- The Washington Times - Thursday, January 27, 2005

A French proposal for a $10 billion international tax to help fight AIDS should be “on the table” when wealthy nations meet this year to discuss improving health and fighting poverty in Africa, British Prime Minister Tony Blair said yesterday.

But the idea, floated by French President Jacques Chirac on Wednesday, faces an uphill international climb and deep skepticism from the Bush administration.

“The United States is not inclined to support international taxation schemes,” said Tony Fratto, a Treasury Department spokesman.

Finance ministers from the Group of Eight industrialized nations are scheduled to meet next week in London, and Mr. Blair has made health and poverty issues in Africa a focus of G-8 meetings this year.

Mr. Blair, who assumed the presidency of the G-8 this month, said details on specific proposals can be examined after leaders receive recommendations from the Commission for Africa he set up to determine the continent’s needs. The commission’s report is due before a G-8 leaders summit in July.

World business and political leaders, as well as celebrities, have been meeting this week in Davos, Switzerland, for the World Economic Forum.

“Today, I propose to forge ahead by creating an experimental levy to finance the fight against AIDS,” Mr. Chirac said Wednesday.

Mr. Blair yesterday said he had not studied Mr. Chirac’s proposal but “it’s important to leave everything on the table.”

Mr. Chirac said $10 billion could be raised through one or several sources, including small taxes on international financial transactions, a special levy on flows of foreign capital in and out of countries with bank secrecy laws, taxes on fuel used in air or sea transport, and a tax on airline tickets. He did not detail how the funds would be administered.

Others were skeptical that the French president’s proposal could gain international support.

“It seems to me, we don’t want to get diverted into debating that,” former President Bill Clinton said at the conference. He indicated that the plan could distract from efforts to keep people alive now and, in any event, is unlikely to attract widespread international support.

South African President Thabo Mbeki said he was concerned the proposal would get bogged down in lengthy discussions.

“The resources are required today,” Mr. Mbeki said in Davos.

Others were harsher in their assessment.

“I think it’s a reckless proposal. International organizations already have a problem with accountability, and giving them a constant stream of revenue would make them less accountable than they already are,” said Ian Vasquez, director of the Cato Institute’s project on global economic liberty. Cato is a libertarian think tank.

Mr. Vasquez, speaking from Washington, echoed concerns that the plan stood little chance of being successfully implemented, and questioned how serious the proposal really was.

“It seems like [Mr. Chirac] is just creating headlines for himself,” Mr. Vasquez said.

G-8 leaders are expected to consider several proposals to help Africa, including trade measures, debt relief, funding to treat AIDS and curb its spread, and other health and development projects.

Africa received more than $26 billion in net aid in 2003, according to the Organization for Economic Cooperation and Development (OECD). It is the largest sum for any region, though aid spending per person lags aid in Europe and in poor countries surrounding Australia.

Sub-Saharan Africa is the world’s poorest region, with 70 percent of its population living on less than $2 per day, 1 million deaths expected from malaria this year and 2 million deaths from AIDS, according to DATA, a Washington-based nonprofit.

Aid to poor nations is a politically charged topic internationally, especially since a Dec. 26 tsunami that devastated coastal areas along the Indian Ocean prompted a charge that rich nations are “stingy.”

The United States gives far more than any other nation — $16.25 billion total in net official development assistance in 2003, according to OECD figures. Japan follows with $8.8 billion, France with $7.25 billion and Germany with $6.78 billion.

But as a percentage of the nation’s income, the United States is last, giving 0.15 percent in 2003, compared with a United Nations target of 0.7 percent and actual assistance that ranges from 0.8 percent to 0.9 percent in Scandinavian countries.

Aid agencies have implored the United States, Japan, France and others to increase spending, especially funds directed toward Africa.

This article is based in part on wire service reports.

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