Innovative financing

Knowledge brokering21 Sep 2010

I am now in a hilarious meeting. It is called the High Level Side-Event about ‘Innovative Financing for the MDGs’. It started by refusing entry to a group of forty people – journalists, NGOs, delegations – for half an hour. Nobody knew why. When we saw Hillary Clinton rush by, surrounded by a lot of security people, the way was cleared.

In Conference Room 2 of the UN buildings, about 300 people are now sitting, listening … but hardly hearing anything: there is a technical failure! The lights are working, but microphones and translation systems are not. Impossible to follow discussions in the back of a hall as big as a football field.

After an introduction by Queen Rania Al-Abdullah of Jordan (cannot tell what is was about), we saw Bernard Kouchner, foreign minister of France, showing his craftmanship in speaking to large crowds. Keeping a positive spirit, joking about a conspiracy and about the efficiency of the UN, he made an intense plea for a Financial Transaction Tax (FTT). He said that the proposal was a levy of not more than 0.005% on every financial transaction. Kouchner held up a five-cent coin: ‘This will be the tax on a 1000-dollar transaction. It is impossible not to accept that. Especially when you have in mind that the result of such a tax would be 40 billion dollars a year, at least’.

After Kouchner, one after another, the speakers pledge support for an FTT. Foreign minister Katsuya Okada of Japan, speaking also as chair of the Leading Group on Innovative Financing, reads a statement. Minister for Development Cooperation Charles Michel of Belgium, the current chair of the European Union. Helen Clark, administrator of the UNDP. High representatives of the UN and the European Commission. Norway’s prime minister Jens Stoltenberg.

OECD secretary general Angel Gurria is doing a great job, reaching the corners of this big hall with his own voice. He states that developing countries should install efficient tax systems. ‘And let us give a clear picture to the world and to our citizens. You can talk about all sorts of taxing financial transactions. But the important thing is that we want to spend these taxes for development.’

So far, so good for the official declarations. Quite some political power is gathered here. The Leading Group consists of 61 countries, international organizations and NGOs. Whether this means that an FTT is near remains totally unclear from this meeting; it seems merely a symbolical event. Later on today, more panels are scheduled which go into more depth, including a presentation of the report Globalizing Solidarity: The Case for Financial Levies, by Lieven Denys and Inge Kaul, who also wrote a recent report about Global Public Goods for The Broker. Maybe more about that later (if the power cut can be fixed). If not, read the next issue of The Broker, published early October, with a special report about the FTT.

This post will be simultaneously published on The Broker MDG blog: Goal Posts – What Next for the MDGs?