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International News

Politicians, Business Leaders React to French President's Proposal of International Tax to Raise Money for HIV/AIDS

January 31, 2005

Many politicians and investors on Thursday reacted "coolly" to French President Jacques Chirac's proposal to institute a global tax on international financial transactions to raise $10 billion annually to fight HIV/AIDS, Reuters reports (Edwards, Reuters, 1/27). Chirac in a speech Wednesday at the World Economic Forum in Davos, Switzerland, said that options for raising more money for the global fight against HIV/AIDS could come from a tax on international financial transactions, aviation and maritime fuel or capital movements in and out of countries that practice banking secrecy. Chirac also proposed that a small tax be tacked onto the cost of every one of the three billion airline tickets sold each year. He said that the funding could be raised without hampering markets and could be used to provide antiretroviral treatment to more HIV-positive people in developing countries, support HIV prevention campaigns and contribute to research on an HIV/AIDS vaccine. He called on leaders from the Group of Eight industrialized nations -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- to debate his proposals in July at the G8 summit in Scotland, which will be hosted by British Prime Minister Tony Blair (Kaiser Daily HIV/AIDS Report, 1/27).

World Leaders' Reaction
The Bush administration reacted with "deep skepticism" about Chirac's proposal, the Washington Times reports. "The United States is not inclined to support international taxation schemes," Tony Fratto, spokesperson for the U.S. Department of the Treasury, said. Blair, who has said he will make Africa's health and poverty issues a "focus" of G8 meetings this year, said that he had not studied Chirac's proposal, but he added that "it's important to leave everything on the table," the Times reports (Sparshott, Washington Times, 1/28). Blair also said it is important to "be clear" that the "overall purpose is to raise the aid commitment to Africa" (Reuters, 1/27). South African President Thabo Mbeki at the forum said that he is concerned the proposal "would get bogged down in lengthy discussions," adding that "the resources are required today," the Times reports (Washington Times, 1/28). Hiroshi Watanabe, Japan's vice minister for international affairs, said that unless "all countries were involved" in the tax, businesses would move to where the tax was not imposed, according to Reuters/Boston Globe. "The problem with an international tax is that unless all countries impose such a tax, there will be a hole in the framework," Watanabe said, adding, "I think that imposing international taxes on financial transactions or airline tickets would be difficult to do" (Reuters/Boston Globe, 1/27). Former President Clinton, who also spoke at the forum calling for increased funding for the fight against HIV/AIDS, on Thursday said that while he did not "oppose" Chirac's proposal, it likely would not "gather enough international support," London's Financial Times reports. "It seems to me we don't want to get diverted into debating that" instead of focusing on "keeping people alive," Clinton said (Beattie/Guha, Financial Times, 1/27).

Business, Donor Reaction
Multibillionaire Bill Gates, who founded Microsoft and co-founded the not-for-profit Bill and Melinda Gates Foundation, questioned how long Chirac's plan might take to be implemented. "How long would it take to get (Chirac's plan) in place? Five years? Ten years?" he asked, adding, "Between now and then millions of lives are at risk." Andrea Lanzi, a regional representative for ACI -- a Paris-based organization for foreign-exchange traders worldwide -- said a tax on international financial transactions could hurt the market, according to Reuters. "Every tax slows things down," Lanzi said, adding, "The moment you tax a (foreign exchange) transaction, people will think twice about making a transaction." Ian Gunner, head of foreign-exchange research at Mellon Bank in London, said, "As soon as you start taxing transactions you start affecting the functionality of the market, and this is likely to be opposed by most market authorities" (Reuters, 1/27).

Editorial
Although the idea of a global tax is "controversial," it is "catching" to see the "mood of cooperation" between the United Kingdom and France in promoting further aid and development, according to an editorial in London's Guardian. Chirac's proposal is "an innovative and thought-provoking solution to the problem of raising funds for development, which deserves to be studied and supported by the international community," the editorial says, adding, that Chirac's plan and others to increase funding are "encouraging" and not "mutually exclusive." The current proposals are "a world away from the 'free trade fixes everything' nostrum that was once the status quo," the editorial concludes (Guardian, 1/28).

Back to other news for January 31, 2005

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Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily HIV/AIDS Report, search the archives, or sign up for email delivery at www.kaisernetwork.org/dailyreports/hiv. The Kaiser Daily HIV/AIDS Report is published for kaisernetwork.org, a free service of the Kaiser Family Foundation, by The Advisory Board Company. © 2004 by The Advisory Board Company and Kaiser Family Foundation. All rights reserved.



  
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This article was provided by Henry J. Kaiser Family Foundation. It is a part of the publication Kaiser Daily HIV/AIDS Report. Visit the Kaiser Family Foundation's website to find out more about their activities, publications and services.
 
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