Proposal to Distribute Remaining Windfall Gold Sales Profits and Strategy to Make the Poverty Reduction and Growth Trust Sustainable

Date: September 17, 2012
Electronic Access: Full Text

Summary:This paper revisits the use of the remaining gold sales windfall profits (SDR 1.75 billion). Directors previously considered three main options: using them as part of a strategy to boost the capacity of the PRGT; counting them towards precautionary balances; or investing them in the Investment Account’s endowment. In past discussions, Directors expressed a wide range of views on these options, and the resources have continued to be held in the Investment Account pending a decision by the Executive Board.

This paper proposes a decision that the remaining gold sales windfall profits be distributed to the membership as part of a strategy to facilitate subsidy resources to ensure the longer-term sustainability of the PRGT. This would involve the same indirect approach that has been used for the partial distribution of SDR 0.7 billion, approved in February 2012. The distribution proposed in this paper will be effected only after members have provided satisfactory assurances that new amounts equivalent to at least 90 percent of the amount distributed—i.e., SDR 1.575 billion—will be transferred, or otherwise provided, to the PRGT.

Series : Policy Paper
Subject(s): Gold sales by Fund | Profits | Poverty Reduction and Growth Trust | Subsidy accounts | Administered accounts | Resource allocation | Use of Fund resources | Executive Board decisions