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CIDSE inputs into “Gates Report” on innovative finance (June 2011)

Rethinking Bretton Woods | Wed, Jun 15, 2011

By CIDSE

Center of Concern joins CIDSE, a transatlantic alliance of 16 Catholic Development Agencies, submitting a contribution to Bill Gates’ working paper on financing for development. The report was requested by the French Presidency of the Group of 20 and is intended to inform the deliberations on the topic  in the lead up to the Cannes Summit, coming November.In its contribution, CIDSE highlights innovative mechanisms to finance development goals such as a Financial Transactions Tax (FTT) and Special Drawing Rights (SDRs) to complement pledged ODA funds.

Center of Concern joins CIDSE, a transatlantic alliance of 16 Catholic Development Agencies, submitting a contribution to Bill Gates’ working paper on financing for development. The report was requested by the French Presidency of the Group of 20 and is intended to inform the deliberations on the topic  in the lead up to the Cannes Summit, coming November.In its contribution, CIDSE highlights innovative mechanisms to finance development goals such as a Financial Transactions Tax (FTT) and Special Drawing Rights (SDRs) to complement pledged ODA funds.  

In its first section, the submission states that as the 2015 deadline to reach the Millennium Development Goals draws closer, it is becoming more imperative to turn to new innovative sources of revenue to fund these minimalistic goals. CIDSE argues that beyond the MDGs, increased revenue sources would be needed to enable poor men and women to live and work decently and in dignity and to finance climate adaptation and mitigation efforts.

Two new revenue sources are advocated as promising. One is the implementation of a Financial Transactions Tax (FTT).  The FTT is a very small (0.05%) tax on all international financial transactions.  If implemented globally, it would raise billions of dollars to finance development.  Second, the generation of more Special Drawing Rights – a reserve asset issued by the IMF, also can raise billions of dollars. SDRs could free resources by being held as reserves by recipient countries, can allow recipients to borrow hard currency at preferential interest rates and can back up lending by regional development banks or funds. In its second section, the submission cites figures on the staggering scale of illicit financial flows from LDCs and states the need to tackle the South-North flow of resources. Among the ways to do this are strengthening tax administration, improved exchange of tax information between governments and the adoption of globally consistent regulations for transfer pricing as well as measures to enforce improved reporting by trans-national companies of all activities on a country-by-country basis.

 Click here for the full CIDSE submission to the Gates report.

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