TIME examines voluntary airline tax that aims to fund global health projects

Sep 21 2009

TIME examines a voluntary airline tax, to be introduced in the U.S. and several European countries in January, that aims to "make up a shortfall in official government aid to poor countries — a shortfall exacerbated by the world financial crisis." The tax will be used to combat HIV/AIDS, tuberculosis and malaria, and it will also go towards improving maternal health and reducing child mortality.

The $2 tax - which is backed by the travel industry and organizations, including the William J. Clinton Foundation and the Bill & Melinda Gates Foundation - is "the brainchild of Philippe Douste-Blazy, a former French foreign minister" who runs UNITAID, the magazine writes, noting that it is "no accident that he's a Frenchman: the French have for several years levied a compulsory tax on airline tickets to help fund development projects and have long sought to get others to join them, with mixed success."

The voluntary tax "will be formally announced in New York on Sept. 23 on the fringes of the U.N. General Assembly ... British Prime Minister Gordon Brown and the head of the World Bank, Robert Zoellick, are expected to participate in the launch, as well as the chief executives of the three companies that have made it technically possible: Amadeus, Sabre and Travelport/Galileo, who run the reservation and ticketing systems for most of the world's airlines," according to TIME. 

The tax could raise up to $1 billion per year, according to estimates by consultants McKinsey & Co., and could help achieve U.N. Millennium Development Goal targets. Douste-Blazy has also said that administrative expenses will be minimal, "especially by U.N. standards — less than 5% of the money raised," according to TIME.

Bjorn Skogno, a senior official in the Norwegian Foreign Ministry who is involved with the project, said, development aid "is likely to go down because of the [financial] crisis, so there's a need to be innovative to find new sources of funds." The article also discusses preparations for the launch of the tax and the chances of its success (Gumbel, 9/18).