Stamp Out Poverty Campaign : Action Update - November 2006

In the last few weeks two innovative funding schemes have come to fruition and will start to generate hundreds of millions of dollars of development finance. In the year after Make Poverty History, when the noise on aid issues is so much quieter, this progress is an important advance ushering in a new phase of the work to treat illness and prevent disease amongst some of the poorest populations of the world.

Meanwhile Stamp Out Poverty, whose work has helped open up the political space for this progress, has been asked to play an important role promoting the modern currency transaction tax (CTT) proposal to an Experts’ meeting hosted by the Norwegian Government, who now host the Leading Group of countries on innovative financing for development.

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UNITAID launched

We are pleased to welcome the launch of UNITAID – an international drug purchase facility to combat HIV/AIDS, malaria and tuberculosis – which is principally financed by the first ever development tax, a small levy on airline tickets. UNITAID was officially launched on 19 September at the UN General Assembly by Secretary General Kofi Annan, President Lula de Silva of Brazil, France’s President Jacques Chirac and Prime Minister Jens Stoltenberg of Norway. UNITAID, which is likely to generate about $300 million in its first year, will not only provide greater funds for the purchase of drugs but more importantly is designed to bring down the prices of medicines so that far more people can receive life-saving treatment.

Stamp Out Poverty, which has worked for the last 4 years on new sources of development finance, sees the launch of UNITAID as a concrete endorsement of the need for new funding initiatives to meet the Millennium Development Goals. It is a vital stepping stone to the introduction of more ambitious ideas, such as a levy on currency transactions, which would produce significantly larger revenue streams through targeting some of the world’s wealthiest institutions.

Stamp Out Poverty, along with the Stop Aids Campaign, whilst welcoming UK participation in UNITAID, is critical of the Government on three counts:

1) Additionality: Whilst Brazil, Chile, France and Norway are all financing their UNITAID contributions through aviation levies, and making this revenue additional to their existing aid commitments, the UK Government has recently indicated that it will not participate in UNITAID on that basis;

2) Ring-fencing: Although the UK’s existing air passenger duty generated almost a billion pounds last year, the government has refused to ring-fence a proportion of it to UNITAID. This undermines the principle, adopted by the other states, of employing a particular nationally collected tax, which is internationally pooled to ensure predictable, long-term financing;

3) Amount: Whereas France will contribute a minimum of €200 million annually to UNITAID, the UK at this stage is putting in only one tenth of this amount – €20 million.

Together with our friends at Stop Aids, we are currently in dialogue with the office of the Prime Minister on this matter. We urge you to add your voice to the demand for the UK Government to review its position by taking a quick and easy action.

To read more about UNITAID, specifically which treatment programmes have been approved for immediate implementation, and to read the recent letter from the Prime Minister on this issue, please click here.

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Stamp Out Poverty to present Currency Duty proposal to key Governmental meeting

Following on from our participation on the panels of the high-level conferences on Innovative Financing in Paris (in February) and Brasilia (in July) this year, Stamp Out Poverty has been offered the opportunity to play a key role in the Norway Experts’ meeting in December. This will serve as a guide for the next international conference that will take place in Oslo in February 2007.

The new Norwegian Government approved the idea of adopting a currency transaction tax (CTT) in its recent election manifesto. Stamp Out Poverty, after its ground-breaking work with leading financial specialists, Intelligence Capital, can present the most modern and feasible means of implementing a CTT, which cannot in practical terms be avoided (click here for the revised Sterling Solution report). Our mission during this year of new ‘pilot’ financing initiatives is to lay the ground for a country to ‘pilot’ the CTT. Taking such a step would show the world that with today’s technology the tax can easily be implemented and holds huge potential for the future funding of development.

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UK Immunisation Initiative to deliver 4 billion dollars over next 10 years

Finally, after a gestation period of several years, the Treasury’s innovative funding idea – the International Finance Facility (IFF) has been born. The IFF for Immunisation (IFFIm), although conceived on a scale 100 times smaller in size than the original IFF proposal, still has the potential to make a powerful contribution to health needs of children in some of the world’s poorest communities. According to the Treasury’s press release (7.11.06): “IFFIm will deliver 4 billion dollars over the next ten years to be spent on the immunisation of up to 500 million children in the world’s 70 poorest countries against preventable diseases like polio, measles and diphtheria. It is estimated this will save 5 million lives in the years up to 2015, and a further 5 million afterwards, and lead to the eradication of polio.”

Commenting on IFFIm’s launch in the Guardian, see link, David Hillman, Stamp Out Poverty’s coordinator said: “We welcome this commitment of greater resources to save lives in developing countries. But given the urgent need to do more we urge the Government to go further by adopting complementary initiatives like a small duty on sterling currency transactions that would generate 10 times as much money over the same time period.”

To read a full story on IFFIm and its recent launch – please click here.

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Mistaken Pound Sign Pickle

The Government seemingly almost cost itself more than a hundred million pounds in the last few weeks through a small keyboard error, when a pound sign was mistakenly used instead of a euro symbol. The mistake was contained in a recent letter from the Prime Minister to the Stop Aids Campaign (SAC) concerning the new finance initiative, UNITAID.

Stamp Out Poverty, who are working closely with SAC on the issue, spotted the currency clanger, which sparked an intense, if brief, debate amongst campaigners. The previous Government communication spelling out how much the UK was giving to UNITAID came from the Department for International Development’s (DFID) press release in mid-September. The difference between the figure in euros and the figure in sterling, over 20 years, would have amounted to more than £100 million.

Could this really be a mistake? Was the Prime Minister perhaps making some concession to our demand for a greater UK contribution to UNITAID? Surely the word of the Prime Minister trumped a lowly DFID press release? Alas, before we could get too excited, a brief letter of correction and apology appeared. Some red faces somewhere in No.10, we imagine. What a pickle!