Argentina and the IMF
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Transcript of a Press Briefing by Thomas C. Dawson|
Director, External Relations Department
International Monetary Fund
Thursday, March 25, 2004
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MR. DAWSON: Good morning, ladies and gentlemen. I'm Tom Dawson, Director of External Relations at the IMF, and this is another of our regular briefings. As usual, we are embargoed until about 15 minutes after conclusion, and I will set a precise time at that point.
I would like to remind everyone that the Spring Meetings are approaching, and press and anyone interested, should visit the Fund website for information on events related to the meetings. Also note that the Global Financial Stability Report will be released on April 6th. Media Relations will advise you shortly on an advanced embargoed access and briefing plans. Our anticipation is that Gerd Häusler, the Director of the International Capital Markets Department will hold a press conference in London to review the report.
That's it for announcements. I would now be happy to take questions, and please identify yourself and your institutional affiliation.
QUESTION: First I have a Latin America question, then a non-Latin America question for a change. But on the report or the statement that was put out last night, first of all my question is, why was it put out so many weeks after the Board actually met? I mean am I correct into reading that you wanted to sort of complete the famous second issue before issuing it or am I just reading something into it that I should not?
MR. DAWSON: You could even admit that we wanted to complete the first review.
QUESTION: Exactly. And my second question relates to Iraq actually. I was wondering—there was a meeting I understand in Beirut last week. Would you give us a read out on that?
MR. DAWSON: Sure. With regard to the "Lessons Learned on the Crisis in Argentina" paper, which as you note the PIN was put out late yesterday, I will note before I get to answering your specific question that we expect that the actual report will be out in the next couple of days. We got a little out of order in terms of having it ready at the same time as the PIN, but we decided to go ahead with the PIN.
In terms of the delay, I don't think it's actually that unusual considering when we have Board discussions on an issue like this require the paper to be looked at in light of the comments of the Board, that then it takes a while for it to be produced. I would also note this is a paper that is in a sense one of a series, written by different people because we are also anticipating, before too much longer, a report from the Independent Evaluation Office covering many of the same subjects on Argentina specifically. We do at times try to space things so things don't come out on the same day, but that might have affected the issuance by a few days, but not by weeks or anything like that.
On Iraq. We did, as your question implies, have a mission visiting Beirut March 12th to 16th, and it met with Iraqi officials and CPA representatives to continue discussions on policies that could form the basis for an economic program that could be supported by the Fund. The discussions were part of the already discussed timeline for use of Fund resources by Iraq under our Emergency Post-Conflict Assistance policy, which we have been indicating under a timeline could lead to assistance sometime in the second half of 2004, assuming that an internationally recognized government is in place by that point.
These particular discussions focused on the macroeconomic framework for 2004, particularly the 2004 budget, as well as the medium term and actions needed on the part of the authorities to continue progress along the agreed timeline.
The discussions were quite fruitful, particularly on policies and prospects for 2004, and it was agreed that further discussions will be held at the time of the Bank/Fund Spring Meetings, just about a month from today.
QUESTION: My question is about the long-term interest rate given in Brazil from the BNDES, the official bank, Banco Nacional de Desenvolvimento Economico e Social. Philip Gerson from the Fund said some weeks ago in Brazil that this interest rate that's lower than rates given by the private banks can cause some distortions in the bank sector in Brazil. I'd like to have your comments on that regarding the fact that this loan has been given for years for private companies in Brazil.
MR. DAWSON: I don't know about the particular quote you're referring to. I am aware that this is an issue that has gotten some inquiries because we've had some inquiries about it already. On the first hand, I would direct you toward the letter of intent, where you will see it is not an issue in terms of the letter of intent, that various issues are discussed in the normal relations between the Fund and a country, should not itself be surprising. But when you look at the Fund program under way, the newly-extended precautionary program, you will see that that is not an issue in the program itself, but that other issues are discussed between the authorities and the Fund Staff is not at all unusual. I don't have anything about a particular comment that he made, but I do know that we've had a couple inquiries on it.
QUESTION: But do you think that this can be an issue?
MR. DAWSON: We discuss the pattern of interest rates in every country, and whether they are official, non-official, or official or private, administered or not. It would not at all be unusual. I, however, would direct you to the fact that it is not in the program, so that should indicate to you the level of saliency that it has in terms of the program.
QUESTION: It's about a new MD.
MR. DAWSON: You have an announcement?
QUESTION: I was expecting you to make an announcement. A week ago a group of Directors issued a statement asking for the nationality of the next MD not to be an issue. I wanted to know how widespread that view is in the IMF? And I also noted you are just humble staff and searching for a leadership.
MR. DAWSON: You've been here before, yes.
QUESTION: But what is your view if Mr. Rodrigo Rato, the Spanish Finance Minister, would—
MR. DAWSON: I would note, yes, last Friday the statement was issued by a group of the so-called G-11, plus three other Executive Directors.
The appointment of the Managing Director is the legal, formal and sole responsibility of the Executive Board, and so the statement that we released at the request of these Directors was their expression of their views on the appointment of the Managing Director. It is a somewhat unique process within the Fund and that it is solely the Board. It is not the staff. The Board speak for themselves and the External Relations Department has been asked to communicate on their behalf. So that's the context in which we made the statement for them at their request.
You asked me how widespread is this sentiment? I think first of all it would be inappropriate for me to characterize the sentiment of staff and management because we are international civil servants. In terms of what the view of the membership as a whole is on this issue, other countries, other Directors, I think frankly, you just need to be talking with them.
As the process of the Executive Board considering this goes forward, when the Board or Members of the Board have additional views to make public we will continue to facilitate it as we did last Friday.
QUESTION: Is Ms. Krueger planning on presiding over the Spring Meeting?
MR. DAWSON: At this point we do not know, we do not know. She is the Acting Managing Director, and continues as the Acting Managing Director until such a time as the Managing Director is elected and takes office. We certainly are proceeding with plans for the Spring Meetings, as I noted when I made a reference to the press registration earlier. The Board itself is discussing the agenda for the Spring Meetings, I think, on Friday. And then next week we will be discussing individual papers that are being prepared for the Meeting. So we are proceeding for the Meetings and the Meetings will take place under the chairmanship of the Chancellor of the Exchequer, Gordon Brown, as it normally does.
QUESTION: Can you give us some kind of a historical perspective on the change of MD? How long does it usually take? Is it troublesome for the organization if it takes a very long time?
MR. DAWSON: Some of the words you used in that question are a little on the loaded side, so I think I will refrain from answering quite that way.
I would commend to you a pamphlet that I have mentioned on a number of occasions here that the Fund put out, although it was not a Fund document per se, or a Fund staff document, by Leo Van Houtven, the retired Secretary of the Fund, Counselor and Secretary of the Fund. He did a pamphlet a couple of years ago, sort of his reflections on the history and governance of the Fund. It has a lot of governance issues, but also goes through some history on the MD selection process that may be a little obscure to those of us who didn't join the Fund in 1963, which is I think when he joined the Fund, pretty close to that.
So I would suggest you take a look at that because while the process is often characterized as a process that is obscured in secrecy, et cetera, et cetera, the reality is at the time of each set of discussions, quite a bit has always been known about what is going on, and I think as time has gone on, even more has wound up being known. But I suggest you take a look at his paper. There is quite a bit of history that is out there publicly, and we can direct you to sort of where it was.
Mr. Van Houtven's paper, for example, discusses the experience of four years ago, which I think people remember, at the point at which Mr. Camdessus came in as the Managing Director in 1987, I believe. There was quite a bit of public controversy and differing positions at the time.
To my surprise, until I read Mr. Van Houtven's paper, those sorts of controversies had existed even previously, and in fact, were publicly known at the time. There are even one or two old-timers that are around here that we could perhaps direct you to, to get some of the history.
QUESTION: I wonder if there is any schedule for the presentation of a final paper of the Independent Evaluation Office as regards Argentina?
MR. DAWSON: Yes.
QUESTION: And related to any decisions with the IMF and Argentina. In the same manner Anne Krueger says that that is going to be a crucial issue. What does it mean a crucial issue in the deadline of the schedule of the IMF?
MR. DAWSON: I think if you take a look at both the press release that came out in terms of the discussions, but also the letter of intent which has been posted on the Ministry website, so it can be accessed on the Ministry website, both in English and in Spanish. I think you will see that the debt issue and discussions, negotiations with creditors is an item, and the authorities have indicated a timeline that they have in mind. So it is clear that in the run up to the meetings it was a major point of public inquiry, so I think that is just a fact.
With regard to the timing of the Independent Evaluation Office's report on Argentina, which I had indicated in response I think to the first question is under way, but it is due to come out in the next two to three months. So I believe the first step will be a presentation of it to the Board for discussion and then it continues in terms of reactions by the Board, reactions by the staff, reactions by the Board, finalization of the report and so on.
So it is under way and I don't have a precise date as to when the report will be delivered, but it's pretty soon. When I say "delivered" I mean delivered to the staff. That's sort of the first step.
Any other questions?
QUESTION: I'm sorry I was late, so it's possible that you've touched upon the point already. I have two questions. There is a meeting next Saturday in Rome of the Deputies of the Finance Ministers of the G-8 to talk about China trade. Will the IMF be represented at this meeting?
MR. DAWSON: I am unaware—that question was not asked, and I do not know the answer and will have to get back to you.
QUESTION: Second question. This is typical Italian question. Is IMF joining the EU in criticizing the way in which the Italian Government is managing one crucial sector of the Italian economy? I mean the soccer industry?
MR. DAWSON: You're two for two. I am uninformed. I'll have to get back to you on that. I thought I'd at least be asked about Parmalat. That I can answer. But sorry, I still have the same answer.
Okay. I guess that is it. I will lift the embargo at 9:30. Happy trails.
[End of press briefing.]
IMF EXTERNAL RELATIONS DEPARTMENT