The United Nations is planning to raise $400 billion every year through tax and other innovative financing mechanisms for development and global challenges.
"The UN is proposing an international tax, combined with other innovative financing mechanisms, to raise more than $400 billion annually for development and global challenges such as fighting climate change," the international body said today during the release of World Economic and Social Survey 2012.
Financial needs of developing countries have long outstripped the willingness and ability of donor countries to provide aid, it said adding that finding the necessary resources to achieve the Millennium Development Goals and meet other global challenges will be tough, especially for least developed countries.
In 2011, for the first time in many years, aid flows declined in real terms, it said.
"Donor countries have fallen well short of their aid commitments and development assistance declined last year because of budget cuts, increasing the shortfall to $167 billion," said Rob Vos, lead author of survey.
It has suggested innovative ways to finance the needs.
"We are suggesting various ways... Such as coordinated taxes on carbon emissions, air traffic and financial and currency transactions," Vos said.
It said $400 billion a year can be raised by ways like taxing $25 per tonne on carbon dioxide emission in developed countries that would raise an estimated $250 billion.
Small currency transaction tax of one-half of a basis point (0.005%) on all trading in currencies, e.G. dollar, euro, yen and pound sterling would yield about $40 billion.
A portion of the proposed EU financial transaction tax may raise $71 billion a year. And regular allocation of IMF special drawing rights (SDRs) and use of idle SDRs could yield about $100 billion a year, it added.
$1 billion has been raised with shift of EU nations to auction emission allocations to fight climate change. It can be increased up to $3-5 billion per year if EU members, except Germany, could match to expectations.