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After air fares and share sales, UN seeks aid money from oil

Source: Reuters - Tue, 20 May 2014 12:14 GMT
Author: Reuters
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Pipelines are seen at the Zueitina oil terminal in Zueitina, west of Benghazi April 7, 2014. REUTERS/Esam Omran Al-Fetori
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By Tom Miles

GENEVA, May 20 (Reuters) - The United Nations is talking to oil-producing African countries about levying 10 cents on every barrel produced to provide funds to help the poorest nations improve public health, a senior U.N. official said on Tuesday.

The proposed funding mechanism would follow two other schemes to raise money for development in unconventional ways - a levy on airline tickets in more than 90 countries and a tax planned by 11 European nations on share transactions.

Philippe Douste-Blazy, U.N. under-secretary general for innovative finance for development, said he hoped the new arrangement would be cemented by early 2015.

"In 2014 I will be working with African leaders for a tax on natural resource extraction, a very important development which we will soon be able to announce," Douste-Blazy, a former French minister of health and foreign affairs, told a news conference.

"I am working with three or four heads of state in Africa to discuss with them about the possibility to take 10 cents per barrel of oil - it's only for Africa, but it is too soon to give you the names of these countries."

Asked who would pay the oil levy, he said it would come via state budgets and "unfortunately" not from the oil companies, who he suggested were not so receptive to the idea.

The levy could also be imposed on gas and mining production, he said, without elaborating.

"I think that we have to begin with a microscopic contribution but I think we have to work on globalised activities that benefit a lot from globalisation. Extractive resources is one of them. But in each case we have to discuss with heads of state," Douste-Blazy said.

Douste-Blazy is the chairman of UNITAID, a body hosted by the World Health Organization that provides long-term funding for the treatment of HIV/AIDS, malaria and tuberculosis in developing nations.

UNITAID was launched in 2006 by the governments of Britain, Brazil, Chile, France and Norway and about 75 percent of its $300 million budget is now funded by the levy on air tickets.

Douste-Blazy said 94 countries had introduced the air ticket levy. Morocco was the latest to sign up and he hoped Japan would soon do so.

UNITAID says it was instrumental in persuading 11 European countries to back the financial transaction tax, including a 0.2 percent levy implemented in France since March 2012.

Douste-Blazy said he wanted to tackle chronic malnutrition, key to the Millennium Development Goals, a set of U.N.-sponsored targets to reduce global poverty and improve health by 2015, but said aid budgets were shrinking just as needs were growing.

He declined to say how much might come from the extractive industries tax, suggesting a big success might take the pressure off donor governments to support U.N. agencies facing big budget shortfalls for development work.

"I am not going to give you some figures now. Because if I speak to you about extractive resources or mobile phones, etc, you can imagine that if we succeed, it's a lot, a huge amount of money."

He said the new scheme would start with Africa because discussions with those heads of state had been most fruitful.

"But if you find me other heads of state who will agree to do it, I wouldn't say no." (Reporting by Tom Miles; Editing by Stephanie Nebehay and Dale Hudson)

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