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Ukraine and the IMF

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PRESS BRIEFING BY THOMAS DAWSON
DIRECTOR, IMF EXTERNAL RELATIONS
Thursday, March 23, 2000
Washington, D.C. [TRANSCRIPT PREPARED FROM A TAPE RECORDING.]

QUESTIONER: Do you expect the statement from Mr. Köhler to address some of the details of when he might take up the post and timing, that sort of thing?

MR. DAWSON: I don't have anything for you at that point. Obviously, we know that's a question that is of great interest. He is at the moment traveling and is returning to London within the next hour. So we'll have an idea by then, but at this point I don't have anything for you.

QUESTIONER: Do you know when is the next visit of Mr. Köhler in Washington?

MR.DAWSON: No, I do not know that, and obviously that's of an interest. You know, one of the questions would be whether he comes prior to taking office, how quickly he takes office. That's a question which everyone has an interest in, and when we have that information, we'll let you know.

QUESTIONER: In terms of the Spring Meetings--we know that there will be a bunch of protests and things around here. Is there anything that you are doing in terms of addressing that or meeting with the protesters?

MR.DAWSON: We have ongoing a series of meetings with a number of the NGOs with whom we have been in regular contact. As an example, earlier this week there was a seminar hosted by the Fund with about 15 or so NGOs that went over financial programming in countries so that they could get a sense of how the Fund puts together, you know, the accounts and looks at budgeting issues and so on.

We have a number of meetings that have been going on with individual groups as well. We have indicated to the groups with whom we are in regular contact a willingness to meet with them before, during, or after the meetings as they may--as they may wish.

I understand that some of the NGOs are taking the position that for the week of April the 10th they don't wish to have meetings, but that's obviously up to them. Others may wish to meet with us.

There are a variety of public fora that may exist, including one or more National Press Club events. I know Mr. Wolfensohn at the Bank has one planned. There is a forum planned also at American University that would have NGO participation and which I expect the IMF would be participating. That's a forum that is very much oriented on the issue of globalization.

So there are, in fact, a number of outreach efforts such as that, and indeed, as a number of you may know, we have a regular--it's normally a semiannual--letter that we send to some 900 addressees on a list of NGOs that we have, and we will be providing them with an update prior to the Spring Meetings as well.

So we have put up what we think is, you know, a "please visit, please call" sign, and we do have a number of contacts underway with them. But this is not something, of course, that ends with the Spring Meetings. It is part of a continuing process. But it is clearly, you know, accelerated at this particular point.

QUESTIONER: Just following on, are any special security measures planned? Is there something that we need to know about in terms of preparing ourselves for this?

MR. DAWSON: No. I mean, we have set up a notice on press accreditation because, clearly, there will be, you know, a particular focus on making sure that people are properly credentialed. But I think from your point of view, I think we've got things under control, and I think that--you know, much of that question, frankly, has--you know, would be directed toward the authorities, not toward us. But we are planning to--you know, planning to have the Spring Meetings as we normally do.

I do understand that at least some members of the press have been in contact with the D.C. Police as well, so you may wish to be in contact with them as to what their plans are.

QUESTIONER: In terms of Russia at the moment, the election coming up over the weekend, et cetera, what's the plan for Russia? Where do things stand from a formal point of view? Are they anywhere near meeting targets? Have new targets been set since the end of the year, et cetera, et cetera?

MR. DAWSON: Well, I'm not sure I really have much new on that. I mean, we have been in contact with them in particular on the structural issues which still haven't been fully addressed. And, I mean, I think that's basically where it is. We're expecting a new government; when it comes in, we'll be in a position to, you know, accelerate the discussions. But in some sense, we're in a bit of a holding pattern, but in particular there still are these structural issues that have been on the table for some time.

I mean, clearly, the macro performance in the economy has been better than I think most people had expected, but the structural issues have still been--are an issue of some concern. And I think that--there is also, I should note for you, a seminar being held in Moscow April 5th to the 7th that the Acting Managing Director will attend. While that is more of an academic seminar, it's my understanding there will be a press briefing after that. So you should probably put that on your calendar.

QUESTIONER: Just to follow up on that, will anybody else except for Mr. Fischer go to this academic seminar? And what exactly do you want to achieve there? What's the purpose of this exercise?

MR.DAWSON: The seminar is, as I understand it, on the post-election economic strategy. It's being organized by the Higher School of Economics, so I think in that sense questions are better addressed to them.

With regard to the attendance at the seminar, I actually don't know the answer to that question, but I don't think we'd have any trouble letting you know whether John Odling-Smee or Gerard Belanger, or whoever may be going. We'll get back to you on that.

QUESTIONER: To move next door to Ukraine, are there any new developments on when disbursements there might resume and any more developments on the audits?

MR. DAWSON: No. we have indicated that we are on hold awaiting the results of the audit, and the first such audit is due around the end of March, which is coming up pretty soon. But we will need to take a very careful look at that as well as any questions that arise from that before figuring out what the next steps would be. There are, of course two audits that are underway, but one will be ready sooner than the other one.

QUESTIONER: If I could follow on from that, overnight the Ukrainian Prime Minister for the first time, to my knowledge, denied that the central bank had actually misused IMF funds. He said the practices they had employed were within the central bank's rules and benefited Ukraine.

Can you respond to this? And do you think that this is setting up a potentially adversarial relationship with the government there?

MR. DAWSON: As we have stated, our analysis to date indicates that the Fund does believe that some of the targets that had been set at the time would have been missed had the reporting been along the lines of what we expected, and that is indeed what we are looking into to confirm that. That's part of what the audit is underway.

I would have to take a look at the Prime Minister's statement to be able to parse exactly what he said and how it may relate to what the Fund's position is on that. But we have been in touch with the authorities. They, of course, have put out statements. We have indicated in our release last week and then also subsequently that we are looking into it. But it is an issue that we take quite seriously and are waiting for the results of the audit.

QUESTIONER: Does this work? In the wake of that, one of the Executive Directors said that there might be a meeting in terms of, in general, changes to how the IMF monitors loans. Didn't a Board meeting happen on that?

MR.DAWSON: We are, in fact, in the middle of that process. There is--there have been already some Board meetings on the subject. In Fund-speak, that is called safeguarding Fund resources. There has been a Board meeting, a couple Board meetings on it as well. It's still a continuing process.

QUESTIONER: Would we expect something to come out in the Spring Meetings?

MR.DAWSON: Yes, it certainly will be a subject of discussion at the IMFC meeting. I expect there will be a report to the IMFC on that and related issues. So, yes, I think that will be a subject of some interest at that time.

QUESTIONER: Mr. Fischer yesterday said something about Board discussion on the private sector involvement, that it was ongoing and that you were looking for political guidance, I think, at the Spring Meetings. Could you talk about how this whole private sector involvement has evolved in the thinking of the Board discussions?

MR.DAWSON: Well, I mean, it is still ongoing, so I think it would be a bit presumptuous of me to say what the Board conclusion will be. But certainly over the last few months, there has been a stock taking in the Board by staff, management, and Board on our experience in a number of the country cases. I mean, I think there's sort of been a particular focus on the cases of Ukraine, Romania, Pakistan, and Ecuador, and that's sort of the framework in which the Board, management, and staff have been looking at the issue.

There are, of course, you know, varying approaches. There are some who advocate a more rules-based approach. There are some who advocate a more case-by-case approach. And what we basically have been doing is looking at the experience broadly, but those four countries in particular, and to some extent, Brazil as well, but mostly those four, and trying to figure out what lessons to draw from that. And that is also--I mean, I'll give you in some sense the same answer to the previous question. That is also something that is being presented to the--will be presented to the IMFC. But as with the other discussion, that is also still a work in progress. It's a fairly busy time for the Board right now. It's sort of our version of bunching season.

QUESTIONER: I just wanted to see if I could get any better sense of what the attitude of the Fund to the recommendations for reforms are. Yesterday, judging by reports from my colleagues, Mr. Fischer said that generally the approach that Mr. Summers suggests will probably be accepted by the members, but there are some exceptions as to the lending for poor countries, for instance.

MR. DAWSON: Well, I think Mr. Summers--I'm not sure I would make that as one of the exceptions. I mean, the issue of IMF reform is an issue that has been on the table for some time. It was raised in the Meltzer report. It was raised in the Council on Foreign Relations report. It's been raised in a U.K. parliamentary committee report. It's been raised by the Geneva Report on the World Economy as well.

So those issues are coming up, Larry Summers' speech last December, his speech on the Bank just a couple of days ago, and, indeed, his FT piece this morning. I think all of those are of a piece talking about better focus of the institution, sticking to what, quote-unquote, your specialties are.

But you made a particular reference to the poorest countries, or the poor countries, I think you said. I would note--and this is a strong view that Mr. Fischer expressed yesterday. It was in Mr. Summers' article this morning that the Fund is and always has been a universal institution, that the recommendations from Mr. Summers' speech last December specifically included as part of the Fund's important mandate the PRGF and our support for providing the macro framework that allows the poorest countries to work with the World Bank in developing their development strategies.

So I don't think--I think, you know, in that sense of the word, certainly the thrust of what is in Mr. Summers' thoughts seems to be broadly along the lines of what we think the membership is behind. Every sign we have from the membership, all 182 countries, is that they are supportive of this sort of a direction, and indeed, we have not heard from any of our members that we should be in any sense pulling back from the PRGF and so on. And I would note Mr. Köhler's press briefing here last week made a note of the Fund's universal character, and I think that's always been a strength of the Fund, and that includes, as Mr. Summers said in the article this morning, a financial component as well.


IMF EXTERNAL RELATIONS DEPARTMENT

Public Affairs    Media Relations
E-mail: publicaffairs@imf.org E-mail: media@imf.org
Fax: 202-623-6278 Phone: 202-623-7100