-2015 development agenda. FTT’s refer to a very small tax on trades of stocks, derivatives, currency and other financial instruments.

Ms. Despotovic asked her fellow panelists to heed to the experts who agree that the most
efficient way to raise capital is to tax the global financial transactions that are ending up untouched in tax havens. She referred to a 2009 UN General Assembly address by the then Dominican President Leonel Fernández in which he outlined the development of a tax on capital deposited in these tax havens, offshore banks and international financial centers. Mrs. Despotovic, noting that financing development has been an upward battle, pointed out that between $190 and $280 billion dollars are
lost annually due to tax evasion on money stashed in offshore banks, representing fully 5 to 7 trillion dollars, or 6-8% of total global investment, according to the Organization for Economic Cooperation and Development.

In her presentation at the UN side panel, Despotovic gave specific examples of the results of this practice. One was jarring: an annual $250 billion in tax evasion will be responsible for the deaths of 5.6 million children between the years 2000-2015,
according to Christian Aid. This evasion of $250 billion annually is the amount the World Bank estimates is needed to complete the funding necessary to achieve the Millennium Development Goals, according to former Dominican President Fernandez and current GFDD and FUNGLODE President.

Other options are also being undertaken in the form of small taxes on airline tickets (Chile); France’s 10% solidarity tax program being used for water programs in Africa; the IDBP Biogas Program Indonesia and some corporations (Nestlé, The Gap, Starbucks, Apple,
American Express) are joining in as corporate sponsors of numerous global projects and partnerships.

While these mechanisms of mobilizing resources for development have been undertaken by “enthusiastic trailblazers in private, public and non-governmental sector,” Despotovic concluded that the quickest and most efficient way of raising capital is through Financial Transaction Taxes, pointing out that nearly all financial transactions are done electronically, therefore
leaving an easy-to-follow digital trail to make tax collection much easier.

Panel Discussion
Manuel Manonelles, Executive Director of the World Forum of Civil Society Networks (UBUNTU), who also moderated the panel, lauded France’s 10% tax program as a good start, adding that the main issue is one of financial governance. Mr. Manonelles introduced Gail Harvey, of the UNDP, who proposed that countries develop their own
financial taxes although she recognized that, up to now, financial tax attempts have rendered very little as shifting financial landscapes and increased crossing of borders due to climate change are exacerbating regional and global attempts. She added that the key is to get more countries to rally around France’s 10% tax program.

Matt Simonds, of the International Trade Union Confederation, said the WTO was in a deadlock over this issue and hoped the upcoming Ministerial
Conference in Bali, December 3-6, will unlock things. He lamented that official development assistance (ODA) is shrinking.

Eva Hanfstaengl, representing Bread for the World, which is a member of the Health and Environmental Care Technical Organization (HECTOR) alliance, focused on EU developments of FTT, reporting that European countries voted favorably for it and that by January 2014, money could be made available for climate change. She added that Europe favored the
concept of a global solidarity fund for the achievement of the MGD’s and climate change.

An issue that came up in the open discussion was the merging of the MDG’s with the SDG’s (Sustainable Development Goals), which Mr. Manonelles suggested was a task to be undertaken within a domestic framework.

Ms. Hurley proposed an agreement for a single unified agenda on SDG and MDGs. While poverty will remain a strong focus, the problem is unsustainable
development, she said, as the difference between developing and developed countries is becoming blurred.

About UN Financing for Development and the Post-2015 Agenda
The two-day Dialogue includes a series of plenary meetings wherein Ministers and high-level officials
are making formal statements on behalf of their countries.

In addition, participants are part of roundtables and an informal interactive dialogue on the reform of monetary and financial systems and implications for development; and mobilization of public and private financing; the role of financial and technical development cooperation.

The informal dialogue focused on the link between financing for development and achieving the eight MDGs and advancing
the post-2015 agenda.

Related Links:
GFDD: http://www.globalfoundationdd.org
FUNGLODE: http://www.funglode.org
Financing for Development: http://www.un.org/esa/ffd
Bread for the World: http://www.bread.org/
UNDP: http://www.us.undp.org
UBUNTU: http://www.ubuntu.upc.edu
Health and Environmental Care Technical Organization: www.hector-asbl.be
WTO: http://www.wto.org