Japan's Official Development Assistance White Paper 2010
3. Innovative Financing
The international community, including Japan, actively undertakes international cooperation efforts, such as efforts towards the achievement of the Millennium Development Goals (MDGs). However, meeting the development demands of the world requires the mobilization of a broader range of development financing. “Innovative financing” refers to mechanisms for securing new sources of financing in light of these development demands of the world.
A variety of innovative financing mechanisms have been proposed. Some countries have already introduced mechanisms, such as the mechanism of levying a tax on air tickets (solidarity levy on air tickets) and the mechanism of raising funds for the purchase of vaccinations by issuing bonds on the basis of donors’ pledges (International Finance Facility for Immunization [IFFIm]). The funds raised through these programs are used to fight the three major infectious diseases (HIV/AIDS, tuberculosis, and malaria) and address other issues, and have already made significant achievements. There are also other initiatives being considered, including the currency transaction development tax to be levied on currency transactions.
The Leading Group (LG) on Innovative Financing for Development was established in 2006 as a major international forum for discussing innovative financing. Currently, there are 60 member countries and the number is growing every year. Japan held the LG presidency from June 2010 to the end of 2010, and hosted the 8th plenary session in Tokyo in December 2010. Japan has fulfilled its role as president by further galvanizing domestic and international interest in innovative financing and contributing to its development.
In addition, the Taskforce on International Financial Transactions for Development was launched in October 2009 to discuss innovative financing mechanisms related to international financial transactions, including the currency transaction development tax. Japan is also a member of this Taskforce and actively contributes to the discussions.