Statement by H.E. Mr. Nobuhide MINORIKAWA
Parliamentary Vice-Minister for Foreign Affairs and the Head of the Delegation of Japan
at the 6th Plenary Meeting of the Leading Group on Solidarity Levies to Fund Development

May 28, 2009

His Excellency Mr. Bernard Kouchner, Minister of Foreign and European Affairs of the French Republic,
His Excellency Mr. Alain Joyandet, Secretary of State for Cooperation and Francophony and the president of the plenary session,

Distinguished delegates, ladies and gentlemen,

I appreciate the opportunity to speak on behalf of the Government of Japan.
And let me take this opportunity to commend the French Government for their diligent efforts in organizing and presiding over this meeting.

Japan officially participated in the activities of the Leading Group for the first time at its plenary meeting in November last year. As Japan attends the plenary meeting for the second time, I can see that there is a growing interest in the Group's activities, with senior-level representation from a number of countries.

The world is now facing a global economic and financial crisis that is said to occur only once a century. Its impacts on the vulnerable population in developing countries are particularly devastating, threatening to wipe out the gains that we have made so far towards the achievement of the Millennium Development Goals.

Japan joins the international community in their concern over the delay in the progress towards the MDGs in regions like Sub-Saharan Africa, even though we are already past the halfway mark towards the final target year of 2015. Japan has been well aware that a wide range of financial resources needs to be mobilized to meet the global development needs including the MDGs. And the seriousness of the current financial crisis makes the discussions and ideas on additional resource mobilization in the international community all the more relevant.

As we deliberate on innovative financing mechanisms in the next two days, let me point out the following three viewpoints that Japan considers crucial.

Firstly, we need to acknowledge that resources are not unlimited, and work to enhance the coordination between donor countries further, and put the available resources to effective and efficient use. At the same time, we should take advantage of a "participatory approach," drawing strength from a wide range of stakeholders from developing countries, donors, and emerging economies to international organizations, private foundations, corporations, and academia.

Secondly, it is the view of the Government of Japan that, even in the face of economic crisis, donor countries should deliver on their existing commitments on development in a timely and steadfast manner, so that the progress towards MDGs is not going to be reversed. Innovative financing should not be used as a convenient means to replace ODA. It should be something that complements the existing instruments for resource mobilization.

Now, I know that several innovative mechanisms proposed or introduced by other countries, such as air-ticket solidarity levy, UNITAID, International Finance Facility for Immunization (IFFIm), and Advance Market Commitments, targeting health and tackling infectious diseases in particular. Japan has always regarded global health as a matter that is directly linked to human security and therefore an important sector for its development cooperation, and announced its "Health and Development Initiative" in 2005. Based on this initiative, Japan has been actively engaged in the efforts to make progress towards the health-related MDGs, aiming to provide approximately 5 billion US dollars in 5 years and also contributing to the Global Fund to Fight Aids, Tuberculosis and Malaria.

Especially at the Hokkaido Toyako Summit last year and throughout its follow-up process, Japan has spearheaded international efforts for policy making on global health that calls for addressing maternal, new-born and child health, infectious diseases and the overall health system strengthening in a comprehensive fashion. We are ready to present our views and activities relating to health in more detail to our colleagues in the United Nations Economic and Social Council at the ECOSOC's National Voluntary Presentation session in July.

My third point is that sustainable economic growth based on the ownership of developing countries is all the more important as we attempt to emerge from the current economic crisis. To do that, a wide range of resources other than ODA needs to be secured, from domestic resources mobilized within developing countries to foreign direct investment. Financing for development is as much a question about the necessity of a system in each country that would ensure efficient and equitable resource distribution to cater appropriately to the most vulnerable as it is about exploring new sources of funding.

With these three perspectives in mind, I now want to share with you where we are in terms of Japan's domestic discussions on innovative financing for development.

In the context of climate change, the Government of Japan made a cabinet decision in July last year which we call an "Action Plan for Achieving a Low-carbon Society." This Action Plan contains passages that read as follows: "the government will carry out a study on a possible modality of an internationally coordinated global environmental tax system that would serve as a financial resource for joint development of innovative technology and implementation of aid projects in developing countries mainly by developed countries. The study will include review of the discussion carried out so far in international institutions and of various challenges. The government will make public of some outcome of study around the end of the current fiscal year." In March this year, the Government of Japan followed this through by issuing a report that contains preliminary study on various financing mechanisms proposed for climate change.

The issue of how to formulate financing mechanisms for a climate change framework beyond 2012 is one of the major points that needs to be addressed in the current negotiations on climate change. Japan is determined to participate actively in the negotiations on financing as part of our serious efforts towards the establishment of an effective post 2013 framework.

There are also ongoing discussions outside the Government as well. With the intensifying international attention to solidarity levy, or solidarity contribution, a number of Japanese parliamentarians across the political spectrum launched the "Parliamentary Group on International Solidarity Levy" in February 2008, and they have been very active since then. Echoing this, "International Solidarity Levy Promotion Council" was also set up mainly by the private sector. Active discussions are underway in this Council on the course Japan should take with respect to solidarity levies, and the Council is scheduled to submit its report within our fiscal year 2010. At their request, the Ministry of Foreign Affairs, the Ministry of Finance and the Ministry of Environment are represented in this Council as observers. Furthermore, the ruling political parties have incorporated a reference to solidarity levies in the outline of their 2009 tax reform proposals as a matter for consideration in the future. It roughly reads: Amidst financial crisis, ensuring resource for development is expected to be increasingly difficult all over the world, and yet the demand for resources for assisting developing countries is still great. In light of this, and also as part of the measures to address global warming, we will consider, in a comprehensive manner and with the understanding and cooperation of the taxpayers, what an appropriate tax system by which the international community assist developing countries together should look like, taking into account such factors as where the international discussions are headed on this matter, what are the possible economic and monetary impacts, whether it will be appropriate as a special-purpose tax, and whether it will be practically implementable.

That is broadly where we are at the moment: at the stage of studying and discussing various innovative financing mechanisms within our Government, including whether the introduction of such mechanisms will be appropriate for us. That said, I must mention that, in Japan, there are already various smaller schemes in place to foster citizen's contribution to development, other than those typically addressed in this Leading Group. They usually capitalize on systems that are familiar to ordinary citizens and allow people to make voluntary donations.

For instance, we have a system called the "Postal Voluntary Savings." If a person chooses to open this particular savings account instead of a regular one, 20% of the interest earned, after tax deduction, gets donated through JICA fund to be utilized for the improvement of people's lives in developing countries and environmental conservation. The total number of the savings accounts reached 10 million by the end of fiscal year 2008.

Other examples include:

• New Year's greeting cards that have lottery tickets attached to them. Part of the proceeds from the lottery goes to support for international students who come to Japan to study from developing countries;
• The "Bell Mark Campaign," in which people collect the pictures of a small bell on the packaging of food and stationery products by manufacturers registered with the campaign and take those earned "bell"s to school, whereafter PTA associations of individual schools can convert the "bell"s into credit to buy necessary school equipment;
• A "social action credit card," which has a built-in system of donating an amount equivalent to, for example, 0.5% of the amount of your credit card purchases, for a charitable cause such as "saving endangered great apes in Africa." A similar scheme using shopping receipts is run by a supermarket chain too; on a particular day of each month, this supermarket collects shopping receipts from their customers and donates goods equivalent of 0.1% of the total amount collected;
• And, another interesting system is called 'carbon offset prescription,' in which annual subscription of a magazine comes with a gift certificate of certain amount of carbon credit. This way, subscribers can help Japan achieve the CO2 emission reduction target under the Kyoto Protocol.

According to a survey conducted in Japan last year, approximately 50% of consumers had the experience of buying eco-friendly or charity-minded products. So there is a sense of widespread solidarity among Japanese people in general, to help out others whether domestically or internationally. I believe that these voluntary mechanisms to mobilize private resources are meaningful activities, from the perspective of a 'participatory approach' that I mentioned earlier and also in relation to our deliberations in this plenary meeting, notwithstanding the fact that some of these mechanisms may need to be streamlined from the viewpoints of preventing duplication and ensuring efficiency.

Finally, it is my sincere hope, ladies and gentlemen, that the discussions we are about to have in this Leading Group will be a lively one that will contribute to achieving internationally agreed development goals. For its part, Japan looks forward to learning the views and efforts by the other participating countries and organizations, and to exchanging information and experiences about various financing mechanisms with our distinguished colleagues during this meeting.

Thank you.