Just the Ticket?

Around $1 billion has been raised so far to help developing countries by taxing plane tickets. The idea, proposed by former French president Jacques Chirac, first took effect in July 2006. Travellers in countries participating in the scheme pay two euros on top of an economy ticket in Europe, four euros in business class, rising to ten euros and forty euros respectively on transAtlantic flights.

The money raised is paid into UNITAID – slogan “Together to Heal” – which in turn distributes it to projects addressing the UN Millennium Development Goals that concern health, including on child mortality, maternal health and HIV/Aids, tuberculosis and malaria. So far 15 countries have signed up to support UNITAID, including France, obviously, though not all of them are levying the tax. Norway collects a tax on CO2 emissions instead, and the British government has agreed to pay up to 60m euros directly from its budget.

This may soon rise to 20 countries, said Philippe Douste-Blazy, the former health minister of France who now heads UNITAID, in a meeting with Matthew on June 19th. There are high hopes that these will include Japan, where Parliament is currently debating a tax which would split revenues 50:50 between environmental causes and development. Countries in the Gulf with significant air hubs are also said to be interested.

Yet there are some big economies that show no interest in taxing fliers – none bigger than America, which accounts for around 44% of the 2.5 billion airline tickets sold every year, and China, now the fastest growing major market. So Mr Douste-Blazy is trying a different tactic – tapping the spirit of giving in ordinary travellers. He has negotiated with the three major ticket booking companies – Sabre, Amadeus and Travelport – as well as big online travel sites such as Expedia to include in the booking process the question, would you like to make a (say) $2 donation to development? Revenue will be collected from credit cards without the customer having to do anything other than click yes.

A new body, the Millennium Foundation, has been created to administer this not very catchily named “voluntary solidarity contribution project” (how French!) – UNITAID is housed within the World Health Organisation, an arm of the UN, which can accept money from governments but not the private sector (as Ted Turner discovered when he gave $1 billion to support UN causes), so (as in Turner’s case) a special private foundation has had to be created to intermediate.

Will people voluntarily donate? The experience of the global “check out for children” partnership between Sheraton hotels and Unicef, where guests paying their bill are asked to donate $1 to the children’s charity, bodes fairly well, having raised $16m since 1995 – a sum that UNITAID hopes to dwarf when the scheme gets going next spring.

Philanthrocapitalists should wish it well, for the money raised from airline tickets has already been a crucial ingredient in public-private-philanthropic partnerships to stimulate markets in drugs for the poor, such as supporting the Clinton Foundation’s efforts to make affordable anti-retroviral drugs available to children with HIV/Aids in the developing world, as well as the new Affordable Medicine Facility for Malaria (AMFm) initiative.

Last week, the One campaign, which successfully lobbied for more aid at the G8 summit at Gleneagles in 2005, warned that “the G8 are at risk of defaulting their commitments to Africa”. In its annual report about the promises made at Gleneagles, One singles out Italy and, oddly enough, France for making “exceptionally poor progress” in living up to their promises.

UNITAID should not let rich governments off the hook. Yet, with public budgets under strain, finding new ways to finance development is more urgent than ever.