See Photos from the 2003 Annual Meetings Closing Press Conference

Annual Meetings 2003

Annual Meetings 2003: News Releases, Speeches, Committee Papers, Documents and Background Information

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United Arab Emirates and the IMF

Iraq and the IMF

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Heavily Indebted Poor Countries -- A Factsheet

The IMF and the Millennium Development Goals -- A Factsheet

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Closing Press Conference of the 2003 Annual Meetings of the Boards of Governors of the World Bank Group and International Monetary Fund in Dubai, United Arab Emirates
Dubai International Convention Centre
September 24, 2003

Participants:
Kaspar Villiger, Chairman of the Boards of Governors of Minister of Finance, Switzerland
James Wolfensohn, President of the World Bank Group
Horst Köhler, Managing Director of the International Monetary Fund
Gerald Rice, Director of Media Relations, World Bank Group

MR. RICE: Okay, thank you. We will begin. Welcome to this end of the annual meetings press conference. This press conference is on the record. The transcript will be available on the web immediately after the conference. We will begin with a short statement from the Chairman of the annual meetings, Mr. Kaspar Villiger. We will then have a short statement from Mr. Wolfensohn, the president of the World Bank, and some words from Mr. Köhler, the Managing Director of the IMF. Let me also remind you, there is a press reception at 1 p.m. Everyone is invited. It is going to be in the main press hall here, so the sooner we can finish up here, the sooner we get to the drinks and the food. Thanks very much. Mr. Chairman.

MR. VILLIGER: Ladies and gentlemen, I will be brief. This year again governors covered a wide field of issues, and it would be impossible to do justice to all of them. Two points stood out in the discussions over the two days. First we expressed our optimism that the global economy appears to be recovering. However, we underscored that this recovery remains fragile. Many uncertainties remain in order to enhance growth and to restore confidence policymakers must continue to forcefully pursue structural reforms and reduce fiscal imbalances. In this regard, many governors regretted the slow progress in reaching a conclusion of the Doha Round. A positive signal from Cancun could have played an important role in boosting confidence and raising global growth.

Second, we noted that progress toward achieving the Millennium Development Goals by 2015 needs to be accelerated. As discussed in Monterrey, developing countries need to redouble their efforts to promote good policies, while industrial countries need to increase ODA to finance growth, development, and poverty reduction. In this context, many of us stressed the importance of doing more to enhance the voice and participation of developing and transition countries in the decision making of the IMF and the World Bank. We emphasized that all of us, developed and developing countries alike, must continue to work together as partners if they are to continue making progress towards achieving the Millennium Development Goals. I would like to express on behalf of all governors our profound appreciation to the officials of the Fund and the Bank, and I would also like to warmly thank the authorities of Dubai and of the United Arab Emirates for hosting our meetings this year and for their very warm hospitality. I said, ladies and gentelemen, whenever Switzerland would have to organize such an event, we would ask the authorities of Dubai to send us their organization and planning staff, they did such excellent work. Thank you.

MR. WOLFENSOHN: Since the next meeting is in Washington, I want to get it in before you because certainly they did a wonderful job, and I want to express my thanks to them. I think this meeting was actually a really useful step forward in two respects. The first is I think that there was a greater sense of balance in the discussions between the developed and the developing countries. There was a sense of realism as we approached the issues of trade and aid, debt relief, approached the issues of each side of the bargain that was made in Monterrey, addressing the questions of what each side had to do, further discussions on the Rome agenda of doing it better together, and perhaps as important as anything, the ability for us to meet here in Dubai and project an image of this part of the world as not being just an area of conflict, but an area of growth and of great potential is something that I will remember and be happy to answer questions later after Mr. Kohler has spoken.

MR. KÖHLER: From my side, I would also like to underline that I go away from Dubai very encouraged. First, there was a clear view amongst governors that after all the global economy is on a good track of recovery.

Second, in my view, the discussions have underlined that there is a spirit of multilateral cooperation and working together which I feel is the most important thing at this time. And third, very concrete, not only that I very much liked and was comforted by the authorities' able organization, but I also do think that Dubai's and the United Arab Emirates' approach to policy and how they see things is encouraging because their approach is they rely on their own abilities, creativity, they are self-responsible, they are self-confident, they are outward looking. They have ideas, they look forward. This is what I do think is not only needed for the Arab world but for the whole world. So Dubai is the direction to move forward, and this is encouraging. Thank you.

MR. RICE: First question down in the front.

QUESTION: I am from Emirates news agency. I will ask in Arabic, please. [Through translator] What are the most important results of the Bank and Fund 2003 meetings and what has been the points of agreement on ODA to developing countries? Thank you.

MR. WOLFENSOHN: I think Mr. Köhler and I gave a quick answer on that before. First, that the economy, which is central to any issue of development, appears to be stronger, and that was the general opinion, and secondly, what came out on ODA was an extremely valuable discussion on the linkage between trade and aid and debt forgiveness, and I believe a recognition that we need to address all these questions with urgency and probably with greater scale than we have up to now. I think this was an advance in the discussions, and I think we picked up from Cancun the fact that the voices of the developing and the developed world need to be more equal.

MR. KÖHLER: I would like to add to this that Jim Wolfensohn made clear in his speech and in his contributions that there is a need for more financing for development, and I join him, but I also would like to add that even more important than money is the recognition that we are all sitting in one boat, poor countries, rich countries, emerging market countries. There is no longer a way forward for a better world with peace and prosperity if there is not a recognition that this is an interdependent world, and therefore multilateral cooperation, and a better balance in the world, is needed for the way forward, and the outcome of this meeting is there was a strong encouragement for this approach.

MR. RICE: Lady down in front. Right here.

QUESTION: I would like to know if there has been any progress and if you see any chance of succeeding in the proposals for changing the rights of vote of developing countries in the IMF and World Bank. Thank you.

MR. KÖHLER: Well, there was a discussion, and many governors have made clear that there is a need for more voice and better representation for developing countries, and I have said in my concluding remarks that I very much hope that shareholders from the advanced countries have listened to their colleagues from the developing countries so that they can reflect on the position. I do think that a consensus is possible for all of us, including an increase in basic voting rights for developing countries.

MR. WOLFENSOHN: I agree with my friend.

MR. RICE: The gentleman way at the back.

QUESTION: This conference, one of the talking points if not the talking point of this conference has been the future of Iraq, and I know you have been quizzed extensively about how much the World Bank or the IMF can give to Iraq to finance reconstruction, so I am not going to ask that question, but my question is this, since you cannot give any facts, what can you say, however, what can the World Bank in particular say now to the Iraqi people that will give them hope that their life in 2004 is going to be a lot better than it has been in 2003?

MR. WOLFENSOHN: Well, I can only speak for the Bank, and we have been very clear on where we stand. We are working today, in fact I have a meeting after this with representatives of the Iraqi people to discuss the needs assessment. We have made very clear that we are in for the long haul in terms of reconstruction. We have made very clear that we will participate in any of the preliminary meetings, including the one in October, and that we look forward, as we have done in many other instances of post-conflict reconstruction to having a full team working as quickly as possible with the Iraqi people. The thing that we do not yet have are the numbers, and the reason for that is that we have had to work very quickly, and we have never promised the numbers until we have discussed it with the people concerned, and so we are not prepared to put out numbers because you need to find out what the people who are going to live in Iraq think about them, and so there is no attempt to distort or to hide. It is just that we are going through a process, and we will have it done early in October.

MR. KÖHLER: I would like to add to this that I think the most important thing which has to happen in order to give the people of Iraq a positive looking forward is that the leaders of the world now really set aside their disputes over Iraq and form a consensus so that the international community can really unite and the World Bank and the IMF and others can go to Iraq and work together with the Iraqi people. This is what I would like and is now urgently needed.

MR. RICE: Lady right in the middle, right here.

QUESTION: [Through translator] There is a huge gap between the rich and poor countries as evidenced by the initiatives given by the two Bretton Woods Institutions that is HIPC and NEPAD, and there is a need for collective measures on the part of the developing countries whereas the developed countries have failed to raise their ODA, are there any attempts to revive the HIPC and NEPAD for the developing countries so as to enable the two Bretton Woods Institutions to succeed in this respect? Thank you very much indeed.

MR. WOLFENSOHN: The answer is yes, the donor countries have taken on board very much the issue of filling the needs of HIPC. They are open to review as to the level of contribution. We expect by the end of another 12 months to have brought all the countries that are at peace to completion point, and in relation to NEPAD, which is a separate issue, it really comes into the whole question of increasing particularly contributions to IDA, which is the development association, and I think that those negotiations will start shortly, and it is my hope that we will continue to have increases not only in amount but also in terms of grant funding.

MR. RICE: The gentleman in the front, third row.

QUESTION: Mr. Wolfensohn, your reluctance to put out World Bank numbers on Iraq is not shared obviously largely by your largest shareholder. Paul Bremer told Congress on Monday that the World Bank needs assessment, not the U.S. needs assessment but the World Bank needs assessment with 60 to 70 billion dollars over 45 years. Now they put words in the World Bank's mouth. Would you care to see whether they are accurate or whether indeed they are in the right ballpark?

MR. WOLFENSOHN: I have said that I think Mr. Taylor's estimates were somewhere in the ballpark. I happen to have with me the drafts together with a summary of the Bank which I am sure you would like to have but which I have said I am not prepared to give anybody because all it is is a summary of the preliminary estimates that have been put in that have not yet been discussed with our Iraqi friends, and so it really would be foolish of me to come out with estimates at this stage. I am not even sure of how Secretary Taylor defined the use of the 50 to 75 million. That can be part of three things. One is the ongoing needs for running the country. The second is the basic reconstruction needs, and the third are issues related to oil and security. So I repeat what I said the other day, it is too early to say we will be out within a week or ten days, we will have full disclosure, but it needs to be done at a time when everybody has been consulted. I think Mr. Taylor is absolutely entitled to put out his estimates, but they are not World Bank estimates.

MR. RICE: The gentleman with the yellow shirt, right here.

QUESTION: The debt of Iraq is estimated about $300 billion, which looks like impossible debt for the situation in Iraq. If there was any decision to forgive the debt of Iraq, who will be in charge or responsible for the commitments, financial commitments towards the World Bank and the International Monetary Fund, the American administration or the temporary government of Iraq which is not recognized yet from all the states of the world? Thank you.

MR. KÖHLER: Well, I cannot confirm the number of $300 billion debt. It may be a number comprising not only sovereign debt, possibly also private debt, and compensation for reparations of previous wars, but I cannot confirm this number, But it is clear that Iraq has a heavy debt and that debt relief must be and should be part of the comprehensive effort to help in the reconstruction.

MR. RICE: The gentleman over here.

QUESTION: Basically after the IMFC meeting there was an IMFC meeting actually gave direction to both the IMF Managing Director and the World Bank President to prepare a report on the Cancun development and the stakes in world. So I just wanted to check, would the report just focus on the states in world or would it also set specific milestones for developed countries on reduction of subsidies and for developing countries on reduction of tariffs?

MR. KÖHLER: Well, I indeed can confirm that one of the results of the IMFC discussion is that the governors asked us, the World Bank President and me, to prepare a letter to the negotiators and the heads of state which should make clear what is at stake at these negotiations, and this means that we need to just put together again the numbers and the arguments why it is so important that this trade round, multilateral trade round is concluded successfully, and the main argument is that trade is the most powerful vehicle for growth, and we need growth in particular for the developing countries but also for the rest of the world. And there was a second argument put forward not least by Jim Wolfensohn that we need to see a positive outcome of these trade negotiations also in the context of broader issues of development and peace on this world, that if there is no positive outcome we will not get the strong growth numbers in poor countries, and this will mean we will not achieve the Millennium Development Goals. We will still have a breeding ground for terrorism and all of this, so the governors asked us to bring together in a readable form all the necessary arguments which should make clear to them that it is now time to define political will to overcome the blockages.

MR. RICE: The gentleman here.

QUESTION: The G-7 statement on currencies talked about flexibility. It was striking that in your address yesterday you used the phrase more flexibility where appropriate. Does that stem from a recognition on your part that actually given the way that the currency and indeed the equity markets reacted to that news over the weekend, that this was exactly the kind of slightly disorderly event that the IMF is there to prevent?

MR. KÖHLER: I do not think that we should overinterpret the first reaction of markets. I expect markets to come down again. It was appropriate to say that global imbalances have to unwind in an orderly way. The first answer was clearly given: There has to be stronger domestic growth in regions outside of the U.S. But there was also an understanding, and I share this view, that exchange rates can also contribute to this orderly adjustment, but certainly the role of exchange rates is nothing that we should push ahead through public trumpeting and organizing pressure. We need to discuss it. We need to look at the fundamentals of economies, and recognize that we all sit in one boat. So I am quite happy about this outcome of Ministers' discussions, but I do not think that we should now overinterpret the first reaction of markets.

MR. RICE: The gentleman way at the back, with his hand up right here.

QUESTION: I have to speak in Arabic language, please. [Through translator] The importance of the Bank and the Fund stems from the needs of many poor countries that need assistance and funds. Now, if there are humanitarian crisis such as Iraq, Palestine, Afghanistan what can you do? We cannot have countries who will be able to seek loans or institutions that can cover the rehabilitation of these crises.

MR. WOLFENSOHN: Well, what we do, we will start with the older case, which is the Palestine case, we have been working there for ten years. The Bank has put in substantial monies. We still are extremely active, and we have also been very active in raising funds which now are close to $10 billion over ten years, so although they are not officially members, we play the role of trying to assist them in construction and reconstruction, and what will need to happen in the case of Iraq is a similar exercise until they are qualified again as a government and as a recognized and dues paying member of our institution, when they have cleared their arrears, in which case we can give further consideration to direct lending, but we are not ignoring any of these places. We have the same sort of problem in Timor del Este, in Kosovo, in Bosnia. There are many such cases, and there is a recognized way of dealing with it on the basis of essentially fund-raising from donors and then administration through our units.

MR. RICE: The gentleman right here at the front.

QUESTION: While we are on the subject of Palestine, regarding the security fence or the barrier that Israel is building around the West Bank, Israel has said that in addition to security that the fence will also, has an economic purpose because preventing suicide bombers from going into Israel would boost the Israeli economy by creating a feeling of security. That seems to ignore the plight on the other side. Already Palestinian farmers have no access to their land, hundreds and thousands of average Palestinians are cut off from their daily livelihood. What has the World Bank done perhaps to or plans to do to bridge the differences on both sides? Thank you.

MR. WOLFENSOHN: Well, I have no influence on the Feds, and I have no influence on the decisions of the Israeli authorities or the Palestinian authorities. What we do is to try and deal with the plight of the Palestinian people, and there we have been extraordinarily responsive to farmers, to people in villages. I think if you were to ask the Palestinian authorities as to who has been the most active person in dealing with the human dimensions, we would be certainly in the top list. So we cannot get into the political considerations as an official situation, but we do everything that we can in terms of unofficial mediation because the official mediation is given to others, but since we are on the ground, we do everything we can to get a more level assessment, and unfortunately at this stage each side feels extremely upset about the other side, and that is not something which I can resolve.

MR. RICE: The lady right here. We have got time for one more question after this one.

QUESTION: Thank you. My question will be in Arabic, please. [Through translator] We thank the Bank and the Fund for their efforts in view of developing the developing countries, especially the Arab countries. The meeting in December in Geneva is the communications summit. How do you think you will have an effect on the summit, the communications summit to be held in Geneva? Thank you.

MR. WOLFENSOHN: We have been consulted, of course, by the authorities in relation to the summit. As I think you know, the Bank has been at the forefront of technology in terms of development, and whether it be in distance learning or in setting up systems in countries for their own management, I think we have perhaps the greatest experience, and so we look forward to bringing that experience to the meetings in Geneva and also to learning of other people's experience, so I hope we will have an influence. It will not be the only influence in Geneva, but we will certainly participate.

MR. RICE: Okay, this will be the last question. Have the lady over here.

QUESTION: Since the end of the meetings, I would like to know your comment, what you have to say about the legitimacy of the drastic economic reforms suggested by the Iraqi ruling council at the moment in the absence of democratic accountability.

Second question, can we speak of any tangible commitment on the part of industrial countries to what you suggest in terms of fighting poverty and committing to the real spirit of free trade instead of putting more barriers and more protective methods towards agricultural production?

MR. WOLFENSOHN: Well, on the first question, in about ten minutes I will be discussing these issues with the Iraqi delegation that is here. We did not come up with the program which seems to me to be — which is something, frankly, which I have not had a lot of either influence on or not a lot of knowledge about. I read about it in the paper. So I cannot comment at this minute. I will learn a lot at lunchtime. But on the more general question of the response of the developed countries to support the issue of development, I sensed at this meet, and I would be interested on Horst's comment, I sensed at this meeting a recognition that we are all in this together. I did not sense any great hostility at these meetings. I sensed a willingness to engage on issues in a very positive sense. That does not mean that people are writing checks immediately, but I do think that the framework of discussion this time was one in which people were prepared to address difficult issues together, and I think that depending on the questions of growth in the world that more attention is likely to be given to the long-term impact of poverty, and if you give attention to that, then you have to do more if you are a rich country, but there were no immediate results, but I personally sensed a different mood in the room.

MR. KÖHLER: I totally agree with Jim Wolfensohn, and related to the question of the economic program for Iraq, I can only say I have not seen it. Nobody discussed it with me, but I do think we should take it as a step forward as the first articulated position about what could be the way forward. But we should also, this is my experience personally but also the experience from the IMF as an institution, Asian crisis and all of this, we have drawn the lesson that ownership is important because without ownership, unless the people themselves believe that the reforms should be implemented, are their own ideas, then it does not work. So my advice is to work together with the Iraqi people, also to draw on lessons from other countries and experiences so that at the end this is a step forward, but for me, my advice would be it should be an inclusive discussion.

MR. RICE: Okay, thanks very much. The transcript will be on the web as soon as possible, and you are all invited to the reception next door.




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