Proposal to Distribute Remaining Windfall Gold Sales Profits and Strategy to Make the Poverty Reduction and Growth Trust Sustainable
Policy Papers, September 17, 2012
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Bibliographic details
- Published: September 17, 2012
- Series: Policy Papers
Summary
- 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;
- investing them in the Investment Account’s endowment.
- Resources have been held in the Investment Account pending an Executive Board decision.
- Paper proposes distributing the remaining windfall profits to the membership as part of a strategy to facilitate subsidy resources to ensure longer-term sustainability of the PRGT.
- Distribution would follow the same indirect approach used for the partial distribution of SDR 0.7 billion, approved in February 2012.
- Distribution would be effected only after members provide 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.
Background and options considered
- Current balance under consideration: SDR 1.75 billion (remaining gold sales windfall profits).
- Three options previously discussed by Directors:
- Boost PRGT capacity using the windfall profits.
- Count the windfall profits towards precautionary balances.
- Invest the windfall profits in the Investment Account’s endowment.
- Directors expressed a wide range of views in past discussions; no Executive Board decision had been taken and resources remained in the Investment Account.
Proposed decision and implementation conditions
- Proposed decision: distribute remaining windfall profits to membership to facilitate subsidy resources for PRGT sustainability.
- Implementation approach: indirect approach analogous to the partial distribution already implemented for SDR 0.7 billion in February 2012.
- Condition precedent: distribution to occur only after members provide 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.
Key statistics and exact figures
- Remaining windfall profits under review: SDR 1.75 billion.
- Previously partially distributed amount: SDR 0.7 billion (partial distribution approved in February 2012).
- Required assurance threshold for transfers to PRGT: at least 90 percent of the amount distributed.
- Required assured transfer amount equivalent: SDR 1.575 billion.
Subjects and policy focus
- Administered accounts
- Executive Board decisions
- Gold sales by Fund
- Poverty Reduction and Growth Trust (PRGT)
- Profits and resource allocation
- Subsidy accounts
- Use of Fund resources
Source: Proposal to Distribute Remaining Windfall Gold Sales Profits and Strategy to Make the Poverty Reduction and Growth Trust Sustainable, September 17, 2012.
Content in this bundle
- Executive Summary — Proposal to Distribute Remaining Windfall Gold Sales Profits