Innovative Financing for Development
Milestones in the Creation of the Airline Ticket Solidarity Tax and UNITAID
22 March 2002, UN International Conference on the Financing of Development, Monterrey, Mexico
President Jacques Chirac calls the international community to consider seriously the possibility to establish international solidarity taxes to finance the development of poor countries and global public goods: “To achieve the aims of the Millennium Summit, the World Bank – to which I want to pay tribute – estimates it will be necessary to double the amount currently spent on poverty eradication. It puts those needs at $100 billion annually. That is undoubtedly a lot of money. But we need to place that in the context of the huge volume of international trade. It does not amount to very much when compared with the human, political and economic benefits our world would reap from eradicating poverty.
We must pursue every avenue in order to achieve this objective. And those avenues exist, starting with an increase in official development assistance. But that alone is not enough. We need to build on that. Through an additional allocation of special drawing rights. Through greater generosity in the application of debt cancellation decisions for the very poor countries and more ambitious treatment for the severely indebted middle-income countries. And it is natural to consider drawing on the wealth created by globalization in order to finance efforts to humanize and control it. We therefore need to ponder more deeply the possibilities of international taxation, whose product would come on top of that of official development assistance.”
2 September 2002, World Summit on Sustainable Development, Johannesburg, South Africa
President Jacques Chirac renews his call to the international community to consider seriously the option of international taxes to finance development (“In the era of globalisation, the persistence of mass poverty is outrageous and an aberration. Let us apply the decisions of Doha and Monterrey. Let us increase development assistance to reach the target of 0.7% of GDP in ten years. Let us find new sources of financing. For example, by means of a solidarity levy on the wealth created by globalisation.”)
1-3 June 2003, G8 Summit of Evian, France
At the initiative of President Jacques Chirac, host to the summit, the financing of development, in particular in Africa, becomes one of the major issues on the agenda of the G8. This summit also inaugurates the practice of the “enlarged dialogue” of G8 Leaders with their counterparts of emerging countries, notably to discuss global issues such as solidarity and development.
21 October 2003, launch of the Landau’s mission
President Jacques Chirac asks Mr. Jean-Pierre Landau, General Inspector of Finances, to set up a working group of senior economic, financial and taxation experts to evaluate the feasibility, from a practical point of view, of different options of innovative financing for development, including international taxes.
14 May 2004, Mr. Jean-Pierre Landau presents his report to President Chirac.
This report concludes to the technical feasibility of innovative financing for development and reviews various options in this respect, including the creation of a small solidarity levy on airline tickets.
30 January 2004, President Lula of Brazil, President Chirac of France, President Lagos of Chili and UN Secretary General Kofi Annan convene in Geneva, Switzerland, to launch an initiative “Action against Hunger and Poverty”.
The four leaders publish, on this occasion, a joint declaration by which they establish a “technical working group” in order to review the various options and feasibility of innovative financing mechanisms for development, such as the international finance facility proposed by the UK and international solidarity contributions, either voluntary or compulsory.
This international working group, chaired by Jean-Pierre Landau, and initially composed of France, Brazil and Chili, is rapidly enlarged to Norway, Germany, Spain and Algeria…
September 2004, the international technical group, chaired by Mr. Jean-Pierre Landau, completes its report, largely based on the conclusions of the “Landau Report” published earlier in May 2004.
20 September 2004, High Level Meeting at the UN, in New York, on the Fight against Hunger and Poverty
Based on the report of the international working group established in Geneva by Presidents Chirac, Lula and Lagos and UNSG Kofi Annan, President Chirac calls the international community to examine seriously the implementation of innovative financing schemes for development, including international solidarity taxes, in the perspective of the next G8 Summit in Gleneagles (June 2005) and the September 2005 UN General Assembly, dedicated to the implementation review of the Millenium Development Goals five years after their adoption.
As a conclusion of this meeting, about 60 countries issue the “New York Declaration on Action against Hunger and Poverty” by which they call the international community to “examine carefully” the proposals of the technical group established in Geneva.
26 January 2005, in his opening speech to the Davos World Economic Forum (by videoconference, due to poor weather conditions in Switzerland), President Jacques Chirac, puts forward four proposals of international solidarity taxes for the consideration of the international community: a micro-tax on financial transactions; a tax on inbound and outbound capital flows with tax haven countries; a carbon tax on the fuel used by maritime and air transport; and finally a micro-tax on airline tickets… In this landmark speech, President Chirac also suggests to use the output of this first international solidarity tax to finance the fight against HIV-AIDS and calls, in this perspective, for innovative partnership with private charities (“such as the Bill and Melinda Gates Foundation” and the establishment of “great international foundations dedicated to the fight against poverty”).
After the Davos speech, President Chirac instructs his Diplomatic Advisor and Sherpa to push the issue of innovative financing for development in the preparatory process of the G8 Summit of Gleneagles to be held next June 2005.
The French diplomatic position concentrates on the creation of an international airline ticket solidarity tax, whereas the UK pushes for the creation of a big international finance facility.
At the G8 Summit in Gleneagles, in June 2005, President Chirac and Prime Minister Tony Blair agree on a mutual political support for their respective initiative:
the creation of a tax on airline tickets to finance the purchase of drugs against HIV/AIDS, tuberculosis and malaria and the setting up of a pilot IFF (as proposed by UK Chancellor Gordon Brown) dedicated to immunization.
14 July 2005, President Lula, France’s guest of honor for Bastille’s Day, and President Chirac decide to move forward in the implementation of a first scheme based on air ticket to finance the purchase of cheap drugs against HIV/AIDS, malaria and tuberculosis.
President Chirac tasks his new Foreign Minister, Dr Philippe Douste-Blazy, to carry on the initiative.
14 September 2005, New York Summit on the Implementation of the Millenium Development Goals.
Due to a health accident, President Chirac is represented at this meeting by his Prime Minister Dominique de Villepin. The meeting is concluded by the adoption of a declaration signed by 79 countries, mentioning the project of the airline ticket tax.
23 November 2005, the French National Assembly starts the discussion on the creation of an airline ticket tax dedicated to financing the fight against pandemics such as HIV-AIDS.
22 December 2005, after an intense debate, and despite an active lobbying of opponents to the project, the French Parliament votes the creation of the tax and its entry into force on 1 July 2006.
28 February 2006, Paris Conference on Innovative Financing for Development.
President Jacques Chirac announces his decision to create an international drug-purchase facility, to which France would allocate 90% of the output of the new French airline ticket solidarity tax (the remaining 10% being allocated to the IFFIm, pursuant to the cross-support agreement decided between President Chirac and Prime Minister Tony Blair in Gleneagles), as a pilot initiative to demonstrate the feasibility and relevance of international financing for development.
2 June 2006, Official Launch of UNITAID in New York at the UN Conference on HIV-AIDS. On 3 March 2007, Former Foreign Minister Philippe Douste-Blazy, who had taken the lead on the project since his appointment by President Chirac at the Quai d’Orsay on June 2005, becomes President of UNITAID.