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The idea, presented to the World Economic Forum, is simple, eye-catching and far easier to understand than complex financing proposals proposed by Gordon Brown, the Chancellor.
M Chirac, speaking via a video link from Paris, outlined his vision of saving Africa while Mr Brown did the same in London. Neither man’s project is likely to get crucial support from the United States.
Mr Brown’s speech pushed his brainchild, the “International Finance Facility”, which he said could raise $50 billion through selling bonds on the capital markets. Mr Brown also announced a donation of £1.8 billion to improve education for girls in poor countries, which he said was “the best investment we could make”.
By contrast, M Chirac said that his range of global taxes, the “International Solidarity Levy”, could raise $10 billion a year, necessary to develop a vaccine for malaria and provide primary education in Africa.
“Development is both the greatest challenge and greatest urgency,” M Chirac said. “Our shared ambition should be to overcome poverty. A new global vision of development is required.”
He said that there was nothing stopping countries working together to raise the money needed. He proposed the levy on all international financial transactions, set at a maximum of 1/10,000 of the amount being transferred.
Such taxes have been previously ridiculed by economists, who say that they would disrupt financial markets and be widely evaded, but M Chirac said: “It would be based on co-operation of major world financial markets, to reduce evasion. It would raise $10 billion a year.”
He also suggested a levy on fuel for ships and aircraft, which is largely untaxed. “This would just represent the end of an exemption regime,” he said.
He also said that a $1 levy should be paid on all the three billion airline tickets sold every year, which “would raise $3 billion without disturbing economies”.
M Chirac said that he would take these proposals to “all the competent authorities” over the next few weeks, including the United Nations and aviation regulators. He said that the aim was to reach a decision on it by the United Nations summit on poverty in September.
Such proposals are likely to be opposed by companies and by many governments that favour free markets. They are unlikely to get support from President Bush, and without America such global taxes would be severely undermined.
However, M Chirac said: “The fight for development is a fight for the future of globalisation. It is a fight that involves the whole of humankind, and together we can win the battle.”
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