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How the Bond Markets React 09.16.05
A Socially Beneficial Bond
It is difficult to be on the side of the Bush administration when it comes to our global participation in the reduction of disease and poverty.
Our commitment to the Millennium Declaration is the primary reason that the President insisted on sending John Bolton to the United Nations. Bolton¹s first job was to wriggle the administration out of as many promises as possible and renege on as many commitments designed to help solve the growing epidemic of poverty and hunger, to tackle ill-health, gender inequality, lack of education, lack of access to clean water and environmental degradation.
Instead of finding innovative ways to help foot a bill we can no longer afford under the crippling pressures of those pesky twin deficits, the Bush position has been based on promises and then a quick retreat from them. To find innovation, one needs only look at some of the other member nations, ones who realize that their position in the world extends beyond military might to humanitarian efforts at building a healthy world.
Finding a unique way to fund this noble effort, five European nations have decided to offer bonds totaling $4 billion to aid the Global Alliance for Vaccines and Immunization (GAVI). Already a pet project of the Bill and Melinda Gates Foundation, who have contributed almost $450 million to the organization, the additional money will help save more than five million children over the next ten years.
Gordon Brown, Britain¹s Chancellor of the Exchequer said:
The five nations include The United Kingdom, which has pledged 35% of the total resources required for a US$4 billion IFFIm, which is equivalent to US$130 million a year, France, who has pledged 25%, equivalent to US$100 million a year, Italy has pledged 10%, equivalent to US$30 million a year with Spain pledging 3%, equivalent to US$12 million a year and Sweden has made a total pledge of US$27 million.
The White House has commented that this type of financial mechanism, one that Paul Kissack of the British Treasury hopes will catch on as not consistent with Congressional appropriations. Perhaps, but the global need does not go away because of a subtle shift in the blame. In this case, policy starts in the White House and is supported by the Congress, not the other way around.
This method of front loading funds is unique and welcomed by the organization. According to the Vaccine Alliance, since its inception in 2000, GAVI has reached almost 78 million children with new and under-used vaccines, and almost 8.7 million additional children with basic vaccines. It is estimated that by the end of 2004, immunization support by the Alliance in more than 70 countries had prevented more than a million premature deaths over the lifetime of children born between 2001-2004. GAVI has also accelerated introduction of new vaccines and is strengthening vaccine delivery systems.
When these bonds become available, we will let you know. Global poverty is that important. And as a side note, the current US contribution to GAVI runs around $60 to $70 million a year.
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