Mozambique has become the latest African country to implement a financial transaction tax (FTT) and airplane levy to fund health services in developing countries, part of the UNITAID initiative. Philippe Douste-Blazy, board chairman of the international financing mechanism, spoke to IRIN about the state of play in innovative health financing.
Q: We’ve heard a lot about innovative financing since HIV funding began to flat-line in 2009. What’s happened since?
A: We began with a levy on plane tickets in 2006 in France and 13 countries. In the last two months, we’ve added Morocco. This week, we have been told Mozambique will also join. We’ve also added Chad, and I hope that discussions with Japan are going to continue.
It’s very important to understand why we do innovative financing… We are living through one of the biggest economic crises in history. You cannot ask members of parliament in Europe or the United States for money. We should continue to try, but it is impossible. We have to ask Brazil, India, China, South Africa, Russia to give more - but they don’t do that. So we have to create innovative financing mechanisms.
The idea is very simple: to take a micro, painless, tiny solidarity contribution from activities that benefit from globalization - that’s mobile, internet, and financial transactions, plane tickets, etc. We proved that innovative financing can help achieve the Millennium Development Goals. In five years, we’ve raised US$2 billion from the small levy or tax on plane tickets. We’ve treated eight out of 10 children with HIV, 322 million people with malaria and one million people with tuberculosis. UNITAID is the first laboratory of innovative financing in the world.
Q: Does innovative financing look different in developed countries such as France than it does in resource-poor countries like Mozambique?
A: No. The strength of the concept is that we are all part of a global community. When a person buys a plane ticket, it is the same price in Paris, Bamako or Maputo. If you can buy a plane ticket, you can pay one dollar more; you have no difference between [the contributions of] developed and developing countries. The strength of this concept is [it fosters not only] North-South solidarity but also South-South solidarity.
Q: Why haven’t more countries joined UNITAID?
A: Each time I speak to a head of state, he says, “This is fantastic. We are going to do this.” After that, he speaks to his minister of finance, and his minister of finance says it’s not possible.
In the case of FTTs, ministers of finance are afraid their stock exchanges will be bypassed. It’s false argument. In 1984, British Prime Minister Margaret Thatcher [imposed] a 0.5 percent levy per share [transacted]. This FTT didn’t change anything. Nicholas Sarkozy did it in March 2011… Now, I believe that I have convinced President Dilma Vana Rousseff of Brazil to do that as well.
So often head of states forget 1.5 billion people are living in the South… If you are a head of state, you should have a vision for your country, of course, but also about your country in the world. That vision cannot continue to be selfish.
Q: You are hoping the US government will join UNITAID. Explain the US government’s reluctance.
A: The American people are the most generous people in the world. There is a culture of giving in that country… but when it is obligatory - and this is cultural - the answer is no. The word “tax” is very difficult for Americans. We have to explain to them that this is an absolutely painless, micro contribution and that it is managed by the public and private sector and civil society - not only by some big United Nations agency with the American government at the table.
I think it is possible to get an agreement. We are a long way from convincing, them but some members of Congress are becoming convinced.
Q: What is your top priority at the moment?
A: When we see this gap between rich and poor grow, you can do two things: Revolution - although in history, revolution is not always success. It’s often a failure, with a lot of civil wars. The other thing to do is... use the momentum of capitalism to take innovative financing further. Say that the more traders who are going to do financial transactions, the more I am going to take 0.0001 percent of that transaction for the poor.
The answer is to create a UNITAID movement, to take micro solidarity contribution from globalized activities. We live in a global village. It’s as true for Apple and Google as it is for the rich and the poor.