Intergovernmental Group of Twenty-Four
on International Monetary Affairs and Development
November 14, 2001
Nigeria and the IMF
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G-24 Press Conference Transcript
November 14, 2001 7:00 P.M.
Martins Kuye, Chairman of the Ministers of the Group of 24, Minister of State for Finance for Nigeria
Alain Bifani, First Vice-Chairman
Sheila Osuna, Second Vice-Chairman, Ministry of Finance, Trinidad and Tobago
Ernest C. Ebi, Chairman of the Deputies, Deputy Governor, Central Bank of Nigeria
The representative from the Liaison Office - I would like to welcome members of the press to the press conference of the G-24. I would like to introduce the chairman, Senator Martins-Kuye, minister of state for Finance for Nigeria. Our First Vice-Chair, Mr. Alain Bifani, to his right, our second vice-chair, Ms. Sheila Osuna, to his left, permanent secretary from the ministry of finance, Trinidad and Tobago, and on the extreme left from the chairman is the chairman of the Deputies, Mr. Ebi, deputy governor, central bank of Nigeria.
I think the chairman would like to make a short presentation after which the floor is open for your questions. I hope you already had the time to go through the communiqué.
I would ask you, please, to identify yourself and the press you represent.
THE CHAIRMAN - I would like to describe briefly the discussions of the ministers that took place today. As you are aware, there are a number of serious challenges facing the world economic community and the developing countries in particular. The communiqué before you addresses some of the most pressing matters facing developing countries. Ministers condemned the recent terrorist attacks of September 11 and stressed that the exceptional circumstances facing the international community requires even more strengthened cooperation and solidarity of global growth prospects. Ministers expressed concern about the sharp slowdown in activity, especially the synchronized nature of the downturn among the three major economies; that is, those of the United States of America, Germany, and Japan. These negative developments will severely affect developing countries through lower external demand for our products, declining commodity prices, lower tourist receipts, and a sharp fall in access to foreign direct investment and capital markets, along with much higher spreads in the cost of financing.
Ministers were very concerned that these developments could hurt living standards in our countries through higher unemployment and a drop in income growth.
Ministers were particularly concerned about the effects of the slowdown on the lower income countries, especially in Africa, where the recent progress could be derailed. Against this background, ministers stressed the critical importance of proactive policies in the advanced economies that could restart global growth.
The recent easing in monetary and fiscal policies were welcomed, but further actions are needed.
Ministers stressed the urgency of substantially improving the trading opportunities and capacities of developing countries in current trade negotiations. Better access for developing countries products must be secured in order to improve trading opportunities for developing countries.
Ministers had a discussion on the issue of combating money laundering and the financing of terrorism. They reaffirmed support for international efforts to combat the activities of the international financing system which hosts help the development prospects of developing countries. Ministers welcomed the recent United Nations resolutions and the standing of the FATF recommendations on anti-money laundering, and the combating of terrorism financing, but they underlined that developing countries must be better represented in the FATF and that the monitoring of the internationally agreed standards must be done in a uniform, cooperative and voluntary basis.
More technical assistance is needed to correct deficiencies in member's regulatory frameworks.
Ministers expressed support for the upcoming United Nations conference on financing for development which should lead to better international cooperation for development.
Ministers called for a number of specific actions on the part of the IMF and the World Bank. In particular, appropriate liquidity and financing must be made available to members in need. In this regard, ministers called for an early consideration of a general SDR allocation, and the capital increase for the World Bank. Also, more generous and speedy debt relief should be provided under the HIPC Initiative while the interim PRGF should be fully financed and possibly accelerated in order to provide sufficient resources to lower income countries.
QUESTION: You just talked about the need to strengthen global solidarity in the fight against money laundering, and I believe that this issue of money laundering has really a major impact for countries in Africa where we know that a lot of the systems have collapsed and there is no effective control over what's going on in terms of transactions. I wonder how Africa will play its role on this issue.
THE CHAIRMAN - I don't think it is completely correct that the financial and regulatory systems that are financing in Africa have completely collapsed to the point they cannot be in the mainstream of the effort toward combating money laundering. On the contrary, many African countries are initiating prudential reforms of the banking sector, and I think that Africa is no more seriously lagging behind in the matters of sound financial architecture. Many African countries are going to be in a position to be part of this global effort at generating the needed solidarity on money laundering activities because we know that it is illegal funds that actually finance terrorism and terrorist operations. I think many countries in Africa are in a good position to lend a helping hand in this matter.
QUESTION: You said ministers stressed that developing countries are the most severely affected by the serious slowdown. Can you quantify?
THE CHAIRMAN - I think it is a very well known fact that the economies of the G-24 countries are not very, very strong, in particular in Africa. They have been weak even before the terrorist attacks, but it is easy to appreciate that after the terrorist attacks, demand, which has weakened over several years, have further weakened, demand for products, further weakened. Can you even take the case of the richer countries, relatively richer countries among the African countries, take the case of oil-producing countries, after the attacks oil prices have plummeted. We're heading toward winter and oil prices are going down. The average basket price of OPEC crude is now around 19. Whereas, we have wanted it to be around 22 at least or even higher. That is for oil producing countries. When you take a look at those who are generating export produce and agricultural commodities, demand has been decreasing and the values and prices obtained for declining and diminishing exports are also getting less. So, when you take a look at transactional costs, these are also getting reduced. So, in several ways, the recent terrorist attacks have been compounding the slowing down in the economies of African countries, and also much of the G-24 countries.
QUESTION: As we all know, discussions are ongoing in Doha and Africa could have a comparative advantage in terms of agricultural commodities. But seeing the way the discussions are going and the hard positions taken for the developed countries who, for example, the EU has even said that they are not going to give any concessions in terms of reducing their subsidies to agriculture, and here we are talking about a global slowdown because of this terrorism and the effects this will have on the economies of the world, so I'm wondering about the sincerity of what you are saying, when we know that, just looking at what is going on there in the discussions in Doha, you can see the developed countries are not really sincere in terms of giving room to help develop African countries to have markets in their countries. I don't know where we are heading.
THE CHAIRMAN - At this point in time, we don't want to be too judgmental. We are watching events that are going on at the WTO talks. We are hoping that conclusions will be reached that will assist African countries and G-24 countries to gain market access. We hope that decisions will be taken that will make world trade truly free, and the one where developing countries and emerging markets will not be disadvantaged in terms of sending their products to developing countries, as well as receiving what they need from developed countries. But we are watching events and we haven't said much on the trade negotiations that are going on, because we do not want to preempt whatever decisions they are likely to reach. But, we are hoping that market access is for produce and products of developing countries, will be given the weighting they deserve in the ongoing talks.
QUESTION: Considering the situation, are you going to ask for more help or more funds from the IMF or the World Bank in the future?
THE CHAIRMAN - That is fairly obvious from the communiqué which you have gone through. We have made a case in the communiqué to the effect that many developing countries are experiencing reductions in their export earnings, demand for the products and produce they generate is decreasing. The prices they take for such produce and products, those prices are also diminishing. Consequently, they have access to less funds for development. Official ODA is decreasing, we know the level at which it was fixed by the United Nations, and we know many developing countries are still struggling to attain that level. We are very grateful to the few countries that have been able to reach that level or in fact surpass that level, but we know that many of the countries are giving ODA that is very much below the 0.7 percent of their GNP. When you put these together, you know that if poverty must be combated in the developing countries, if poverty must be alleviated, and if faster growth must become the norm, then we certainly will require additional financing, and that is why we talk about World Bank making greater liquidity available for the developing countries. So, we are certainly going to need more funds, and this we have made, very, very clear in your communiqué.