Paging Robin Hood
The following article appeared in the Toronto Star on November 2, 2011:
Prime Minister Stephen Harper may be opposed to the idea of using a financial transaction tax for revenues to alleviate poverty and hunger in poor nations. But he should not stand in the way of other nations embracing this or other innovative proposals at the Nov. 3-4 summit of G20 leaders in Cannes.
Bill Gates helped Harper last year, pledging $1.5 billion from his foundation to the Canadian government’s G8 and G20 maternal, newborn and child health initiative. Now it’s the Prime Minister’s turn to consider proposals by Gates for this year’s G20 summit. Among them are a tax on financial transactions and a surcharge on international shipping to foster economic development, fight global poverty and help vulnerable communities adapt to climate change.
Gates is scheduled to present his report to the G20 Thursday evening, Nov. 3. He figures in the gathering of leaders of the most advanced economies because the host of the 2011 summit, French President Nicolas Sarkozy, turned to him to identify the most promising “innovative sources of finance” for the G20 to address poverty and climate change, given that the global financial crisis has depleted government coffers and thrown tens of millions more people into extreme poverty.
At his own summits, Harper dismissed the “Robin Hood tax” on financial transactions as a radical idea parked on the margins of debate.
Now the G20 has acknowledged that the financial crisis reaches far beyond boardrooms and bourses into the homes of the world’s poorest citizens. Thanks to Gates, and strong support from Sarkozy and German chancellor Angela Merkel, who won over the head of the European Commission, the idea of a small levy on the trading of equities and currency by major financial institutions has moved into the mainstream.
Many Canadians have asked the Prime Minister to make alleviation of hunger a top priority at the G20. In one day alone last week, 800 Oxfam Canada supporters wrote to the Prime Minister urging him to support Gates’ ideas on innovative finance, as well as other proposals on the G20 table.
Brazil, India, the U.K., South Korea and South Africa already apply some form of financial transaction tax. The key would be an agreement to apply most or all of such revenues to helping the most vulnerable.
Finance ministers Pravin Gordman of South Africa and François Baroin of France circulated a joint letter at the last G20 finance ministers’ meeting citing a wide array of potential innovative funding sources to help pay for climate change mitigation and adaptation — “one of the biggest challenges facing the international community in the coming years.”
Those two ministers said they also strongly support a financial transaction tax for climate change or for development. More than 1,000 eminent economists, including several Nobel Prize-winners, backed the tax in a letter to the G20 in April. A new report from the IMF to the G20 demonstrated its utter feasibility and practicality.
In the run-up to the G20 summit, the media’s eyes will likely be on financial stability in the Euro zone.
But the Gates report will be on the table at Cannes. G20 finance ministers and central bank governors, including Canada’s Jim Flaherty and Mark Carney, said in their communiqué mid-October they look forward to it.
Our Prime Minister ought to have a change of heart on these new ways of freeing up resources to help the people hit hardest by global shocks. At the very least, he should not discourage those leaders who are prepared to act now.
by Robert Fox, executive director, Oxfam Canada