Q&A / George Soros: Global-scale 'prescriptions'
International Herald Tribune
March 14, 2002
Alan Friedman  

The latest book by George Soros, the billionaire financier and philanthropist, is an analytical essay about globalization in which he calls for greater regulation of the financial system and a stronger political hand to match the money side of the process. Soros lays out a proposal for using reserves from the International Monetary Fund to help poorer nations and closes the book with a stinging attack on the Bush administration. On a visit to London, Mr. Soros discussed the book and the global economy with Alan Friedman of the International Herald Tribune.

Q. Your new book, "George Soros on Globalization," follows earlier writing efforts in which you have criticized the same financial system that has made you a wealthy man. Why another book along the same lines?

A. I've been working on the problems of globalization for the last five years, and this is the distillation of that work. And in my previous books, I was a little bit weak on prescriptions. Here I take a look at our existing institutions and study what is missing, and I make concrete proposals that could be implemented.

[Q.] What is the message of this book?

[A.] That the global capitalist system as it currently functions is a lopsided version of a global open society. The capitalist system is very good at the creation of private wealth. We have global markets, we have global financial institutions, but our political institutions have not kept pace with the development of our market institutions.

[Q.] Do you see any contradictions about being a billionaire capitalist who's now turned into a critic of the system?

[A.] I made my money according to the present system, but I can see the faults in the system, and being a practitioner, maybe I can see them a little better than most other people, and I would like to correct them. And I don't think there's any contradiction whatsoever.

[Q.] What message is President George W. Bush sending to the world with his announcement of steel tariffs?

[A.] President Bush has put domestic political considerations ahead of U.S. obligations under the World Trade Organization. The rules were clearly violated, and the United States will have to compensate for it. But that will take time, and in the meantime, the congressional elections will take place in November of this year, and President Bush will have reaped the benefits in states like Pennsylvania, where he will have gained support.

[Q.] What do you say about international aid in the book?

[A.] There is a generally agreed and well-recognized need to increase international assistance. The goal is to provide $50 billion more a year, but we have done very little, if anything at all, toward that goal. So I have a specific proposal. It involves the use of Special Drawing Rights. These are international currency reserves created by the International Monetary Fund and allocated to the member countries. To use these Special Drawing Rights, the rich countries would donate them for international assistance, and the developing countries could use them directly to add to their reserves.

[Q.] But how would this benefit the poorest countries?

[A.] In two ways. One would be this direct addition to their reserves; and secondly, there would be a new mechanism for providing for certain social needs, such as public health, education, improvement of legal systems. It would achieve three things: It would add to the amount of money available, but that's the least of it. It would assure an equitable distribution of the burden; but most importantly, it would provide a new mechanism that would ensure that the aid is put to good use.

[Q.] Is it possible that the Bush administration would ever agree to this?

[A.] I think there is broad-based support now, bipartisan support, for increased aid following Sept. 11. And I very much hope that President Bush will step up in front and will propose this at the United Nations development conference in Monterrey. If not, there will be a social movement to get it done.

[Q.] In 1997, you battled with Prime Minister Mahathir of Malaysia, who was calling for more financial regulation, more controls on globalization, and now, in this book, you're sounding pretty much like him and at odds with the United States.

[A.] I am taking on the Bush administration. I don't think it necessarily represents the point of view of the population of the United States. It's taking a hegemonic view of the world, and that I think is today the greatest danger for a global open society.

[Q.] In your book, you describe President Bush as unabashedly unilateralist and hegemonic. What do you really think about Mr. Bush?

[A.] President Bush has responded very well in the immediate aftermath of the Sept. 11. attacks, and in a way he's been born again. But I don't think that the unilateralist view that he has adopted is in the long run in America's interest.

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