CASH-STRAPPED G20 RAISES FUNDS VIA FUN SHOW
Erle Frayne D. Argonza
It seems cash-strapped wealthy nations are desperate in raising funds to use for development aid or related sweeteners in the group’s dealings with poor nations. Their officials, who have targeted to raise $50 Billions for development aid, just may be running out of fresh ideas precisely on how to raise funds for the largesse.
No wonder that the said power bloc has gone to the extent of sponsoring a show in the Cannes for the same purpose. Just exactly how much can the special event raise seems to be concealed to the public at large. Will this ‘innovative financing’ work out without inviting guffaws and ethical questions hurled from various quarters?
Below is a blog article about the subject.
[Philippines, 26 November 2011]
Short on Cash, G20 Leaders Try ‘Innovative Financing’ for Size
Last year in Seoul, G-20 leaders made an ambitious commitment to the “Seoul Development Consensus for Shared Growth.” This week in Cannes, the global financial meltdown and Eurozone crisis are likely to dominate.
G-20 leaders estimate that 64 million more people are now living in extreme poverty as a result of the financial crisis. Meanwhile, the Organization for Economic Cooperation and Development has predicted a sharp slowdown of aid levels in the next three years.
It’s no surprise, then, that the French G-20 presidency has prioritized finding “innovative sources of finance” to meet the G-20’s development commitments. Earlier in the year, French President Nicolas Sarkozy asked business magnate Bill Gates to identify the most promising sources of new finance. Gates’s report will be formally presented to G-20 leaders this week, but the substance was shared with G-20 finance and development ministers in September.
Gates is expected to identify a financial transactions tax as one way to make up cash, estimating an additional $50 billion raised for global development if G-20 countries adopted an FTT. Sarkozy has championed the FTT, and the European Commission recently drafted legislation for a European FTT. However, U.S. Treasury Secretary Tim Geithner has taken a strong stand against a European FTT, voicing his disapproval at a September meeting of European finance ministers. Geithner’s intervention may backfire at Cannes once he realizes how much the French love getting lectured by America.
Gates will also propose to G-20 leaders a surcharge on shipping emissions, so-called “bunker” fuels, as another credible and feasible option, estimating an additional $25 billion raised if the charge was adopted by G-20 countries. A measure is on the table at Cannes, but the United States again appears to be playing a blocking role.
In a measure that’s getting less attention, Gates will also call on the G-20 to tap into the long-term power of domestic resources for tackling poverty. Gates will ask G-20 leaders to share the experience of strengthening their tax and budget systems with developing countries, supporting governments to collect in a transparent manner the revenues they need to finance investment in the health and welfare of their citizens.
The bigger question on the table in Cannes will be whether the G-20 will graduate from perpetual crisis mode to taking more proactive steps to promote broad-based growth. G-20 nations are facing increased pressure at home, as more than half of the world’s poor live in G-20 countries, and income inequality has worsened in most G-20 countries since the 1990s. The success of the Cannes summit will depend largely on the willingness of G-20 leaders, including the United States, to accept Gates’s challenge and adapt to a changing world.
- Bill Gates to highlight Innovation in Report to G20
- G20 Urged to Tackle Food Crisis in Upcoming Summit
- Pressure on G20 to Continue Aid Programs Build Up as Summit Approaches
- G20 Pressed to Outline Concrete Development Measures at Upcoming Summit
- Bill Gates, Howard G. Buffett Win Anti-Global Hunger Award
- Jasmine Burnley: Oxfam’s 21st Century Aid Visionary
- How Can the G20 Development Working Group Continue to Support Growth? Looking Ahead to 2012
- G20 Urged to Focus on Small Farmers in Food Price Volatility Action Plan
- LDCs Eyeing Alternative Development Financing Sources
- 1,000 Economists Voice Support for Financial Transaction Tax
- EU Parliament Supports Implementing Financial Transaction Tax
- France Looks to Bill Gates for Aid Financing Schemes
- Oxfam International Renews Call for Financial Transaction Tax
- In Davos, Nicolas Sarkozy Calls for Financial Transactions Tax
- Donors Urge Developing Countries to Strengthen Domestic Tax Base
Porter McConnell is a frequent blogger on development issues, including US foreign aid effectiveness, global health, and the G20. She has worked as an advocate for Oxfam America and the ONE Campaign, and for NGOs in Colombia and Costa Rica. She currently lives in DC.
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