Taking the Next Step - Implementing a Currency Transaction Development Levy

As we approach the half-way point for the achievement of many of the Millennium Development Goals (MDGs) the spotlight is shining ever more intently on the urgent need for new sources of revenue to pay for them. With the first international development duty launched, in the form of the ‘pilot’ solidarity levy on air travel, the momentum needs to continue to the implementation in quick succession of a second such initiative to provide another long term predictable source of additional finance. Innovation is required not just in financing but also in delivery. UNITAID’s mission is to transform a situation of high cost drugs for the treatment of the few to low cost drugs for the care of the many. In so doing its potential value is exponentially greater than a simple addition of extra revenue. The choice of how and where the next new stream of finance is spent also needs to be to be similarly strategic. The Core Group1 Governments rightly pride themselves on an international development policy that has, as one of its pillars, the tackling of global inequality which has risen rapidly in the latest phase of globalisation. For example President Chirac opened the Paris conference held in February 2006 in Paris stating that ‘despite the continuous increase in global wealth, a third of humankind still lives on less than a euro a day’, and that ‘…globalisation, far from bridging the (poverty) gap, is widening it even further’. In this report, we offer some suggestions for tackling global inequality through concrete proposals for both raising substantial new revenue equitably and spending it in ways that strategically target the ‘weak spots’ in the international development effort. The financial services industry has been one of the biggest beneficiaries of globalisation. Annual turnover in the global market for currencies, has, for instance, expanded from about $4 trillion in 1973 to $40 trillion in the mid 1980s to more than $450 trillion now – a more than 100 fold increase.2 Profits at financial services firms are also ...