From left, Dr Mohan Kaul, director general and chief executive officer of the Commonwealth Business Council; Michael Mansoor, chairman, FirstCaribbean International Bank; and, Sir Allan Fields, chairman, Cable & Wireless, Barbados, at the Commonwealth Business Forum, aboard the Serenade of the Seas cruise ship, Wednesday. PHOTO: KARLA RAMOO

Commonwealth non-governmental organisations (NGOs) have lent their support for a proposal from British Prime Minister Gordon Brown for a financial transaction tax (FTT) in support of health and humanitarian projects across the globe. David Hillman, director of Stamp Out Poverty, a global humanitarian non-governmental lobby group, said the proposed tax has the potential to finance several global humanitarian funds that are struggling to reach their targets for delivering service and drugs to achieve their millennium goals.

Speaking at a press conference at the IFC Building C, at the media centre of the Commonwealth Heads of Government Meeting (CHOGM) yesterday, Hillman urged Commonwealth leaders to support the financial transaction tax, including a currency transaction levy for health. Hillman said the foreign exchange market amounts to trillions of US dollars daily and exacting a tax of less than half of one per cent will be unnoticed by traders, yet make a significant difference to the standard of life for disadvantaged and poor people worldwide. He said a 0.05 per cent tax could easily raise US$20 billion annually for these special projects. Other speakers included Dr John Foster of the North South Institute (Canada) and Basil Williams, director HIV and Aids Alliance Caribbean.

Tax to benefit poor
Hillman said key benefactors of the funds will be UNAids and several related funds seeking to deliver medication, food and humanitarian relief for poor and disadvantaged countries. “This is a very exciting time for us, with the breakthrough two weeks ago with the British Prime Minister and the United Kingdom government openly coming out in support of the financial transaction tax after years of extensive lobbying from civil society and NGO groups. “It has recently come to our attention that indications from Number 10 Downing Street—the Prime Minister’s Office—that they are proposing to use 50 per cent of the revenues to help pay for bank bailouts, while the other half will be split between international development funds and projects dealing with delivering healthcare and climate change. “These are extraordinary times, the issue of FTTs or a currency transaction levy (CTL)—sometimes referred in the media as a Tobin tax—was not being discussed seriously by world leaders a year ago,” Hillman said. “Due to the recent financial crisis, governments are no longer prepared to fall back to the ‘so-called’ wisdom of banks, and there seem to be an end to ‘no-go’ areas, such as taxing currency transactions.”

Fixing the financial system
Hillman said serious questions were being asked about the actions and operations of the international banking system and the attitudes of bank leaders. “The approach was that the banks could get away with this because all of society appear to benefit from their actions, and their ‘if it’s not broke, don’t fix it’ attitude— but the financial international system literally became broke, and it needs to be fixed,” he said. “This changing approach by world leaders first manifested itself in the G20 meeting when they tasked the IMF in their recent summit in Pittsburgh to explore options for the financial sector to pay for its own bail out. This opened the discussion and we are pleased that these issues are being dealt with. “Finally, this subject can now be discussed and moved on in a way not possible before,” Hillman said. “The truth is, taxing financial transactions are normal, commonplace and technically simple because the market is electronic and automated, and a simple change in computer code can set aside the funds for collection.”