The Leading Group on Innovative Financing for Development, the main forum for rallying support for such mechanisms, today brings together 59 countries from the northern and southern hemispheres along with international organizations and NGOs (www.leadinggroup.org). Under the six-month French presidency, the Sixth Plenary Meeting was held on 28 and 29 May in Paris. This meeting at ministerial level brought together the main public figures interested in innovative financing: foreign, development and finance ministers from the 59 member countries; heads of international organizations including the FAO, WHO, UNAIDS, OECD and the World Bank; experts; and representatives from the main NGOs, foundations and companies.

Opened by Bernard Kouchner and other ministers and heads of international organizations belonging to the Leading Group, the meeting was based on three workshops devoted to new resources for development (workshop 1), new sectors (workshop 2) and financial innovative instruments to better manage these resources (workshop 3). The Leading Group also hosted the third meeting of the High-Level Taskforce on Innovative Financing for Health Systems directed by Gordon Brown and Robert Zoellick (created in 2008) to promote synergies between different initiatives on innovative financing for health.

At this meeting, innovative financing was defined more precisely, its role underscored, particularly amid today’s economic crisis, and a wide range of existing and future mechanisms were presented. Innovative financing is stable, predictable and complementary to conventional ODA. The fresh resources such financing provides development rely on four types of mechanisms (mandatory contributions, voluntary contributions, loan guarantees and market mechanisms). In three years’ time, innovative financing has raised over US$2.2 billion in additional funds for development. In the health sector, such funds have helped vaccinate over 100 million children a year and provide paediatric AIDS treatment for 100,000 children a year.

This high-level conference gave new countries and international organization the chance to join the Leading Group, including Japan, Romania and the European Commission. Some countries also announced that they plan to implement innovative financing mechanisms: notably Morocco (air-ticket solidarity levy) and Australia (Debt2Health) in cooperation with the Global Fund to Fight AIDS, Tuberculosis and Malaria. Fifteen countries who do not belong to the Leading Group wished to attend the conference as observers. The French Presidency also suggested that Chile take over the Group’s presidency for six months starting September 2009 and Chile accepted to do so.

This conference ended with a final declaration (available on the Leading Group’s website: www.leadinggroup.org). It set goals in different areas: the adoption by each member country of an innovative financing mechanism in a year’s time (voluntary contributions, taxes or market mechanisms), the creation of a working group to assess the technical and legal feasibility of a currency transaction levy and voluntary contributions based on international financial transactions, the use of innovative financing in new sectors (climate change with proceeds from the auctioning of CO2 credits or education) and towards financially innovative instruments (counter-cyclical instruments, loan guarantees) or even a series of specific recommendations regarding tax avoidance and remittances.

The sixth recommandation of this Declaration points out that “In connection with work initiated by the Working Group coordinated by Norway, Global Financial Integrity and the Leading Group, a set of specific and implementable recommendations on actions that could be taken by Leading Group members (for example curtailing abusive transfer pricing, country-by-country reporting, confirmation of beneficial ownership, automatic exchange of tax information, harmonization of predicate offenses) should be proposed by the next plenary session.

Unanimously considered a success in terms of debates and level of participation, this conference focused on the “scaling up” of innovative financing mechanisms announced at the Conference on Financing for Development held in Doha in November 2008. It has become a major forum with a view to the upcoming international meetings including that of the G8, the UN Financial Summit and the upcoming United Nations General Assembly meeting.

This entry was posted on Sunday, May 31st, 2009 at 12:52 pm and is filed under Multilateral Institutions, Resources.