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Air Ticket Solidarity Levy

As of 30th September 2007, the Korean government introduced an air-ticket solidarity levy entitled "Global Poverty Eradication Contribution," a measure in which 1,000 KRW gets collected from each international flight passenger departing Korea.

Background

At the UN World Summit in 2001, the international community adopted the Millennium Development Goals (MDGs), a set of eight goals for global sustainable development. To secure financial resources as means to deliver the MDGs, the international community has begun substantive discussions since 2004 concerning the discovery of innovative financial resources for development. Due to these efforts, in September 2005, in the presence of 79 nations, the New York Declaration was adopted, which calls upon the need of new financial resources for development. In step with the discussions of the international community, the president of the Republic of Korea gave a speech at the UN General Assembly (September 2005), in which he emphasized our responsibility and plans of action in the global fight against poverty and hunger.

Accordingly, the Korean government has been a participant of the 'Leading Group on Solidarity Levies to Fund Development' since April 2006, accepting the chair position from March - September 2007; hosted the third General Assembly in Seoul (September 2007) and has continued to take part in the global community's efforts towards additional financing for development.

Outlook and Forecast for the Air Ticket Solidarity Levy

The implementation of this model of alternative financing for development has been motivated by Korea's commitment to the achievement of the MDGs. Given the fact that the largest proportion of Korea's development assistance is focused on Asia, this scheme's focus on Africa will reinforce Korea's effective participation in the global tasks of poverty and disease eradication. It will also help Korea fulfill its pledge to carry out its role in the resolution of poverty and hunger, as announced at the UN General Assembly in September, 2005, and contribute to the expansion of innovative financing for development.

Why Africa? Africa has made the least progress in achieving the MDGs, and at its current pace of development Africa has yet a long way to go until 2015. Thus, the aim is to provide the least developed countries of Africa with focused support from the Air Ticket Solidarity Levy and enhance their fulfillment of the MDGs.

Why Disease Eradication? Health promotion is an aim and requisite of development, and is essential especially for the development of the economic social standards. In this regard, it is thus impossible to accomplish the MDG of eradication of poverty and hunger, etc without the accomplishment of the MDGs directly linked to health. Of the many areas entailed within the MDGs such as poverty, training and education, equality, health and environment, the area of poorest performance has been evaluated as health. Furthermore, concentrated support is required for the elimination of disease.

Management of the Air Ticket Solidarity Levy

The amendment to the Korea International Cooperation Agency Act (KOICA Act) of March 29, 2007 provided the legal basis for introducing the Air Ticket Solidarity Levy, the system of Global Poverty Eradication Contribution. The Enforcement Decree of Korea International Cooperation Agency Act (KOICA Decree) prescribes on the matters relating to the general management and operation of the contribution. This Air Ticket Solidarity Levy programme was set to expire in 2012. However, considering existing demand against disease in Sub-Saharan African countries and its achievement so far, the Korean National Assembly revised the KOICA Act in August 2012 to extend the programme until 2017.

Summary of the management in the KOICA Decree
- Outline: KRW 1,000 is levied on all international flight passengers departing from Korea
- Exemptions: Children under 2 years old, adopted children from overseas, transit passenger, flight attendants, etc.
- The Contribution Management Committee: Reviews major policy issues concerning the management of the contributions; with the Minister for Foreign Affairs and Trade as its chairman and 8 members, which include vice-ministers from relevant ministries and experts in related fields.

The Use of the Air Ticket Solidarity Levy

The Air Ticket Solidarity Levy is being spent in a transparent and efficient manner in accordance with the decision of the Contribution Management Committee. It seeks to:
1. Support the treatment of HIV/AIDS, tuberculosis, and malaria in developing countries by UNITAID
2. Support disease eradication projects in Africa by Korean NGOs
3. Support disease eradication projects in Africa requested by the African governments

First, a large proportion of the contribution is channeled through UNITAID. UNITAID was established to scale up the efforts of the treatment HIV/AIDS, tuberculosis, and malaria which hamper development of the international community. As a UNITAID Executive Board Member, Korea is actively participating in the management and operation of the organization and thus contributing to the efforts in eradicating these three major diseases.

Second, the Global Poverty Eradication Contribution is used for the support of Korean NGOs' disease eradication projects in Africa. Through this contribution, projects are being conducted in Tanzania, Mali, Senegal, and Uganda by Good Neighbors International, Save the Children Korea, Plan Korea, Korea Food for the Hungry International with the aim to combat endemics and strengthen the local health system. Three additional projects by Child Fund Korea, World Vision Korea, and Korean Red Cross have been approved beginning in 2009. These NGO projects are financed through a matching fund method by both the Global Poverty Eradication Contribution and NGO resources.

Lastly, the contribution is being used to support disease eradication projects requested by the governments of least-developed African countries. KOICA conducts these projects in the form of bilateral cooperation. Currently, three projects have been launched in Sudan, Niger, and the Democratic Republic of the Congo for eliminating and controlling schistosomiasis, meningitis, and malaria, respectively.

Innovative Financing for Development

  • Despite the increased ODA volume, growing concern that the MDGs may not be achieved with the current ODA status has given rise to further discussions on new financial resources for development to begin in 2004.
  • - In September 2004, through the 'New York Declaration on Eradicating Poverty and Hunger', there has been an increase in concern and interest towards innovative financing for development as means to accomplish the MDGs.
  • - In September 2005, through the 'New York Declaration on Innovative Financing for Development', the importance of innovative financing for development as means of reinforcing traditional financial measures of development has been emphasized.
  • As opposed to the traditional ODA budget that was annually arranged by the government followed by the voting procedure of the National Assembly, innovative financing allows for the mobilization of predictable, long-term, sustainable development resource