Mitterrand bows out with call for world tax

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FRENCH President Franois Mitterrand set a summit of 121 heads of government alight yesterday by proposing an international tax on currency speculation in order to eradicate world poverty. Haltingly making his international swansong before the election which will replace him next month, Mr Mitterrand , who has terminal cancer, was speaking after a week in which speculation caused crises for currencies around the globe.

His proposal will now go to the summit of the seven richest nations in Nova Scotia in June.

The president was speaking at the World Summit for Social Development, which ends today in Copenhagen, before the largest number of heads of government ever assembled in one place - including Nelson Mandela of South Africa, Li Peng of China, Helmut Kohl of Germany, and Narasimha Rao of India. Vice President Al Gore represented the United States, but John Major refused to attend. Britain sent the Minister for Overseas Development, Baroness Chalker.

Criticisms of Britain's approach to the summit exploded yesterday when Oxfam accused Lady Chalker of making a speech "bordering on the obscene" in her call for free trade as the key to global prosperity and the reduction of poverty.

Patricia Feeney, Oxfam's poverty adviser, said Lady Chalker's emphasis on the free market and the need to remove "unnecessary barriers to job creation" in developing countries, such as cost and over-regulation, had been "quite a shameful speech" when the summit's declaration recognised the limits to the free market and the need for a social dimension to economic policy.

The leaders at the summit will today sign a declaration pledging them to "eradicate poverty" and "promote full employment", and committing themselves to launch national programmes to do this. The tax on speculation is the brainchild of Professor James Tobin, winner of the 1981 Nobel prize for economics, who argues that global transactions in currency markets amount to $1 trillion a day. A tax of just 0.5 per cent on them would raise $150bn a year, three times current aid levels, to attack world poverty.

Mr Mitterrand said the tax would "release considerable resources even if it was set at a very low level". Without that kind of commitment, he added, the summit would merely be "playing out a farce in front of the world".

"Speculation ruins in a few hours the work of millions of men and women and menaces the results of long negotiations like these. I ask myself: are we going to abandon future generations to the gamble of these blind forces?"

But the managing director of the International Monetary Fund, Michel Camdessus, said he was "not excited" by the proposal, and that financing an attack on poverty should be left to governments. Britain is sceptical about the tax, and a senior US official said: "Taxation is the role of the sovereign state."

lPresident Clinton yesterday nominated investment banker James Wolfensohn as next president of the World Bank to succeed Lewis Preston.

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