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Transcript of a Press Briefing by Thomas Dawson
External Relations Department
International Monetary Fund
Friday, August 17, 2001
MR. DAWSON: Good morning, everyone. I am Tom Dawson, Director of External Relations at the IMF. This is another of our regular press briefings. Ground rules are the same. The briefing is embargoed until approximately 15 minutes following the conclusion. I will set a precise time when we wrap up.
I don't have any prepared remarks, but I should note that press registration for the 56th Annual Meetings opened 10 days ago. We had a record first week sign-up. And the deadline for journalists is Friday, September 21st.
I'm sure you've seen the statements that have been issued over the last week or so jointly with the Bank on the meetings. I think they are clear. Developments will be progressing, and schedule changes, I think, certainly can be expected. But we will shortly post a public engagement schedule for planning purposes, and we expect to open the press room for the Annual Meetings around September 25th. And that press schedule will include our own preliminary events such as the launching of the annual IMF report, the World Economic Outlook briefing and so on.
For veteran Fund watchers, we are moving in the area of senior management. As I think you all know, there have been some changes, and we're moving from names that are hard to spell to names that are hard to pronounce.
MR. DAWSON: September 1st will mark the official start of our new First Deputy Managing Director, Anne Krueger. That's correct, "Kree-ger" not "Krew-ger", as many of us might say or might have said. Ms. Krueger will be getting to know you better over the next few months, but at this point I expect that her first formal press briefing will be on September the 19th.
I'd be happy now to take any questions, if you have any. But as usual, please identify yourselves and your organization.
QUESTION: Could you confirm that Argentina is negotiating new funds?
MR. DAWSON: I noticed in our own little morning news this morning, that according to La Nacion "Tom Dawson will admit today" - `Admit,' that's the word' - "that Argentina is in fact negotiating new funding."
I don't think it's much of an admission. The government has in fact indicated for some period of time that it is seeking additional support from the Fund, and that Daniel Marx has been here all week. We've been in contact over the last few weeks regarding the possible strengthening of the program. So I'm not sure that there's any news in that. Daniel is still here, the negotiations are continuing today; there will be meetings with him today. And I would say that I have nothing to differ from what he has been indicating to you all in his late-in-the-day briefings. We're having good talks, constructive, and I think it's fair to say that progress is being made.
If I could also perhaps take the opportunity to caution people, there's been quite a lot of speculation about sizes of packages, imminence of announcements and so on. As one of the spokespeople for the Argentine Ministry said yesterday, these estimates and predictions and projections are rather exaggerated. What is going on in Washington at this point are the negotiations between the Argentine team and the Fund about strengthening the program and whether that would involve additional Fund support, financial support.
QUESTION: Could you indicate what the impact of the curtailment of the September meeting will be? What kind of events will be lost?
MR. DAWSON: Well, there are some events or activities that have actually been canceled, such as the program of seminars. Other than that, the meetings that had been scheduled to take place, by and large, will be taking place.
I think it will be, obviously, a more compressed schedule, and I think it is also a fact that it will be somewhat more difficult for a number of our members to be able to have the sort of activity and presence that they might have been hoping to have.
These meetings are of course a major international economic financial event, and this is an opportunity, I would say one of the few opportunities, for the full membership of the Fund to be able to meet with the press, meet with the private sector, meet with other governments. And so, obviously, this is an inconvenience in that regard. But I think that by and large the activities, the necessary activities will take place, and I think that's where I would leave that.
QUESTION: Let's play the game of the opposite, like you have in the last briefing with Brazil. We ask something, you answer, and we assume the opposite. So should we not expect an agreement by the end of the day?
MR. DAWSON: Well, no. Actually, I would direct you back to the transcript of the last briefing, in which I did say, in fact, stay tuned, that things could change on very short notice, and indeed we did a few days later, when the Brazilian team was up here, and the announcement of an agreement on an extension and augmentation of the otherwise-to-expire Brazilian program was announced. So I think that was, in fact, foreshadowed in my comments previously, if not necessarily reported.
In terms of when one might expect a statement from the Fund about the status of the negotiations with the Argentine authorities, I would suggest that you keep in touch with the Press Office. I have no plans for an announcement, but if there is something that is concluded, I can assure you, we will let you know in a timely fashion.
In fact, I would add that we do try to let people know as soon as there are developments, and indeed that's one of the reasons why I caution you against over interpreting the market rumors. I think it's sort of a Gresham's Law of journalists, too many journalists chasing too little news.
QUESTION: Can you comment on the impact of the fact that the US is not inclined to support a dig-out of Argentina? And how does it impact the discussions?
MR. DAWSON: I don't think I can possibly comment on the impact of a fact when I don't know that it's a fact.
QUESTION: Since you've just given us, in fact, the first admission by the IMF that there's a negotiation going on -- because before, remember, you used to say it was just a review of the program and this is the first time you talk about reinforcing the program--
MR. DAWSON: Well, no. The Argentine authorities, sometime ago, have announced that this is their intention, and we have never--
QUESTION: Yes, but this is the first time you say there is -
MR. DAWSON: But we--
QUESTION: This is the first time you say so.
MR. DAWSON: We've never said that that was not what they were up -- in terms of their intentions.
QUESTION: Well, but you never said it, and you're saying it now. But anyway, my question is: What type of reinforcement are you looking at? There has been talk by Argentine authorities that it would be mainly reserved for the Central Bank, and that it would be a different type of package or arrangement, if you don't want to call it package. And -
MR. DAWSON: Well, no. As I said, we are discussing with the Argentines their thoughts about the strengthening of their program. My comments on the package were simply indicating that I think there's too much of a game that goes on in terms of expecting large amounts -- large packages with line items of numbers and so on.
In terms of the elements that the Argentines are discussing with us, we do have quite a bit of transparency here as you know, but we don't usually discuss what's going on in terms of the actual discussions. But obviously, they do involve a serious discussion of the Zero Deficit Law, which is something that the Fund has welcomed, and how it's going to be implemented, as well as other medium-term issues with regard to the prospects for the Argentine economy.
Again, when if we do have, something to report in terms of the status of the negotiations, we will be in touch with you all, today, over the weekend, or next week. I can't tell you at this point.
QUESTION: You just mentioned the weekend and next week. Do you believe that Mr. Marx will be in town and that talks will continue through that time, or can you just give us a rough estimate of how long you think they'll continue, and when they might conclude?
And you mentioned also that some of the Annual Meeting activities might have to be curtailed. Are you going to be discouraging government officials and Fund officials from participating in side meetings arranged by private banks outside the IMF and World Bank buildings and outside what might be a cordoned off area?
MR. DAWSON: No, we are not discouraging people from taking part in activities, to answer your latter question.
In terms of Daniel's plans, I'm not aware of Daniel's plans. Daniel is here. He will be here throughout the day, and I am sure he will, as he does normally, be letting you know about his plans later on.
We understand there is tremendous interest. This August turnout is most impressive here, and we will keep you informed in that regard. We do understand that you're interested.
QUESTION: Just for a change, a couple of questions about Turkey. First, when will the next IMF mission visit Turkey for the tenth review of the economic program?
And second, many people, including [inaudible] IMF officials have been saying that the Turkish program is being implemented well, but despite that, the international market's reaction is still bad. Interest rates and the [inaudible] rates are high. Do you think these threaten the Turkish program, and anything you would like to say about Turkey?
MR. DAWSON: Your assumption of our views was correct. We do think the program is being well implemented. There is clearly a problem of market confidence with Turkey, which we think the continued and sustained implementation should take care of.
In terms of a mission, we expect that a mission will visit Ankara in early September for discussions on the tenth review of the program. And assuming things go well in that, the Board Meeting for the tenth review would take place in late September or early October.
QUESTION: I have two question. The first is, what happened with the early disbursement for Argentina. And the second question is: The IMF is considering -- yes or no -- new money for Argentina right now?
MR. DAWSON: With regard to your first question, the current review, allowing the disbursement of about $1.2 billion, is among the issues being discussed with the Argentine team up here is. That is part of the discussions going on. And the possibility of additional financial support -- that is, an acceleration issue, if you want to think of it in those terms -- is also one of the items being discussed. I admit that.
QUESTION: Do you have a comment, does the Fund have an opinion about statements by Argentinean officials that have created expectations of a possible deal very soon?
Second, do you foresee the possibility of not having an announcement on Argentina in the next few weeks?
And third, about the meetings. Has the Fund or will the Fund suggest to the countries that send to send small delegations, and are you concerned about having them all inside a security perimeter, in hotels inside security perimeters?
MR. DAWSON: I think I answered that question earlier, we have not recommended that delegations curtail the size of the delegations. Delegations will make their own decisions in that regard.
I find it inconceivable that we won't have something to say in the next few weeks about Argentina, but I don't have any sense of timing. But as I say, if we have something to say later today or over the weekend, we will make sure that we inform you in a timely fashion, and if it goes on into next week as well.
Did I miss something else in your question?
QUESTION: About the statements made earlier in the week.
MR. DAWSON: Oh, yes. I mean, some of the market expectations that have built up there are rather hard to attribute, because quite often names are not associated with the statements. But I would note, as I think I did in the outset, without citing him by name, Horacio Liendo, an adviser to Minister Cavallo, did in fact caution publicly yesterday against the speculation about packages as being, quote, "a bit exaggerated." I might delete the word "a bit", but I think both Mr. Liendo, as well as Daniel Marx in his comments, have tried to present this, and I think have done so, in an appropriate fashion, which is that we are having discussions, but that this sort of numbers game is not appropriate or, quite frankly, helpful.
QUESTION: Going back to the fall meetings. Some of the protest groups are critical of the meetings for not allowing any of the public, or not allowing the meetings to be open. Would you consider allowing some members of the public to be there, and if not, why not?
MR. DAWSON: Well, that is in fact absolute nonsense. The meetings are quite open. We have had, I believe, 800 press accreditations issued in the first week since opening the registration, NGOs are invited, and have for a number of years, been attending the meetings. NGO press also attend the meetings. So I think there's not much in terms of the annual meetings that is not known. And there are, obviously, space constraints, but the number of visitors at these meetings traditionally has ranked in the thousands. And so I'm not quite sure, frankly, what that complaint is really about.
And the transcripts, speeches and so on are all made available on a timely fashion. I think, in fact, our record on transparency of these meetings of the Joint Fund/Bank meetings is quite a good one, in fact, exemplary, I think, for international meetings.
QUESTION: You say that there has been some progress in the talks between the IMF and Argentina. Nevertheless, when Mr. Marx arrived here, if I don't remember wrong, he mentioned that they would take a couple of days, you know, to finish the discussions. So apparently, you know, even when you say that there has been some progress, obviously these discussions have not been easy. So could you comment why it's taking so long this time to get an agreement, or what are the issues where both parties seem to be, you know, having common ground?
And also, there has been some calls by presidents from Latin America for the IMF to help Argentina. The last one came yesterday from Chile. Is the IMF considering those presidential statements?
MR. DAWSON: Well, obviously, we take note of all communications we receive, not only from the official sector, but private sector as well. And I'm not actually familiar with Daniel having said that he expected it to be two days. I think our experience in program situations that are difficult, complicated and serious, as this one clearly is, that things do quite often take longer than expected, and I think I would just note that Daniel, in his last couple days of briefings with you all at the end of the day, has used much the same language -- I might add, without coordination -- as I have in terms of the fact that we are in fact making progress.
So, yes, these things do take a while. It is a difficult situation. There are elements in Argentina that are new, as it were, in terms of the program. I cited the Zero Deficit Law as one that we are interested in understanding how it's going to be implemented over time, and I think we're satisfied with the explanations that we've been getting from the government, and the talks are in fact progressing. I am not, however, as I said, in a position to let you know when they are going to end, because no one is in that position.
QUESTION: News reports say that you will offer a Contingent Credit Line or CCL to Mexico. Do you confirm these reports?
MR. DAWSON: The Mexican Government has in fact made it known that they are interested in exploring the possibility of signing up for a CCL. But I don't believe there's any new news I that regard in recent weeks.
QUESTION: I was wondering if you could tell us whether the United States has signaled to the IMF at all whether it supports or whether it doesn't support extra funding for Argentina?
MR. DAWSON: I don't think it's appropriate for me to be commenting on communications of that sort. However, I would repeat what I indicated earlier in response to a question that stated it as a fact that the United States had indicated opposition. I indicated that that was not my understanding.
Our shareholders, our Executive Board, are in fact, as we are, looking at options and trying to figure out what the right course of action is. So in that regard, I think the report that came out last evening had absolutely no basis in truth.
QUESTION: Considering the incredible price tag for security for these meetings coming up -- the city has gone to the White House asking for approximately $38 million to provide security, and the police have to bring in 3,600 additional officers from outside the area to provide security -- is there or has there been any discussions in perhaps moving these meetings, not only for the upcoming meetings, and/or possibly in the future moving these meetings to a more secure location like a military base or even a cruise ship?
MR. DAWSON: As the Director of External Relations, I don't think I want to become the Director of Military Operations.
No is the simple answer to your question. You know, we are cognizant of the fact that the meetings are attracting this additional attention, if I can call it that, as well as the security considerations. But I think this is, for better or worse, a fact of life. This is not something that is unique to the Fund or the Bank. It's happened at the recent G7, G8 Summit. It happened at the recent EU meeting in Sweden I believe it was. It's happened--happens around the world.
And I think, as I say, for better or worse, this has become a fact of life, and I think, frankly, it would be quite inappropriate for an institution of the sort that the Fund and the Bank are to wall ourselves off. I mean, transparency, openness is very much our business.
QUESTION: The informal meetings have always been productive or important to your membership. In the past, how much time has been set aside during your meetings for these informal sessions in contrast to what is now available in this compressed two-day period?
MR. DAWSON: Well, because they are informal meetings, time is not set aside for them. Officials of member countries, private sector, public sector, NGOs -- we use the occasion of the annual meetings to meet with NGOs I would note - all those people find the time to do that. Because of the compression that some of these meetings may take place earlier, some meetings may take place later, some meetings may take place in different venues. So I think all of that may happen. It is in fact a regrettable effect of that, that this process of communication, which is an aspect of openness, for our members to be able to meet with the private sector, meet with other governments and so on, will be more difficult, but I am sure people will be able to make due. But there probably will be additional costs and maybe people may have to make a second trip to Washington later on.
QUESTION: Can you discuss the steps that led to the decision to cut the meetings short? For example, was this an idea that originated within the IMF or the World Bank, or was the request made, for example, from US Government officials, that for safety consideration that it might be a good idea to cut them shorter?
MR. DAWSON: The Fund and the Bank are located in Washington. The United States is our host in Washington, and we very much follow their lead and advice in terms of the conduct of the annual meetings. There were discussions between the Bank, the Fund, and the US authorities, led by the Treasury. And the conclusion was a common conclusion. There was not, as it were, dissent in that regard. And so I think I would leave it at that, but obviously, this is something where we very much follow the lead of those who are concerned with security, who are concerned with the potential disruption for the citizens of Washington, and of the community. And the decision was reached, taking all of that into account.
I should note, of course, as I'm sure that you are aware, the decision was--these have also been incremental decisions in a sense. We had already made a decision to curtail the meetings somewhat earlier this year. Then over the course of the last couple of weeks, the decision was made to concentrate the meetings, the actual annual meeting on one day, but with the preparatory IMFC and Development Committee meetings on the previous day.
QUESTION: It sounds like you're saying that the request was actually initiated by the US Treasury to shorten the meetings?
MR. DAWSON: I'm not quite sure I would call it a request, but -- because the discussions had been continuing over the last several months, but the security for the meetings is fundamentally a responsibility of the host government, so in that sense of the word, they have the call. The institutions could, I presume, choose to do otherwise, but this was not an issue where I think anyone would have any reason to take a different position than the view of the security officials.
QUESTION: I would like to jump to Uruguay. A special mission from the Uruguay Government is coming this weekend. Could you just give us some insight about this delegation?
MR. DAWSON: I was aware that in the case of Uruguay, as well as a number of other of the Latin American countries, that discussions are going on and that a group was coming up. I think it's entirely appropriate that they look at what their options are, because of the difficulties in their neighbor across the other side of the Rio Plata. I think it's prudent that they come up. But I don't have more details than that. I think it should not really be particularly a surprise, and it's my understanding that a number of other of the governments have been in touch with the Fund, and indeed there are several other delegations that will be coming up in the near future.
QUESTION: Moving to Ecuador. Do you think that Ecuador's Government failure to raise the VAT will affect the program with the IMF?
MR. DAWSON: My understanding is that the authorities are looking at alternatives to achieve the same fiscal targets, so I think that's the status of that. And I think we are looking forward to seeing how that process works out.
QUESTION: Some people have been saying that the IMF and the International Monetary and Financial Committee, should change approach to bailouts and go into a new framework, that of so-called constructive defaults. There are also reports that some people in the Bush administration think that, for example, in Argentina, default would be a more useful approach than a bailout. And my question regarding that is, whichever is the position that they may have, has the IMF Board discussed any of these proposals?
MR. DAWSON: I'm not familiar with that expression, `constructive default.' Certainly, there have been any number of ideas floated about how the Fund might change how it does business in terms of its lending activities, you know, without giving undue prominence to any individual group, but obviously, the Meltzer Committee had a number of ideas, some of which went along the lines of the contingent credit line, for example.
So, yes, we do look at any number of these ideas, and in fact, I think it would be fair to say we have already responded in terms of adaptations of Fund lending practices in terms of, for example, revising the contingent credit line, for example, the changing of the terms, both in terms of maturity and interest rate, on lending programs. So this is a continuing process, and we're always open to suggestions as to how we should do things better.
Perhaps an implication in your question had to do with the new US administration, and I think, as I have said on a number of other occasions, the relations with the new US administration have been very cordial and constructive, and I would note Secretary O'Neill, as well as the President, have been quite firm in indicating their support for the Fund and their support for the Fund in taking the lead in these very difficult country situations.
QUESTION: Again on Argentina. You mentioned that a number of options have been looked at in the negotiations. Is the restructuring of the debt one of them?
MR. DAWSON: Actually, I don't think I said that a number of options have been listed in the discussions, but, obviously, we are discussing any number of issues. Debt is an issue in Argentina. Everyone recognizes that. There was, of course, recently the mega swap, a couple months ago. And so debt is one of the issues, as it would be in any country program, but I would not highlight that one in particular.
QUESTION: [Inaudible] Indonesia?
MR. DAWSON: On Indonesia we have a mission that will be going to Indonesia I believe at the end of next week, and beyond that, I don't really have anything to say.
MR. DAWSON: No. This is an opportunity to talk with the new team.
Okay. I think that's it. I think we can lift the embargo at 20 minutes after 10:00. Thank you very much. Thank you.