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Transcript of a Press Briefing by Thomas C. Dawson|
Director, External Relations Department
International Monetary Fund
Thursday, July 15, 2004
View this press briefing using Media Player
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 press briefings. As usual, the briefing is embargoed until 15 minutes after we conclude, and we'll set a precise time at that point. This applies to those of you watching over the miracle of the Web as well.
Before I take questions I would just like to bring your attention to the fact that the International Advisory and Monitoring Board on Iraq will be having a press briefing at 2:30 p.m., 1830 GMT, today, July 15th, in Room 710 here at Fund Headquarters. Media Relations put out an advisory on that yesterday.
The briefing is to give you an opportunity to review the initial findings of the auditor, KPMG, that have been presented to IAMB, which is, as you probably know, an audit oversight panel responsible for monitoring of the Development Fund for Iraq. The panel is composed of representatives from the United Nations, the IMF, the World Bank, and the Arab Fund for Economic and Social Development, and I believe as a consequence of the UN resolution that recognized the government of Iraq, I believe Iraq itself is now a member of the IAMB. The briefing will be IAMB's latest meeting, which was being held yesterday and today at Fund Headquarters.
The audit reports and related documents will also be posted on the IMF Media Center password-protected site to facilitate advance press access, but of course the documents are under embargo until 4:30 p.m., 2030 GMT today, Thursday, July 15th. After the embargo expires, the documents will then be posted on the IAMB public website.
Additionally, the IAMB briefing will be web cast live on the IMF Media Briefing Center password-protected site for journalists unable to attend the briefing.
Finally, concerning Management public engagements, I think you all know we are entering into one of the quietest periods of the year. The only one I have to note, travel plans is for Deputy Managing Director Carstens, who will be traveling to Sydney, Australia, July 23 to 27, and to Port Moresby, Papua New Guinea, on July 28th to 30th for meetings with the authorities. I don't have any press events envisioned for the trip at this stage.
I'll also note there will be some Managing Director travel at the very beginning of August that we will be announcing shortly. I think we'll probably put out an announcement prior to my next briefing, because that will just give you enough time.
Just to note that the Executive Board will be in recess from August 9th to 20th. I expect I'll be gone probably the first week of that, but there will be coverage of course throughout the period. That is all I have. I'll be happy to take any questions that you may have.
QUESTIONER: I understand that this week the presidential candidate in Uruguay was here, and he met with Carstens. I would like to know what you could tell us. And if he was there, any technical talk or if it was just a social gathering?
MR. DAWSON: Somewhere between social and technical. I mean it is quite common for the Fund to meet with visiting officials, visiting candidates for election from member countries, and that includes, as you noted, the case of Uruguay. And I don't have anything beyond that. That is basically what it was, and it's something that is an important part of our getting an understanding not only of the candidate's views but for the candidates and other important groupings to understand the Fund. And I think you can expect this sort of process will continue there as well as elsewhere.
QUESTIONER: As you probably know, yesterday there was a meeting of Argentinean bond holders in New York, who accused Argentina of not being negotiated on good faith, and they did a presentation of an alternative outline of how to deal with the debt.
I would like to know what is your assessment about that, and second is if you're going to update us on the third revision.
MR. DAWSON: As far as that meeting, yes, we certainly knew of that meeting and I've seen reports on that meeting. We, however, were not there at that meeting simply for reasons of scheduling and personnel. It may be in the future we may be at some of the meetings that this group has. I think they're having something that they described as a road show. But we were not there. I've seen the reports.
Certainly a resolution between the creditors and Argentina of the debt issue is something that is important so that Argentina can regularize its relations with the international community and put that part of the difficulties behind. But we are not a party to those negotiations, as we have indicated on a number of occasions, so I don't have anything to say about those particular discussions.
With regard to the status of the third review discussions, as I've noted on previous occasions, we're in regular contact with the Argentine authorities, both in Buenos Aires and Washington, in writing, in person, in telecommunications, and there is a process clearly under way for dealing with the issues on the review. For the moment I don't have anything to add to our statement of June 25th at the conclusion of the staff visit to Buenos Aires, where we outlined the next steps in the negotiations and described it as discussions toward defining policies that will achieve the essential objectives, except by the authorities in their program.
I will also repeat that we will be in touch. We will let you know when we do have any news to report. But it's a process of more or less continuous contact.
QUESTIONER: Is it true that yesterday there was going to be a meeting on, an informal meeting of the Board to discuss the Argentinean case and that that meeting was canceled?
MR. DAWSON: Indeed we do regularly, as I'm sure you know, have informal briefings on country matters generally, but in particular it's quite a tradition now to have informal briefings on Argentina, and there had been consideration toward scheduling one. It was posted on the schedule, and then it was decided that there wasn't a need to have it at this point. I would suspect we will have one again, and I'm sure you will have your own ways of finding out when we have it.
MR. DAWSON: But it is not a formal meeting. It is not a discussion of conclusions or anything. Essentially it's a staff briefing. But your sources are correct, there had been consideration being given to scheduling it. Briefly it was scheduled, then it was unscheduled, if that's a word.
QUESTIONER: Just following up. I know in the past you've said that some of these issues that are being discussed are, you know, utility regulations, debt, banks, fiscal issues. Have those outstanding issues been narrowed in any way? I mean you've been talking now for--I don't know what--six weeks. I mean what are the outstanding points?
MR. DAWSON: No. You've indicated there we had in debt as well, and talk about banking sector issues. You've got the full menu, and those issues are still on the table and all still under discussion.
QUESTIONER: In the last press briefing you mentioned that--or you didn't rule out the possibility of another meeting on Argentina. I wonder if there was any, you know, in development and--
MR. DAWSON: There's no change in that regard.
QUESTIONER: And if I may ask another question.
MR. DAWSON: I'm sorry. Please identify yourself. I'm sorry.
QUESTIONER: On Spain I understand there was a mission recently to look at fiscal issues, and I wonder if you could give us--you know, update on that.
MR. DAWSON: Yes, indeed, there was a mission, a ROSC mission for the cognoscenti that is a Report on the Observance of Standards and Codes, where there are a number of areas where standards have been set forward on sort of good practices.
And as I indicated, there was a story in the media in Spain that I think gave something of a wrong impression. The ROSC process goes on with many of our members, most of our members. It's a voluntary process. The mission, in this case a Fiscal Affairs Department mission, went there, found that Spain has in fact made major progress not only in the fiscal consolidation but on strengthening fiscal institutions, and as a result meets the codes, the ROSC standards in most areas.
There are areas where further improvement would be desirable, particularly involving the finances of regional and local governments, and the mission made some recommendations in that regard, as well as on compilation and dissemination of data on spending commitments and contingent reliabilities at all levels of government.
The authorities have the draft report following the incorporation of their comments, as well as review of the report here in Washington, including by the Board. The report we would expect will be published on the Fund website later this year.
I think it got a little more publicity than it needed. It's a rather routine process. As a matter of fact, I'm not sure the last time a ROSC got coverage. FSAPs sometimes get coverage but ROSC's don't. I suspect it might have to do with a recent personnel change here.
QUESTIONER: With regard to Argentina, has there been a decision yet to--for the review to take longer or to continue beyond the recess, or if not, is there a possibility that it could take longer and go beyond the recess?
MR. DAWSON: This is not the sort of thing where a decision is made. We are trying to reach an agreement, both sides are, and in good faith trying to reach an agreement. The process will take as long as it takes. As you may remember my saying before, sooner is better than later, but better is better than not better.
MR. DAWSON: So that's the process that we're under.
QUESTIONER: So if I could just have a follow up on that one. So if it does go beyond the recess, what are the pros and cons of that? I mean--
MR. DAWSON: I'm not going to get into that.
QUESTIONER: Surely it will affect--
MR. DAWSON: I will have one more briefing before the recess, so if we don't have any--
QUESTIONER: But surely it will affect market confidence.
MR. DAWSON: I certainly wouldn't touch that question with a 10-foot pole. But I do have one more briefing prior to the Board recess, and I think your question, which is hypothetical now, if we are still in the same situation, will be less hypothetical then and I'll address it at that time if we need to, but I have no reason to know that we will need to.
QUESTIONER: Can you confirm that a mission of the IMF is now in Italy or is on its way to Italy? And do you have any comment on the last economic maneuver of the Italian Government?
MR. DAWSON: The last what?
QUESTIONER: Economic maneuver.
MR. DAWSON: I think I will avoid that question. But you are correct. You've got good information regarding--there is in fact a short staff visit taking place starting yesterday through tomorrow, focusing on Italy's economic and budgetary prospects, and doing some preliminary work for the 2004 Article IV Consultation Mission which is planned for October.
And you had a second question?
QUESTIONER: The second question is regarding the recent verdict of the European Court of Justice on the Stability Pact. Do you have any comment on that?
MR. DAWSON: I don't have any comment on that. I can understand you're interested in it. I was occupied on other issues and didn't get a chance. I think maybe we'll see what we may have on that and I'll post an answer. I don't think you'll find anything earth shaking out of that, but I think it's a reasonable question and we'll get you an answer.
QUESTIONER: There are reports coming from Brazil that a team from the International Monetary Fund is due to arrive next week to discuss ways to improve the country's infrastructure investments...any fiscal goals. This was discussed quite a lot in the spring meetings. There were some ideas of pilot models that would be established. What's their new--I mean what is this mission going to discuss specifically in Brazil?
MR. DAWSON: That is correct, the mission is going to be there through, we think through about July 26. It includes not only Fund staff from the Fiscal Affairs Department, as well as the Res Rep, but it also included World Bank and IDB staff. This mission is--represents the first of a group of pilot cases that we discussed the Fund would examine on the application of an approach to public investment issues, and the issue of the treatment of public investment in the fiscal account. We have papers on this subject that have been posted on the website, so this is an issue that has come up in this briefing as well before.
The results of the various pilots are going to be discussed by the Executive Board early next year, so I can't really say what the findings or conclusions are, but this is showing that we are following up on the interest in the region, particularly I'd say in some sense led by Brazil and by President Lula on the treatment of public investment.
I would also direct you--I didn't bring a copy of it--yes, I did. There is a--Leslie, you'll be happy to know--a Reuters story this morning out of Brasilia--I'm sorry, actually I guess it was yesterday out of Brasilia--that also quotes Treasury Secretary Joaquim Levy on this subject, and I think he puts it in the right context as well. So you can see the context in which this discussion is taking place.
QUESTIONER: Just a follow up here. Regardless of the decisions or findings of this mission, although many actual changes will only happen after the next year when they are discussed by the Executive Board, but is it possible that any changes come out of this--
MR. DAWSON: No. One of the reasons I decided to cite Mr. Levy was to preemptively deal with that question, where he in fact notes that this is a process that in the context of Brazil won't come to a conclusion till after the current program or around the time the current program expires. So, yes, it does not affect the present situation.
QUESTIONER: No. 1, do you have a Board date for Turkey yet?
MR. DAWSON: Yes. Next question.
QUESTIONER: What is that date?
MR. DAWSON: No, no, no. That doesn't count as a question. I'm looking it up.
QUESTIONER: And is it Article IV and the review at the same time, or is it going to be handled separately?
MR. DAWSON: Let me just see. Here we go. The Article IV meeting has been tentatively set for July 30th. We hope to be able to hold the review meeting at the same date, and I think I will have something for you momentarily or today on that. It's my understanding that this is being set up now. So certainly the Article IV is July 30th, and I believe we are managing to have the Board at the time.
QUESTIONER: When you said that the Board will discuss the Brazilian infrastructure issue--
MR. DAWSON: No, no. It is the broad treatment of public investment, infrastructure investment in the accounts, yes, early next year.
QUESTIONER: Again, just to be absolutely clear on this, that means a decision will be made early next year?
MR. DAWSON: No, no. This is a study on the account treatment. There may or may not be a decision, because there certainly is a paper with recommendations on treatment, and then there will be whatever follow up there is. I'm not quite sure how to formulate what the decision would be because what we have, you know, this pilot study itself is, I think, moving--itself is movement. Whether then there's a generalized change, whether it applies to certain kinds of investment, other kinds of investment, that's of course what the entire study is about.
So early next year we will have a sense of where we are going from here. I mean if you look at it in something of a historical context, there already has been, in certain countries under certain circumstances, some movement in that regard. The treatment of public-private partnerships, is an example that's been under discussion in a number of countries, both industrialized and developing. In the context of the Brazilian program, Petrobras has already gotten this particular treatment in the program in the context again of the Brazilian treatment at the moment. I think it's sanitation infrastructure has gotten a little bit of special allowance.
I mean this is a process that is--and all of this is in the program. All of this is something that's a work in progress. This is a study to sort of try to look at it somewhat more broadly. It's come up in particular in the Latin American context, but it's applicable elsewhere too.
QUESTIONER: Tom, can you say when that audit report on Iraq will be posted on the press site, at least a target time for when you're going to expect to put it out?
MR. DAWSON: Around 11 o'clock this morning.
QUESTIONER: And does this report--how will this report impact what the IMF is planning?
MR. DAWSON: I mean I have not looked, and I think it would be speculative for me to say. I should note, I think you understand, we are doing this--we are members of this board. We are represented on the board by people from the Finance Department, and the members of the board should answer any questions.
In terms of impact on us, I think I ought to look at the report before I have a sense of what kind of impact there would be.
QUESTIONER: [Off microphone.]
MR. DAWSON: As I've indicated, you know, we've been in contact. In fact, were meeting last week with members of the new Iraqi Government to have policy discussions on the possible program that could be financially supported by the Fund, as I've said before, likely by a post conflict assistance arrangement.
The mission went well. The Iraqi officials provided the mission with updated economic data and briefed them on recent economic developments. It's encouraging that information on fiscal and monetary areas is becoming increasingly available. You know, substantive policy issues were discussed and the Iraqi authorities will be getting back to the Fund on a number of issues. This policy dialogue is expected to continue through teleconference contacts as well as a possible follow up mission in the near future.
And as we've said in the past, the aim is to have agreement on an economic program sometime in the fourth quarter of this calendar year.
QUESTIONER: [Off microphone.]
MR. DAWSON: As I've indicated before, we're not discussing where the missions were. Missions typically aren't here though. That's why they call them missions.
QUESTIONER: I'd like to speak to you about Russia for a moment. There are two current issues. First of all, do you feel there is a banking crisis in Russia either active or brewing?
MR. DAWSON: We recognize that strong action was needed to provide liquidity to the banking system and to prevent unwarranted contagion affecting otherwise health sound banks, and we welcome the fact that the Central Bank of Russia acted promptly, including the decision to extend deposit insurance to all banks.
That, however, while helping to restore confidence in the short term, does entail some longer term risks, as it could encourage unsound banking practices to persist, and it's therefore critical, crucial that the Central Bank of Russia remain unwavering on insuring--enforcing sound prudential decisions. So we understand their need to take the action. We understand the appropriateness of it, but continued vigilance is appropriate.
QUESTIONER: Okay. You fully covered the subject, but I have another one. The Russian Government is now discussing the scheme of monetizing all the benefits in Russia. I'd like to ask you to give me a view from the Fund about this plan, and hopefully not only from the point of view of the macroeconomic situation and the budget, but also from the point of view of the people who are receiving the benefits, whether it's to their advantage or not to have the new rules imposed.
MR. DAWSON: Yeah. I mean this is a relatively new subject, I mean new subject in terms of a proposal. It's not a new subject generally. So I'm really not in a position to discuss the proposal particularly, but clearly reforms of these--what I think elsewhere would be called unfunded mandates--and the proposal to monetize the in-kind benefits is a good idea and it's to be welcomed.
But of course--and this gets to part of your question--monetization needs to be well targeted and part of a comprehensive set of reforms. I mean it is generally our view that the role of the public sector is to provide well targeted and high quality services while keeping a sound macro, fiscal policy. I got you on that one too.
QUESTIONER: Coming back to Argentina.
MR. DAWSON: You've exceeded your quota today.
QUESTIONER: Coming back to Argentina, would you say that these talks at the moment are going a lot smoother than previous reviews? I mean we haven't seen as much angry rhetoric coming out of Argentina as we have before. And can we just go through--
MR. DAWSON: Or from the Fund.
QUESTIONER: Well, the Fund hasn't usually said anything before, so.
MR. DAWSON: Okay.
QUESTIONER: And what--we can go through the main--could you maybe elaborate on the main issues?
MR. DAWSON: I won't elaborate on the issues. I will direct you--
QUESTIONER: But can I accept that they are utilities, debt, banks--
MR. DAWSON: They are the issues that were set forth in the June 25th statement. I would also note that last Friday, I believe, we posted the documents from the second review, which also can give you a sense of what the issues are. And in terms of the discussions, they are, as we said previously, they are cordial, they are fluid, they are taking place, and that is certainly good.
QUESTIONER: The decision to post a second review, was that your decision at the IMF? Was it taken in tandem with Argentina?
MR. DAWSON: These are all decisions--
QUESTIONER: And why was it posted?
MR. DAWSON: All decisions to post country documents are ultimately the decision of the authorities, and the timing also is derivative of when the authorities and we are in the position to post the document. So it was--it's posted by the Fund, but it's the authorities who basically give the green light. Sometimes there's a little bit of a lag between when they give the green light and it's posted just for technical reasons, because as you saw, it's a bundle of documents.
And in this case there typically is a lag between--before the posting of the documents and that's just the way life is.
QUESTIONER: I have a question about--
MR. DAWSON: No, no, no.
QUESTIONER: I have a question about Mr. Rato and his name.
MR. DAWSON: Yes?
QUESTIONER: Well, I'm curious to find, you know, just from a human interest point of view. We knew him as Rodrigo Rato, and then suddenly it became Rodrigo de Rato.
MR. DAWSON: Certainly in terms of how the journalists wish to describe, identify him, you do however you wish. In terms of the--of our description of him, in terms our formatting, whether it's in correspondence or otherwise, it is Rodrigo de Rato, and in some cases an even fuller name. It's no different than James D. Wolfensohn. I mean this is just the issue.
If you had access to our e-mail list, which you might like to have, you would note that for the people of hispanic and Portuguese and other origins, we have multiple treatments of "de" or "da" or "du," depending on the case, but that's just the way it is. But if you call him in a headline Rodrigo Rato, we will not complain at all and we'll know who you're talking about.
QUESTIONER: But did he say he would like to be known as--
MR. DAWSON: No. We had to decide how to do a format, and this is what it is, and the format--the formal format you will see on correspondence if you get a letter from him, that will have in fact, Rodrigo de Rato y Figaredo. In other cases, generally it is Rodrigo de Rato, followed by Mr. de Rato. Occasionally, if you get confused, you can just call him the Managing Director.
MR. DAWSON: Thank you very much. We'll lift the embargo at 10:15.
[End of briefing.]
IMF EXTERNAL RELATIONS DEPARTMENT