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Argentina and the IMF

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Transcript of a Press Briefing
by
Mr. Thomas Dawson
Director, External Relations Department
Friday, November 17, 2000
Washington, D.C.

MR. DAWSON: Good morning, everyone. I'm Tom Dawson, Director of External Relations at the IMF.

I don't have any initial statements to make this morning, so we'll open the floor to whoever would like.

QUESTIONER: What's the latest you can give us on the record on Argentina at the moment? We're hearing that the mission, or at least the lead elements of the mission aren't going now because of the fall-through in discussions between the governors and the federal government down there.

MR. DAWSON: We understand that discussions are continuing on a fiscal pact between the Argentine Government and provincial governors. A Fund mission will go to Buenos Aires when agreement is reached. As the Managing Director indicated in his statement last Friday, the IMF stands ready to support a program which, based on our judgment, should promote market confidence and a return to growth.

QUESTIONER: What is so important in the agreement between the federal government and the provinces? Why is everything delayed because of that?

MR. DAWSON: No one has said that everything is delayed because of that, but I think the Managing Director's statement last Friday made it clear that this is an important element of an agreement with Argentina. And I think the reasons for that are explained in the statement last week.

QUESTIONER: It has been reported by an Argentine newspaper today that First Deputy Managing Director of the IMF, Mr. Fischer, talked last night with President De La Rúa, and told him that the mission would be postponed. Could you confirm that?

MR. DAWSON: I don't have any information on that. I'll see if I can get anything for you.

QUESTIONER: Has the mission been delayed going to Argentina? I mean, you said discussions are continuing. Was there the plan originally—

MR. DAWSON: It was always anticipated that the mission would go when the agreement had been reached. The mission that was planned for once agreement was reached, so that depends on what your expectations were on the fiiscal pact.

QUESTIONER: Not just between the provinces?

MR. DAWSON: No, no. I'll repeat my statement, which answers both of those points. We understand discussions are continuing on a fiscal pact between the Argentine Government and provincial governors. A mission will go to Buenos Aires when agreement is reached on the fiscal pact.

That has been our understanding from the beginning. You could then ask: was there a deadline for when the agreement was to be reached ? And the answer is that there wasn't.

QUESTIONER: Could I just follow up? Was the expectation that it would have been completed this week? Because we had heard that the mission was expected, I think today, right?

MR. DAWSON: Expectations change over time. A delay in the fiscal pact, you know, is something that happens.

QUESTIONER: Can we conclude that there will be no mission if there is no agreement between the government and the governors?

MR. DAWSON: In the present context of this agreement we need to have a fiscal pact.

QUESTIONER: [inaudible]

MR. DAWSON: It is still an element of the program. It is not the issue that deals with the sending of the mission. And I should also note there are some IMF staff who are in Buenos Aires now doing technical work that relates to the program. But when we talk about mission here, we're talking about a negotiating mission.

QUESTIONER: [inaudible].

MR. DAWSON: Somebody of that type, yes.

QUESTIONER: [inaudible]

MR. DAWSON: I have seen references in the press made to some IMF staff being down there, and I just wanted to make it clear that there are some staff in Buenos Aires doing work that is not directly related to this—to the particular issue of the fiscal pact.

QUESTIONER: And here in Washington—

MR. DAWSON: The conversations go on all the time, on a continuing basis.

QUESTIONER: Does this means that if there is no agreement with the provinces everything is dropped?

MR. DAWSON: As the Managing Director indicated in his statement last week, this is a critical part of the program. But certainly we continue in contact with the authorities on a number of issues.

QUESTIONER: Any word from Moscow on how the mission is going on, and maybe about stumbling blocks, if there are any? And not to come back to this, second, do you have anything on Ukraine?

MR. DAWSON: Let me take the first question first. You're correct, the mission is in Moscow and is negotiating a program that could be supported by a new stand-by arrangement. It's too early to predict the outcome. Discussions are expected to continue until next week. As we've indicated previously, a new stand-by agreement, because of the strong balance of payments situation, is likely to be precautionary.

Now, do you want to try to be a little more specific with the Ukraine question?

QUESTIONER: Two things. First of all, the chief of the IMF mission in Ukraine said recently that a new program was to be adopted, I think by the end of the year, if I remember correctly. And, second of all, the President of the nation had some words of criticism about the IMF.

MR. DAWSON: We have seen some of those comments, but our view is we've had very constructive, positive discussions with the Ukrainian authorities and I'm not quite sure how to respond to those reported comments. I think you describe the comments by the mission leader fairly well, that there is an understanding that could lead to something by the end of the calendar year. But there are measures, still to be taken.

QUESTIONER: What are the issues that remain between you and Ukraine to be resolved in order to get this program?

MR. DAWSON: I'm not sure that I would take quite that interpretation. I think there is an understanding between the IMF and the Ukrainians on what needs to be done, so now it is a matter of implementation. And I think Mr. Belanger, the head of the mission, indicated to that. This is budget season, if I can use that phrase, in Ukraine and so it is in the natural course of events that actions would be taken in early December. But there is also a matter of reviewing the progress has been made back here.

QUESTIONER: Do you have a Board date for Pakistan yet, or any rough idea?

MR. DAWSON: As you know, we are always cautious about precise Board dates because things do change because of scheduling. I would note, for example, that at this point in the IMF we are working very hard on the HIPC Initiative and, therefore, Board dates do jump around. So I would say, that you can expect it to be shortly. And shortly means the time frame that was identified by the Minister and Mr. Aninat in Prague, which was essentially, certainly before the end of the year and more likely end of November, beginning of December.

I should note we will be shortly—in the next few days, I believe—releasing the latest edition of our work program, on the sort of policy issues that will be discussed over the next six months, and in that context we are starting to try to give you a little more information as to when particular items are likely to be discussed. But it is still difficult for us to specify particular days.

I was in a meeting this morning where four or five items were changed for the next two or three Board meetings, and that just is the way it is. None of them for policy reasons.

QUESTIONER: Things seem to be moving fast for Yugoslavia, with Mr. Köhler saying they would be a member possibly by the end of the year. What's the status of Yugoslavia's membership in the Fund and the timetable?

MR. DAWSON: There is a mission presently in Belgrade which hopes to make further progress on the membership issue, with the objective of completing membership by the end of the year.

As I've indicated previously, one of the conditions for membership is clearance of arrears to the IMF, and that is one of the issues that the mission is discussing. And, as I also indicated earlier, there is work currently being done on trying to identify a bridging loan, a group of countries to participate in a bridging loan to clear the arrears. I would also say that we are still on track with the tentative deadline set two weeks ago when this issue came up. Mr. Sugisaki, I believe, attended the meeting you referred to earlier, in Paris.

QUESTIONER: Are you expecting today to have the new rules on a CCL released from the Board? And in light of the announcements by Mr. Fischer the other day, have any other countries expressed interest in perhaps signing up for one, including Argentina?

MR. DAWSON: At this point Argentina has indicated their desire, and we've indicated our support, for a different approach. So that would be ruled out at this point.

The IMF Board is discussing the details, the finalization of the review of Fund facilities. I do not believe we would be in a position to have anything out today on that issue. It's a rather technical issue, so it would be announced in the near future. And with regard to other countries that might be interested in the CCL, we continue discussing that with a number of countries, but we have not made it a practice, and will not, to disclose the nature of those discussions or the identity of the other countries.

Clearly, the intention of reviewing the Fund facilities and the CCL in particular was to make it a more attractive instrument, and we believe we have done so.

QUESTIONER: Mr. Fischer said yesterday that one of the reasons why the IMF was given the package had to do with contagion and the situation in other countries and emerging markets in general. I was wondering, with this uncertainty about what's going to happen with the fiscal pact and the governors, how do you see the situation evolving and the reaction by the market?

MR. DAWSON: I don't think I'll go beyond what Mr. Fischer said yesterday. As I've said, the discussions are continuing and I think that is natural, and I don't think it is in itself a cause for drawing any conclusions. I'll leave it at that.

QUESTIONER: The Russian Government was supposed to discuss today this quota increase dating back to before the Hong Kong meeting. I understand that it will not go forward until the Americans ratify that. So do you have any information on how soon that may happen?

MR. DAWSON: No, I don't. I'm not quite sure what you're talking about. I'm not aware of any discussions at this point.

QUESTIONER: Can you update us on the situation in Ivory Coast? Are you getting any closer to renewed involvement with the government there?

MR. DAWSON: I don't believe I have anything for you at all on the Ivory Coast. We'll have to get back to you on that. Sorry.

QUESTIONER: I just wanted you to clarify: didn't Mr. Fischer say earlier in the week that he expected the Board to approve it today?

MR. DAWSON: Yes, but the question was—

QUESTIONER: Was he over optimistic?

MR. DAWSON: —whether we would have a press release today, and I do not believe we will have it because these are very technical issues, and to prepare them for release, it takes longer than a day.

QUESTIONER: So we won't know what the Board did today or what?

MR. DAWSON: Well, the outlines were already announced. During the Prague meetings, we handed out a fact sheet that described what we were doing. We are still at that point. These are very technical, legalistic documents that require quite a bit of review, and that is what the Board is doing.

It will be released when it is ready to be released. We have to make sure that we have the legal language correct.

QUESTIONER: So, I'm sorry, you're saying that the Board could do that today but you are just not going to release anything?

MR. DAWSON: That is right.

QUESTIONER: Does the IMF now expect growth in Western Europe to outpace growth in the U.S. next year?

MR. DAWSON: I'm not prepared to go beyond whatever the actual figures were in the most recent World Economic Outlook.

QUESTIONER: A senior IMF official is being quoted as saying that you are looking at scaling back growth because of the increase in energy prices of up to about a half percentage point next year. Is that what is being examined?

MR. DAWSON: Well, that's a slightly different question than the one that was asked, which was differential European and U.S. growth rates. The quote—

QUESTIONER: World growth rates.

MR. DAWSON: Yes, but that question was a different one, and I can confirm that statement, the one you just referred to. Yes, that is accurate. I just do not know how it breaks down among the regions. He wasn't just "a senior official." He was actually identified by name.

QUESTIONER: Are you going to release, as in past years, an updated interim WEO in December? Is that what you're planning to do this time?

MR. DAWSON: I don't know that we are, but given the interest in it and given the fact that there have been some adjustments, let me look into whether we will do that.

I think there were special circumstances for the other cases you mentioned. I'm not aware that we're planning on it this year, but I'll raise that with management.

QUESTIONER: If you can stand just one more question on Argentina, and forgive me if you've already answered this, but do you view this delay, so to speak, in sending the mission as a setback, the fact—

MR. DAWSON: No, I wouldn't—

QUESTIONER: —that there's no agreement yet?

MR. DAWSON: I wouldn't say that. I mean, I think we are still on a course that is consistent with what the Managing Director indicated last Friday. In the stories I read out of Argentina both sides seem to be professing a desire to reach an agreement.

QUESTIONER: So the statement we had heard before that—the Argentina loan could go to the Board by the end of November, does that time line still hold, or is that no longer the case?

MR. DAWSON: I don't believe there was such a statement, because that is simply not true.

QUESTIONER: The agreement by end-November?

MR. DAWSON: Okay. That's not the same as the Board.

QUESTIONER: I'm sorry.

MR. DAWSON: I have indicated that the time line that we were on previously could still be met.

QUESTIONER: The agreement this year?

MR. DAWSON: The time line we were on previously was that the Board session could be done by the end of the year. We have no reason to change that.

QUESTIONER: [inaudible].

MR. DAWSON: The question was whether the Executive Board action was expected by the end of November, and the point I was making was that this has never been in the cards. What was in the cards, and is still in the cards, is Board action by late December

QUESTIONER: [inaudible].

MR. DAWSON: Right. That's what was the situation before, and we have not changed that.

QUESTIONER: An agreement by the end of November?

MR. DAWSON: I have not—

QUESTIONER: That was in the cards.

MR. DAWSON: Right, yes. I mean, we wait and see what happens with the discussions that are ongoing. But it is not a situation where there is some drop-dead date that has been passed.

QUESTIONER: Has the IMF been asked by any legal authorities to look further down into the George W. Bush allegations on Mr. Chernomyrdin?

MR. DAWSON: I'm not aware of any developments on that.

QUESTIONER: How does the IMF foresee working with a Republican White House, Republican Congress, and Republican Senate?

MR. DAWSON: The IMF has a long tradition of working with the U.S. administrations—working successfully with U.S. administrations.


IMF EXTERNAL RELATIONS DEPARTMENT

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