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Using a Solidarity Levy to Fund Disaster Relief

Solidarity Levy
The United Nations is urging countries to adopt a solidarity levy in order to help victims of war and natural disasters.

The recommendation comes with the news that $40 billion per year is now needed to help vulnerable populations. Climate change and prolonged regional armed conflicts have resulted in a $15 billion shortage in relief funding, the organization says.

“The stakes are sky high,” said U.N. Secretary-General, Ban Ki-moon. “More than 125 million people need humanitarian assistance worldwide. The financial burden is five times greater than a decade ago. Humanitarian action is now the U.N.’s costliest activity.”

In response, a U.N. panel on humanitarian financing has released recommendations on solutions to tackle the widening funding gap. In its report “Too Important to Fail,” the panel highlights, among others, two strategies: adopting a solidarity levy to broaden the humanitarian resource base and reducing the need for humanitarian intervention altogether.

A “solidarity levy,” the panel suggests, is a promising solution to the revenue shortage because it corrects an over-reliance on humanitarian donations. The levy is a tax voluntarily adopted by countries and applied to airline tickets, sporting tickets and other transactions.

The idea has been successful in the past. One such levy on airline tickets raised over $1.7 billion for UNITAID’s fight against HIV and malaria between 2006 and 2011.

The panel wants more countries to adopt this model to generate more predictable and reliable streams of income for humanitarian work. “The simple act of catching a plane turns passengers into contributors to the cause of saving lives—it is responsible travel on an enormous scale,” the report said.

However, one of the most meaningful ways to reduce the cost of humanitarian aid is to build resilience to conflict and disaster, the panel noted. Over 93 percent of people who live in extreme poverty also live in fragile countries.

The U.N. panel recommends using scarce development dollars in the most vulnerable countries first in order to build adequate infrastructure and emergency services. It also supports the existing recommendation to allocate more funds to the U.N. Peacebuilding Fund, which is used to foster political dialogue and strengthen national institutions. Taking these steps, the U.N. suggests, will mitigate the costliest emergency interventions.

In the meantime, more funding is needed to address current issues. With the World Humanitarian Summit set to take place in Istanbul in May of this year, the panel is hopeful that its report will encourage conversations about adopting a solidarity levy and the future of humanitarian financing.

Ron Minard

Sources: IB Times, UN 1, UN 2, World Humanitarian Summit