There are enough resources in the world, but they are not distributed equitably. We need fairer and more equitable distribution of wealth between countries and within countries. Innovative financing can been seen as one of several mechanisms that can help us to promote this agenda.
As stated in the Rio Outcome document, innovative financing mechanisms can play a positive role in complementing sources of financing for sustainable development. This is not a substitute for domestic ressources mobilisation. Neither is it an excuse for states not to deliver on official development assistance commitments.
Norway allocates 1 % of gross national income (GNI) to official development assistance. This is a testimony to the importance of official development assistance and of fulfilling ODA commitments. However, it is necessary to look at the broader range of financial flows for development, and innovative financing is part of this picture.
Norway supports and contributes to the various initiatives promoted by the Leading Group on innovative financing for development in the health field, such as UNITAID, the International Finance Facility for Immunisation (IFFIm), the Global Alliance for Vaccines and Immunisation (GAVI), Advance Market Commitments (AMC) and the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM).
In addition, the Norwegian Government supports the introduction of global taxes that would limit the adverse effects of globalisation and create global redistribution mechanisms. Such global taxes can include a tax on currency transactions, a tax on financial transactions and taxes on carbon emissions.
The foreign exchange market is more than 40 times larger than international trade in goods and services. If we put a very small levy on currency transactions in the foreign exchange market, it could provide a substantial part of what is needed to fight global poverty and climate change.
According to an expert report from Leading Group countries, a levy of just 0.005 % on currency trade could generate close to USD 40 billion a year. The report makes it clear that this can be done with little market distortion. Some may ask whether we can afford to do this. The real question is can we afford not to.
Norway has signed the Leading Group declaration in support of a tax on financial transactions for development. We urge more countries to consider to join the initiative. The financial sector has profited from the support it received from governments during the financial crisis, and will continue to benefit from the opportunities offered by globalisation. A currency transaction levy can be viewed as a reasonable contribution from the financial sector to global stability and sustainability. The revenues should go to development, climate change measures and global public goods.
The same applies to levies on air and sea transport. This was pointed out in the report of the High-level Advisory Group on Climate Change Financing, which was appointed by the UN Secretary-General Ban Ki Moon and co-chaired by the Prime Ministers of Ethiopia and of Norway. The polluter-pays principle should be implemented in this context too, and the revenues should be used to fight climate change.
I started out by saying that there are enough resources in the world; the problem is that they are not distributed equitably between countries and within countries. Discussions on inclusive growth and mechanisms for redistribution should also be part of the overall discourse on innovative financing.
Thank you, Mr President.