Thursday, November 27, 2008

Second Day of FfD Conference

Starting off the second day of the NGO Conference was a series of workshops. I went to the one on "Innovative Funding Mechanisms to Bridge the Funding Gap". The focus of the conference was on funding health initiatives but I thought maybe I could pick up some ideas that could be transferred to our situation.

I am not sure that goal was achieved. The first presentation focused on a tax by the French government on all passengers flying internationally from French airports. I failed to see this as innovative (unless you focus on the fact that few other governments are doing this). It seems to be just another tax and
I don't think taxes help build public support for solving problems. Apparently Chirac was pushing this initiative which always helps. But I don't think 1% of the people flying out of France know that they are paying this tax (I pointed out that no one understands airline ticket costs and several people shook their heads in agreement.) Nor are people particularly aware of the problem it is attempting to solve .

The second initiative presented is indeed creative but not transferable to our situation. "Debt Swap" allows a debtor nation to use its repayment for improving the health of its own people. Using the agreement between Germany (creditor nation) and Indonesia (debtor nation) as an example: Germany forgave €50 million of Indonesia's debt. Indonesia was required to pay €25 million to the Global Fund (Germany gave Indonesia a 50% discount on its debt) which then holds the money while Indonesia's health ministry comes up with an approved health improvement program. The Global Fund pays for its administrative costs out of the interest raised on the money held.

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