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UN proposes global 'micro levy' to fund humanitarian aid

Humanitarian aid

The United Nations has proposed a new global tax in an attempt to address perceived shortfalls in fundraising for humanitarian aid.

A UN-appointed nine-person panel claimed the traditional methods for raising money were failing, adding that new sources of funding, such as taxing entertainment purchases or donations could provide a solution.

The panel's concerns stem from recent figures suggesting that despite the global economy reaching a value of $78 trillion, just $24.5 billion was raised in 2014, representing a shortfall of 62 per cent.

Those figures come against a politically-volatile backdrop that saw an estimated 42,500 people displaced every day due to violence and conflict, with another 53,000 forced to leave their homes due to natural disasters.

Unsurprisingly, a UN report found that 2014 saw humanitarian aid overtake peacekeeping as the organisation's largest expense for the very first time.

Experts have subsequently suggested that an extra $2 billion is needed to help plug the gap.

The report stated: “The most effective way to bring down the cost of humanitarian aid is to reduce the necessity to resort to it. Yet current trends reflect the exact opposite – as illustrated by the increase of people in need of humanitarian aid, and even more dramatically by the increase in the number of deaths caused by conflicts."

Dwindling pool of cash

But according to the UN panel, the main problem facing humanitarian groups is the fact that the cash pool available comes from a very small percentage of people, mainly governmental sources.

Medicins Sans Frontieres, which was cited as an example in the latest report, receives 89 per cent of its budget from just 5.7 million donors. 

Kristalina Georgieva, the European Commission vice president, who was also the co-chair of the panel, claims the solution may lie in introducing a tiny amount of tax on large-volume transactions, such as tickets for airlines or cinemas.

The former World Bank economist said the "micro levy" on such items would likely be set around five US cents.

Ms Georgieva added the panel had even been in touch with soccer's world governing body FIFA with a view to capitalising on the game's worldwide popularity to raise further funds.

Other proposals include the use of Islamic finance, particularly given that many of the areas in need of humanitarian aid are Muslim countries.

"We are working on some very concrete products to tap into different parts of Islamic finance," Ms Georgieva added.

"Keeping radical plans in check"

The proposals have not been met with universal approval, with the Center for Family and Human Rights (C-Fam) stating that voluntary contributions from member states have "guaranteed at least a modicum of control" over how such money is spent.

In a recent column, Austin Ruse, President of C-Fam, said: "The danger is that if the UN Secretariat and the agencies have their own independent source of revenue they will be utterly free to be as radical as they want to be. The disconnect between the General Assembly and the agencies and bureaucracy has existed for a long time. The General Assembly will decide a question and the bureaucracy will ignore this and do what it wants."

The UN panel claims it has already thought about how best to deliver aid during the humanitarian crises.

Most resources are, according to experts, delivered in the form of food, tents, water and medicine, but there is a growing feeling within the UN that aid would be better off being donated in the form of cash as it would allow those in need to make their own decisions about their priorities. 

A UN report concluded: “Cash is more likely than in-kind to cover affected populations’ prioritised needs. A 2014 study found that 70 per cent of a sample group of Syrian refugees in Iraq traded the in-kind assistance they received for cash."