Copenhagen climate summit: George Soros urges use of IMF gold for green loans
George Soros, the billionaire investor, has suggested that the International Monetary Fund should use $100bn (£62bn) of gold reserves to back green loans from rich to poor nations.
10 Dec 2009
George Soros lays out plans for the IMF to use its gold reserves for green loans from rich to poor nations at the Copenhagen climate summit.
George Soros lays out plans for the IMF to use its gold reserves for green loans from rich to poor nations at the Copenhagen climate summit. Photo: AP
Mr Soros waded into the Copenhagen climate change talks this morning, explaining that the “not sufficient” money offered by developed nations to help out developing countries is threatening to “wreck the talks”.
He claims to have “found a way to bridge the gap” between the two sides, calling on the 192 governments at the summit to listen to his proposals.
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Mr Soros believes that developed countries should hand over their “special drawing rights” – international foreign currency assets distributed by the IMF – as loans to help poorer nations tackle climate change.
Developing countries would pay interest and eventually the whole loan, but in the event of a default, the sum would be backed by the IMF’s gold reserves.
It is a different approach to the current proposals, which primarily rely on contributions from the balance sheets of developed countries.
“Developed countries’ governments are laboring under the misapprehension that funding has to come from the national budgets but that is not the case,” Mr Soros said.
“They have it already. It is lying idle in their reserves accounts and in the vaults of the IMF”.
The Prime Minister, Gordon Brown, has suggested a $10bn emergency fund for developing nations, rising to $100bn a year by 2020.
But China and the 137 emerging economies want up to 1pc of global GDP – or $600bn a year starting as soon as possible – causing tension at the summit.
“The $10bn fund is more than nothing but not much more because of the magnitude of the problem,” Mr Soros said, criticising Mr Brown’s proposal.
“It’s not sufficient and it’s already becoming apparent that there’s a gap between the developed and developing worlds on this issue that could actually wreck the conference."
The billionaire investor was met with a receptive audience among non-governmental organisations, but the US is understood to be reluctant to consider such a plan because it would need Congressional approval.
“I did have some informal discussions with the US and while there’s sympathy for the plan the difficulty of getting Congressional approval has been emphasised,” he said.
He suggested the best use of the money would be to look at reducing emissions from agricultural, forestry and land use, because they offer the highest potential for cuts.
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