Spring Meetings 2002
Argentina and the IMF
Nigeria and the IMF
Proposals for a Sovereign Debt Restructuring Mechanism (SDRM) -- A Factsheet
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Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development
Press Briefing with G-24 Ministers
Friday, April 19, 2002
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Mr. MALLAM ADAMU CIROMA, Minister of Finance of Nigeria, Chairman
Mr. ALAIN BIFANI, Director General, Ministry of Finance of Lebanon, First Vice Chairman
Mr. CONRAD ENILL, Minister in the Ministry of Finance of Trinidad and Tobago, Second Vice-Chairman
Mrs. T.A. IREMIREN, Permanent Secretary, Ministry of Finance of Nigeria, Chairman of the Deputies
MS. MBOTO FOUDA: Ladies and gentlemen, good afternoon.
I am Lucie Mboto Fouda from the External Relations Department of the International Monetary Fund, and I would like to welcome all of you to this press conference of the Chairman of the Intergovernmental Group of 24 on International Monetary Affairs and Development.
The First Vice Chairman, Mr. Alain Bifani, will join us later, and the ED for Lebanon is sitting on his behalf.
Now let me introduce the participants to this press conference. To my right is the Chairman of the G-24, Mr. Adamu Ciroma, who is Minister of Finance of Nigeria. To his right is Senator Conrad Enill, Minister in the Ministry of Finance in Trinidad and Tobago; and to my far left is Ms. Iremiran, who is Permanent Secretary of the Ministry of Finance of Nigeria, and she is sitting here as Chairman of the Deputies the G-24 Group.
As usual, I would like to ask you to identify yourself and our outlet before you ask your question. Now before we take questions in the room, I would like to ask the Chairman to offer a few opening remarks.
Mr. Chairman, you have the floor.
MR. CIROMA: Distinguished colleagues, great gentlemen of the press, I would like with your approval to handle this occasion somewhat unusually.
I believe that the Communiqué of the G-24 has already been circulated, and this is the basis for this press conference. I also have with me a statement which I could read if you insist, but which I don't need to read, because I believe it has been circulated, in which case, it may be better use of my time if I assume that you have the Communiqué of the G-24, and you have a copy of the statement which I intend to read here, and in not reading, it gives you more time to ask the questions that you really want to ask. That, I believe is a better use of our time than me going through this script.
If that is okay with you, I'll consider that I have read the speech and allow you to ask questions.
MS. MBOTO FOUDA: Thank you, Mr. Chairman.
QUESTION: According to your Communiqué, you say that "They stress the need to consider voluntary, country-specific, and market-based approaches to crisis resolution." So why does the G-24 Group think that the IMF proposal to restructuring of sovereign debt is not good, and what kind of changes or actions will the G-24 Group do in order to reverse or change those proposals by the IMF and also the U.S. Treasury?
MR. CIROMA: What we believe is that the restructuring has not yet been finalized, and that a lot of work is still to be done, and we are therefore not being that categorical about the position which we hold. We believe that all of us, working together, should produce a scheme which should cover all situations more effectively.
QUESTION: Referring to paragraph 24, where you ask for increasing the basic quotas of the members, can you give some details as to what exactly is the size of your demand, what is the position of the developing countries now, and what further representation do you want? What is the size of the representation that you are seeking?
MR. CIROMA: I believe the issue we have raised is that the SDR which will be created ought to be shared in the normal way, but that a developed country should agree to put their own shares in a fund whose proceeds can then be made available to the more needy developing countries.
My view is that these institutions could do a restructuring so that all members will feel sufficiently involved and that it is possible for some groups to relinquish some of their chairs to other groups, for example, the African group that together have only two chairs.
QUESTION: You are saying that the G-24 supports I think it was George Soros' proposal for this allocation of SDRs to go into a fund that would then be used for a kind of marketplace of development projects?
MR. CIROMA: Yes.
QUESTION: When you say "voluntary, country-specific, and market-based approach," that seems to me to be directly at odds with the IMF proposal that came out, the so-called Sovereign Debt Restructuring Mechanism (SDRM). Aren't you saying that you don't like that idea, or am I reading something wrong here?
MR. CIROMA: I think you are reading something wrong. We are not saying that any proposal so far is fine, but we believe that proposals at this stage can suffer greater discussion and that a solution which will be generally acceptable can evolve.
QUESTION: You are concerned about the depressed commodity prices, but you are not concerned about the high oil prices. Do you not see that high oil prices actually are a risk for the world economy?
MR. CIROMA: We have stated in this Communiqué that we are worried about the cost of oil price volatility for both consumers as well as the producers. So we have indicated our sufficient concern for this, just as much as we have made reference to depressed commodity prices that have affected very much adversely countries in the developing world, especially in certain cases, countries that are reaching the point of action as far as HIPC is concerned.
So we believe that if general prosperity is to be created, we have to have to be concerned for the interest of all sides, and that people who are doing well should be able to ensure that the interests of those who are in depressed situations are taken into consideration.
QUESTION: Sorry, just to follow up on the crisis prevention and resolution topic, what exactly do you mean by "consideration should be given to addressing the debt sustainability of middle-income, heavily-indebted countries"? Do you have any specific recommendation--and does that mean that these middle-income, heavily-indebted countries will not be covered by these proposals of restructuring of sovereign debt or even these market-based approaches to crisis resolution?
MR. CIROMA: So far, I have attempted to respond to the questions which have been asked, and I know that my colleagues are here, and they may also wish to respond to some of the questions.
So this particular question, I will ask any of them to respond.
MR. BIFANI: For the middle-income countries in fact, the Communiqué wanted to stress the importance of keeping an eye on what is going on and probably start searching for any solutions. It doesn't mean that we have necessarily something very specific in our minds for the time being, but the intention was to put on the track the beginning of reflection to really start taking care of this aspect, because until now, until this day, the problem of the debt was only limited to the low-income countries. So it is only the beginning of a process. We are trying to initiate something. There is nothing yet specific for that.
QUESTION: But Argentina wouldn't fall into that low-income country category?
MR. BIFANI: Yes, Argentina would fall into this indeed. But in fact, the Communiqué is not at this stage trying to give the beginning of an orientation. It is meant for the time being to try to push things toward having broader view on this issue.
QUESTION: Which countries do you think should have a smaller quota on the Board, or fewer seats around the Board?
MR. CIROMA: We believe that the African countries that own in fact only two chairs could do with additional chairs, and we believe that the European Union has already made a statement to the effect that they could be represented by one chair as effectively as by the eight which they have now. So there is this line of thinking which is emerging from all directions.
QUESTION: What about Saudi Arabia, which has one whole chair for itself?
MR. CIROMA: We are not proposing the splitting of chairs. We are proposing the allocation of certain chairs.
QUESTION: I just wanted to know whether the G-24 has a position on the grants-versus-loans debate, and also what the G-24 thinks about the U.S. directing its fresh assistance toward countries which it deems to have good governance.
MR. CIROMA: Well, I believe that generally, the issues of good governance and accountability are becoming acceptable the world over, and we believe that it is necessary that these moral issues are made generally applicable.
So the fact that the U.S. may be insisting on such matters is not a particular problem for other countries to apply. We believe that even without a desire of the U.S. to see its application, the other countries should want to apply because it is in their own interest to do so.
QUESTION: On the debate between whether the World Bank and IDA should be giving more grants as opposed to loans.
MR. CIROMA: Oh, yes, on this particular issue which would more or less affect the flow of funds to IDA, we believe that the longer-term interest of the recipients of the support of IDA is to have the present system maintained rather than using the resources available there as grants, because once the resources are used as grants, they could dry up, and the assistance which those countries enjoyed from IDA may then stop. This will not be in the interest of promoting development, especially in low-income countries.
QUESTION: James Wolfensohn, the President of the World Bank, suggested today, that the World Bank had been held back from consultation with civil society groups because, "democratic governments have been pushing the Bank not to consult with civil society groups". I was wondering if you could let us know what is your position on consultations with civil society groups and whether you approve or back any of their agenda, such as debt cancellation, more aid, more grants, and so forth.
MR. BIFANI: There is no doubt that it is very useful, of course, to have contact with the civil society groups, whether it is from the World Bank or any other institution that is involved in a country. And there is no doubt also that it is very important in the long run to make sure that one that is involved in a country is having enough data and enough feedback from all the constitutional parts of the country.
So the position, I think, is very, very clear. If, in certain countries in specific places, the World Bank has found it difficult, we of course endorse the position that it should be given the possibility and opportunity to have the necessary contacts.
QUESTION: Has the G-24 taken a corporate position on Argentina? If not, how do you think, Mr. Chairman, the Argentina crisis will be solved?
MR. CIROMA: We believe that the Argentina crisis is receiving the attention of the IMF, and we await the final recommendations which will be made to deal with these issues, but we know that no definitive positions have yet been reached.
Our own position is to urge that solutions should be produced early so that they will be made applicable in dealing with the problems which have emerged in Argentina.
I don't know whether you may wish to add to what I have said.
MR. BIFANI: Not really, Mr. Chairman. I just wanted to refer to what Mr. Koehler said this morning when addressing the Group. He said, of course, that the Fund was willing to continue to back Argentina and to try to find solutions provided that the Fund feels "that enough is being done inside Argentina to make sure that efforts, internal efforts, are on the way to have one position and to show very clearly that there is an intention to get out of the crisis".
QUESTION: It is also a follow-up question on the debt restructuring mechanism.
A question for Mr. Bifani. You said that the G-24 wants to study and set in motion a more broad view on the debt restructuring mechanism. Could you be a little bit more specific? We know we have the proposal of Krueger, and we have the proposal of the U.S. What are the other options that could be thought about?
MR. BIFANI: As I said earlier, the G-24 is going to be trying to start, initiate, a process to be more specific. Precisely in the research program of the G-24, this was one of the items that was put forward, and in the coming months, we are expecting studies and papers to materialize.
IMF EXTERNAL RELATIONS DEPARTMENT