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The IMF and Good Governance -- A Factsheet
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IMF Managing Director
Tuesday, February 8, 2000
[TRANSCRIPT PREPARED FROM A TAPE RECORDING.]
MR. DAWSON: Today is another one of our regular press briefings; however, Michel Camdessus, who's the Managing Director of the Fund for the last 13 years, is joining us today for his last official press event in Washington.
As I think you all know, Mr. Camdessus, the seventh and longest-serving Managing Director of the Fund, will be leaving us on February 14th. His career has been distinguished and memorable and he's done much to promote a more open, transparent and effective Fund. On behalf of the staff and management of the External Relations Department, we'd like to thank him for his help and support in this effort, and of course we wish him well.
I'm sure that the Managing Director now has a few remarks before we open the floor to questions.
Again, as is standard, when the questioning begins, please identify yourself and your affiliation, and the briefing is embargoed until 15 minutes after its conclusion, and we'll set a specific time when we conclude.
Mr. Managing Director.
MR. CAMDESSUS: Thank you, sir. You see how nice they are, and you see how nostalgic I can be in leaving this institution.
But my only purpose this morning is to bid farewell to all of you and to tell you my thanks for your attitude toward the Fund, and myself, during my long stay here.
You have been very fair, you have been very professional, and you have been very courteous, and I tell you that because I believe that. It's exactly that. I'll give you, immediately, a scoop.
On Tuesday morning, the 15th of February, I will be a nonentity. You will hear no more about me. So, today, I can really speak my mind.
This morning, I had a few minutes to think about this occasion, and I was reviewing what has been my experience with you, from the first day.
Well, I remember I was a little bit uneasy the first time I came. After that, you have certainly perceived that I was enjoying each experience with you, and excited, each time, that I had certainly not a very tense face in coming to see you. On the contrary, each time I came with an expectation of some kind of a debate, some kind of fun, as always, in a debate among honest people.
At the beginning I was a little bit uneasy, I must confess. First, I had a terrible problem of language. My English was even worse than my English now. Those who are recent in their job of covering the Fund must imagine what it could have been.
So this was a problem. But I saw, rapidly, that asking you how do you put that in English was a good way of having a few seconds to think more, and of course all of you have identified that, at times, it could have been a trick of mine.
If my successor uses the same trick, please show the same forbearance with him as you had with me when I used that trick.
I had another one. I was split between two things. One, my hereditary gene--the son of a journalist, who likes the press, has an understanding of the press and has only positive feelings about the press and media. I had that in one part of my heart, and certainly very deep. It was genetic.
But I also had a recent experience of three years as a central banker. Thirteen years ago, in central banking, the virtue was not transparency but secrecy, and if you had been a "fly on the wall" of our secret meetings--central bankers like very much secret meetings--you would have heard that the challenge among ourselves was who would be the most secretive of all of us, and of course there was always somebody who had been more secretive than you. So I was split between these two things in my mind. But you convinced me, promptly, that I would have to go back to my genes, and my inclination to speak as much as possible, and you have given me, generously, the benefit of the doubt, and I have tried of course never to abuse it.
Well, now, at the end of this experience, I have a feeling of success, and another one of failure, and of course I see at the word "failure" you start taking notes. No? I have observed this inclination of yours.
MR. CAMDESSUS: A sense of success. I believe you will recognize that we have made this institution distinctly more transparent. I have been preaching the golden rule of transparency to the world since the Mexican crisis at least, and we have tried to give as much as allowed by our membership to make this institution totally transparent.
We have tried that, and I think further steps are certainly needed, but we are truly moving in the direction of success and a positive change in the Fund.
The failure is that in spite of that, we have not been able to change attitudes toward the image of this institution. There are still people around the world who can, without provoking an outcry, say that the IMF kills babies. You have old demagoguery of the world pretending that we don't serve the common good.
You have vested interests in the world trying to destroy us because of course they know that we destroy them. You cannot go and confront the family monopolies in Indonesia, or the chaebols in Korea, and so on, without, well, provoking some adverse, negative campaigns.
And of course we suffer a lot. It's possibly the price of a very strong contribution to the international common good, and of course there are crosses you are proud to carry from time to time on your shoulders, because it is the price of the common good.
But, indeed, we will have to continue working hard to explain that what is being done here, together with the efforts of our friends at the World Bank, to explain that all these necessarily tough programs serve a common good.
And if we see today--and of course I am happy to leave in such a context--the world economy exceeding all forecasts for growth in an extremely widespread way, be it in Asia, be it in Latin America, be it in Africa, be it in former Soviet Union, and be it in Eastern Europe, it is, I presume the effect of our efforts and of the actions of the very valiant, courageous, professional staff of this institution, and I am proud to say that.
Well, this institution is challenged every day, and it must be. This is why I attach such importance to maintaining with all of you a tradition of mutual trust. You have been very generous in giving me your trust. I thank you for that.
Now, in terms of media, I am very happy to leave the Fund, not only at a time that the world situation is good, but at a time when there is not so much talk about the Fund around the world--be it in Asia, where we were so bitterly criticized, be it in Latin America, or be it even in Africa. This, to me, is a confirmation of what my eminent friend, Stan Fisher, used to say, and he has already told you that, I presume--namely, that when you have a crisis, and when difficult measures are announced, these are the IMF's policies.
But when success starts emerging, and developing, and the skies are better and more sunny, then the policies are the policies of the country, and you don't hear any more about the IMF.
It's what we call our ultimate objective, which is ownership. The countries then own their policies and their success, and we are happy to see that, and people forget about us.
This being said, I don't forget 100 percent, and I must tell you that I had two extremely rewarding occasions this last month. One was the Libreville meeting with 20 African heads of state, and 45 countries, in reality, at the highest level, meeting about how to do the best out of the new set of instruments we have put in place for debt reduction and growth in the poorest countries. It was their meeting, and you heard about the Libreville declaration, which was their declaration. I urge you to reread it and to compare it with what the Ministers of Finance of Latin America have said in Cancun. There, also, it was "their communiqué," not the communiqué of the Interim Committee or of the Executive Board of the Fund. Read that, and you will see that there is a silent revolution going on in the world.
That what we have tried to promote is a kind of second generation of reform based on stronger institutions, better governance, fights against corruption, more transparency, economic policy focused on poverty alleviation, and the reduction of inequalities around the world. All of that is starting to take shape and it's owned by these countries.
Three years ago, you wouldn't have had many African heads of state launching a powerful fight against corruption. Now they do that together. Now Latin American countries join forces, including with the Caribbean countries, to fight corruption and money laundering, and promote good governance. All of that I think is good and positive for the world.
But of course industrial countries and our institutions must play their part, corresponding to the effort of these developing countries, and I'm happy, today, to leave you the very day when I am able to tell you the three first cases of implementation of HIPC No. 2--Uganda, Bolivia, and Mauritania--have just been decided by our Executive Board.
It's not the end of the fight, and a lot, for 15 years, at least, will have to be done, for this difference to be discernable by the man in the street, possibly, and I say 15 years, because this is 2015, and you know my fight, together with all my colleagues of the Fund, for at least having the world delivering on its pledges. We shouldn't allow the world to be cynical about the pledges of the big UN conferences of the last 10 years.
We must have extreme poverty reduced by half by the year 2015. You have, all of you, in your book these seven pledges. Let's go for that. It is possible. We have committed that. If we don't respect them, we will have a really big threat to the very fabric of international cooperation and the conditions for the world.
But I believe it is still feasible. I will go with this message next Sunday to Bangkok, where I will have to speak for a last time to the UN family of institutions and members on the occasion of UNCTAD X. There is, indeed, the possibility of doing that, and in doing that, enacting all of these pledges, you can trigger a new dynamism in the world, and this new paradigm of development we have tried to develop during all this last year.
How to make the fight against poverty and inequality in the world serving more high-quality growth in these countries. This is a fight of every day. You will have always against these strategies all the demagogues of the world, all the arms traders in the world, all the populist, charismatic leaders of the world, but our institutions must go that way, knowing that at the end of the day, it is for them the only way in delivering on their purposes.
So I am going for a big sermon, finally. Thank you very much.
A QUESTIONER: I was interested in your response to a letter that you may have seen by now, it went out to members of the formerly Interim Committee and of the International Finance and Monetary Committee as well as Executive Directors of the IMF. It called on the IMF to have a more open and transparent process for choosing a new Managing Director, and one of the points they made is that they believe that the Executive Board decisions should have recorded votes, both for the selection of the next Managing Director, and going forward in all votes.
MR. CAMDESSUS: I have not seen the letter you are talking about, but I hope that the next IMFC will want to review this, to my judgment, too-protective process of selection of a Managing Director, and, well, draw appropriate lessons from that.
But you will certainly understand that as we are now at a critical moment of this process, it wouldn't be proper for me, even if I have very precise ideas about that, to make the process even more complicated, by introducing my personal views in this discussion. You know pretty well that the MD of the Fund has very broad prerogative and powers in selecting all the staff of the Fund, and I have done that to the best of my ability. But the only person he does not appoint is his successor. So on that, I must remain discrete.
A QUESTIONER: Can you address the idea of recorded votes by the Executive Board?
MR. CAMDESSUS: No, I will not comment on that for obvious reasons.
A QUESTIONER: Seattle seemed to bring home to a lot of people, if remarks at the Davos conference are any indication, the fact that there is a lot more attention being paid to the global institutions--such as the WTO and, now, some of the protest groups are thinking of the meetings in April of the IMF. What should the IMF do, in a proactive sense, to get its message across, that it is doing the right thing, or what it considers to be the right thing? Is it actually doing that? Is it thinking ahead to these sort of concerns? Is it taking any heed out of what happened in Seattle?
MR. CAMDESSUS: Thank you very much. First of all, what the IMF must do every day is more transparency and I would like to express my thanks to the External Relations Department, which during the past 13 years, has done with the modest means put at its disposal by our budget, done everything it could to do the job and to communicate and disseminate the realities of the Fund. I wouldn't say the messages of the Fund. The realities of the Fund.
And I must, in particular, pay tribute to what Tom Dawson has done in the few months since he has been here. I don't need to tell you that. You have perceived a remarkable new impulse given, and I am immensely grateful to him for having presided over that.
Now we will never have the means to match, dollar by dollar, if I may say so, all the campaigns around, which are not, all of them, as you know, those of generous, disinterested, idealistic NGOs. Behind many clamors, there are also vested interests, and we shouldn't be naive about that.
It's part of life. It's our universe. It must be known. But we should take seriously what Seattle told us, and you will do me this justice to recognize that I have not waited for Seattle to tell us that the world, the people of the world, want to see the Fund seen as more accountable.
You remember that for years, I have been pressing, for instance, the Interim Committee at that time, to establish the so-called council for the responsibility to be seen where effectively it is. We are accountable. We are accountable to 182 countries of the world, and they take every day, interestingly enough, frequently by consensus, all the decisions of this institution.
But it happens that, well, because it's difficult and because politicians are politicians, they don't always take responsibility for what is being done here. I cannot ask them to stand up and to say how great the IMF is, when the IMF is fighting the monopolies in Indonesia or the chaebols in Korea, and trying to promote more openness, a level playing field in countries which, for so long, have developed an incestuous relationship between government, banks, and enterprises.
This is life. Nevertheless, we must continue pressing for that. I do believe that Seattle tells us something about the need for establishing clearer rules of the game, on where are the responsibilities for the economic governance of the world. You have read my speeches, you know what I think about that. I think if the world were to go in that direction, not instantly, but, nevertheless, then things would be clearer. We will always have the extremely difficult problem of listening, and taking in proper consideration--in our process of reflection and decision making--both the views of governments that are sitting on our boards, and the elected bodies behind them, and the views of the civil society.
It's an extremely complicated thing. We shouldn't allow the demonstrators in the street to intimidate those who are democratically elected and responsible to their people, but, nevertheless, we must be very sensitive and attentive to what all these NGOs, academia, and all those tell us, because there you have certainly questions for the future to take seriously into consideration, and I believe the world must find a response to this extremely difficult, underlying, reconciliation problem.
This being said, we shouldn't be naive, and when talking about Seattle, I must say that I spoke only three minutes in Seattle, but said something very simple. That to paralyze the body which has just been created to introduce a little bit more fairness and regulation in the international trade, to paralyze it, or to kill it, just five years after its creation--it's certainly not the good response.
Second, to paralyze it to the extent of not allowing an immediate decision on opening the major industrial countries' markets to the products of the poorest countries, a decision which we pressed for having in the agenda of Seattle, is totally inconsistent with the decision we have taken a few months before, to reduce the debt of the poorest.
It's a mockery of the reduction of the debt, to simultaneously not to take the decision on the trade domain, because it is the opening of the trade which finally will make the difference, if they can't sell their products.
So you have this contradiction there. These things must be handled. I hope that Bangkok, in the near future, plus the good sense of the people around the world, will allow us to overcome this problem. I trust that the WTO will be able to restart the millennium round, soon. It is necessary. But there is also a contradiction in trying to promote good governance and growth in Africa, and not acting more efficiently to promote peace in Africa.
Development and peace are the two faces of the same coin. You cannot have the one without the other. Peace is the other name of development in the same way as development is the other name of peace. We must go for that.
A QUESTIONER: Secretary Summers, a month ago or so, proposed some rather fundamental changes in how the Fund might operate, and as you know he is not the only one who's proposing that. Can you tell us where you stand on that at the end of your tenure here?
MR. CAMDESSUS: As you said, Secretary Summers made very interesting proposals. He is not the only one, and I thought, at the very end of my stay here, that I had also to say what I see as indispensable to do, and you have probably observed that I coincide, in many respects, with the views, offered by Secretary Summers.
There are things I perceive differently, because he is in charge of the Treasury of a country, the most important country of the world, by its wealth, and a shareholder of the Fund; but here, my perception is one of 182 countries together, with a need of optimizing the synergies among them. So the angles are different, and all of that must be thought out and taken into consideration.
My views are now there. I have expressed them at least on two occasions, recently. In the last week in front of the Council of Foreign Relations in New York. Later in the week, in a speech, a little bit more philosophical, at Georgetown University. I know that in putting my views so clearly, I have defined for my successor the labors of Hercules--no? But you will observe that I put only ten Herculean tasks on his shoulder, while, normally, I should have put twelve.
I want you, and all of us in the world to define the two which are missing. I have a few ideas about that.
A QUESTIONER: Please allow me to ask a rather parochial question. You have been a kind of symbolic figure to the Korean people during these years, and Korea's sudden collapse, and sudden resurgence. Korea is now experiencing rapid growth and rapid recovery, the stock market is booming, and many people are now saying that Korea actually [inaudible] from the IMF. But I wonder whether the Korean crisis is really over and if now is the time to forget about the IMF. So I'd like to know the terminology of "graduation." Is there that kind of terminology in the IMF?
MR. CAMDESSUS: It's an academic term, as you know, and this is not academia. I will tell you a few things. First of all, I am delighted for the Korean people, to see what I see in Korea, and this is due, let me put that on record, in some part, perhaps, to the good perception by the staff of the IMF and its Executive Board, of what were the problems and where action had to be put, urgently.
But it is chiefly due to the courage, the sense of sacrifice, of the people of Korea, and to the leadership of President Kim Dae Jung, and his government. You were fortunate, in Korea, to have such a man to take the helm just at that very moment. History will remember that.
Now, yes, the resurgence is there, with stability, and all the prospects for higher quality growth in Korea. This being said, the effort in economic life is never over. Economies change. Environments change. Always vigilance is in order.
I believe that Korea can forget about the IMF. I believe you can forget about the IMF. But please, don't forget the policies you have adopted, the reforms you have launched. There are still things to do, particularly for corporate restructuring, for consolidating the financial sector, for maintaining the proper budgetary and financial discipline, for continuing, strengthening your social policies.
But knowing President Kim Dae Jung, knowing your government, knowing the good sense of the Korean people, I have no doubt that these things will be well-taken and the effort maintained.
This is my definition of graduating. Graduation of a country, a country renouncing IMF financing at the end of the program, is for the IMF the most splendid victory. Normally, at the end of a program we expect countries to graduate. In general, they ask us to stay a little bit more because they are intimidated by the risk of the world, because they feel, they perceive their remaining weaknesses, and then, from time to time, frequently, we accept to prolong the programs or to go for another program. But when a country asks us to graduate, we say hallelujah, and we are delighted, a little bit, with the traditional discretion of the IMF to cry victory with the country, provided graduation is about forgetting the IMF, but not forgetting its policies.
MR. CAMDESSUS: And of course what I say about Korea will apply soon, I presume, to Thailand, and I will cry the same hallelujah that very day, and I hope it will apply to many other countries, and we will be able to develop, as suggested, in some way, by Secretary Summers--I say that in passing--a kind of relationship which is basic in the structure of the IMF, namely, a relationship based on continuous, mutually trustful dialogue on the policies, on the environment, on what should be done, without necessarily implying IMF resources, disbursements.
A QUESTIONER: I'd like to ask you something about the Japanese economy because of the [inaudible] policy and a series of fiscal stimulants [inaudible] Japanese economy has just begun improving. Do you have any advice to the Japanese government to make sure [inaudible] recovery?
MR. CAMDESSUS: As Mr. Dawson asked you at the beginning of our meeting, I am not coming here for the world economic outlook. I am here for bidding farewell and reflecting a little bit on my experience with all of you. I have answered this issue in Tokyo, recently, after the G7 meeting, and you can imagine, two weeks after I have not changed my mind. Thank you.
A QUESTIONER: The relations between the IMF and Russia in the last decade were very dramatic. There were a lot of ups and downs, bombs and hurdles on the road, and as we see the results are not too positive.
MR. CAMDESSUS: Are not too positive?
A QUESTIONER: Not too positive.
MR. CAMDESSUS: Are they that negative?
A QUESTIONER: Yes, I think that, in general, they are more negative than positive. What are the main lessons for the IMF and for Russia over these relations during your tenure? And do you think that there were any mistakes on the side of the IMF in dealing with Russia during this period, and what are the main mistakes you think there were? Thank you.
MR. CAMDESSUS: Well, let me tell you that it showed that the glass is, at most, half full. The first obvious lesson is that when you try to help a country out of 70 years of a Marxist-Leninist regime, under all its guises, including the decrepitude of the Brezhnevian era, you are not in a business as usual operation. If I regret something, it's possibly to have shared, somewhat, the illusion of everybody in the world, including Russia, that this could be done rapidly. Possibly it could have been done rapidly if everybody had felt as mobilized for change as the IMF was. If everybody had taken as many risks for change in Russia as we did. But this was not the case.
We were frustrated, many times, by half-hearted implementation of the agreed programs of the Russian authorities. We were disappointed by the lack of support, of sufficient support by the state Duma for these policies. By the delays in adopting the indispensable legislation for establishing a level playing field. Was that a reason for us to say [foreign phrase], to say, well, they don't deliver, let them go their way.
MR. DAWSON: The translation is "Enough already."
MR. CAMDESSUS: No, the role of this institution is to continue working, and working hard, whatever the frustration, to create the conditions, one way or another, of a resurgence, of a renaissance, and I feel proud to have done that.
Of course you will have the impression that it is not that much of a change. But Russia is a country where the democratic rules for elections of a president are not challenged.
Russia is a country where the basic principles of a market economy are not challenged, and where the government now, and all political forces now recognize that the only route for the future is reform, further integration in the world economy.
That by continued support, well, with discontinuities in many occasions as you know, and at this time, still, we are in a episode of discontinuity in the financing, but not in the dialogue. But I believe the price we have paid, this price of continued support, and, at times, the blame for supporting you is a little price compared to what is achieved. After all, your country needs democracy, your country needs a market economy, your country needs a conception of the economy with demand at the center. This is the thing to which you have given some chances.
So I wait with great tranquility the judgment of history, which must come in due time, and I will remind you of my favorite quote of Chou En-lai. You know that, the comment of Chou En-lai about the French Revolution, a little bit before he passed away, saying, well, 200 years after the French Revolution, it is possibly a little bit premature to pass a final judgment on it.
MR. DAWSON: One last question.
A QUESTIONER: If you'll permit me, Mr. Camdessus, I would like to return, very briefly, to the world economic outlook, because last week, in Cancun, you were very upbeat in saying the Fund is revising its forecast up, and, today, also, you said the world is doing better. How concerned are you that a wild card factor such as the oil price, the rise in the oil price, could derail this scenario, because it's been going up, inexorably. It's got to be inflationary, globally. Are you concerned about it? Do you think something should be done?
MR. CAMDESSUS: Well, I can tell you that this is one of the question marks of this very moment--no doubt. I am comforted when I see the future markets' pricing, what I see the consensus of all market specialists about the evolutions which are most probable for the future. Nevertheless, no one can be sure, and this is why, on one side, I understand, and approve the prudence of the central banks in the world, which wanted to take any necessary step to keep inflation in check, and on the other side, I salute the efforts of many oil-producing countries in the world--not all--but several of them, who are taking steps to diversify their economies, and to be in a better shape the day when the price of oil could go down again.
And here, I can tell you that we have engaged in a regional dialogue with the Gulf oil-producing countries for some time, and I am delighted to see that all of them go to a medium-term strategy, trying to protect themselves against new misfortunes in that market. So we must prepare for the two alternatives and then the world could avoid major problems in the future.
MR. DAWSON: Thank you very much. If I could just make one brief announcement. For those of you who may have missed anything or would like to see this again, in keeping with new technology the press conference will be transmitted on our Web site, Webcast on our Web site at about 3:30 or so this afternoon, and if any of you don't know how to reach our Web site, we have our standard advertisement for the Web site back here. The embargo will be lifted at 11:15. Thank you very much.
[End of Press Conference.]
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IMF EXTERNAL RELATIONS DEPARTMENT