THE BLOG

An Invisible Way to End Poverty

02/02/2015 12:12 pm ET | Updated Apr 04, 2015

What if our everyday transactions could contribute to poverty alleviation? To nourishing a hungry child or purchasing a life-saving medication? And what if this action was effortless to the global consumer? This is the concept behind Innovative Finance -- shaving small amounts off targeted transactions to make capitalism work better for all people, so that they can share equitably in the world's wealth for their health, education, nutrition and other development needs.

Development assistance, corporate and civic philanthropy are vital resources in the campaign to solve the world's gravest social issues. But they are not enough. There has never been a greater need for innovative financing mechanisms to meet the scale of developmental disparities and human suffering. The international community today agrees that these new forms of financing are becoming essential if we want to achieve the Sustainable Development Goals after 2015.

UNITAID is one of the first initiatives to be largely funded by minuscule solidarity levies on certain global transactions. Since 2006, UNITAID has raised an astonishing $2 billion from a 1€ levy on air tickets leaving France and 11 other countries. The sum is virtually invisible to consumers and, importantly, airlines have reported no negative consequences for their business. But the impact has been exceptionally powerful so far.

The funds raised are invested in initiatives to fight HIV/AIDS, tuberculosis, and malaria. Today, there are now 700,000 children living with HIV who are receiving proper medication and care (compared to 10,000 in 2006). It has ensured 351 million treatments of malaria and similar action against child tuberculosis.

UNITAID is a starting point for changing the course of things to come. There's a second revolutionary project in the pipeline: UNITLIFE. Following in the footsteps of it's predecessor, UNITLIFE will work as a micro-levy. Multiple African countries have already agreed to the initiative of using a small solidarity levy in extractive industries to combat chronic malnutrition. In the oil industry, for example, the sum collected would be a nominal $0.10 per barrel of oil.

If expanded to eight African countries, the 10-cent oil levy would generate $100-200 million per year, and a worldwide roll-out would generate at least $1.64 billion a year. In addition to the millions of preventable deaths that would be avoided, the trickle-down effect of providing children with adequate nutrition is immeasurable. Improving public health and giving children global public goods such as education, clean drinking water, and sanitation, allows them to grow up to be fully-functional producers and consumers in a stronger economy. Countries whose populations are prosperous and well-fed are less prone to political instability and terrorism, which is a concern that's relevant to all of us.

It is now time to widen the tax base of global activities. I am convinced that after the micro-levy on plane tickets, a tax on financial transactions (FTT) is the next step. By implementing a very small tax on each trade of stocks, bonds, derivatives, and other financial instruments, high-income countries can raise massive revenues for international development, while at the same time naturally curbing short-term financial speculation. Having convinced the French government to put in place a financial transactions tax and to allocate part of the proceeds to development, we are now asking the ten European countries which have decided to do likewise.

Join me in calling on these countries to commit 30 percent of this transaction tax to development.

Innovative finance mechanisms have proven that it is possible to achieve real impact through small contributions and that there is a way to engage millions of individuals and institutions to produce sustainable aid funding. Help this innovation become the standard by signing the petition below asking European finance ministers to allocate revenue from the Financial Transaction Tax to poverty reduction efforts.