Earth to G-20 Part 2: The Hidden Treasure of the IMF
[continued from part one] Recently, Neil Watkins took some time to answer a few questions from Sojourners assistant editor Elizabeth Palmberg about the upcoming G-20 meeting, the global economic crisis, and helping the poor. Here's part two of that interview.
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Palmberg: Several years ago, I was surprised to hear that the IMF was sitting on a huge store of gold which its account sheets listed at a bizarrely fictional book value less than one-sixth of the market price. Normally I think of bankers as doing sophisticated accounting and investing, but this gold thing seems more like hiding money under a mattress. Is the IMF still doing this? If the gold were accounted for using real market rates, how much debt cancellation could the extra value pay for?
Watkins: The IMF is still hiding its gold under the mattress. They've actually now got a proposal to sell 12 percent of their gold to help cover the IMF's administrative budget. We're saying that if the IMF agreed to sell just an additional 12 percent of its total gold stock, it could raise $10 billion which could write off all the IMF debts and even some of the World Bank debt of up to 24 poor countries that need it to meet the Millennium Development Goals (MDGs). These countries were identified as the ones needing debt relief in the Jubilee Act, which passed the U.S. House of Representatives in the last session and is soon to be re-introduced in the new Congress. With aid budgets unlikely to grow in the U.S. or rich countries given the financial crisis, IMF gold