Argentina and the IMF
Indonesia and the IMF
Turkey and the IMF
República Bolivariana de Venezuela and the IMF
Proposals for a Sovereign Debt Restructuring Mechanism (SDRM) -- A Factsheet
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Transcript of a Press Briefing|
by Thomas C. Dawson
External Relations Department
International Monetary Fund
Friday, April 12, 2002
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MR. DAWSON: Good morning, everyone. I'm Tom Dawson, Director of External Relations at the IMF, and this is another of our regular press briefings. As usual, the briefing is embargoed until about 15 minutes after conclusion. We'll set the precise time at that point.
Though you know I would never, ever limit questions, or answers, at my briefings, we did call this briefing primarily to assist you in the preparation of stories ahead of the April 20-21 meetings of the IMFC, International Monetary and Financial Committee, and the Development Committee here in Washington.
Media Relations briefed television networks on logistical matters this morning, and any logistical questions by the print media should be directed to our Media Relations Division. Logistics are their job, and I don't think I can help much on that.
The tentative schedule of events is posted on our website, and you should refer regularly to the information there as well.
Before taking questions, let me briefly review the very busy week that we have ahead.
First, I would note the luncheon address at approximately 1:00 p.m. of the Managing Director on April 17th at the National Press Club here in Washington. He will take questions after the address, and this will be an opportunity for journalists attending the Spring Meetings to gain insights into some of the key issues facing the IMF and economic policymakers at this point.
The World Economic Outlook will be released on Thursday, April 18th. Ken Rogoff, the Fund's Economic Counselor, will brief the press on the Outlook on Thursday morning. We've already circulated a note on embargoed access to the WEO.
Now let me turn to the broad agenda of the April 20 meeting of the International Monetary and Financial Committee, which is, of course, the policy guiding body of the IMF.
The IMFC will start meeting at the lunch hour on Saturday, and I expect we will conclude in the early evening with a press conference by Managing Director Kohler and Gordon Brown, Chairman of the IMFC and Chancellor of the Exchequer. They will review the IMFC Communiqué and take questions on the deliberations of the panel.
Broadly speaking, there will be discussions of the World Economic Outlook, a range of crisis prevention issues, and ongoing efforts to address poverty in the world's poorest countries.
In the context of looking at the array of poverty and development issues facing the Fund, it's anticipated that there will be a joint dinner of the IMFC and the Development Committee. The Development Committee, which meets on Sunday, April 21st, is the joint committee of the institutions and provides guidance to the Fund and the Bank on key development issues, and I believe the World Bank's External Relations Unit can offer guidance on Development Committee questions.
The joint dinner of the IMFC and the Development Committee is an innovation that was introduced at the last meetings of the committees last November in Ottawa. The weekend meetings overall are part of the ongoing efforts of the Fund and the Bank to consult with our 183 member countries on issues of interest and to take stock of evolving operational matters.
Now let me take your questions. And proper decorum, identifying yourself and your institution. Thank you.
QUESTION: Do you expect any protests?
MR. DAWSON: Certainly given the events at meetings over the last couple of years, it would be prudent for us to be aware of the possibility and to take precautions. On the other hand, I think in terms of what we understand at the moment, while there may be some demonstrations planned in the Washington area, the days around, before, and after these meetings, we do not have a sense of the level of interest and activity regarding the institutions themselves.
On the other hand, of course, as I say, it would only be prudent for us to take appropriate precautions. But, frankly speaking, we do not expect anything like the events of two years ago, and probably not even like last year. I'm talking about the two Spring Meetings.
QUESTION: Is SDRM on the agenda of the meeting? And if not, why?
MR. DAWSON: SDRM, well, crisis resolution is indeed on the agenda of the meetings, and the SDRM is indeed one of the aspects, elements of the crisis resolution effort. So yes, indeed, it is certain to be a discussion item in the meetings, and we would expect to get some guidance from the Committee on how to proceed with the issue of sovereign debt restructuring.
QUESTION: A few weeks ago, you said that it was not planned that the SDRM would be at the agenda, so why suddenly does it--
MR. DAWSON: No, I don't think that's quite what I intended to say. I don't expect decisions to be made on it. That is, I believe, what I was indicating previously. Certainly I expected that it would be discussed. I continue to expect it will be discussed, and I do expect that we will get guidance on how to further proceed. It is certainly an item that has attracted a great deal of interest. I would just note, without going into detail so don't try to follow up too much. I was yesterday at a meeting of the IMFC Deputies, who meet 10 days or so before each meeting of the IMFC itself, and it was an item of discussion then in preparation for the meetings for this--for next weekend.
QUESTION: A follow-up on that. What would the couple of areas be that there are expected to be decisions and, you know, agreements, to sort of modify the Fund or, you know, change direction or modify direction? If you could sort of pinpoint one or two of them so that we can [inaudible] what the focal point is going to be. And then also if you could update us on the talks about this new loan with Indonesia.
MR. DAWSON: I'm sorry, what--
MR. DAWSON: I'm not sure I am--we'll get to Indonesia.
In terms of what to expect out of the meetings, I mean, change in the institutions is, of course, our nature. So, I mean, we'll be reviewing what we've been doing the last few years in crisis prevention, and I think as we look at the record in terms of the recent difficulties in emerging markets, the lack of contagion and so on, that is something we took--we continue to take some comfort in. But we know that we have more work to do in trying to, you know, pursue our agenda on crisis prevention. And in terms of the crisis resolution, it is our belief, as presented by First Deputy Managing Director Ms. Krueger that in dealing with sovereign debt restructuring issues, there's sort of a hole in the system where we think we need additional work, and we believe an additional mechanism.
I think the Committee will be looking at that and, as I say, will come to give us, I think, some guidance as to how to proceed on that.
We certainly are meeting at a time, compared to, say, last November, when we had the meetings, where the prospects for the global economy seem, as I think is generally known, don't seem as worrisome as they did last fall. So, as a consequence, I think people will take stock of that and see what sort of guidance both to the institution and for our members in terms of the appropriate policies to be following at this point.
I should also note I skipped over one of the agenda items; also we'll be discussing anti-money laundering and combating the financing of terrorism, which will also be an item on the agenda. And I think you can expect the IMFC to be expressing its view on that, as they did at the meetings last November in Ottawa. But in terms of a proposal for, radical reform of the institution, I think that's not the nature of these meetings. The reality is we are a changing institution, and we are constantly evolving, and this is the semi-annual opportunity of our membership at the policy level to give us sort of a report card and some direction as to where they want us to go next.
QUESTION: [inaudible] next tranche [inaudible] negotiating a [inaudible] loan for Indonesia in addition to the one you already have?
MR. DAWSON: I will confess--
QUESTION: [inaudible] the Paris Club [inaudible] today so--
MR. DAWSON: That's right, but I'm not sure I have any more.
We'll get back to you. I'm not sure I have any more on that.
QUESTION: Your reaction to the Paris Club [inaudible]--
MR. DAWSON: That's a logical follow-through to the conclusion of, you know, the review. Not to denigrate our friends in the Paris Club. The Paris Club agreements tend to be a lagging indicator of something the Fund has already done.
QUESTION: Could you tell us about, you know, if [inaudible] problems with some manifestation like other previous years? And what is the security measure that authorities in D.C. are taking?
MR. DAWSON: Well, certainly I don't think you could expect us to go into the detail on security measures that will be taken. But I do think that the indications are that while there are a number of demonstrations planned, it would certainly appear that the bulk of the traffic discussing the demonstrations does not actually involve the Fund or the Bank. It tends to be other issues, anti-war issues, and so on.
So in that sense, we have an expectation of a lower level of activity, but we certainly--you will see, if you wanted to compare this to the meetings three years ago, I think you would see heightened security, but I don't think you would see security of the nature that we had two years ago or maybe even last year.
QUESTION: It seems the Board will meet on Turkey on Monday.
MR. DAWSON: Correct.
QUESTION: Anything you'd like to say about that, and about last year's negative growth rate [inaudible] minus 9.4, which is worse than expected? And is this a reason to revise this target?
MR. DAWSON: First of all, you are correct that the Board will be meeting--will be meeting on Monday for the review of the Turkish program. Broadly speaking, the Turkish program in terms of the performance objectives criteria appears to have gone really rather well. I think that's been evidence supported by declines in interest rates, relative strength of the Turkish currency and so on. By those measures, the program remains on track. The government has followed through with the actions that were contemplated in the program.
You are correct also that the growth figures for the year 2001 were disappointing. They were lower than expected, and this is indeed something that we hope that, as confidence returns to the economy, that growth will pick up. So, indeed, you know, that is an area of concern, but I think we do recognize and commend the Turkish authorities' commitment and perseverance in implementing the program, and we think that has been the appropriate way for them to go.
QUESTION: Are you going to revise the targets?
MR. DAWSON: We will be discussing the targets this year. I believe in some areas it's still only preliminary data for the end of last year, so I think that some of that will have to be taken into account at the next review. But I'm not aware of any changes in the targets. But, frankly, I have not looked--I didn't look at the program paper today. I did go through the review of the work to date, and we'll have a release, of course, on late Monday or early Tuesday. I think it's the last of the Board items, so it may be a late issue in the day.
QUESTION: Mike Mussa, former chief economist here, has written a report for a think tank in town in which he's somewhat critical of the IMF's handling of the Argentine case, especially of the decision in August to extend money when he felt that that was a mistake.
Do you have any reaction to that, that assessment that he's made? And, also, can you--will Argentina's situation be discussed in these meetings?
MR. DAWSON: With regard to Mike's paper, actually I did have the opportunity on the plane ride yesterday to read it in its entirety. And I think I would suggest that people read it in its entirety. I mean, I think it has a lot of interesting reading, a lot of views. He is, as I think you all know, someone who's quite frank in his opinions, and I think from his point of view and with his views, this is quite a reasoned document. And he is certainly entitled to his opinions with regard to the August 2001 tranche, which, as you note, he did not support, or with regard to the decision to support Argentina at the beginning of 2001, which he did support.
So I think that there's a lot to be read into that paper. He also deals with a number of the criticisms of the Fund's approach to Argentina, gives a context with his point of view as to how that could be--should be viewed. And I think it's another example of sort of interesting commentary that we certainly will reflect on.
Without revealing too many secrets, I would note that, you know--I mean, first of all, as I understood it, this paper was under preparation for some time, and Mike indeed was one of the outside experts that we consulted with a couple of weeks ago when we had the session with academics from various parts of the world to discuss options in Argentina.
So I would view his commentary as part of the range of responsible opinion, and we do not ever turn down advice, whether it's solicited or unsolicited.
QUESTION: [inaudible question related to Argentina].
MR. DAWSON: I'm absolutely certain it will be not only a discussion in the corridor sense of the word but a discussion among Ministers. Indeed, the scenario going on in terms of the mission presently in Argentina was it has been--and we've noted this from the beginning--anticipated that the mission would return sometime shortly before the Spring Meetings, which would allow the Fund, management, staff, as well as our members, to use the opportunity of the Spring Meetings to discuss the situation. So it will be there.
It is not an agenda item in the context of `agenda item 3(c)' or something like that, but it is certainly going to be discussed.
QUESTION: Is it--I mean, there has been some hope that during the course of the meetings that there will be a statement by the Managing Director on Argentina that would at least leave the impression of whether a deal could be reached soon, maybe not details, maybe not, you know, whether there would be money attached or whatever, but just to say, you know, with the mission back we believe we can support a program. Is that a possibility over the weekend?
MR. DAWSON: I mean, first, you premised that by saying there's been some discussion of that. I'm not aware of such discussion.
Now, on the other hand, I think I would find it rather difficult to imagine that at the wrap-up press conference of the IMFC that one of you enterprising journalists will not ask a question that would allow an answer to come forward along those lines. But it has not been part of a scenario that there was a plan to make a particular announcement at that time on Argentina, but it's perfectly reasonable to expect that in the context of the meetings it will, as I said earlier to Marty's question, not only come up but that, you know, we will give some sense of where we stand.
But to repeat from what I had said at previous briefings, the anticipation had been, assuming things go well, that sometime after the Spring Meetings an additional--a follow-on mission could go down. That would be to take it to the next step. Now, whether that is heralded by a formal announcement or not, we're just simply not in a position to say.
QUESTION: Any comment on the situation in Japan?
MR. DAWSON: I don't think I have an update at this point. I think it's appropriate to ask that question, again, at perhaps the National Press Club or next Thursday when Ken Rogoff has his briefing. But I think I don't have new developments on that, and I think that's the kind of a question that I think is better off taken next week.
QUESTION: Does the IMF have any concern about the current events in Venezuela? And what are--or what is the status of the IMF-Venezuela relationship?
MR. DAWSON: Obviously, we are concerned about the human developments down there, the loss of life and so on. In terms of the Fund's relations with Venezuela, in recent time they mainly involve surveillance of economic developments. There is not a Fund-supported program.
Fund missions visited Caracas in December of last year, and, in fact, there's a small team there at the moment to conduct reviews with the authorities that are carried on on an annual basis. And we would hope that these discussions could continue with the new administration, and we stand ready to assist the new administration in whatever manner they find suitable.
QUESTION: I'm just interested in when you said take it to the next level with Argentina, does that mean to sign an agreement to--
MR. DAWSON: No, no. I was quite clear in my previous statements. The next level would be a further mission to possibly start working on an actual letter of intent and that--I mean, we are sticking to the precise scenario that we had outlined several weeks ago, that this mission, which is a negotiating mission, would then break and come back and there would be consultations in a number of directions and levels at the time of the Spring Meetings, and then assuming things went well, the next step, the next level would be another negotiating mission that hopefully--hopefully; there's nothing guaranteed on this--that would be able to start negotiating an actual draft letter of intent. And this is exactly the same scenario that the authorities have been--or "calendar" is the word they use--have been describing.
I would, by the way, direct to you the attention, the statement that Anoop Singh put out--was it Wednesday night?--Wednesday night, which may have missed some of you because it was rather late in the day.
QUESTION: Is there a time frame for this negotiation mission which will take off after the Spring Meeting?
MR. DAWSON: Which could take off, if all things went well, shortly after the Spring Meetings. That's as precise a time frame as we could have.
I think maybe just a couple questions, a couple more.
QUESTION: On the protest, the meetings have been compressed for the first time. You're meeting on the same day at the G-7, G-8 sessions, as opposed to the day before. Was there any thought that this--of expanding it out, since you're not expecting that much of a protest presence here, to go back to that, or was that just--
MR. DAWSON: No, I'm not aware--there has been, I think--actually, there may be some benefit from the condensed time frame to, you know, getting focused on the discussions, focusing on discussing what is truly important, and maybe even shortening the length of some of the interventions.
QUESTION: Could you tell us any comments about the mission in Buenos Aires, and if there are problems?
MR. DAWSON: No, I think we should just leave it with the statement that Anoop Singh put out on Wednesday, Wednesday evening, and I think we would expect that it is likely that there would also be a concluding mission statement from Mr. Singh before he leaves Argentina, which, according to our thoughts, would be sometime around the middle of next week. But I think we'd just leave it at that.
Thank you very much. We'll lift the embargo at 10 minutes after 3:00. Thank you.
IMF EXTERNAL RELATIONS DEPARTMENT