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US Billionaire Wants More SDRs from IMF for Climate Change

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US billionaire investor George Soros on Thursday suggested an additional US$100 billion of IMF special drawing rights (SDRs) be used for assisting developing countries' efforts to tackle climate change.

Developed countries should lend the SDRs for 25 years in a special green fund serving the developing world, the 79-year-old investor said at a press conference on the sidelines of the UN Climate Change Conference.

Soros made the proposal while warning that the gap over financing developing countries' efforts on tackling climate change would probably "wreck" the Copenhagen talks.

Developed countries' proposal of 10 billion dollars a year for the next three years "is unlikely to satisfy the developing countries," Soros said. "I believe this amount could be at least doubled and ensured a longer period of time."

There is no similar agreement on where the money will come from, and developed countries are reluctant to make additional financial commitments, he added.

Soros said the IMF SDR-based green fund should grow from forestry and agricultural projects because they are the areas that offer the greatest scope for reducing carbon emissions and could produce substantial returns.

He proposed that the IMF members agree to use gold reserves of the IMF, worth about US$100 billion at current prices, to guarantee the payment of interest and repayment of the loans for the developing nations.

However, Soros was worried that the US Congress would likely block the plan. "Nothing will happen unless there is public pressure and pressure from the developing countries to make it happen," he maintained.

In addition, Soros told Xinhua at a press conference that the idea of generating US$100 billion is not an original one. "But I do think that financing is a big obstacle, and in fact climate change is a very real threat," he warned. "I've been convinced that it is really an existential problem for the world."

(Xinhua News Agency December 11, 2009)

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