Don't freeze aid; instead, fund Robin Hood Tax

 

Check out Oxfam’s news release today for an infuriating story. We added up the cuts to aid planned by donor countries this year and it turns out to be the biggest drop in aid for 15 years: $9.5 billion, enough to educate most of the 67 million children currently unable to afford primary school.

Our numbers don’t even count the effects of Canada and France freezing aid increases, which takes additional billions out of the pockets of people living in poverty. Most of the cuts are in the United States, while the UK and Australia continue to increase aid, despite facing an economic crunch at home.

The fact is that aid represents a tiny proportion of the government’s budget - in Canada’s case, $5 billion out of $276 billion this year, or less than 2%. The foregone increase in 2011 would have been in the neighbourhood of $450 million, barely more than 1% of the projected $30 billion deficit.

This is a symbolic savings at best; one that does little to put our fiscal house in order yet will lead to fewer children in school, more women dying in childbirth, more chaos for the world’s most vulnerable people.

The 'Greek' bailout hijacking the G20 agenda is a similarly sad story. The bailout is really for the French and German banks that lent money to Greece. Why should Greeks pay for that through thousands of layoffs and cutbacks to public services?

The Occupy Movement has it right: inequality is the central problem of our times. The very rich paying their fair share is the price of civilization.

Don’t freeze the aid budget. Instead, fund a substantial increase with a new tax on the financial transactions of commercial banks, hedge funds and the like. The Robin Hood Tax should get a significant boost here this week, with Germany and France leading the way.

Next: Tomorrow is 'development day' at the G20. Bill Gates releases his report to the G20 and we on innovative sources of finance to fight poverty and climate change, and the G20 take up actions to rein in rising food prices.

Mark Fried is Oxfam Canada's policy coordinator. He is in France for the G20 summit - sometimes posing as President Obama.

 

 

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