2 February 2015: Innovative financing mechanisms are necessary to achieve the Sustainable Development Goals (SDGs), writes Philippe Douste-Blazy, Chair of UNITAID. In an op-ed, Douse-Blazy recommends a tax on financial transactions (FTT) as the next step in such innovative financing mechanisms.

Douste-Blazy outlines ways that everyday transactions can contribute to poverty alleviation and development needs, such as education, health and nutrition, by “shaving small amounts off targeted transactions to make capitalism work better for all people.” For instance, UNITAID has raised US$2 billion from a €1 levy on air tickets leaving France and 11 other countries, which is then invested in fighting HIV/AIDS, tuberculosis and malaria, Douste-Balzy explains. He also describes a planned micro-levy, UNITLIFE, which will collect a levy on extractive industries that will be used to combat malnutrition. Such mechanisms are necessary to meet the scale of development disparities and complement development assistance and corporate and civic philanthropy, Douste-Balzy argues.

An FTT would consist of a tax on each trade of bonds, derivatives, stocks and other financial instruments. He further explains that such a tax in high-income countries “can raise massive revenues for international development” while “naturally curbing short-term financial speculation.” Douste-Blazy notes that the Government of France and ten other European countries have implemented FTTs, and calls on these countries to commit 30% of the revenue to development and poverty reduction efforts.

UNITAID is hosted by the World Health Organization (WHO). It derives approximately half of the its finances from the air ticket levy. [UNITAID Website] [Op-Ed] [Douste-Blazy IISD RS Guest Article]