New York, NY (BBN)- The United Nations has proposed a series of financial mechanisms to raise $400 billion annually for development needs, as many donor countries have cut back their assistance funding due to the global economic crisis.
“Donor countries have fallen well short of their aid commitments and development assistance declined last year because of budget cuts, increasing the shortfall to $167 billion,” the lead author of the World Economic and Social Survey 2012: In Search of New Development Finance, which contains the proposals, Rob Vos, said in statement on Friday.
“Although donors must meet their commitments, it is time to look for other ways to find resources to finance development needs and address growing global challenges, such as combating climate change,” he added. “We are suggesting various ways to tap resources through international mechanisms, such as coordinated taxes on carbon emissions, air traffic, and financial and currency transactions.”
Produced by the UN Department of Economic and Social Affairs (DESA), this year’s issue of the annual report on global development found that development aid declined in real terms in 2011, highlighting the need for additional and more predictable financing from new sources.
The report said that while existing initiatives to fund programs in the developing world have been successful, the scope for scaling them up or replicating them is too limited to meet the needs for development financing in the next coming decades, and new funding sources need to be tapped.
Some of the new mechanisms to raise funds which were identified in the report include a tax on carbon dioxide emissions in developed countries, a tiny currency transaction tax, and earmarking a portion of the proposed European Union financial transaction tax. These measures would yield substantial revenues of $250 billion, $40 billion and $71 billion per year, respectively, for international cooperation.
The World Economic and Social Survey 2012: In Search of New Development Finance also notes that current financing resources in many low-income countries have focused on allocating funds to fight specific diseases such as HIV, tuberculosis and malaria, and that while this has brought benefits for disease control, it has also contributed to the fragmentation of health systems in these countries.
BBN/SSR/SI-06July12-2:45 pm (BST)