Transcript of a Press Briefing by Thomas C. Dawson, Director, External Relations Department, IMF
June 12, 2003Transcript of a Press Briefing by Thomas C. Dawson
Director, External Relations Department
International Monetary Fund
Thursday, June 12, 2003
View this press briefing using Media Player.
MR. DAWSON: Good afternoon, everyone. I am Tom Dawson, Director of External Relations at the Fund. Welcome to another of our regular press briefings.
As you know, the Managing Director is currently in Mexico City to participate in a ceremony marking Mexico's early repurchase of the Brady Bonds. I anticipate we will have statement and/or text available later on today. I have already seen some wire service coverage of his remarks. You can touch base with Media Relations if you have any additional questions.
Our First Deputy Managing Director Anne Krueger spoke this morning at a Bretton Woods Committee event here in Washington, and we will also advise when the text of her remarks is available.
In addition, to anticipate a question, I can confirm a report out of Buenos Aires that the Managing Director will be visiting Argentina the week after next. Pencil in June 23rd and 24th. I do not have further details at this point. I suspect the Argentine authorities may have some additional information.
I would be happy now I guess to open the floor to questions.
QUESTIONER: Could you explain in which steps are the second review of Argentina, and if it will be discussed by the Board?
MR. DAWSON: I do not have an announcement at this point, but it is on-track to be discussed by the Board. I do not have a date. When we have a date, we will let you know, but we are proceeding on that basis. I should add I anticipate it will be before the end of June.
QUESTIONER: Could you give us an update on the situation in terms of the World Bank and IMF investigation of reconstruction in Iraq? This morning Paul Bremer said that IMF officials had met with him in Baghdad. I just wonder if you can give us an update where we are on that, the IMF, and also how investigations are proceeding about the size of the Iraq external debt, which is something also that was mentioned by U.S. officials.
MR. DAWSON: I am not quite sure I would use the word "investigation," but certainly it is an issue that is being examined.
As I think people in this room know, the Fund does now have a fact-finding mission in Baghdad that has indeed been meeting with the Coalition Authorities as well as others. Parallel to that is the examination of the debt issue. That is being done by people by and large not within Iraq, in consultation with individual governments.
I do not really have a detailed report on the mission in part for practical reasons, in that they are not in regular touch with us given the conditions there. So I think I would just have to sort of pass. As I understand it, both efforts are proceeding with good cooperation, and when we do have information to report, which I would suspect would be after the return of the mission, in the next week or so, I think that might be a better time to ask. But we certainly are conducting fact finding, both within Iraq and outside, on the outside in particular, that that issue is being looked at in terms of approaching other potential--you know, people, institutions, countries we believe to be creditors.
QUESTIONER: Could you just comment a little about the timing [inaudible] make a report [inaudible]?
MR. DAWSON: I think it is--well, you said "make a report" and then said "public." Yes, I caught that distinction. I think it is a continuous process in terms of reporting. I suspect the next likely point is after the mission is back. I believe there are some meetings scheduled for later in this month with key actors. I suspect that the Board would be briefed. That is our normal procedure. And it is also our normal procedure, when the Board is briefed, that we, in some fashion, try to let the public know, through either this briefing or some other sort of briefing. So my guess would be in the next 10 days to 2 weeks to expect that we would have a little bit more information for you.
Whether we set it up as an independent briefing or not, I just say at this point.
QUESTIONER: I have a few questions about Turkey. During the fifth review talks in Ankara, has the Turkish Government assured you strongly about its determination to continue with the IMF program?
And secondly, what is the status of the fifth review now? Do you have a time frame in your mind about when the Board could meet for Turkey?
And thirdly, the Turkish lira has considerably appreciated in recent months with respect to major foreign currencies. Is this bad for the country? Thank you.
MR. DAWSON: I will fall back--on the latter question, I will fall back on my Brazilian answer, as--we will want to then turn it to another country perhaps, but I think first of all, we do not tend to make detailed comments about market developments, but I think in the context of Turkey as a program country, appreciation is certainly a vote by the market in terms of confidence.
As you know, the mission to conduct the fifth review concluded on May 20th. We did put out a press statement on the mission at that time, which indicated that the authorities need to take additional steps to keep the fiscal program on tack and to accelerate key structural reforms in order to complete the review. It certainly is my understanding that the authorities are committed to working with us in that regard.
Since the letter of intent has been finalized, it is too early therefore to say when there might be a Board meeting on the review, although I would repeat sort of as I did with the earlier question, once we have a sense of that, we will certainly let you know, even if it is before the time of a press conference.
QUESTIONER: I have questions about Georgia and Kazakhstan. The Georgian question is--obviously there has been a lot of speculation, even up to the point of the IMF actually dropping the program. So the question is, do you foresee the program with Georgia going on, the IMF program? And then we will come to Kazakhstan.
MR. DAWSON: I understand there is a possibility of a question about sunflower seeds too?
QUESTIONER: Flower seeds, no.
MR. DAWSON: No? Too bad. I am prepared for it this time.
First of all, no, we are not about to terminate the program in Georgia. We do expect that there will be a mission there. I believe it is June 24th we will be going, to conduct the annual Article IV consultation discussions and to try to complete the fifth--I am sorry, the third review under the PRGF arrangement.
To go beyond the narrow answer to your question, we are under the PRGF arrangement from January of 2001. The issues at this point have to deal with some of the macro performance targets and getting an understanding for a suitable framework for the year 2003. There is a fiscal gap that we have identified on the order of about 1-1/2 percent of GDP, and I think a revised 2003 budget needs to be developed. Energy sector issues are the centerpiece for the structural reform agenda, especially prospective for increasing utility collections which are significantly below target.
And of course the review, completion of the review is a prerequisite for the Paris Club to go forward in the fall.
QUESTIONER: But then since it is also a condition for the Paris Club, they are waiting for the money to come forward, and--
MR. DAWSON: The Paris Club is or the authorities are?
QUESTIONER: No, the authorities, to pay the Paris Club. And basically from your answer, I could not really understand whether the money is forthcoming.
MR. DAWSON: Well, we need to complete the review. The authorities' relationship with the Paris Club is they are supposed to maintain current payments with the Paris Club without regard to the present status of the Fund program. A successful review under the PRGF is what allows the Paris Club to go forward for additional relief. So I think that is the logical order in which to look at that.
QUESTIONER: One last thing about Georgia is, did they ask you for waivers, or is it done this way?
MR. DAWSON: I do not know the answer to that question, but it is not at all unusual in this kind of a context that if a program can be put back together, there would be revised targets, and that therefore does of necessity require waivers. I would steer you away from thinking that that is necessarily of itself a significant development.
QUESTIONER: All right. And in Kazakhstan of course the government just resigned because of land reform. So I understand you do not normally comment about personnel changes, but maybe you could comment on that.
MR. DAWSON: Only at the Fund.
QUESTIONER: Maybe you could comment on the underlying issue there.
MR. DAWSON: I mean the situation certainly is uncertain, but at this point we have no reason to expect that development will affect or have implications for Fund relations with Kazakhstan. And with regard to the issue which the dispute and the resignation took place, we are not in a position to comment on the farmland privatization proposal. We do not have enough information at this point.
No sunflowers. I am disappointed.
QUESTIONER: [Inaudible]. If you do not comment on personnel changes in Kazakhstan but in Fund, please tell us about new Mr. Rogoff. When will he be announced or she?
MR. DAWSON: The successor for Mr. Rogoff. Well, it apparently will not be Mr. Stern.
MR. DAWSON: And I do not know on that regard. The applications I believe have closed, but I do not have any update on that. Certainly in my own observations I have not noted potential candidates on the 12th floor, so I suspect we are a little way off.
QUESTIONER: When is he leaving?
MR. DAWSON: He does not leave till the Annual Meetings. He is still here, and he has got a fairly active, I think, speaking engagement and travel schedule. I believe he will be visiting Russia at one point in the near future, but he will be here through the annual meeting. So you will have a chance to wish him farewell at the WEO press conference in September.
QUESTIONER: Could you talk about the mission of Mr. Köhler in Argentina?
MR. DAWSON: Well, this is an opportunity for the Managing Director to meet with the new President. There is of course a new government. A number of figures in the government are well known, familiar and friendly with us, including in particular the Economy Minister, Mr. Lavagna. But it seems this is quite an appropriate time for us to make introductions to the new President, and that is indeed what the purpose of the visit is, and I think that is the explanation. I think the authorities have themselves indicated from the time even before the election, but certainly after the election, a desire to have a meeting at an early point with the Managing Director, and had issued an invitation which the Managing Director was pleased to accept.
QUESTIONER: Could you also tell us the status of the Argentina review, please?
MR. DAWSON: I touched on that earlier. You know, the mission is back. I do not have an announcement yet about a prospective Board date, but we expect we will have something for you shortly, and the expectation would be the Board meeting would probably be before the end of the month.
MR. DAWSON: I can't tell you whether it is before, during or after. It could be any of the three.
QUESTIONER: Does the visit of Mr. Köhler to Argentina means the beginning of the negotiation of the next program, and are there any possibilities to subscribe a short-term agreement, or instead extend the actual agreement?
MR. DAWSON: I do not think this is the point at which to speculate as to what those--what will happen. You have identified what some of the options will be, and it is certainly clear that those issues are on the table, but this is, as I say, a chance for the Managing Director to meet with the new President, his economic team, other elements in Argentine society as well, and so let us wait and see how the mission, or the visit develops. I think it is a little premature. The present program does continue on into the summer. There is actually indeed under the present arrangement, an additional review after the one that is about to be concluded, so that there is no sort of action forcing time at this point to require any particular result of the meetings. The meetings are I think a perfect opportunity for the two individuals to get together, get a sense of each other, and indeed, it is quite clear they will talk about the future relationship, but I would not expect that this will be, in that sense of the word, a negotiating meeting. I think this is going to be an opportunity to get together and for the two principals to develop a relationship. This is quite common when there is a new government with an existing program.
QUESTIONER: There is a debate in Argentina about if they are going to get extension of the agreement they have already with the IMF or if they are going to go for a long-term agreement. There was this meeting in morning with Lavagna and Taylor. and they said that one of the main conversations they had, it was actually if there are going to be long-term agreement or an extension. So what does the IMF prefer?
MR. DAWSON: This is one of the issues that will be discussed, and it is not a point in which we can have a preference. We need to talk to the authorities. Fundamentally, it is for the authorities, to present their views, their position, and then we see how we can support them. That is the nature of what our relationship. So it is premature at the least, but it may almost be wrong to ask us which our preference is because we need to have a sense from the authorities of what their preferences are for us to figure out what we think is the best way to go. That is the way the relationship should be. It is not a case of we having a preference and then trying to impose it on them. We try to see if we can work with their preferences.
QUESTIONER: You said there is no action forcing date, I think, was your words.
MR. DAWSON: Around the time of this mission.
QUESTIONER: Okay. Around the time of this mission. This current arrangement does expire at the end of August, and ostensibly it should be replaced by something, something new. This arrangement grew out of protracted discussions lasting several months, requiring several months. Is not there a sense of urgency to at least put in place some sort of program, given that this, the current program expires August 31st? And to carry that further, do you expect a certain date by which you will begin discussions on a new extension or a new program?
MR. DAWSON: Well, our relationship with Argentina and working with them to assist them, is indeed, as you said, a matter of high priority for us, and indeed, you are right about the expiration of the agreement, but we are talking about a visit toward the end of June. And as I indicated we actually have an additional review schedule, still under the present agreement. So that, yes, I think you can expect quite an active level of engagement between the Argentine authorities and us in the period between now and August. Yes, in that sense your premise and your question is well founded.
But I do not think that there is a particular date at this point. I think we will be more or less continuously involved with them.
QUESTIONER: So just to clarify, there is no target date for the beginning of discussions on a new program that would go on after August 31st?
MR. DAWSON: No, no, that is correct.
QUESTIONER: So can you confirm that a short-term agreement for Argentina is on the table?
MR. DAWSON: I cannot. There is--
QUESTIONER: You said that it was one in several options--
MR. DAWSON: Either everything is on the table if you mean are we considering everything, or nothing is on the table, have we decided anything. So take your choice.
QUESTIONER: You are considering--it is--you are considering--
MR. DAWSON: No. The formulation begs an answer that is not I think appropriate. There are lots of options out there. On the table--and are you talking about exclusively on the table?
QUESTIONER: No, not exclusively.
MR. DAWSON: There are lots of options on the table.
QUESTIONER: Including a short-term agreement?
MR. DAWSON: I mean if that is the desire of the authorities, that is something that will be considered. But on the table, as I said, we are not proposing. We are in a listening mode with the authorities to see what they are interested in. As I think one of the questioners indicated, there is an active discussion within Argentina about the appropriate way to go. That is a very appropriate discussion, and we look forward to engaging with the authorities and seeing the best way to go forward. And there are lots of options.
It reminds me of a debate many years ago, or an issue between the United States and Panama, when someone said, "Do you want to table the agreement?" And "table" in American English means to put it aside, and "table" in English English means to discuss it. So that is why I have a little trouble with table.
QUESTIONER: Can I just ask--can I ask a follow up on that, please?
MR. DAWSON: Probably not successfully, but go ahead.
QUESTIONER: Last time you were here you listed several conditions Argentina needs to do before even completing the next review. Even this morning--
MR. DAWSON: I do not believe that is actually quite what I did. I indicated a number of issues that were on the table. I explicitly indicated that none of them were deal breakers, so I did not list issues that needed to be resolved. I listed a number of issues, and I said there was no single issue that was a deal breaker.
QUESTIONER: So are there going to be no waivers in this next review of any condition?
MR. DAWSON: Wait till it comes out. As I said in answer to the earlier question, waivers are commonplace because there is a long time between the setting of the targets and the accomplishment. Waivers can indicate over performance. They can indicate problems of implementation. They can indicate changed circumstances. They can indicate lots of things. So the fact whether there will be or not waivers, I actually do not know at the moment. If there are, I do not think it itself is a particular signal. You have to look at what the actual agreement contains, and that will be clear by the time of the Board meeting, and we can rely on the Argentine press being active in terms of explaining what is in the agreement, and then ultimately we will have published publications and statements from the Fund as well.
QUESTIONER: Does the IMF have any comment on the fact that the Finance Minister of Colombia stepped down last week, and how will that affect the IMF's relationship with the country?
MR. DAWSON: Well, what I read the minister as saying is that he was 60-years-old and it was time to move on and to have his deputy take over. And I am only 55, but I can kind of sympathize with some of those thoughts. So it is my understanding that I think that perhaps he had, as it were, in a way, come as a matter of public service, come back to duty. I believe, unless I am mistaken, I believe he was in fact the minister many, many years ago, and this was sort of a second time back.
He is an individual with whom I have a very friendly and warm relationship, regard him highly, and I think this was just a case of his having accomplished what he set out to do and turning it over to his deputy.
QUESTIONER: Any comment on the replacement and the discussions? There is an IMF program, is that right?
MR. DAWSON: Yes, yes. We just recently, yesterday, put out a press release about Colombia's review. It came out last night, so you can take a look at it--and as far as the deputy goes, I believe I have met him, but I do not have anything to report at this point.
QUESTIONER: Have you sent a mission to the Dominican Republic?
MR. DAWSON: We do have a mission that will be traveling shortly to the Dominican Republic at the request of the authorities to continue discussions on economic policy, so there is a mission about to go, and we will keep you informed on its progress.
QUESTIONER: Are they going to be discussing a loan program?
MR. DAWSON: I think it is a bit early to say that, but clearly there are some issues there, and needs, and the mission is going in response to the authorities, and so I am sure the authorities will indicate what their interests are, but I am not steering you away from that interpretation. It is just that at this point the mission is going down to hear what they have to say.
QUESTIONER: The Paris Club chief said the other day that they expect, I think by the end of June or in July I think he said, to have some figures on the Iraqi debt. So is this the kind of time frame that you also have? Do you want to synchronize efforts with them?
MR. DAWSON: Well, we certainly are working with the Paris Club. I think our particular task is dealing with non-Paris Club creditors. And I am not familiar with what his statement was, but that is a time frame that I do expect that there is going to be information that will be shared with the relevant parties, and the time I had in my mind was the end of this month, the beginning of next month. So it sounds coordinated, and it is my understanding that they are in touch with each other.
QUESTIONER: Do you expect the Turkish review to be before the end of this month?
MR. DAWSON: I cannot say at this point, I will just stick with where I was earlier. I do not know.
Just to remind people, by the way, we will be having the Board recess the first two weeks of August. We will give you a sense of what the briefings will be between now and then. Besides the Managing Director being in Mexico City today and then in Argentina the week after next, there is some other travel coming up as well. So we will let you know what that is and also coordinate it for these press briefings.
Thank you very much.