2007/04/16

Intervention by Roberto Bissio at the special high-level meeting of the ECOSOC with the BWIs, the WTO and the UNCTAD

Social Watch

During the special high-level meeting of ECOSOC with the BWIs, the WTO and UNCTAD in New York on 16 April, Roberto Bissio defended innovative finance mechanisms against the attacks of the US and the business sector and the ambiguities of the European Union. Social Watch demands that the presidents and prime ministers come away from the Financing for Development summit in Doha next year with a political declaration and not just a no- consequences debate.

Intervention by Roberto Bissio at the plenary of the special high-level meeting of the Economic and Social Council (ECOSOC) with the Bretton Woods Institutions (BWIs), the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD). New York, USA, April 16, 2007.

Audio version available here.

Thank You Mr Chairman.

I’m Roberto Bissio from the Third World Institute of Uruguay and the International Secretariat of Social Watch.

I would like to thank the distinguished delegate of the USA for his clarification on the issue of the apparent decline of aid in 2006. We shouldn’t be sad that aid dropped in 2006, but then we shouldn’t celebrate either the aid increase in 2005. Both were just a result of “creative accounting”, computing debt cancellation as part of official development assistance (ODA). And, further, the cancelled debt was accounted at its face value and not at the real market value, which was almost nil. The NGO community has always demanded that any income from new financial mechanisms and debt cancellation, both very much needed, should not be accounted as part of ODA.

In that regard I would like to request a clarification from the European Union, since there is some ambiguity in the position presented earlier in this meeting. German minister Heidemarie Wieczorek-Zeul, speaking on behalf of Europe, said that new sources of finances are needed to achieve the commitments. We certainly agree that they are needed to achieve the MDGs and other commitments, but if the idea is to count those incomes as part of ODA in order to achieve the 0.7% target we would be doing precisely the opposite of what the group on aid effectiveness said earlier today, which is that those mechanisms should be additional to ODA and not be accounted as a part of it. A clarification would be very welcome.

Finally, on the issue of international air travel taxes, resisted by the business delegate and the United States, I would like to point out that the airline magazine I read on the plane on my way here explained to passengers its satisfaction at contributing to the fight against diseases through UNAIDS. And today we heard from the co-chair of group D that France, which is already applying this airport tax, has not seen any diminishment in tourism as a consequence. Let me remind you that many airports around the world have increased their airport taxes by 50 to 100 dollars per passenger to pay for extended security. In comparison, a tax of one dollar per passenger to contribute to world health is insignificant.

Nobody likes to pay taxes, and those of us who travel a lot particularly dislike airport fees. But as citizens we know that taxes are the other face of citizen rights. Taxes are so very linked to citizenship that modern democracies are based on the principle of “no taxation without representation”.

Yet what we are increasingly seeing with globalization is a lot of “representation without taxation”. The amount of taxes being evaded through fiscal heavens has been estimated in 225 billion dollars a year, out of which 50 billion come from developing countries through transfer pricing, capital flight and fiscal heavens.

If low income developing countries could raise their taxes to a similar level as that of developed countries, their revenues would increase by an additional 140 billion dollars a year, which is more than the highest estimate of what is needed to achieve the MDGs. But they are not earning those taxes because of the incentives and tax exemptions that are given, mainly to big business and transnational corporations, and not to family businesses or to individual citizens. And tax-exempt business has not lost its representation in global decision-making; quite the contrary.

I think that aid, debt, international taxes and new sources of finances for development are key issues to be considered in the process towards the Doha summit on FfD in 2008 and we do hope that Doha has an outcome at a presidential level that reviews and updates the Monterrey declaration to the challenges of today.

Thank you, Mr. Chairman.