Norway's aid u-turn has devastating global impact
The Norwegian Government's inability to make an announcement on a new development levy, is perceived an embarrassing failure.
Friday 2 February 2007
The Norwegian government's inability to make an announcement on a new development levy, which could raise over $200m a year for the poorest countries in the world, is widely perceived as an embarrassing failure and will have a significant and damaging impact on the UK government's development agenda. The announcement was due to take place at a key international conference on new ways to finance aid to developing countries in Oslo on 6 and 7 February.
A similar conference in Paris last year launched UNITAID, a $300 million a year fund to provide treatments for HIV/AIDS, TB and malaria. This was paid for by a modest aviation levy, the world's first development tax. Given Norway's impressive track record in the field of international development, it was expected that the government would use the conference to announce a new initiative of a second development levy on currency transactions. It is estimated that a very small levy of 0.005 per cent on Krone exchange transactions would raise over $200 million per year for development. This would help bridge the enormous funding gap required to meet the Millennium Development Goals agreed in the year 2000 and make a difference to the lives of some of the poorest people in the world.
However the Norwegian government has spectacularly changed course away from making any such announcement. This lack of leadership will not only let down people in poor countries but will also constitute an enormous set back to innovative aid financing, to which the Norwegian government had previously shown so much commitment. Without the example set by Norway, the UK government are now far less likely to implement their own development levy.
Sarah Hague, Economic Adviser at Save the Children UK, said: "This u-turn by the Norwegian government is a massive step backwards for the poorest children round the world. The UK government needs the Norwegians to lead the way by introducing this vital development levy. Without it the UK government will continue to stall on introducing such a policy, and the Millennium Development Goals will remain a distant fantasy."
