Davos 2013: Soros calls for new strategy on drugs
George Soros, the billionaire investor, has called for an end to the West's "war on drugs".
Mr Soros has thrown his weight behind a push by Guatemalan President Perez Molina, who recently declared that prohibition should be abandoned.
Speaking at the World Economic Forum, Mr Soros said that the narcotics trade threatened stability in many countries.
He also said austerity "demanded" a new approach to drugs policy, as incarceration was very expensive.
While he admitted that he did not have a specific solution to the problem, Mr Soros said he was "very, very optimistic" of seeing a new approach to the "festering problem of drugs".
"What got me involved is that the war on drugs was doing more damage than the drugs themselves," he told a press conference alongside President Molina.
"I have a strong conviction that the current approach is doing more harm than good, and it has endangered more political stability in a lot of countries. That we need to change."
President Molina said he would organise a meeting of Latin American leaders next June to discuss the issue, which will involve several groups including Mr Soros' foundation.
The "war on drugs" refers to a hard-line approach undertaken by the US government since the 1970s, which involves strict law enforcement, and foreign aid and military intervention in countries, in order to stamp out the narcotics trade.
But with the estimated $365bn (£230bn) industry growing, not shrinking, the strategy has been called into question.
'Incarceration too expensive'
A 2011 commission on drug policy concluded that prohibition spawned new forms of violence including guns and money laundering. President Molina said that four in 10 homicides in Guatemala - where some 400 tonnes of cocaine are believed to transit each year - were linked to drugs.
President Molina, a retired general, won elections in 2011 on a campaign calling for the legalisation of drugs aimed at controlling their production, transit and consumption.
Meanwhile Mr Soros also said that austerity demanded a new approach to dealing with the drug problem, because incarcerating offenders was too expensive for local government coffers.
"So for instance in California, the state spends more money on the prison system than it spends on the education system," said Mr Soros.
To me that is an intolerable state of affairs, so reducing the imprisonment of non-violent drug offenders is one of the obvious remedies to reduce expenditures and there is a bipartisan support for this," he said.
"The problem is that some of the people, or governors, or politicians, who favour reducing incarceration are not willing to spend money on alternative treatments. And that is an issue over which advocates have different visions, but I think the cost of alternatives is significantly lower than the cost of incarceration."
Former US Secretary of State George Shultz and former Federal Reserve Chairman Paul Volcker are also advocates for a new policy decriminalising and regulating drugs.