The current supply of public goods and services in the global and regional levels, it is dangerously inadequate. United nations (UN), the European Union (EU) and other multilateral agencies are under a strong pressure, because their budgets are not at the height of their responsibilities.

Although a few free market ideologues still hold that there is that let corporations motivated by profit lead the world without state intervention, the experience proves otherwise. The State is essential to facilitate the universal access to vital services such as health and education; infrastructure (e.g., highways, railways and electricity distribution networks); and funding for scientific research and the early stages of technological development. It is also necessary to tax the rich and transfer income to the poor. Otherwise, our societies will become dangerously unequal, unjust, and unstable (as is happening today in the united States).

In high-income countries, the State charges at least 25% of the gross national product in taxes to perform these functions. In the more developed economies of the world, among which stand out the socialdemocracias of the north of Europe, the State collects in taxes about 50% of the national GDP. These revenues are used for three vital functions: services and public investments and transfers from the rich to the poor.

Today it is urgent to extend these three public functions to the supranational level. Groups of neighbouring countries (for example the EU and the African Union, AU) in need of public services, public investments and transfers across national borders, often with the participation of dozens of countries simultaneously. The regional bodies need to regional budgets adequate to carry out its vital functions. The UN as a whole also requires an adequate budget that will allow him to fund global initiatives to combat climate change, protect the oceans, eradicate extreme poverty, to resist the proliferation of nuclear weapons and to stop local conflicts through the Security Council of the UN before they become global disasters.

the EU, The AU and other regional groupings should be trending regional networks of electrical power distribution based not on fossil fuels but on renewable energy sources (e.g. wind, solar, and water). They should also be transferring funds from the richest regions to the poorest, to eliminate pockets of persistent poverty. And they should be protecting nature, without distinction of borders and investing much more in science and technology to take advantage of the digital revolution.

The contribution of the USA is 10,000 million dollars a year. With your greed hurts himself

But the budgetary resources available for multilateral cooperation are minimal. While many EU member States charge in taxes at least 25% of the national GDP to finance public expenditure in the national and local levels, the budget set of the EU only account for 1% of the combined income of the member states. The European Investment Bank (EIB) provides additional funding for investment projects, but dependent on the obtaining of funds in the market.

The reason for the low funding is obvious. The taxes are under the jurisdiction of national and local governments, which jealously safeguard their prerogatives to tax; in Asyabahis the EU, the national governments agreed to transfer only 1% of GDP to Brussels for joint use. The result is an EU with aspirations very large and an operating budget is very small. Worse still, the european nationalists (for example, supporters of Brexit on the United Kingdom) claim that the EU budget is too large, instead of terribly small. No country could sustain itself with only 1% of the national product; and it is possible that neither the EU to be able to do it with a budget so miniscule. The amount of public services, investments and transfers on a pan-european level is a tiny fraction of what is needed for a union really effective.

The situation is even worse at the global level. The regular budget of the UN is only 2,700 million dollars a year, that is to say, only 0,003% of the world’s gross domestic product (90 billion dollars). The fund’s annual total organism, including additional contributions of the member States for humanitarian operations and peacekeeping, round 50,000 billion (0.06% of world GDP), only a fraction of what is really needed. Although the member States of the UN have proposed the right steps and bold, such as the Sustainable Development Goals and the Paris agreement on climate, lack of financial means to implement them.

Despite the small budget of the UN, the u.s. government does not stop accusing the institution of being oversized and be too expensive. The united states contributes about 22% of the regular budget, annual of 2,700 million dollars (i.e. approximately us $ 600 million a year), but that’s less than two dollars for each american… Adding contributions to peacekeeping and other payments, the total annual contribution of the united States comes to approximately 10,000 million (approximately us $ 30 per capita). With their greed, the united States harms itself. It is possible that the final cost, for America and for the world, chronic underinvestment in the overall needs amounting to several tens of billions of dollars.

in Addition to the contributions through the UN, the high-income countries make direct transfers to other poorer in the form of official development assistance. The net value combined aid round the 150,000 million dollars a year, or only 0.31% of the income of the donor countries, who long ago promised to allocate for such aid to 0.7% of their income. As these global transfers are so small, there is still extreme poverty in a world of abundance. And the rich countries are still failing to fulfill their old promises to provide the poor countries with at least 100,000 million dollars a year to finance projects related to the climate.

The world should be taken seriously equate the multilateral funding with the needs multilateral. The EU should double its budget to 2% of GDP pan-european (and continue to keep increasing with time). Also, the world should devote at least 2% of the world’s wealth to the provision of public goods and services that are global to eradicate extreme poverty, combat climate changetico, protect nature, to save the millions of destitute of a premature death, to ensure universal education and to sustain the peace through the UN.

the time Has come to think in new global levies (on income, corporate, offshore accounts, international financial transactions, the net worth of the billionaires and the pollution) to fund the needs of an interconnected world, and under pressure. With creativity, cooperation and foresight, we can mobilize new funds to convert our huge wealth global sustainable prosperity for all.

Jeffrey D. Sachs is professor of Sustainable Development at Columbia University. © Project Syndicate, 2018.

Translation: Esteban Flamini