Currency Transaction Levy (CTL) to meet MDGs for Health
pressure is mounting with Stamp
Out Poverty taking a lead with organizations from around the world
in advocating for a Currency Transaction Levy (CTL) for Health, which
when applied to the four major currencies (US dollar, Yen, Euro and
British pound) could potentially raise up to USD 33 billion a year. This
will raise sufficient finances to meet the Millennium Development Goals
(MDGs) for health, namely to reduce child mortality, improve maternal
health and combat the major diseases by 2015 (MDG numbers 4, 5 and 6).
The estimates that the CTL for Health, when
applied to the four major currencies could raise up to USD 33 billion a
year, donít distort the financial markets, and thus provide an
additional, predictable and sustainable source for funding. More
information is available online at: www.stampoutpoverty.org
Stamp Out Poverty is a network made up of
more than 40 UK charities, trade unions and faith groups that has been
working on measures to help fund the finance gap required to pay for the
Millennium Development Goals and is increasingly concerned with how the
substantial costs of climate change are going to be met. Its flagship
campaign is for a Currency Transaction Tax (CTL), where it has lead the
way in commissioning work to demonstrate the feasibility of the proposal
when applied at a very low rate for the purpose of raising additional
revenue for the alleviation of poverty.
In the run-up to the Group of Twenty
countries (G-20) meeting later this month, the campaign is seeking
endorsements from organizations in support of the Declaration of the
Global Campaign for a Currency Transaction Levy for Health. This
initiative is geared to push governments to take the necessary steps to
introduce such a CTL levy, and make sure the benefits are dedicated to
reach the health MDGs.
The Campaign acknowledges that neither
allocated nor committed levels of Official Development Assistance (ODA)
and domestic financing are sufficient to meet these MDG targets related
to health, a situation compounded by the global financial crisis, which
is severely affecting the poorest countries in the world.
The campaign call upon donors to keep their
commitments to allocate 0.7% of their national budgets to ODA and that
African countries, similarly, honour their Abuja Declaration pledge to
commit at least 15% of their national budgets to health.
The campaign is committed to locating and
harnessing additional, new and predictable income streams that are
capable of meeting funding shortfalls. A Currency Transaction Levy (CTL)
has the potential to raise revenue of at least USD 33 billion a year on
a sustainable, predictable and on-going basis from the foreign exchange
(fx) market, that has not been privy to levies or taxation to date.
The CTL is technically simple to implement:
the foreign exchange market is fully electronic, revenue collection
would be automatic, with no scope for avoidance.
At the proposed low rate of 0.005%, the
foreign exchange market would not be adversely affected whilst at the
same time significant income would be generated.
The CTL would be applied to the wholesale
foreign exchange market only, and not affect the retail market nor have
an impact on migrant remittances.
The proceeds of the CTL should benefit the
health MDGs, most notably MDGs 4 and 5 on maternal and child health,
which are seriously under-resourced, and Universal Access to HIV, TB and
malaria prevention, treatment, care and support. The international
community currently has the mechanisms in place to channel the funds and
rapidly scale up interventions, (e.g., through the GAVI Alliance, the
Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) and UNITAID).
The campaign is so far supported by the
Africa Japan Forum, Japan; PLUS Coalition, France; Health GAP, USA;
Family Care International, USA; International HIV/AIDS Alliance, UK;
International Civil Society Support, Netherlands; Partners in Health,
USA; Physicians for Human Rights, USA; RESULTS, USA; Stamp Out Poverty,
UK; Stop AIDS Campaign, UK; Treatment Action Group, USA among others.
author is a World Health Organization (WHO)'s WNTD Awardee 2008, coordinates
the Stop-TB eForum Resource Team of HDN, and writes extensively on health and
development. Email: email@example.com)