Transcript of a press briefing by Thomas Dawson, Director IMF External Relations Department
February 15, 2001
External Relations Department
International Monetary Fund
Thursday, February 15, 2001, 9:00 a.m.
MR. DAWSON: Good morning, everyone. I'm Tom Dawson, Director of External Relations at the Fund, and this is another in our continuing series of briefings.
I know that a number of you have another press event to go to this morning, so we moved up the time, and I hope and expect that we can keep this session short. But I will stay as long as you want to ask questions. Not only do we try to be transparent, we try to be helpful.
A couple of items to go over. This, as usual, will be embargoed until 10 minutes or so after it wraps up, and we'll set a specific time then.
I'd like to draw your attention to the latest quarterly report on emerging markets financing that's now published on our website, and I think there may be copies out there in the back. We have now completed a full year of these published quarterly reports. We've had a lot of interest from market participants and analysts, and if you'd like to talk to our capital markets staff about this report, we can try to set something up to help you go over the data.
We're also launching today on the website the publication of our staff code of conduct, financial disclosure code, as well as a link to the judgments and orders issued by the IMF Administrative Tribunal, which resolves disputes between staff and the institution. You should have a news brief on that as well.
Our decision to publish this information is, of course, further affirmation of our commitment to transparency in the operations of the Fund, and as I think I mentioned in the last briefing, we're hoping to have a technical briefing on transparency issues generally in the near future. We'll be drawing on the resources of our colleagues in PDR, the Policy Development and Review Department. And once we can understand our transparency policy, we'll be happy to give you a briefing on it. It is an interesting process. We started with what was a one-page table that explained it all in table form, and then you try to attach the words to the table, it starts getting longer and longer. But we will have something for you before too much longer.
And in keeping in transparency, I'd appreciate if, as usual, you identify yourselves and your affiliation when you ask questions.
QUESTIONER: The other day Mr. Deppler said it would be good for the Turkish Government if it could find a way to make its planned and problematic telecom sale more attractive. What exactly do you mean by more attractive? Currently, 34 percent of the Turkish Telecom is supposed to be privatized. Do you suggest that it could be raised to 51 percent, a majority stake?
MR. DAWSON: No, I don't think that comment was directed at all toward the level of ownership. I think it is a matter of having management control and assured in terms of the sell-off of what is under the present plan a minority stake. So I think it's a matter of -- the attractiveness of an institution is not necessarily just a matter of the voting shares. It's a matter of the management control, and it's quite common in telecommunication privatizations for majority control to pass when there is still minority -- I'm sorry, for management control to pass when there is still minority ownership. So I would steer you away from thinking it's an issue of the percentage ownership.
QUESTIONER: Just to clarify. The idea would be they sell the 34 percent but the people [inaudible] 51 percent rather than the board?
MR. DAWSON: No, that's not exactly the way it works. I mean, it's management control. It's not necessarily the board. You have a management contract for presumably the strategic investor that has bought in. So it's a matter of operational control. It varies from country -- in how that precisely works, but it is not a matter of share ownership. That's what I'm saying.
QUESTIONER: So what exactly do you propose?
MR. DAWSON: Well, this is -- it's not a matter of what we propose. This is a matter of the -- the idea of it being more attractive is -- I think you've correctly quoted Mr. Deppler. There are a number of ways that should be. Your question was: Are we pushing for an increase of share ownership? The answer to that is, no.
QUESTIONER: In Indonesia yesterday, the government said that it might not be able to put a cap on what the provinces can borrow. Does that run counter to what the IMF has been pushing them to do. Does that mean that there's no possibility for new lending for Indonesia?
MR. DAWSON: Well, we understand this is, in fact, a difficult issue there. There are a number of issues that I think I went over in the last briefing here in terms of the Indonesia program. The decentralization issue is certainly one of them. The central bank independence is another one. And all of these issues are still in a state of discussion.
So I think there's a continuing dialogue with the authorities, and I don't think one can say categorically yes or no. Clearly, we have a number of issues that are unresolved, and they will need to be resolved.
QUESTIONER: If I can follow up?
MR. DAWSON: Sure.
QUESTIONER: Yesterday the government said it wouldn't be able to do that this year. Is the IMF willing to take that off the table?
MR. DAWSON: I don't think that's -- they can't do it at this point. We will continue talking to them about what they can do. And I think it's hard to say what deadlines or what time frame (there) is. I think setting time frames and deadlines, in the sense of the word, doesn't really work, because this is a process where we're continuing to talk with them. And as I say, there are a number of issues. That is one, an important one, but there are other issues as well.
QUESTIONER: Could you address yourself to the Managing Director's meeting with the G-7 this weekend? What other than the world economy, is there any other particular issues that are pressing?
MR. DAWSON: The G-7 work up their agenda. They invite the Managing Director to make a presentation. Obviously, the World Economic Outlook is a major component of our contribution to that process, but I don't think it's appropriate for me to talk about the G-7's agenda.
I would note -- I guess we're allowed to tout other publications -- take a look at the `Il Sole' interview, as well. That is, I think, out and posted on the Web today of the Managing Director. That would give you some sense of his latest thinking on WEO issues and Europe. And if you need to, I think we can make that interview available.
QUESTIONER: There have been reports that the mission in Moscow may extend its stay. Can you confirm that? And, secondly, is there a chance for the negotiations on the new program to be wrapped up during this mission?
MR. DAWSON: I do not believe the mission is going to, in fact, extend its stay. My understanding is that there will be a press briefing this evening or a press release this evening our time, tomorrow morning Moscow time.
The mission did make good progress on the discussions on macro policies and year 2001 targets. Discussions are continuing on the structural issues in areas of interest of the Fund, fiscal, banking, non-payments and governance. And the release tonight is expected to assess that progress and also note the plans for the period ahead. So I think we should just wait until the mission and the authorities speak, which is, I think, something like around 10 o'clock tonight our time.
QUESTIONER: Does that mean that you're not going to comment further on an AP story this morning about a snag in the talks on a short-term loan -- actually, a credit. What's the term they use? Stand-by loan.
MR. DAWSON: We're discussing the year -- a year 2001 program. But that discussion has been conducted also in a medium-term context. The mission and the authorities think the discussion should first focus on the substance of the policies, and 2001 is sort of the target in that immediate sense.
The status? I think you can expect that the statement tonight will have a little more information on the status of negotiations. But I think we've been pretty clear that we've been talking about a stand-by at this point.
QUESTIONER: Is there anything positive you can say about progress that may have been made on Indonesia? Your comment didn't seem to move it forward, and there were indications that there may be something positive to say this week about sending a mission or -- is there anything positive at all you can say [inaudible]?
MR. DAWSON: I guess I should say -- I resent the implications of the question because I think I've been basically providing a pretty -- I think a pretty clear state of play. It isn't that much different than what it was a couple weeks ago at the last briefing. We are continuing in discussions with them. I'm not sure what progress -- how you would define progress. Progress would, I guess, be concluding an agreement, and we obviously are not there. We have the issues that I described a couple weeks ago.
QUESTIONER: Mission date?
MR. DAWSON: Do not have a mission date. No.
QUESTIONER: When is the next time the IMF Executive Board will evaluate the sixth review for Turkey?
MR. DAWSON: We just did.
QUESTIONER: It was the fifth.
MR. DAWSON: Fifth review. There's no way. I have no date, no date for that.
I should note -- you've been very polite in not asking --that the First Deputy Managing Director will be in Turkey over the weekend and I think Monday. There is a G-20 Deputies meeting in Istanbul which he will be attending, and he will take advantage of that visit to meet with Turkish authorities at some point over that period.
QUESTIONER: Any comments on that meeting?
MR. DAWSON: On which meeting? On the G-20 Deputies? No. And on the meeting with the authorities? No. But it's quite possible that Mr. Fischer will be available to talk with the press at some point during the visit.
QUESTIONER: On Ukraine, the Ukrainian authorities seem to be optimistic about the IMF releasing its new tranche that has been held because of the oil [inaudible] or whatever. And I would like to hear your assessment on how well based that optimism is.
And, secondly, a technical issue. Was Ukraine in default technically on its Paris Club debt when the new program of the IMF was approved -- when the program of the IMF was resumed?
MR. DAWSON: I think you would have to ask the creditors that question. I mean, the mission did recently return from Ukraine and was unable to conclude discussions on the fifth review. While a number of the monetary and fiscal targets for end-December were met, further progress in a number of areas will be needed before we could complete the review.
So I think I would caution not to expect something along the lines of what you have been reporting -- you have been hearing.
MR. DAWSON: In the area of tax arrears, transparency of the privatization program, monitoring and payments arrangements, discipline in the energy sector, and financial sector reforms, and my notes here say -- please don't ask me about it -- the issue of the export tax on sunflower seeds. I've only learned about cashews in Mozambique. I haven't done sunflower seeds in Ukraine yet. But I will be briefed on it for the next time.
QUESTIONER: In the event Turkey fails to do the telecom privatization, it will most possibly fail to meet this year's privatization target for $6 billion. You would probably say that it's not the end of the world, but do you have a contingency plan or...
MR. DAWSON: You've been to these briefings before. Privatization of Turk Telecom is not a condition per se in the program. The policy implementation to make privatization possible is a condition. We clearly recognize the difficult environment both in terms of within Turkey but also the world market in telecom, so that we clearly do recognize that as a problem.
And to your end-of-the-world scenario, certainly in terms of the fiscal targets for the program, it is not required because there is room on the fiscal side of the program.
That's it? Thank you very much. Very good. I can now go to my next meeting.
MR. DAWSON: 9:30. Lifted at 9:30. Thank you.