Robin Hood Tax is not a feather in Sarkozy’s cap
During the recent G20 meetings the world watched as Western leaders tried to make sense of the growing Eurozone crisis while the Greek government teetered on collapse. Many other topics for debate failed to get much public attention and that will remain the case until the Greek crisis is resolved and the growing financial crisis ...
During the recent G20 meetings the world watched as Western leaders tried to make sense of the growing Eurozone crisis while the Greek government teetered on collapse. Many other topics for debate failed to get much public attention and that will remain the case until the Greek crisis is resolved and the growing financial crisis is addressed.
Gone are the days when world leaders looked forward to talking about the role the G8 and G20 should take to commit to the developing world and its needs on global health issues, the spread of democracy and the provision of humanitarian assistance to those still in dire need.
Add to this the skewed view that now is somehow the time to transfer a large portion of this responsibility to the private sector insinuating that they are in many ways responsible for the current shortfall in government foreign aid budgets.
Politicians would rather place blame on the private sector than look at their own bloated and over-spent government foreign aid programs.
And yet they still profess a desire to maintain robust foreign assistance programs and to look for new ways to fund global development in a bid to accomplish the Millennium Development Goals.
So how do some of our "progressive" leaders aim to do this? A new financial transaction tax (known by its advocates as the "Robin Hood" tax) has been proposed to raise more money for developing countries. Far from being a creative solution, I fear that this is yet another way for governments to trumpet flashy big number deliverables rather than focusing on making aid more effective and coordinated.
The "Robin Hood" tax also fails to take into account what the private sector continues to do in the developing world.
To be sure, there remains great hardship in the developing world and foreign aid should be a priority within the G20. But, we need to get away from just upping the ante for the sake of a headline and move towards requiring international aid organizations to prioritize and strategize.
There is also a need to set conditions in which foreign aid recipients themselves start to contribute some revenue to establish a coordinated approach to solving a programs objective.
There exists a continued disconnect and infighting between donor nations on how best to address foreign assistance.
Agencies like USAID are often accused by donor nations in Europe of setting up parallel structures and as a result not providing the funding needed to government institutions in developing countries. At the same time, Congress wants accountability for money spent knowing that there exists too much waste in budget transfers to governments who take advantage of (and even squander) tax payers’ money.
So, let’s take some time while governments are short on cash to actually prioritize what we are already spending. Let’s get away from big number deliverables and "bold new approaches" and move towards a focus on best practices, program money based on results, targeted spending and investment where we know it will make a difference.
The one thing that should not be on the table right now is an ambitious new tax, especially not one that risks penalizing the only sector that can truly lift people out of poverty; the much maligned private sector.
No matter how many actors and activists Tweet about the noble "Robin Hood" tax, let’s remember what works and then focus on making that even more effective.
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