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Sell Oil For Gold, Mahathir Tells Saudi Arabia
JEDDAH, Saudi Arabia, Jan 18 - Former Malaysian Prime Minister Mahathir Mohamad said on Sunday that Saudi Arabia should sell oil for gold, not dollars, to avoid being "short-changed" by a decline in the U.S. currency.

"The price of oil is $33, but the U.S. dollar has declined by 40 percent against the euro so you're effectively getting $20," Mahathir told an economic conference in Saudi Arabia's Red Sea city of Jeddah. "So you're being short-changed."

Saudi Arabia, the world's biggest oil exporter, has justified higher world oil prices by saying they are necessary to compensate for the slide in the U.S. currency.

Mahathir, who retired last October, spent much of his time in office upsetting Western governments and defying their economic orthodoxies. But he became a respected spokesman in Islamic and developing states and received an ovation in Jeddah.

He suggested countries tally their total annual imports and exports and settle the difference at the end of the year in "gold dinars". Sounding a discordant note, Mahathir also warned Saudi Arabia against rushing to join the World Trade Organisation (WTO), saying it was not necessarily a positive move.

Saudi Trade Minister Hashem Yamani said on Saturday his country had narrowed differences with the United States that were holding up accession to the organisation and said he wanted to join "tomorrow".

"Everybody should be careful before joining the WTO because it is not all positive. It can be very negative if you don't handle it properly," Mahathir said. "They try to impose their agenda without regard for some other countries."
 
Source: Reuters

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UK's Brown Urges IMF To Revalue Gold For Debt Relief
VATICAN CITY, July 9 - UK Chancellor of the Exchequer (finance minister) Gordon Brown on Friday called on the International Monetary Fund to revalue its gold reserves as a way of releasing more money for debt relief for the world's poorest countries.

Brown, who is also chairman of the International Monetary Committee, the IMF's policy-setting group, told a seminar organised by the Catholic church in Vatican City that debt relief is both a moral and economic issue.

"While 100 percent of bilateral debt of the poorest countries is cancelled by many donors, in practice only 50 percent or less of multilateral debt is being cancelled," he said.

"So to do more to complete the process of debt relief, we propose to the international community that we consider anew all options to finance further debt relief for the poorest countries, including making better use of IMF gold."

Most of the IMF's gold is valued at $40 an ounce under a 1971 agreement, though some was revalued at market prices in the late 1990s to finance the Highly-Indebted Poor Countries (HIPC) debt relief initiative.

That delivered more than $2.5 billion of debt relief through off-market gold transactions.

Treasury officials said the proposal was to adjust the paper value of the IMF's gold to current market prices of around $400 an ounce to generate more funds for debt relief.

Britain was not suggesting that the IMF sell its gold -- something which could push the market price down and hit poor countries that depend on gold exports.

An IMF spokesman in Washington declined to comment.

Brown also used the seminar to raise pressure on the United States and Germany in particular to back his idea for an International Finance Facility.

He said the creation of the IFF could double aid to the world's poorest countries to $100 billion a year by issuing bonds in the international capital markets using donor countries' long-term commitments as collateral.

Brown said this money was urgently needed if the Millennium Development Goals of halving world poverty were to be met by 2015.

"The IFF will enable us to deploy the critical mass of predictable, stable and coordinated aid as investment over the next few years when it will have the most impact on achieving the targets -- saving lives that would otherwise be lost," he said.

More than 50 countries, including France, are supporting the creation of the IFF but the United States and Germany have so far not given the plan their full backing at Group of Seven meetings.

The IMF and World Bank are expected to produce a report on the scheme in time for their annual meetings later this year.
 
By Sumeet Desai
Source: Reuters / allAfrica Global Media