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Innovative instruments

Other instruments debated internationally


A child in Somalia being immunised against polio.

In addition to the instruments described in the preceding sections, the following innovative financing instruments are in use or under discussion internationally:

In­ter­na­tional Finance Facility for Immunisation (IFFIm)

The In­ter­na­tional Finance Facility for Immunisation (IFFIm) was set up in 2005. Its task is to pre-finance planned official de­vel­op­ment assistance (ODA) com­mit­ments for several years, with these funds being used to support large-scale vac­ci­na­tion pro­grammes and health sector im­prove­ment programmes. The main aim is to reduce infant mortality in poor coun­tries (Millennium De­vel­op­ment Goal 4).

The Facility raises funds by issuing bonds on the in­ter­na­tional capital markets. Great Britain, France, Italy, Spain, Sweden, Norway, the Netherlands and South Africa have under­taken to make contributions.

Germany does not yet contribute to the IFFIm. The German par­lia­ment has not reached agree­ment on this model of long-term pre-financing, because the Bundes­tag sees it­self as having only limited scope to make budgetary com­mit­ments in the fore­see­able future.

Advance market commitments for vaccines (AMC)

Advance market commitments (AMC) are designed to speed the research, de­vel­op­ment and availability of vaccines.

Under this model, participating coun­tries subsidise the research carried out by pharma­ceutical companies and promise to purchase the newly developed vaccines at a pre-agreed price. An AMC pilot project aimed at broadening vaccination against pneumococcal disease was launched at the start of 2007 with funding of 1.5 billion US dollars. The project is supported by Italy, Great Britain, Canada, Russia, Norway and the private Bill & Melinda Gates Foundation.

Germany is not at present involved in advance market commitments as the pilot phase has revealed some issues that still need to be resolved: How is the price decided? Who bears the cost if the research turns out to take longer and be more expensive than was expected? Is the industry prepared to continue providing vaccines at cost price after the AMCs have expired?

Taxation of in­ter­na­tional financial transactions

Since the worldwide financial and economic crisis began in 2007, there has been renewed discussion in gov­ern­ment circles of whether and how fi­nan­cial mar­ket players should con­tri­bute to countering the risks associated with the globalisation of the market and to the costs of crises that occur. A possible in­stru­ment would be taxation of fi­nan­cial trans­actions as a means of regulation or as a source of revenue to ensure that the financial industry helps to bear the costs of the risks associated with crises.

Following a joint proposal by Germany and France, nine other EU member states have now declared their intention to intro­duce a fi­nan­cial trans­action tax under en­hanced co­op­er­a­tion. The European Com­mis­sion has al­ready sub­mitted a pro­posal on enhanced co­op­er­a­tion for authorisation; this must now be approved by the European Parliament and by a qualified majority in the Economic and Financial Affairs Council (ECOFIN). At the meeting of the ECOFIN Council on 13 November 2012 the German Finance Minister urged that the process be expedited.

However, this process does not currently provide for these taxes to be specifically used for de­vel­op­ment purposes, although such use has been repeatedly demanded by members of the Leading Group on Innovative Financing for De­vel­op­ment.

Levy on airline tickets

Nine coun­tries have decided to impose a levy on airline tickets to help finance de­vel­op­ment projects. In France, for example, this levy raises around 180 million euros annually.

France pays 90 per cent of the revenue from its de­vel­op­ment levy into UNITAID, an in­ter­na­tional drug purchasing facility set up in 2006. UNITAID negotiates with the pharmaceutical industry and buys large quantities of drugs used to treat HIV/AIDS, malaria and tuberculosis. These drugs, which are purchased at low prices, are then supplied to de­vel­op­ing coun­tries.

In spring 2009 the Leading Group on Innovative Financing for De­vel­op­ment re­com­mend­ed ex­tend­ing the solidarity levy on air tickets to other coun­­tries. It is es­ti­mated that this could raise up to 200 to 400 million US dollars annually in future years.

In September 2010, as part of its budget consolidation, the German gov­ern­ment decided to intro­duce an air traffic tax. It is not planning to ear­mark the revenue for the funding of de­vel­op­ment co­op­er­a­tion. With the inclusion of air traffic in the emis­sions trading scheme from 2013, additional funds for in­ter­na­tional climate change mitigation will be generated in the EU from 2014. First, how­ever, in­ter­na­tional agree­ment must be reached with other states on the situ­a­tion that applies to air travel to non-EU coun­tries.

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