The first class way to fight poverty
Most business- and first-class air travelers support the fight against AIDS and poverty – without knowing it.
• Global airline profits expected to fly high
• 'Climate bad boy' urges billions on clean tech
• Insurance man new CEO of airline SAS
For the past four years, French business- and first-class air travelers have been paying more than 50 dollars each toward the cost of the fight against AIDS, malaria and tuberculosis each time they get on a jet.
Most have probably not noticed.
Even economy travelers on French jets on trips within Europe pay just over one dollar to the special multi-national fund.
Travelers on South Korean, Chilean, Madagascar, Mauritius and Niger airlines are now also paying a solidarity tax that is playing a mounting role in the debate on how to pay for the global effort to cut poverty and the diseases that kill millions each year.
UNITAID, the international organization that manages the money raised, says about 70 percent of the one billion dollars it has made in health since 2006 has come from the air seat tax.
And it is set to spread with Benin, Burkina Faso, Democratic Republic of Congo, Ivory Coast and Mali introducing the airline seat surcharge.
UN Secretary General Ban Ki-moon calls France a "champion" of this example of so-called "innovative financing" to raise money for the world's worthy causes.
The same goes for Scandinavian airline SAS. When buying a ticket for a child almost one dollar is automatically donated to the organization Save the Children.
Bertil Ternert, vice president of corporate communications, told The Swedish Wire that it clearly states when booking that a small amount of every ticket goes to the aid project – but admits that most people probably never notice it. SAS is one of the main sponsors of organization; mainly based on a fixed yearly amount of “some million kronor”, campaigns during the flights and in the Euro bonus shop.
French President Nicolas Sarkozy and Spanish Prime Minister Jose Luis Zapatero on Monday reaffirmed a call for a tax on financial transactions, which would be a major and potentially controversial extension.
Philippe Douste-Blazy, a former French foreign minister who now advises the UN secretary general on innovative financing, can see lucrative micro-taxes on tourism and Internet and mobile phone subscriptions.
A tax on financial transactions was first proposed by US economist Brian Tobin in the 1970s in a bid to ease wild currency swings at the time. Supporters of the so-called "Tobin tax" now see it as a means to tackle the fight against poverty, avoidable diseases and even the battle against climate change.
The tax is divisive however.
Japan, France and Belgium lead a group of about 60 countries supporting innovative financing. They insist this not be a replacement for government assistance, but a valuable supplement.
Europe is mainly in favor, with Germany supporting France and Spain in calling for a financial transaction tax. At the Group of 20 summit in Canada in Toronto however, the United States, Canada, Australia and many Asian countries were opposed.
Sweden introduced a similar tax in the 1980s but had to withdraw it because of the loss of revenue when money was put in foreign accounts.
In Europe, Britain opposes a financial transaction tax and the European Commission has doubts. A recent EU study warned there could be "undesirable" fallout and that efforts to divert the tax could make it bureaucratic burden to collect.
The European Commission is more in favor of a tax such as on bank profits or turnover.
Sarkozy said in his speech to the UN Millennium Development Goals summit that he would fight for a financial transaction tax when France heads the Group of 20 and Group of Eight nations in 2011.
"Finance has globalized, so why should we not ask finance to participate in stabilizing the world by taking a tax on each financial transaction," Sarkozy said.
Douste-Blazy, who chairman of the UNITAID executive board, said that classic government financing will not be enough for the enormous needs of the Millennium Development Goals -- cutting the number of people living in extreme poverty and at risk from AIDS and other deadly diseases.
He estimates the funding gap at 40 to 45 billion dollars a year.
The Oxfam aid group estimates that even a 0.05 percent tax on financial transactions could generate 500 billion dollars a year for development -- about four times as much as the UN estimate of the sum needed to meet the Millennium goals by 2015.
Last Updated (Tuesday, 21 September 2010 10:41)




