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Currency tax to fund global health?

27th September 2010

Governments could come much closer to the adequate treatment of child malnutrition if they imposed a financial transaction tax to help fund intervention programmes, a leading aid agency has said.

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According to Doctors Without Borders (MSF), the tax could transform some of the world’s malnutrition “hotspots”.

Currently, it said in a statement during the United Nations Millennium Development Goals summit in New York, a lack of funding is undercutting opportunities to overcome global health threats.

Two of the leading causes of childhood deaths - malnutrition and HIV/AIDS - could be tackled with the funding mechanism, it said.

If the health-related MDGs are to be met, an additional US$37 billion needs to be spent on global health every year by 2015, according to the World Health Organisation (WHO).

The financial transaction tax could involve a levy of as little as 0.005% on transactions of the world’s four most traded currencies.

Experts estimate that it could generate an estimated US$33 billion a year in funding for the fight against global health threats, including malnutrition and HIV/AIDS.

MSF's US executive director Sophie Delaunay said the charity's doctors were already using new tools and approaches to fight malnutrition and HIV among children.

But she said funding had become unreliable for long-term, widespread implementation of effective health interventions.

She said the tax could provide a dedicated and predictable funding stream, freeing healthcare programmes from dependence on volatile markets and political agendas.

MSF said the effect on funding for global health interventions of the global finanical crisis, and government responses to it, had been catastrophic.

Even key institutions like the Global Fund to Fight AIDS, TB, and Malaria, were left without funds, as donors failed to meet funding pledges.

In particular, MSF named the United States, Germany, Italy and Spain, as governments that had gone back on previous funding promises.

Delaunay said that crucial health programmes would be reliant on commitments from governments that often turned out to be nothing but rhetoric, unless the tax was introduced as a source of funding.

 

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