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Argentina and the IMF

Brazil and the IMF

Japan and the IMF

Republic of Korea and the IMF

Russian Federation and the IMF

United States and the IMF

South Africa and the IMF

Zimbabwe and the IMF

Gold in the IMF -- A Factsheet

Heavily Indebted Poor Countries -- A Factsheet

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INTERNATIONAL MONETARY FUND
VIDEOCONFERENCE WITH DEVELOPMENT BANK OF SOUTHERN AFRICA (DBSA)

Tuesday, June 8, 1999
[TRANSCRIPT PREPARED FROM A TAPE RECORDING]

MR. IBRAHIM: Good afternoon, ladies and gentlemen. I would like to thank you for being available and welcome you to the jointly organized IMF/Development Bank of Southern Africa (DBSA) videoconference on: the most recent World Economic Outlook, the Heavily Indebted Poor Countries Debt Reduction Initiative known as the HIPC Initiative, and the Reform of the International Financial System, or the new architecture.

My name is El Tigani Ibrahim, Program Coordinator for Southern Africa, in the External Relations Department of the IMF. I will be moderating from this side, and Mr. Mosebjane Malatsi, Senior Strategic Business Planner at DBS, will be assisting on your side.

Our speakers today are, to my right, Mr. Graham Hacche, Chief, World Economic Studies Division, the Research Department of the IMF; Mr. Anthony Boote, Assistant Director, Financing Operations Division, Policy Development and Review Department, IMF; and next to him, Mr. Matthew Fisher, Chief, Capital Accounts Issues Division, Policy Development and Review Department.

We are also honored today to have with us Mr. Jose Morais, Executive Director for the African constituency, which includes South Africa.

This approximately one hour-and-a-half teleconference is on the record, and we will try our best to get to each of those who would like to ask questions at the end of the presentations. But before I call on our first speaker, I would like to invite Dr. Ian Goldin [ph], Chief Executive, DBSA, to say a few words.

Dr. Goldin?

MR. GOLDIN: Dr. Ibrahim, friends and colleagues at the IMF and here in South Africa, we're delighted to have this opportunity to videoconference with you. This is a first, we believe, for South Africa and the region in terms of this sort of open communication and it's a very exciting moment for us in that respect.

We hope that this will be part of a process which will bring the world closer together, and certainly bring us into the major policy debates which go on elsewhere in the world. The IMF, we respect as an institution which is at the forefront of many of these debates. We don't always agree with you, although we do believe you're right in saying South Africa will have a very good record of growth next year.

And we're also very excited to see your prospects for Africa, which are, in fact, leading the advanced countries and leading developing countries, and, of course, developing countries in the rest of the world for the coming year.

We look forward to what we hope will be a very lively and educating debate on three issues which are at the center of our concerns, as well as yours; that is, where is the world going in terms of the economic outlook, what will happen to the highly-indebted countries, and what is behind and what will happen with the HIPC Initiative, and what shall we look forward to and how can we feed into the debate regarding the financial architecture.

The Development Bank of Southern Africa is one of the leading players in the region in thinking about these issues and, of course, investing in the region. And we very much welcome this opportunity to host this debate. We have with us here colleagues from the media and from other walks in South Africa, and we thank you again for this opportunity to listen to your speakers and then to engage in debate.

MR. IBRAHIM: Thank you very much, Dr. Goldin.

Now, I call on our first speaker, Mr. Graham Hacche.

MR. Hacche: Good afternoon. The May 1999 World Economic Outlook which I will discuss appeared from the printers about 10 days ago and was rushed to you last week. But an earlier version of this World Economic Outlook was released at a press conference here seven weeks ago, when it was also, as I'm sure you know, made available on the IMF Web site, together with a transcript of the Washington press conference.

The WEO's main purpose is not so much to publish the IMF staff projections for the global economy. It is to provide a basis for the discussion of the global economy by finance ministers and central bank governors representing the Fund's global membership when they meet in the Interim Committee twice a year.

This WEO provided part of the documentation for the Interim Committee meeting of April 20, and an earlier version was discussed in the Fund's Executive Board in a two-day meeting at the end of March. The summary of that meeting appears for the first time as an annex in this WEO. This is the first time the summary of the Board discussion of the World Economic Outlook has been published so you can read it in the book.

Since the projections in this WEO were finalized in late March, more than two months ago, they would now be revised in various ways if we were to review them today, and I shall indicate some of the changes that would be likely to be made. Rather than referring to the book, I wish to refer to the hand-out of 18 tables and charts that I hope you have received.

The projections of global growth are shown in the bottom row of the first page of the hand-out--global growth of 2.3 percent in 1999, down from 2.5 percent in '98, rising to almost 3.5 percent next year, in 2000. You can see from this table that the global growth outlook is little changed from our last published forecast in December, or indeed the one before that in October.

The 1999 out-turn now looks a bit better than it did a few months ago, while the '99 projection has stabilized. This stabilization of the global outlook in recent months is one of the stories in this WEO. It contrasts with the substantial deterioration that occurred in the year or so up to last October.

In October '97, as you see in the top row of this table, we saw global growth continuing at what seems to be its potential rate of 4.25 to 4.5 percent. Like everyone else, we at the Fund failed to foresee the slowdown that has occurred.

Even though the global growth outlook has changed little since late last year, there have been some significant changes in individual regions and countries which have been largely mutually offsetting. This is shown in the second page of the hand-out, which is the detailed table.

Reading down the last column of this table, you can see for '99 a significant upward revision of 1.5 percentage points for the United States, a significant downward revision for Japan, and somewhat smaller downward revisions for the major European countries.

The next big plus as you read down that column is for the newly industrialized Asian economies which reflects upward revisions for Korea and Singapore. Then among the developing countries, we see downward revisions for Africa and the Middle East, but much bigger downward revisions for the Western Hemisphere associated with the Brazilian crisis. So the "no change" that is shown in the top row for the global growth projection in '99 masks some pretty significant changes at the regional level.

The third page of the hand-out provides some more detail on our projections for the developing countries, including Africa. You can see there that growth in Africa has recently been running at 3 to 3.5 percent. This compares with close to 6 percent in 1996, but it is somewhat higher than the average for this decade or the average of about 2.5 percent for the 1980s. We are projecting that growth will pick up to 5 percent next year.

The current global economic slowdown is the fourth in the past 25 to 30 years, as is shown in the top left-hand panel of the fourth page of the hand-out. It also seems likely to be the mildest of these four. You can also see from the bottom right-hand panel that we are projecting inflation to remain subdued, and in the top right-hand panel that we are assuming, partly on the basis of futures market prices, that commodity prices will stabilize at historically low levels.

What explains this latest global slowdown? We can begin to answer this question by turning back to the table in the second page of the hand-out that I just referred to. If we compare the '98 or '99 column with 1997, we can see that the slowdown is fairly widespread, but that the most marked downturns are in Japan; the newly industrialized Asian economies; a subset of the developing countries of Asia, shown here as the ASEAN 4; the developing countries of the Western Hemisphere, especially Brazil; and Russia.

By contrast, growth has been robust in the United States and, at least until late last year, in the euro area. The global slowdown is therefore essentially a result of the crises in emerging markets that have occurred since mid-1997, first in Asia in mid-'97, then Russia, then Brazil early this year, and the Japanese recession.

A feature of the slowdown is the marked decline in world trade growth. As you can see in the middle of this page, global trade volume grew by 3.3 percent in '98, which is the slowest rate of growth since 1985, and not much pick-up is projected for this year.

Another feature of the slowdown is the uneven pattern of growth that it has created, and associated with this have been some significant swings in external current account balances which are shown in the fifth page of the hand-out.

The upper panel here shows the large swing into surplus between '96 and '98 of the Asian crisis economies as they were forced to retrench, owing to reduced capital inflows, and the increase in Japan's surplus, with the main offsetting shifts into deficit being in the United States and the commodity-producing developing countries.

For 1999, in the bottom panel, we see a swing into surplus in the developing countries of the Western Hemisphere reflecting the Brazilian crisis, a further increase in the Japanese surplus, and a smaller rise in the surplus of the euro area, and again a large rise in the U.S. deficit.

The sixth page shows the contrast between the widening current account deficit of the United States, which is now approaching the levels reached in 1986-87 in relation to GDP of around 3.5 percent of GDP--the contrast between that and the surpluses of Japan and the euro area.

This contrast is to a large extent an outcome of the uneven pattern of domestic demand growth among the industrial countries and, in particular, of the fact that the United States has recently been generating about one-half of global demand growth, more than twice what you'd expect if the pattern of growth was even globally.

Let me now turn to the Outlook, where do we see the upturn that I referred to coming from and what are the risks to the projections. First, the emerging market economies. As indicated in the second page of the hand-out, that first detailed table, we're projecting moderate positive growth in almost all of the crisis countries next year, the main exception being Russia where output is projected to be flat. So we're assuming that the economic recoveries that have already begun in Korea, and also, it seems, Thailand, will gather strength and spread to other crisis countries.

The seventh page of the hand-out illustrates the V-shaped recoveries we are projecting for the main Asian crisis countries, and the eighth page the paths projected for the major Latin American countries. These projections assume, importantly, that the return of investor confidence that we have recently begun to see will continue, and related to this that the countries concerned will continue to implement the reforms needed to turn the recoveries that we have begun to see into sustainable growth.

With regard to investor confidence and capital flows, the ninth page of the hand-out illustrates recent developments and what we are assuming. The bottom panel shows how net capital flows to all developing countries, countries in transition, and newly industrialized Asian economies collapsed from a peak of about $210 billion in 1996 to about $65 billion last year, with net outflows from Asia. We are projecting a similar level of net outflows overall this year, followed by a significant recovery in 2000.

The upper two panels show recent information on bond spreads and gross financing flows that point to some significant recovery in recent months. The yield spread has declined significantly from its peaks associated with the Russian and Brazilian crises, and gross flows have turned up from the very low levels reached late last year.

But financing conditions for emerging market countries are still less favorable than may be considered normal, and one of the main risks to our projections is the possibility that the continued recovery of private capital flows that we are assuming will not occur.

The next two pages of the hand-out illustrate some other contrasting developments among the emerging market economies. The tenth page shows the recent slowing of growth in China and India, the two largest developing countries in Asia, which have largely escaped the worst effects of the crisis in the region. And the 11th page contrasts the buoyancy of growth in Poland and Hungary, with a continuing decline in Russia.

Turkey is also shown here. It has been adversely affected by the Russian crisis, and also the Czech Republic, an early successful performer among the countries in transition which has recently been in recession.

Let me now turn to the industrial countries, and first Japan, which has been experiencing the most severe recession of any industrial country in the post-War period. Here, we are projecting a second consecutive year of declining activity in 1999, but then a bottoming out of the recession and a very modest start to recovery next year. This is illustrated in the 12th page of the hand-out.

Domestic demand in Japan is being supported by very easy monetary policy, with short-term interest rates virtually zero for the past 3 to 4 months, and by expansionary fiscal policy, with a fiscal deficit approaching 10 percent of GDP. But these expansionary policies have had limited effects on private sector demand.

The turnaround in the economy will also call for a recovery of private sector confidence, and partly because of this, considerable uncertainty attaches to the growth projection for Japan even for 1999. In fact, if you look at private sector growth forecasts, some are as low as minus 2.5 percent for this year, while others are as high as minus one-half percent. We are not far from the mean, which is minus 1.25.

There has been a notable recovery of financial market sentiment in Japan in the last few months, including the rise in the stock market and the virtual disappearance of the Japan premium charged on borrowing by Japanese banks, and these developments auger well. And there has also been a modest improvement in business sentiment.

But private demand remains very weak, and the possibility that it may fail to revive, for example, because of the impact of corporate restructuring on business investment or the impact of increases of unemployment on consumer confidence, may be considered another risk to the projections.

Turning next to Europe, before considering the United States finally, we are projecting that the recent slowdown in much of the euro area will reduce growth for the area to 2 percent this year, from almost 3 percent in 1998, but that the slowdown will not last, so that growth will bounce back to about 3 percent next year.

This recovery is expected to be supported by the easing of monetary conditions since the middle of last year, reduction in interest rates, and also the depreciation of the euro, and by the waning effects of the emerging market crisis. But business confidence in most of the euro area has recently remained quite weak, and it would be difficult to argue that the projected recovery in 2000 is assured.

So here again the risks to our projections seem to be somewhat on the downside. Even the growth we are projecting promises little further reduction in the euro area's still very high level of unemployment, which is shown in the 13th page of the hand-out. You may see that a chapter of this World Economic Outlook is devoted to the unemployment problem in Europe and the continuing need for labor market reform.

Turning finally to the United States, U.S. economic performance has continued to exceed most expectations, including our own, and including most recently the 4-percent estimate of growth in the first quarter, which would probably tend to lead us to revise our '99 growth projection up a bit again from 3.3 percent probably to somewhat above 3.5 percent, if we were revising the projections now.

As you know, strong growth in the U.S. has reduced unemployment to a 29-year low of 4.25 percent. But nevertheless inflation has remained very subdued, partly owing to declines in import prices owing to weak commodity markets. This is illustrated in page 14 of the hand-out.

So people have been talking about a Goldilocks economy, not too hot, not too cold, but strains have been building. The labor market is very tight, with employment growth having exceeded the growth of the labor force over a number of years. So it seems clear that output growth will have to slow.

And I referred earlier to the widening U.S. current account deficit which has been helpful to international adjustment in the face of the emerging market crisis and the sluggishness of domestic demand in other industrial countries, but may at some stage lead investors in dollar assets to demand higher returns and to worry about the dollar's exchange rate. For the deficit to be corrected, domestic demand will have to slow.

Then there is the stock market, where price/earnings ratios have risen to unprecedented levels, shown in page 15 of the hand-out. Stock market gains have contributed to the strength of demand partly through declining household saving, shown in page 16 of the hand-out.

And with private investment growing strongly as well, the private sector saving/ investment balance has swung into deficit to an extent not seen at least for some decades, as shown in page 17. This may be compared with a similar swing into deficit experienced in the United Kingdom in the late 1980s, which is shown at page 18. This World Economic Outlook points to various other examples like the UK of such a deficit occurring.

Now, we know what followed in the UK, a sharp recession that returned the private sector balance into positive territory. We are not projecting this for the United States. We are projecting a soft landing in which growth slows gradually to a little below potential and the private sector sustains a continuing financial deficit.

The low level of inflation is one factor tending to make a soft landing quite likely. Another is the very healthy state of the public finances. Unlike in the mid-1980s, the external current account deficit is not the mirror of a fiscal deficit. And capital inflows have been helping to finance the large rise in investment. But the risk of a hard landing, a sharper slowdown initiated perhaps by a pickup in inflationary pressure and a tightening by the Fed, all by a drop in the stock market, is there another downside risk.

I just referred to the upward revision we would be likely to make now for U.S. growth in 1999 if we were reviewing our projections. In light of recent developments, we would probably also be revising up our projections for '99 growth in Brazil from minus 3.8 percent, and that would probably be sufficient to give us for the Western Hemisphere group of developing countries no change in output this year, rather than a decline of 0.5 percent. It is likely that we would also be revising up our '99 projections for Korea and some other Asian emerging market countries.

Meanwhile, for Western Europe recent data have been less promising and there may be downward revisions for one or two countries in the euro area. Nevertheless, on balance, it seems that we would now be revising our projection of global growth in '99 upward somewhat from 2.3 percent, which you have there in our tables, to, say, 2.5 to 2.6 percent. But for 2000, the revisions are rather unclear.

Let me summarize briefly this way. The first point I would make is that the world economic outlook has stabilized. Projected global growth has changed little since late last year, even though there have been some significant changes at the country level. The baseline projection shows global growth recovering. The risk of a global recession which exercised policymakers six or seven months ago has diminished, not least because of policy actions that have been taken.

Point two: the worst of the emerging market crisis seems to be over, but risks that the recovery may falter cannot be dismissed.

Three: projected recoveries in Europe and Japan still have to prove themselves.

Four: since 1997, growth in the industrial countries has become more unbalanced and there have been associated increases in external imbalances. Growth in the United States needs to slow below potential to ease pressure on resources, and growth of domestic demand in the U.S. needs to slow below the growth of output to allow the current account deficit to narrow. A soft landing is a plausible, even likely outcome, and it is what we are projecting, but the risk of a hard landing cannot be dismissed. Finally, in sum, the balance of risks to the projections still seem to be somewhat on the downside for 2000, if no longer for 1999.

Thank you very much.

MR. IBRAHIM: Thank you, Mr. Hacche.

And now I call on Mr. Anthony Boote and the debt initiative.

MR. BOOTE: Good afternoon. It's a particular pleasure for me to do this videoconference because I had the good fortune to visit your beautiful country in the fall of last year myself, attending a conference in Cape Town. So I wanted to first of all describe, although I will do rather little of this, the Heavily Indebted Poor Country Initiative, which is a joint Bank-Fund initiative--that's the World Bank and the IMF--which was established in the fall of 1996.

Details of the Initiative are on our Web site, and I think you have a pamphlet which describes it. It's an area where we are very transparent. Basically, every document we produce is published, so all of this information is available in the public domain.

The Initiative was a major change, is a major change on past practice, and some would say revolutionary in two respects. First of all, it attempts to establish debt sustainability from the point of view of the debtor, from the point of view of the debtor's total debts. Secondly, and I'm sure you're all aware of this, it involves for the first time multilateral institutions, including the IMF, providing debt relief assistance on their own claims.

Since the Initiative was established two-and-a-half years ago, I think we've been making pretty good progress in implementing the Initiative in that, for example, we've committed assistance of more than US$6 billion to seven countries, five of which are in Africa. We've delivered assistance to Uganda, and I expect agreement to be reached later this month to deliver the largest package of assistance so far to your northern neighbor, Mozambique.

However, as I'm sure you're aware, despite what I've just described, there has been considerable criticism of the Initiative for not delivering relief fast enough, early enough and deep enough, amongst the expressions used. In a sense, what I think has happened is that the Initiative, despite the fact that we've made good progress, as I said, in implementing it, has not kept pace with rising public expectations in this area.

Partly in response, we've been engaged in a review of the effectiveness of the Initiative designed to strengthen that, and we've asked for public consultations on our Web site. We've held meetings in Africa and there will be further meetings in Africa particularly focusing on the link between debt relief and social expenditures and poverty reduction, which is the second phase of the review in which we are now concentrating.

As you know, I'm sure, the HIPC Initiative is going to be an important focus of discussion at the forthcoming G-7 Cologne Summit later this month, and we will then make proposals to Bank and Fund Boards on strengthening the Initiative in providing a more robust exit from debt problems, and indeed also on strengthening the link between assistance under the Initiative and social expenditures.

I'm confident that before the Annual Meetings, the fall annual meetings here in Washington in September, there will be agreement on a significant strengthening of the HIPC Initiative. But I think it's important that one sees the Initiative in context. After all, our objective and I think the objective of everybody who has been discussing the Initiative is not debt relief by itself, but rather debt relief in a process which promotes sustainable development in the countries concerned, with a focus on poverty reduction.

That's why the Initiative from the point of view of the Fund is closely linked to our concessional facility, the Enhanced Structural Adjustment Facility, ESAF, which helps countries with policies toward those twin objectives, sustainable development with a focus on poverty reduction.

It's also important that the Initiative be strengthened in a way which strengthens the incentives for countries to adopt strong programs of adjustment and reform which are in the interests of increasing per capita income for their own inhabitants.

Now, it's also important that the Initiative be strengthened in a way which complements the wider tools the international community uses for these objectives of sustainable development and poverty reduction. And here let me briefly refer to three or four other things that are important; for example, trade liberalization in industrialized countries so that HIPCs have free access for their exports to those important markets.

A second obviously important area is aid flows, where there's been a decline in the overall level of flows in relation to output in industrialized countries. And, clearly, it's desirable that that's reversed. HIPCs are far more dependent on aid flows than they are on debt relief. They receive twice as much by way of aid flows than they actually pay, in aggregate, on debt service, and it's very important that measures be taken there to increase aid flows and also provide them to the better-performing countries.

Also, obviously it's important in the context of a debt initiative to strengthen debt management, and also for developed countries in their lending practices, for example, of export credit agencies to try and prevent recurrence of debt problems.

But to conclude, perhaps I should refer to one other issue on the Initiative which, of course, is its financing. It's very important that what I envisage as this significant strengthening of the Initiative be fully and credibly financed.

Now, as I'm sure you know, from the Fund's point of view, the point of view of the IMF, we envisage financing, a continuation of our ESAF facility, together with the Fund's share of providing debt relief under the HIPC Initiative by a combination of bilateral contributions and, of particular interest, I know, to your country as a major producer, gold sales.

Now, the proposal that management has made is up to 5 million ounces of gold sales. Clearly, it's very important both for South Africa and to other gold-producing countries, which include some HIPCs, that this be done in an orderly way with full consultation with markets so that these sales do not in any way disrupt the gold market.

I should tell you that--I'm happy to tell you that there's a consensus, international consensus forming for such gold sales, though they have not yet been agreed. But we hope that will be part of the package that will be put together on the timetable that I've described, namely before the Annual Meetings.

Thank you very much.

MR. IBRAHIM: Thank you, Mr. Boote.

And now to our final short presentation, Mr. Matthew Fisher and the new architecture.

MR. FISHER: Well, good afternoon. It's a pleasure to be with you today. In the aftermath of the Asian and Russia crises, the international community has embarked on an ambitious agenda designed to reduce the likelihood and severity of future crises, while improving at the same time the efficiency and the operation of market economies.

This consists of efforts to address policy weaknesses in individual countries and to strengthen the architecture of the international monetary system. The latest thinking of the Fund's Executive Board and a number of staff studies can all be found on the Fund's Web site, and I would encourage those who are interested to follow up there. These are quite comprehensive papers.

Strengthening the architecture consists of a number of interrelated elements, and let me look at four of them. The first is that in order to promote the efficient decision-taking by the private sector--and here I mean both domestic investors and international investors--major efforts are being made to promote transparency and to disseminate and monitor the implementation of standards.

In terms of transparency at the individual country level, countries are being encouraged to make their government operations more transparent, to make their fiscal accounts more transparent, and make the operations of their central banks and financial systems more generally more transparent.

For our part, the Fund is making its operations for transparent through the publication of a wide range of documents related, for example, to the annual health checkups we have for our members, the so-called Article IV consultation reports, documents supporting requests for the use of the Fund's resources, and policy papers.

The promotion of standards is closely linked to transparency, and the aim is to allow the private sector to examine economic data, whether those relating to the economy as a whole or those relating to an individual company, and to have the confidence that these data have been compiled in accordance with known and internationally accepted standards. But standards go wider than simply the collection of data and accounting. They include, for example, bankruptcy.

A second critical element of improving the architecture consists of efforts to strengthen financial systems. This includes strengthening the supervision of financial systems and the establishment of appropriate mechanisms for managing bank failures. Now, this is a very difficult problem. Success will not come quickly, but it is clear from the crises in Asia and Russia that the weak state of financial systems play critical roles in both triggering and exacerbating those crisis.

A third element consists of the orderly liberalization of capital movements and the critical importance of sequencing such liberalization with efforts to strengthen financial systems. The crisis in Asia was complex, but a critical factor that contributed to the build-up of vulnerability and the magnitude of the eventual crisis was the approach taken in these countries to capital account liberalization.

The fourth element consists of efforts to involve the private sector in forestalling and resolving financial crises. This is perhaps the most important and difficult challenge facing the international community in the area of architecture.

As we have looked at it, it has become clear to us that there is no silver bullet than can allow crises to be handled in an orderly fashion. Indeed, the very difficulty of finding satisfactory means of resolving crises has inevitably shifted our focus to the prevention of crises and to putting in place mechanisms ex ante that could help to resolve future crises.

Just let me say that with regard to prevention, experience has pointed to the critical importance of maintaining appropriate debt structures by avoiding the excessive accumulation of short-term debt. Experience has also underscored the importance of keeping off-balance-sheet transactions under appropriate restraint, and this applies both to sovereigns and central banks on the one hand, and to private sector, particularly financial institutions, on the other.

Experience also points to the importance of countries maintaining regular contacts with their foreign investors. I would note, in particular, Mexico and Argentina which are successful in maintaining an ongoing dialogue in good times which serves them well when tensions emerge.

But recognizing that prevention will, on occasion, fail and countries will experience crisis, it is important to put in place now mechanisms that could help facilitate a resolution of future crises. Let me just mention briefly three.

First, contingent credit lines. Pre-negotiated contractual obligations on the part of financial institutions provide liquidity in times of crisis. Argentina and Mexico both have these, and we are encouraging other countries to seek to negotiate similar arrangements.

Debt service insurance. This isn't something that by and large the international community has done, but it ought to be possible to combine a debt contract with a commodity derivative that allows the burden of debt service to vary in proportion to the country's capacity to pay. This would be particularly useful for countries that are commodity exporters.

Finally, let me mention the modification of bond contracts. These modifications are designed to facilitate the renegotiation of these contracts and collective action. Now, in the 1980s debt crisis, bonds were de minimis and were not included in debt restructuring. But with their growing importance in the financial system, this halo effect is unlikely to be sustainable. While we would always prefer for a country to be able to mobilize new money rather than restructure its debt, there may be circumstances in which new money has been cut off and restructuring is the only feasible option.

Now, in extreme situations, notwithstanding efforts of prevention, if efforts to mobilize new money do not work, efforts to reach voluntary agreements with creditors do not work and the crisis does not abate, it may not, as a practical matter, be possible to avoid some combination of a sovereign default and the imposition of exchange controls that lead to an interruption in the ability of the private sector to service its debt.

Now, this is a very complex area, but we do need to ensure that in such circumstances, countries that are making good-faith efforts to resolve their problems and to normalize their relations with creditors are able to do so expeditiously, and that these efforts are not derailed by aggressive litigation by creditors seeking to get settlement through going to the courts.

This is a very controversial area. One possibility that we have floated would be to devise a mechanism to impose internationally a temporary stay on creditor litigation which would bring to the sovereign context what you have already in the non-sovereign context. But no consensus has yet emerged on either the need or desirability of such a mechanism.

Thank you.

MR. IBRAHIM: Thank you, Mr. Fisher.

And now we'll turn to questions and answers, and I would rely on Mr. Malatsi on the other side to let us know who is having a question and how to prioritize the questions.

But before going into that period, please do your best to be precise and very brief in your questions, and direct to the subject presented. Thank you very much.

MR. MALATSI: Thank you, Tigani. I'll now invite questions.

Question: [inaudible]

MR. Hacche: One factor that we expect to benefit Africa in the period ahead and which should show in growth numbers for next year is the waning of the effects of the emerging market crisis, the economic problems that we've seen in Asia and Latin America. We are also assuming a stabilization of commodity prices and no further declines in commodity prices which will benefit many African countries.

In the specific case of South Africa, as you know, South Africa was hit last year, in 1998, by contagion from the emerging market crisis which led to sharp increases in interest rates in your country which affected growth adversely this year. In recent months, the government--the central bank has managed to bring interest rates gradually down, and that will help to boost your growth next year, we believe, to around the rate of about 3 percent.

MR. IBRAHIM: Thank you, Mr. Hacche.

The next question, please?

MR. MALATSI: Thank you. Any other questions or comments?

MR. STREMLAU (WITS UNIVERSITY): Could you say a word about whether or not you factor in problems of conflict which are so endemic to this region in your projections?

And, secondly, I know the HIV/AIDS epidemic is a long-term problem, but we're already interested in its impact on growth rates. Can you say something about that?

MR. IBRAHIM: Mr. Hacche?

MR. Hacche: As you indicate, armed conflict has certainly been damaging growth performance in large parts of the African region recently. In the formulation of our projections, the projections are formulated here by our desk economists who work on the individual countries of the region. The assumptions that are adopted for individual countries vary from case to case, and I think it's difficult to be general.

If it's possible to say anything general, I think economists here tend to take a relatively optimistic view that conflicts will be resolved over the medium term and our forecasts will reflect that. The effects of AIDS--I'm afraid I have no information on that factor as it affects African growth.

MR. IBRAHIM: Thank you, Mr. Hacche.

Any follow-up or other question?

Question: You had mentioned before that part of the HIPC Initiative is poverty reduction. Can you explain why, then, that most countries that have taken the ESAF route are getting poorer everyday?

My other question is you have also said that you have been criticized for not giving aid deep enough. What has been the problem, for instance, in Zimbabwe? Can you explain whether the issue is policy performance, or are they the deeper problems which have not been explained to us?

Thank you.

MR. IBRAHIM: On question two, I think that is a more country-specific question which we really don't have anyone here to answer. We don't have anyone on Zimbabwe, so on the other one which is a broader issue relating to the World Economic Outlook, I think Mr. Hacche may say a word or two, or Mr. Fisher.

MR. BOOTE: I can say something briefly on the second question. Zimbabwe is not a heavily-indebted poor country. It's not in the classification. It has a per capita income of above the thresholds that one uses for the Heavily Indebted Poor Country Initiative.

On the first question, I think the question--though I apologize, it wasn't very well heard here--was why have Fund programs been associated not with declines in poverty, but rising poverty. I think that was the question. But if that was the interpretation, I wish to correct the question, in a sense, and say that is not actually correct.

And as I mentioned, the focus of the Heavily Indebted Poor Country Initiative and the link between the debt relief we provide under that Initiative--I mean, what we're currently trying to do under the review is, first of all, provide more debt relief and, secondly, have a closer tie-in from that to social expenditures which will reduce poverty.

And then, as well, that in itself, higher health and education spending, I do not regard as an objective, per se. Our aim is to actually generate improvements in health and education outcomes which we would also like to monitor.

Thank you.

Question: I relate to the whole issue of the architecture of international financial system. I wonder if you could comment on already a proposal that seems to be gaining ground on regulation of the capital flows, and perhaps maybe if you could also comment on the whole issue of the role of the hedge funds and what the position behind that is.

MR. FISHER: Well, let me if, I may, address those two questions separately. First, on the regulation of capital flows, I think there is consensus on two issues. One is that capital flows have brought enormous benefits in emerging markets, and however severe the recession has been in Asia, without those capital flows they would not have had the growth that they did enjoy for a decade and they would have been worse off, without any doubt, in my view, than they are now.

But, nevertheless, capital flows clearly pose major challenges for macroeconomic management, and I certainly recognize that there are countries that are not yet in a state of development where they can efficiently absorb the flows, countries where their domestic markets are perhaps too small to be washed around by capital flows.

And in those cases, I think one can envisage measures which are designed to reduce vulnerability. I would see a short-term role perhaps for controls, and over the medium term moving toward regulation and reduction of vulnerability through the prudential supervision of banking systems. If you've got a problem that commercial banks are building up too much short-term debt, rather than control that, I would rather deal with the way the banks manage their portfolios and their need to maintain liquidity against that.

Now, on the role of hedge funds, there has been a lot of work done and I think at the moment it's somewhat inconclusive. There is emerging agreement--I don't think we're there yet, but there is emerging agreement on the importance of transparency in disclosure of their large trading positions. This is very difficult because hedge funds tend to operate in offshore centers.

There's no doubt that they played a major role in the Asian crisis, and there are a number of countries, including Australia, that believe that they have important impacts in more recent times. That's difficult to demonstrate as an empirical matter, but it's certainly something that we're looking at carefully.

Question: [inaudible]

MR. BOOTE: I'll try, but it's not directly my responsibility. I brought up trade as well, and I agree with the questioner that debt relief is not a panacea. That's the whole basis on which the HIPC Initiative is founded.

I brought up trade because, yes, it is probably as important, if not more important than debt relief. Countries themselves generate earnings through their own exports which, of course, requires access to industrialized countries' markets.

We have very much brought up this issue in the context of the HIPC Initiative. We want to encourage that in the new trade round, which I believe is being talked about as starting perhaps later this year, that there be a focus on unrestricted access by poorer countries to developing countries, and guaranteed access; i.e., that it's quite clear that that would continue, so that would provide a basis for investment by both domestic and foreign investors in those exporting industries.

Now, this is not something in which the Fund has a, if you like, direct responsibility. We can't require this, in a sense, but it's always something that we're trying to bring up in discussions both internationally, plus also in the Article IV consultation that Matthew Fisher referred to, with our industrialized members.

Question: My question is more of a general one about lessons learned from the experience of the economic crisis among the emerging markets. What lessons has the IMF drawn from the experiences of the economic crisis in the emerging markets and in the developing countries?

MR. FISHER: I think that we have learned a number of lessons. The first, I think, concerns exchange rate regimes. What we have learned with considerable force is that countries that maintain pegged rates, if they are going to do so in a stable way, there are some very, very stringent requirements in terms of the domestic policy framework.

The sort of mismatch of monetary and fiscal policies that you had in Thailand is setting yourself up for instability. To be sustainable, you really do have to have extremely tough control over your fiscal accounts.

I think the second lesson I would learn has to do with the importance of the strength of financial systems and the critical role here of central banks. If you look to see what was happening in the financial systems in Asia, you found that banks were not intermediating international capital efficiently. They were lending short-term dollars into long-term capital projects which were not going to generate foreign exchange. They were [inaudible], that as soon as the exchange rate moved, either the company or eventually the banks got into serious financial difficulties.

We saw financial systems that were not able to manage their liquidity, and that, I think, is another critical role of banking supervision to force banks to behave in a prudent way so that when problems emerge, they don't at the first instance have to come and knock on the front door of the central bank. They can address their problems through their own balance sheets.

I think the whole financial system--and this goes a little bit broader than the banks--the securities houses need to be better placed to manage risk. I think we saw in Asia institutions getting into enormous financial difficulties because of off-balance-sheet transactions. The Indonesian banking system came close to being brought down by excessive exposure to foreign currency options.

A securities company in Korea got into big, big trouble and almost brought down one of the Korean banks with it because it had exposure to a very complex off-balance-sheet item, a total return swap with an imbedded highly leveraged structure note.

I think that the final lesson I would draw is the critical importance of transparency. What happened in Asia was that when one company went and got into trouble--look at Korea. You had Kia, the motor manufacturer, went bankrupt, and investors said, well, gracious, if Kia could get into trouble, everybody else could get into trouble, and they left like a herd.

If you had had better accounting, if you had had transparent accounts, investors could have seen that Kia was a little bit wobbly, but the other companies were sounder and they would have had the confidence to stay.

Well, those are my personal impressions, but maybe my colleagues have additional points.

Question: I wonder if Mr. Fisher or one of his colleagues could continue that analysis because I mean obviously we're talking here about a debate about whether these problems are endogenous. And all your examples have been, you know, a critique of the difficulties of the Asian--the weaknesses in the Asian systems are well-known.

Could you tell us a bit about Brazil? I mean, it seems to me that the issues there are somewhat different. The problems are, in a sense, as great. So, you know, how does that analysis fit into Brazil?

MR. FISHER: Well, I'd be very happy to certainly answer both to Brazil and perhaps to Russia because there are some interesting similarities there. Russia is more extreme, but both countries experienced enormous difficulties in their domestic debt market. They became heavily dependent on financing not only the rollover of existing maturities, but ongoing fiscal deficits, but progressive shortening in the maturities of their domestic debt instruments.

Now, Russia unfortunately did not have a happy landing. On the 17th of August 1998, they ended up freezing and defaulting on their GKOs. Brazil, in contrast, by the relatively early adoption of comprehensive adjustment measures, was able to address that problem in a sustainable way. Interest rates are now coming down and Brazil has avoided the major economic dislocation that Russia experienced.

A second point I would throw out from the Brazil experience is that in the period October-November, the authorities, while they were trying to elaborate an adjustment effort, staged a defense of the exchange rate very largely through intervention in the forward market.

Now, in Brazil they don't have an outright forward market. It's done through non-deliverable forwards. But what happened, unfortunately, was the unwillingness to adjust domestic monetary policy meant that the exchange rate became a one-way bet and the central bank became the whole of one side of the market. Now, that is clearly unsustainable.

The situation reverses when they started raising interest rates, but the unwillingness of the congress to take the decisive fiscal actions required to build the confidence that policies were sustainable resulted, in my view, in the pressures that led up to the devaluation in January. And that devaluation, I think, has done two critical things.

One is by moving to a more flexible system, it has taken away any element of the exchange rate being a one-way bet, and so investors aren't likely to move around so much. Secondly, the crisis galvanized the political support you needed to take some very difficult measures.

MS. THOMAS: My name is Rosalyn Thomas from the Development Bank. I would like to address a question which looked at how the Bretton Woods institutions, including the IMF, handled the emerging market crisis.

You did not escape any criticism in the manner in which you reacted. And if I recall correctly, a Harvard professor--I think it was Jeffrey Sachs--criticized the approach that the IMF took in dealing with these issues.

Are there lessons that you've learned on how to handle these particular kinds of situations?

MR. IBRAHIM: Thank you.

I think this is directed to you, Mr. Fisher.

MR. FISHER: Well, let me say that Professor Sachs has been quite uniform in criticizing everything the Fund has done for almost 20 years. If we were not being criticized by Professor Sachs, I would begin to worry that something has gone seriously wrong.

We went into the Asian crisis to some extent blind. We had never handled a crisis like that before. We were struggling with it. We didn't know quite what was happening on the ground, and I think with the benefit of hindsight mistakes were made.

I think the particular mistake that was made related to fiscal policy. We did not anticipate at the onset of the crisis how deep the recessions would be in those countries, and as a result fiscal policy was, with the benefit of hindsight, too tight.

But what I would say is that we may have made a mistake, and I think we did, but we did also try to learn that as it became apparent in the individual cases that the depth of the recession and the change in the current account was much greater than we had anticipated, we moved very quickly to relax fiscal policies and to allow the automatic stabilizers to work.

MR. IBRAHIM: Thank you very much.

Any follow-up or further questions?

MR. MALATSI: Yes. Munja?

Question: In South Africa, as the population is becoming more aware of what the implications of democracy are, the people on the ground ask us questions about why, when Russia is in trouble, South Africa gets into trouble, why when something happens in Asia, we have to pay. In a simple way, to the ordinary person on the ground who is poor and earns the minimum wage to survive, how would you simply explain to them that the kinds of measures that you're suggesting to government will, in the long run, give them benefits that are sustainable?

MR. FISHER: Well, I think you raise two issues. One concerns contagion, and let me just say a very brief word on that. The reason we believe that there is so much contagion concerns, in part, a lack of transparency; that when something happens in one place, people turn around and look to see whether something else could happen in a somewhat similar place. And the second transmission mechanism is you have people who are forced to sell off assets in one country as they need to generate liquidity, so they will sell across a range of markets.

But what gives confidence that these measures will work? Well, what are we trying to do? What we're trying to do is to go back to the cause of the original problems. If you have a weak financial system, you may be able to keep it going by just printing money for a little while and you can move off to hyper-inflation. But if you do not cut off the original loss-making banks in a system, for example, you have no way to stabilize your financial system.

Now, I think that the methods we're using in these countries are essentially development methods that have been applied across a wide range of developing and industrial countries for many years. They're designed to put countries on to sustainable positions and to deal with these weaknesses as we see them. But I don't think there are any magic solutions, and in some of these problems it will take many years to find adequate solutions.

MR. IBRAHIM: Any additions from our side? Mr. Hacche?

MR. Hacche: Perhaps I can just add something to what Matthew said. I mean, I think I would be inclined to say to the man in the street that his welfare--people's living standards in any economy in the world depend to a significant extent on the integration of his economy with the world economy.

Living standards have never thrived in an economy that has tried to cut itself off from international trade or international financial flows. Growth has been most vigorous and robust in economies that have embraced what we call globalization and international trade.

But with the benefits of globalization come risks and costs, and it is incumbent on governments to try to reduce the vulnerability of their economies to the disturbances which can rock their economies and in the short term affect people's living standards, even while in the long term living standards benefit from globalization.

MR. FISHER: Perhaps I can add something very briefly as well, which is that in Fund-supported programs--ESAF programs I referred to before--but also, in all of the programs in the Asian crisis, we have spent considerable effort with the country authorities concerned to try and make sure that the burden of adjustment does not fall on the poorer members of the country concerned. We do that through social safety nets and other measures designed to make sure that that is not where the burden of adjustment falls.

Thank you.

MR. IBRAHIM: Thank you.

MR. MOHAJANE: My name is Tomy Mohajane, an economist from the Industrial Development Corporation. My question is more or less similar to the two previous questions. Your overall intention may be noble insofar as endeavoring to alleviate poverty in developing countries, particularly in Sub-Saharan Africa.

However, in the eyes of many politicians, policymakers, entrepreneurs, academics, and the majority of the population, your image as an IMF is very, very negative. What are you doing about this unfriendly profile?

Thank you.

MR. BOOTE: Let me try and say something. As I said before in the context of ESAF arrangements, I think there is some misperceptions. First of all, we had an extensive both external and internal review of our ESAF programs, and the results of those reviews was a clear consensus that ESAF-supported programs had a positive effect on both growth and income distribution, and helped reduce poverty.

For example--and this is the background number to what I was saying before--in the four years to 1998, growth in per capita income in ESAF-supported programs was 2 percent more than in non-ESAF-supported developing countries. There is reflecting that--I'm sure you're aware of this--in the leadership of at least many Sub-Saharan African countries, there is wide support for ESAF-supported programs of adjustment and reform.

Let me refer to one other conclusion or figure, if you want. Often, it's said that under ESAF programs adjustment falls on social expenditures. That again isn't true. In the 10 years over 1986 to 1997, the real per capita spending on health and education in ESAF-supported programs rose by 5 percent a year. That's by way of background.

So what are we doing on the overall question? I think on the overall question, we're taking part in videoconferences like this. We are very much looking to disseminate information on how our ESAF facility which supports our poorer members operates, and we're trying to focus, in particular, on, in the context of the HIPC Initiative, as I have said, a greater and more transparent focus on the objectives that I referred to, the twin focus of sustainable development with a focus on poverty reduction. So both substance and also trying to get the message out as to what we're really doing would be what I would say in answer to the question.

MR. IBRAHIM: To be more specific, actually, and to add to what Mr. Boote has said, in particular with regard to southern Africa and South Africa specifically, we started two years ago a program called Outreach to Southern Africa, which, because of the image problem-most notably-in South Africa, we actually focused that program primarily on South Africa. And I personally have been in and out of South Africa for the last 18 months on a regular basis reaching out to civil society groups and trying to link not only civil society groups with the IMF, but also the public side was being brought into the picture so that we have a trilateral dialogue going on between the IMF, civil society groups and the public side.

And this teleconference today is part of that outreach program. As the Chief Executive said earlier in his introductory remarks, we never had such an engagement before and this is the first time, and we hope to continue this outreach exercise.

At the continental level, if you look at Africa today and the sustained growth the continent has been achieving in aggregate terms over the last few years, that by itself is a clear indication that IMF involvement in Africa is productive and is useful to those countries.

You know, the stop-and-go policies the continent had been pursuing in the '70s and well into the '80s are becoming increasingly a matter of the past. And today we have something like 26 African countries involved in

IMF-supported programs, and all of those countries are not involved in one- or two-year programs, but are in multi-year programs. Some of them have been now under ESAF programs for almost, as you may know, 7, 8 years, with good results.

And the performance we are seeing today, which we are projecting to continue into the future in a sustained manner, is a good reflection that the IMF image is changing, and with it also the environment in Africa and the attitude toward economic policy reform and policy implementation.

MR. GELB: Thank you. I'm Stephen Gelb, an economist at the DBSA. Just a slightly different tack that there seems to be growing concern at least in the media about the financial situation in Argentina, with the general view emerging that the peso is increasingly overvalued against the dollar, to which, of course, it's tied in a one-to-one ratio. And the Argentinean government is looking at dollarization as one possible policy response to avert a financial collapse of the Brazilian or Russian type in their country.

I wonder if Mr. Hacche could perhaps comment on dollarization as a solution, I mean, if it really influences or is related to this debate about the financial architecture. But also could you comment on the possible impact of a collapse in Argentina, should it happen, on the world economic outlook over the next year or so? Have you factored that into your calculations?

MR. Hacche: We do not take the negative view of the situation in Argentina that you do. We believe that the currency board arrangement in Argentina has served the country very well in achieving low inflation. Policies in Argentina have supported the currency board very well. Fiscal policy, of course, has supported the arrangement.

It is hardly surprising that there have been crashes in recent months arising from the situation in Brazil and the broader region. With the Brazilian situation stabilizing, the situation in Argentina should stabilize also.

As far as dollarization is concerned, in the Fund we regard the choice of exchange rate arrangements by countries as their decision. So we do not take a particular position on the advisability of dollarization, although we are, of course, in touch with the authorities in discussing with them the benefits and costs of such a change in the arrangement which would, of course, have to be agreed between the Argentinean government and the United States. There would need to be some agreement, presumably, with the Federal Reserve before the adoption of such an arrangement if they were to go in that direction.

MR. IBRAHIM: Thank you, Mr. Hacche.

We are running short of time because of the time allotted to us on the air, so we will take two more questions, please.

MR. STREMLAU: John Stremlau again from WITS University. I have a question about WEO methodology and the issue of productivity which has become a big debate in the question about the U.S. economy. Is it fundamentally different because of information technology?

There's a big debate down here about the investment in productivity versus employment generation sometimes, and I wonder if you could say something about how you're thinking about the factor of information revolution and productivity increases are impacting on WEO estimates, if at all.

MR. Hacche: In our latest examination of the data for the United States, it does seem to us that there has been some moderate increase in the growth of productive potential in the United States which may be linked to developments in information technology.

When this World Economic Outlook was being drafted a few months ago, there was a reference to potential growth of the United States being in the order of 2.25 to 2.5 percent. During the revision of this document, you'll see somewhere that that is revised up to a range of 2.25 to 2.75. And it seems to staff here that the growth of potential in the U.S. may now be slightly above 2.5 percent.

Estimating the effect of developments in information technology is not straightforward, as you know, because of the problem of measuring the capital stock, in particular, and the answer at the moment is not particularly clear. Further work is being done on that question.

But it does seem to us, as I said, that there does seem to have been some increase in potential growth of the U.S. economy that does not seem to have spilled over into other economies, at least to the same extent.

MR. IBRAHIM: Thank you very much, Mr. Hacche.

The final question, please.

MR. FRIEDMAN: Thanks. Stephen Friedman, Center for Policy Studies. I think a concern some of us have with some of the earlier questions is that some of the Fund's analyses and prescriptions are very strong on economics and perhaps not as sensitive as they might be to politics. In other words, it seems to me that it is possible to prescribe remedies which, while demonstrably economically optimal, are politically highly sub-optimal.

If I can give an example in our context, the question of flexible labor markets features quite prominently in the Fund analyses of South Africa. There is a debate about how flexible our labor markets really are, but it's certainly possible to argue in our situation that the economic benefits of a change in our labor relations regime would be more than wiped out by the political costs of social conflict.

So my question is really to what extent do our Fund analyses of issues like the one I've mentioned--to what extent do they take cognizance of the need of governments to reduce social conflict in their societies.

Thank you.

MR. IBRAHIM: Thank you.

I don't know. Mr. Boote, do you want to say something about that?

MR. BOOTE: I'm not sure that I'm competent to answer that. Let me answer it perhaps from a different direction, which is that one of the conclusions of the external review of ESAF was the desirability of enhancing ownership of programs by country authorities.

Now, in response to that conclusion, and indeed the desirability of wider ownership by society as a whole, Fund missions in the context of ESAF negotiations are trying to consider with authorities alternative policy mixes; i.e., policy mixes that might meet the questioner's concern, well, okay, if you have this objective but we have this constraint, can we move around that constraint in a different way rather than perhaps tackling it head-on in a way that was referred to in the issue of labor markets in South Africa?

But I don't think one can get away from the basic issue, which is that certain policies, even if they face strong opposition from powerful domestic interest groups, may well be in a country's longer-term interests to pursue and implement changes which lead to greater flexibility in the economy. And there, of course, one other avenue one can explore is ways of, if you want, compensating the losers in a way that society as a whole still benefits from.

So I don't know if I've got directly to the question posed, but, of course, that's part of the dialogue with country authorities. The Fund does not impose policies at all. We have a dialogue with country authorities which, together, we seek to move forward on policies which are in the wider interests of that country concerned and all of its people.

But, obviously, at times that can be--and that applies just as much to industrialized countries, for example, in the context of agriculture and agricultural support and agricultural protection, an area I was, in effect, referring to before in the trade liberalization context--that policies that may be in the wider interests of everybody and not in the interests of some members of that society.

MR. IBRAHIM: Thank you very much, Mr. Boote.

Mr. Hacche?

MR. Hacche: If I could just one add point that high levels of unemployment are, of course, a major source of social injustice. And, presumably, politicians will take note of the potential social conflict that can arise from that situation.

MR. IBRAHIM: Just also to add to that, actually to show that the IMF is well aware of the problem and we have been working on it, the African Department has recently hired a number of social scientists, with the particular aim of looking at Fund programs from the social perspective, hoping that exactly the issues you are raising there are correctly addressed and being dealt with within our programs.

With that, I would like to thank all of you for taking the time to come to this teleconference. In particular, I would like to thank Mr. Malatsi and his team in the Strategic Business Planning Unit at DBSA. I would also like to thank the Chief Executive for taking the time to be present at this teleconference.

And we hope that we will continue this dialogue in the future and it will not be just a one-time event, and we certainly look forward to seeing you soon in another event. I would also like to thank my colleagues here on this side, and we wish you all the best out there.

MR. MALATSI: Thank you, and before you go, the Chief Executive has expressly said I should on his behalf thank you, thank everybody present here and say that this is our first experiment and we hope that you are going to continue. And we hope that it is going to be as good a success as it promises to be, and we are looking forward to the materials which we can share out here.

Thank you so much.

MR. IBRAHIM: Thank you very much.

[The videoconference was concluded.]


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