Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations, December 3, 2009

December 4, 2009

Washington, D.C.
Thursday, December 3, 2009
Webcast of the press conference Webcast

MS. ATKINSON: Good morning. I'm Caroline Atkinson, Director of the External Relations Department at the IMF, and welcome to you here and those online to our regular biweekly press briefing. The briefing is embargoed as usual until 10:30 a.m. Washington time or 1530 GMT.

I'd like to start by saying today we're releasing the IMF's Executive Board Work Program for the next 6 months. We are going to be looking at taking work forward on the four Istanbul decisions that the MD and IMFC announced when we were in Istanbul for the Annual Meetings. These four decisions were about the Fund's mandate, how we can help with providing resources and funding in the world, what are your ways of helping countries build up their reserves, how to strengthen multilateral surveillance and continuing governance reform.

In that context, the Executive Board will be looking at exit strategies which are of course very important now. We have a high-level conference going on today on exit strategies. It's a closed meeting, but it's part of the analytical work that we're doing and the agenda is on the website. We're also looking at how to develop our financing instruments to help countries that are worried about being insured against future crisis. We're enhancing our policy advice through the G-20 Mutual Assessment Process. Of course, over the next year we'll be implementing the governance reform with a quota increase. And in the next 6 months the Board will be looking at ways of fully implementing the decisions on gold sales and so on so that we can support the doubling of our concessional lending for low-income countries.

Ahead of next week's U.N. Conference on Climate Change in Copenhagen from December 7 through 18 we have a few announcements. First of all, tomorrow, Friday, December 4, here in the gallery of our headquarters building the Managing Director Dominique Strauss-Kahn will accept an award for earning one of the highest environmental designations for our headquarters buildings from the U.S. Green Buildings Council and this event will be open to the press.

Also tomorrow at 9:30 we will be releasing a Staff Position Note and posting it on our website on Climate Policy and the Recovery which looks at how to exit from the crisis and foster the recovery while also developing an effective response to climate change. We will have a conference with the press and the paper is being provided to the press under embargo.

Finally, tomorrow we have our upcoming "Finance and Development" magazine and three of the lead articles concerning climate change will be released early tomorrow. The full edition will be available a week later on December 11.

In terms of management trips and engagements, Tuesday, December 15, the Managing Director will hold an end-of-year press conference. We'll send out a regular media advisory on this. And because of that, we won't have this regular press briefing on the 17th, and we'll resume these in January.

On December 10, next week, the First Deputy Managing Director John Lipsky will give a speech to the Japan Society in New York about strengthening the post-crisis economy. Finally as a housekeeping matter, the Fund will be closed on December 25 and January 1.

Let me now turn to your questions and remind those participating online to submit questions, and please identify yourselves and your affiliations.

QUESTIONER: What would you say is the main gist of the program here? Clearly I see Reza Moghadam saying, and everybody has been saying that the recovery is underway. How does the Fund see this program? Is it just setting the building blocks in place? Could the recovery be moving fast enough that the Fund needs to possibly implement some of this stuff a lot quicker?

MS. ATKINSON: We're moving quickly on our work program, and we moved quickly in the past year and we will continue to move quickly in terms of focusing on how to build the post-crisis world economy, how to support countries that are coming together to consider exit policies, to consider how to strengthen the stability of the international financial system going forward.

This work program, and I should have mentioned that Reza Moghadam is having a survey that will be released from embargo at the same time as this press conference at 10:30, is quite ambitious. It is for our work in the next 6 months, and of course, we're already underway with that. Your other point about what's happening with the recovery, you're right that there is some evidence that in some countries it has got underway sooner than our original projections, but we still believe that this will be a fragile recovery supported initially to a large extent by government action, by continued fiscal stimulus which of course will begin to wear off over time, and by accommodative monetary policies. How we encourage and global leaders encourage a strong and self-sustaining recovery is an important element of our work.

QUESTIONER: How do you assess the UAE and Dubai economies after the recent Dubai World announcement?

As you know, Masood Ahmed who is our Director of the Middle East Department gave a press briefing yesterday. We will have that transcript online. But just to answer that question, we expect that the economy of the UAE will be affected somewhat. We had been projecting 3 percent growth for the United Arab Emirates next year and we expect now that it will be somewhat lower with obviously a bigger impact in Dubai itself than in the other emirates. Are there other questions?

QUESTIONER: If I could follow-up on that Dubai question. Masood didn't talk about it yesterday, but I was wondering if there were an Article IV mission going to Dubai earlier than expected to do the assessment because obviously these assessments are doing through the Article IVs. Right?

MS. ATKINSON: It's true that the assessments are doing through the Article IVs, but it's also true that we have close contacts with most of our member countries. We don't just sort of wait for the Article IV to trigger some interaction. For example, obviously Masood has been in close contact with his counterparts in the UAE, and there has recently been a mission. There has not yet been a report to the Board, but the last Article IV took place in late 2008 and the materials from that were published earlier this year in 2009. So on the regular annual schedule we would expect to be talking a lot to the UAE around this time.

I have another question on Dubai online which is, How many the Dubai situation affect the global economy? I'd just say in regard to global financial markets, we believe that the evidence in recent days is that the impact is likely to be contained. Obviously, we as well as other regulators will be watching, but so far we believe that the fallout is going to be contained on the global markets.

QUESTIONER: I have a question on Latvia. They passed their budget. Did you have any reaction to that? Does the Fund support the possibility of Latvia issuing bonds?

MS. ATKINSON: We have a mission in the field. They may be just starting today. So as usual, I won't comment on the particulars of any program. We did issue a press release pretty much over Thanksgiving that was really just announcing that the mission was there and talking about the budget situation there. I'm going to leave it at that while they're discussing with the authorities.

QUESTIONER: I was wondering does the Fund, does the MD, feel confident that he can get this governance issue through by January 2011? The NAB was one example of how things are changing to give emerging economies a greater voice, but the rest is going to be a lot more difficult and I was wondering how you see that proceeding, specifically, I see that you're going to be breaking into groups, but mostly how easy is this going to be or how difficult is it going to be to complete the process?

MS. ATKINSON: I think that the NAB as you say has been a very important signal. It is an important signal of how the world is changing. There were earlier signals which were the importance and the direction given to policy from the G-20 leaders' meetings beginning and year ago and then very importantly in London in April and followed-up in Pittsburgh. I think that we have seen this inclusion and working together. I also think that some of the economic and financial issues that countries face can't be easily divided along advanced and emerging economy lines. There are some advanced economies that are in a position for example to have fiscal stimulus and some emerging market economies that had more fiscal space. As one thinks about the world economies, it's also useful to think that countries don't necessarily fall into different pots depending on whether they're classified as advanced or emerging in terms of the issues they're facing, and many emerging market countries have a very important stake in the world economy now.

Turning to your question about how difficult it will be, these things in a way are never easy and certainly my colleagues who are involved in the previous round would say that. But we have one huge advantage I believe this time which is that IMFC, the governing body of the IMF, has already committed to a shift of as you know at least 5 percent in quota share toward the dynamic and emerging market countries from overrepresented to underrepresented countries, so that very important. I think it makes it much easier, I'm not going to say it's going to easy, to work toward a goal when we've got a broad agreement about what the end objective is. I believe we had that and we had that from Istanbul, and of course there was a step toward that in Pittsburgh. I should also add that as I said the Managing Director himself is going to be having a press conference on the 15th and of course you should be thinking about what questions you want to ask him about how he sees things. I don't want to speak for him. Are there any others?

QUESTIONER: The conference today on exit strategies, would you see that as an indication that the Fund thinks it's time to start moving on exiting or is this still in the planning phase do you think?

MS. ATKINSON: I think we've been clear that it's time and it has been time to be thinking about and designing exit strategies, we've also been clear about how there's a delicate balancing act and that we still see the recovery as rather fragile and we have advocated erring on the side of caution. This is bringing together high-level policy officials to brainstorm about the issues that they face. It's not about implications.

QUESTIONER: Is Mr. Strauss-Kahn going to Copenhagen?

MS. ATKINSON: No, he is not going. The Fund is going to be represented by an Assistant Director in the Fiscal Affairs Department, Mr. Michael Keen, and another economist from the Fiscal Affairs Department. They are also authors of the note that we are putting tomorrow. You may have seen that there is, I believe it's already just been issued, a press release about the importance of climate change and of global cooperation including among the international financial institutions which quotes our Managing Director Dominique Strauss-Kahn as pointing to how important it is that we move forward on the issue of climate change and build recovery strategies that take account of the importance of climate change.

QUESTIONR: Has the Fund defined its own role as to what its role is in this new climate change agenda that's moving forward?

MS. ATKINSON: Again there will be a lot of material on that tomorrow, so I encourage you to wait for that. We have of course a role in advising on economic policies on considering how best to consider promote recovery, reverse the increase in unemployment, and all of those issue feed into how do you rebalance growth, how do you look for sustainable engines of growth that take account of climate change.

QUESTIONER: I was going to ask about Pakistan because a mission was out in Pakistan earlier. I've heard that the mission is going back for talks with Pakistan. I was wondering if you have any update on those discussions.

MS. ATKINSON: You're right that the discussions are continuing. I believe I may have mentioned last time that we're talking closely with the Pakistani government. It is of course important that they have full support from donors because they've had shocks to their economy over the past year.

I just need to mention that we're having some webcasting problems with our Online Media Briefing Center so I apologize to any of you who might be trying to post questions, and we will have the transcript of this on the web, but we owe you one for a question for next time. Thank you all very much. Just to repeat, the embargo is until 10:30 our time, and that we will at the same time be posting the work program and the IMF's survey and Q-and-A piece from Reza Moghadam. Thank you.

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