Global Policy Forum

By Faisal Islam

Turkeys voting for Christmas hardly compare. In a surprise move George Soros, the international financier and philanthropist, has lent his voice to calls for a 'Tobin tax' - a levy on international currency speculation which would be used to fund education, environmental protection and medicines.

'I'm in favor of the Tobin tax. It doesn't happen to coincide with my personal interest, but it could be a very good source of funds for providing global (public) goods,' he said. The endorsement could not have come from a more unlikely source. Soros's Quantum Fund is believed to have made around pounds 1 billion during the ERM crisis in 1995.

Feelings are still running high in East Asia, where he is seen as the cause of the region's 1997-98 financial crisis. He recently abandoned a trip to Thailand after threats from local activists. The Malaysian Prime minister recently denounced a dotcom entrepreneur who accepted investment from one of his funds as a 'traitor'. But Soros, whose funds suffered from the technology stocks collapse, has found common cause with anti-globalization campaigners.

The campaign for the tax is gaining ground among groups such as War on Want. Campaigners see it as the next international rallying call after the moderate success of lobbying for debt relief. The United Nations is currently conducting a feasibility study for the levy. War on Want is lobbying for a tax of between a tenth and a quarter of a per cent on Dollars 2 trillion of daily financial flows. 'There's a valid argument for it, despite some problems with options,' Soros said.

In the UK to promote his new book Open Society , he said that the intellectual property rights system for medicines was 'anti-competitive'. He also saw merit in a tax on international airline tickets to fund development.

However, Soros will not be manning the barricades outside meetings of the International Monetary Fund just yet: 'I'm not an unequivocal advocate of the Tobin tax. If the government eliminated speculative activities, it would reduce the depth of the market. The (benefit) depends on what it's used for.'

The tax was first proposed by Nobel prize-winning US economist James Tobin in 1978 as a way of 'throwing sand in the wheels' of the financial system.

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