Press Conference by IMF Managing Director Rodrigo de Rato with First Deputy Managing Director Anne O. Krueger and Thomas C. Dawson, Director of External Relations
September 22, 2005
September 22, 2005
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MR. DAWSON: As is usual, this is on the record and live.
MR. DE RATO: Good morning, and welcome. Thank you for being here, especially for those who are from out of town. Anne Krueger and myself will be very happy to take some questions from you, but let me first make some comments.
The first comment is to welcome to these Annual Meetings Paul (Wolfowitz) at his first Annual Meetings as Head of the World Bank. We have been working together since he took office in a very productive way, and I look forward to continue working with him and with his team. I also want to say goodbye to two very good old friends, Mr. Jim Wolfensohn and Mr. Enrique Iglesias; one left his post a few months ago and the other is going to leave it next week. Both have been —and are, and will be —very good friends and very good colleagues. Jim Wolfensohn visited the Fund to say goodbye and Enrique Iglesias will do the same.
Now let me address the agenda of this weekend. The International Monetary and Financial Committee will focus on three main topics: the World Economic Outlook, the strategic direction of the IMF, and the Fund's support for low-income countries. Yesterday, Raghu Rajan made a very comprehensive and clear presentation about the first topic, the World Economic Outlook, but just let me dwell on some of the issues he said yesterday, to begin with to say that we see the world economy in a strong footing and, as reported in the WEO, growth last year was the highest in two decades and we see growth continuing this year and next.
The global financial system is also more resilient now than been in many years, with long-term interest rates in a very low situation and relatively stable markets, but we see some important and increasing risks. Chief among these certainly is the unprecedented global economic imbalance and we have to, once again, stress that this is creating growing risks for prosperity. The global economy has developed, in our opinion, a pattern of growth where investment in most Asian countries —taking out China —is too low, and there is a very high degree of consumption in the United States financed by rapidly increasing debt. That, united with an elevated level of asset prices, makes the actual pattern of growth unsustainable, in our opinion, and should evolve to a situation in which we see more investment in some countries and more savings in others. Certainly, we see merit for countries that have right now excess in their current accounts to pick up the rhythm of growth.
I have to say that the last 12 months have seen progress in many areas of global imbalances. We have seen fiscal revenues in the U.S. rebound, more progress certainly made in Japan regarding structural reform and the rooting out of deflation, and some emerging markets in Asia have begun to adopt more flexible exchange rate regimes, and others also in Asia have kept up flexible exchange rate regimes. In that respect, we have to acknowledge that things have started to move but, in our opinion, given the size of the imbalances, things have to move much more and probably faster.
I think there is a very clear consensus of what is needed to address actual global imbalances. In that respect, we see the need in Europe to carry through reforms in both the product and labor markets, and in the service sector. We see the need of Europe to increase its growth potential through structural reforms. In Asia, we see the need to continue with the structural reforms and, along with oil-exporting countries that are in a sound macroeconomic situation, to increase investment. Certainly, the United States should move swiftly to rein in its fiscal and current account deficits. We believe that the Fund, as a global institution, is the place to discuss these issues; it was the work discussed here last year, discussed in the spring. We have seen some movement. We look forward for an orderly but deep discussion of these issues this weekend.
Oil prices have become certainly a threat for the world economy and, as Raghu Rajan was explaining yesterday, we see that part of the increase in prices in 2005 is not only related to an increase in demand but also to supply constraints, both in some oil-producing countries mainly outside OPEC, but especially in the refinery capacity in oil-consuming countries. The fact that we have started seeing signs of an increase in prices related to supply constraints is a worrisome sign regarding the future of world growth and, in that respect, we emphasize the need to take that into account from the point of view of policymakers, and specifically also from the point of view of central bankers and monetary regulators.
As I said, the second topic of discussion will be the strategic direction of the IMF. Last year, in July, I launched a strategic review of the Fund's activities. There was a Steering Committee working on that for the whole year chaired by Anne, and early this month I presented to the Executive Board the conclusion of that report. I look forward for the views of Governors —some of them have already expressed them to me —and to work on that strategic review during this weekend, and that will be the basis of future work of the Fund.
My report begins with a call of the Fund to intensify its focus, its work on helping countries come to grips with globalization. The Fund needs to be able to advise all our member countries on dealing effectively with the consequences of increasing international integration, and I want to underline the word "all"; we believe that not only emerging economies and low-income economies, but also developed economies are facing substantial challenges regarding global integration. Sometimes by the nature of the debate, some of them do not seem to realize it too clearly. Certainly, we are going to increase our research on global issues and the consequences of globalization on the macroeconomic and financial evolution, and we might —that is open to discussion right now —have some annual reports on these issues.
There are many issues in the strategic review; I had the chance to present it to you a few days ago and is public. Let me just mention one more, which is the question of quotas and representation. I understand that the Fund's effectiveness depends, in part, on our perceived legitimacy. I think that we are now in a position where the voting shares of some countries do not accurately reflect the size of their economies. This calls, in particular, for an increase in voting power in some of the emerging market economies —especially in Asia, but not only in Asia —either as part of a general quota increase or through ad hoc increases, as has been done in the past —I believe last time in 1988 —and certainly to ensure from our point of view that our members from Africa are adequately represented and have the administrative and political capacity to influence the Fund.
Finally, the final topic for Saturday's discussion will be our policies regarding low-income countries. Last week, in the name of the Fund, I had the privilege to attend the UN World Summit, and I think there was a general consensus that was said by many world leaders of the need for more rapid progress toward achieving the Millennium Development Goals and the compromise by developed countries to increase their levels of aid...
MR. DAWSON: Commitment.
MR. DE RATO: Sorry, commitment. We see a very important task for many players here. Certainly, low-income countries can help themselves by, above all, pursuing policies that promote economic growth and make their private sector flourish in an environment of macroeconomic stability, and certainly increase trade among themselves. The international community, as a whole, can make a major contribution to developing countries' reduction of poverty by increasing the liberalization of trade at the multilateral level, and we give a lot of importance to the conclusion of the negotiations in Hong Kong.
Overall, there are also efforts to increase the levels of aid, as I mentioned. One of them is the G-8 proposal on debt relief. I want to, once again, show my personal support and management of the Fund for that initiative. We believe debt relief has proven in the HIPC Initiative to be a useful tool to increase the chances of countries to devote more resources to poverty reduction and, as part of the comprehensive package, it will be certainly important.
As to the role of the Fund in this initiative of debt relief, we are working in the final stages of its financial implications and certainly in the way it should be applied to members in an evenhanded manner in conformity with our Articles of Agreement, and I think that we will be able to reach a final consensus soon, in the near future.
In the last few months, the work of the Fund regarding low-income countries has been especially intensive. We have developed a wide and flexible range of instruments to support our policy and certainly around the Poverty Reduction Strategy which, I believe, has been extremely useful when it was launched about five years ago. In the past year, as I said, we have reviewed that Poverty Reduction Strategy. We have developed a facility to help low-income countries cope with shocks, with external shocks, commodity prices, natural disasters. We have started using the Trade Integration Mechanism to help countries deal with temporary balance of payments costs stemming from trade liberalization. We are finalizing a new mechanism, the so-called Policy Support Instrument, to support reform in countries that do not want or do not need the Fund's financial assistance. I believe that the Fund has really sharpened its tools to help low-income countries in a moment in which we expect that the flows of aid will increase, and certainly the chances for many billions of people to have a better chance to get out of poverty. The Fund will its role in this effort.
With that, I would like to end these remarks, which maybe were a little long, and Anne and myself are ready to take your questions.
QUESTION: Both you and Mr. Wolfowitz a little while ago used the word "soon" with regard to debt relief. Can you say how soon and what you expect to accomplish this weekend? I understand that the Fund's part of this is much smaller than the Bank's, but I would like to have your view on it as well.
MR. DE RATO: Well, from the point of view of the work of the Fund, I want to say that we have been working very intensively on this issue; this issue was, as you remember, first agreed in London at the beginning of June. Since then, and even before Gleneagles, we had some informal meetings with the Board to present the proposal and also to discuss its implications. We already had a formal Board meeting —that is, a formal paper presented to the Board at the beginning of August, and we have had work since then. I cannot give you a specific date, but I certainly see that, given the nature of the discussions that we have had in recent days at the Board, and the stage of the work of the staff in answering some of the questions that the Board members had put forward, we should be able to have this in the next few weeks, unless there is something that I do not right now expect happen.
I think the issue is a very important one for many low-income countries. We have been talking to them, too. I believe that we will be able to have a framework for the Fund to pursue the initiative. That will not be only a G-8 initiative but will be a Fund initiative that is backed by the Board that represents 184 countries.
QUESTION: When you revise the quotas, will you be taking [inaudible] the market rate of the economy or the purchasing power parity? Secondly, for centuries, rich countries have been lending to the poor. Now there is a reversal; poor countries are lending to the rich. I was wondering whether poor countries would be better off using the money on infrastructure and other projects instead of lending the money.
MR. DE RATO: First of all, we are in the process of the Thirteenth Review of Quotas, so there is a good chance to decide if there is going to be an increase in quotas or if there is going to be some ad hoc [adjustment]. I can not answer specifically the question you asked, because that is going to be part of the discussion. What I can tell you is that we have already had a very important discussion in the Board on this issue a few days ago, an informal one. I will be working with the staff to propose to the Board alternatives in this respect.
As everybody is aware, the review of quotas is a decision that has been taken by the constituency, a wide majority of it, so we will need a very broad consensus. That consensus was achieved last time in 1998, so that means that it is possible, but it does not happen every year. I will be working on that, and I cannot get more specific right now. I think there is merit for it. I think it should not be seen as a zero sum game. I think the strength and the legitimacy of the institution will be enhanced by solving its own problems and that will help and will be a value for every member of the institution.
As Raghu Rajan said yesterday and I tried to say today, we see —now I get to the second question —the need for the pattern of growth of the world to evolve in the direction that countries with clear surpluses start increasing their domestic demand, specifically their investment, of course good and qualified investment, not trying to renew the mistakes of the past. Certainly, we have seen a pattern that we believe is not sustainable of the use of a high degree of savings in one part of the world to finance very low savings in another but, as we have stated more than once, we believe that the problem of the world is not so much an increase in savings but a not sufficient level of investment in many countries, in many developing countries especially, but I do not know if Anne wants to say something about this issue.
MS. KRUEGER: Only that I think one cannot completely generalize; there are some countries among the emerging markets that are running larger than perhaps is desirable current account surpluses, but others are running current account deficits. So, you cannot say all the rich countries and all the poor countries; it varies quite a bit, of course, by country. We talk about the global imbalances between broad groups but, as we are dealing with individual countries, we look more at their own situation. Some build-up of reserves and of assets was quite clearly warranted. Many of them had, if anything, borrowed too much and need to get to a more sustainable level, and then can go back to some kind of prudent borrowing regime or capital inflow regime. Others have scope to increase their current account deficits now, just depending on their situation. So, I do not think there is one answer that fits all countries.
QUESTION: Turkey this year is experiencing a major privatization boost, and at the same time the program's first review is facing a major delay because of the government's failure to pass a key reform law in parliament. Now, do you think that the Turkish program is faltering, and do you think that the Turkish government is trying to use the privatization money as a substitute or alternative to the IMF funding?
MS. KRUEGER: We think that the Turkish economy is doing well. As you know, several years ago, the situation was rather dire. We are now seeing a huge reduction in inflation and in interest rates, and growth is fairly solid. We worry somewhat about the current account deficit. Now, the delay in the review was because parliament did not pass the social security reform law which, as you know, is essential. We believe that that is forthcoming. We do not believe that there is any likelihood of the whole program going off track so much as we think there was a delay simply because of the recess in parliament and the need to get those measures taken.
QUESTION: Mr. de Rato, you said last week, last Friday at the Clinton forum in New York that things will not remain equal if countries fail to reach a compromise in Hong Kong at the WTO. Since that seems to be the direction, failure seems to be the direction we are headed to, I wanted to ask you to elaborate on that, what will happen if we do not have an agreement.
MR. DE RATO: I do not necessarily agree with your prediction that failure is the direction. I think that everything is not written. Right now, countries are in a moment to take a decision and I believe that all the countries involved are responsible for that decision. But probably a group of countries that you could maybe define around the G-20 is the key sector that has to understand that trade liberalization is, first of all, a two-way street and also is good for all of them.
At the same time, one of the dangers that is not materializing in the world but that we see is an increase in protectionism pressures. Some of those protectionist pressures are not even aware of the new nature of problems regarding the consequences of global integration; we have seen that with the discussion and the consequences of the first measures taken in Europe regarding textiles. It is not anymore so easy to protect yourself from outside producers that have become part of your domestic system. So, even old-fashioned protectionism might be even more counterproductive than before. Nevertheless, we see some strong signs of protectionist measures, and that will be very bad news for everybody, and will certainly make the orderly evolution of global imbalances even more complicated.
I believe that Hong Kong not only will have merit in itself by increasing a more open, multilateral agreement on trade, but at the same time will reduce the chances of protectionist pressures. That is what I tried to explain in New York and what I tried to repeat now.
QUESTION: Can you update us on where things stand with the IMF and Iraq, and to what degree the increased violence will impact rebuilding efforts?
MR. DE RATO: We approved a post-conflict program for Iraq last fall, and we are working with the Iraqi authorities. The situation regarding, for instance, the fiscal position in Iraq has strengthened importantly, in part, as a consequence of oil prices. We believe that right now there are three areas which, I would say, are crucial looking into the future for Iraq and also for our collaboration with the country that, as you know, has put to us the possibility of having a Stand-By Arrangement by the end of the year when the post-conflict program will end. We are working on that, but I would like to mention the three areas in which I think progress has to be made.
One is to continue the improvement in data that we have already seen, so there is progress. The second is to put forward a framework of transparency in dealing with the resources of the central bank, and I have to say that there has been progress there, too. An international audit firm has been hired to do that job and we hope that, even if it is not finished, the audit, it will be certainly advanced by the end of the year. The third issue is the reduction of the very important oil subsidies that the Iraqi government has in the budget and certainly a source of very, I would say even unjust social policy in which speculators are making a lot of money just taking the oil out of Iraq and selling it in other markets. Progress there, also, has been achieved. In the last few day —I do not know if it is three or five days —the Iraqi authorities increased some of the price of oil in Baghdad. We believe that that progress has to continue, too.
Those are the three main elements in which we are working with the Iraqi authorities. They are also visiting us this week. If we have progress on those three issues, I think that we could put to the Board a Stand-By Agreement by the end of the year. We are working on this.
QUESTION: As you say, there is pressure from Asia and elsewhere for increasing quotas and redistribution of quotas. Do you see any willingness on the part of traditionally strong countries in the IMF, including some smaller European countries, to relinquish some of their power within the IMF, their relative status within the IMF? Briefly, could you just say something about the Policy Support Instrument, which countries that is aimed at?
MR. DE RATO: I see that there is increasing awareness or agreement that the quota issue has to be at the top of the agenda. If your question is if some country has told me that they are against it, my answer is nobody has told me that, but that does not necessarily mean that it will be easy to do it. The Policy Support Instrument is a very new instrument that we have not even approved definitively but that we already have most or all of the papers prepared and the Board will be discussing in a few days. That would allow countries that do not want or do not need financial support from the Fund but, at the same time, find reinforced surveillance useful from the point of view of anchoring their economic policy, but also from the point of view of signaling to outside investors and donors to be used.
We are already working with some countries in that respect and we see more and more demand for that type of product, if you want to use that commercial language. I believe that in a few days, a very few weeks, we will have that PSI approved, which will be a system by which we will be having close monitoring of the country, with discussion in the Board twice a year, more or less. That will give us the chance to certainly help, with our very close advice, those governments to anchor their macroeconomic policies and reform policies, and certainly to give clear signaling, very accurate and up-to-date signaling to investors and to possible donors, in some cases, regarding those countries.
QUESTION: The projections for the Argentine economy that were given to us yesterday were better than expected. I wanted to ask you if the IMF thinks it is really necessary to have a new program for Argentina, or if Argentina could perform as it has done this year without an agreement.
MR. DE RATO: Well, let me answer you in a little different way than your question was posed. I think that depends on the government's willingness. If the government thinks that it is useful for them to have an agreement, a program, a financial program with us, of course we will be ready to discuss it, but that is a decision that has to be taken by the government in every case, not only in Argentina. So, I will not dwell more on that; it is up to the government, this government or any government to decide if they want to have a program with the Fund, if they think that in their financial condition it is useful for the country.
QUESTION: Mr. Rajan spoke yesterday on the question of reputation of the central bank in reference to the dispute with the Bank of Italy regarding foreign takeovers of banks. Last night, Mr. Siniscalo resigned from this dispute with the Governor the central bank, and it is the second Minister that resigned [in the context] of the Governor of the central bank. I was wondering if you think this will impact the credibility of the government and the country.
Also, the WEO was very critical of the performance of Italy in terms of growth and also in terms of fiscal performance. I was wondering if it were easy that, one week before the deadline for the presentation of the budget, and with the accounts already deteriorating, the Minister resigns.
MR. DE RATO: Well, I guess there is a lot of political discussion on those issues that I certainly am not capable of giving an opinion about. Regarding the need to have not only in Italy but in all countries, developing and developed, clear and transparent central bank and monetary authorities is of the utmost importance, both for the credibility of macroeconomic policy but also the credibility of institutions as a whole. Institutions, which always have been essential from the point of view of the development of macroeconomic policy, with globalization have become essential. It is very difficult —if not impossible —for countries to have sound and competitive macroeconomic policies in an integrated world with weak institutions. So, institution-building is something in which all countries and all governments have to work. Certainly, the Fund, in our area of expertise, is working with all governments in that respect, and we will continue to do so.
Now, returning specifically to Italy, first of all, we have seen progress in the Italian economy in recent years. The reform agenda, both in labor markets and in pension reform, has been positive and there have been results; employment has grown significantly. The question in Italy —and I think there is an agreement between the authorities and us there —the key question is productivity. In that respect, we see that the so-called competitive package is the key question to move forward on the issues of Bankruptcy Law, business deregulation, private pension pillar, and reform of the financial sector and financial oversight. We believe those issues are very important for the present and for the future of Italy.
Certainly, fiscal consolidation, given the level of public debt in Italy and also the aging problems of the Italian population, has to put at the top of the list. Growth has been disappointing in Italy in the last year. We have seen bigger strength in recent months. The second quarter of this year recorded a stronger-than-expected pick-up in activity. We believe that the reform agenda in Italy is very important and very clear, and we are ready certainly to work with the government regarding those issues both in the Article IV consultations and the recent FSAP, financial sector analysis that we are doing and that will be ready some time next year.
QUESTION: Quite recently, Russia benefited a great deal from its cooperation with the IMF, and now Russia seems to be in a position to help the world and the IMF with energy resources, with financial resources. My question to you, sir, is what role can Russia play in those areas, in debt relief, in energy supply, especially given the fact that next year it will chairing the G-8?
MR. DE RATO: First of all, I want to say that Russia is already playing a role; it has been an active member of the [inaudible]. Also, Russia is increasing its role as an economic force in the world; you have described some of the issues. I think this year the Russian government has made very important efforts to reduce vulnerabilities and have been using in a way that we commend the increase in oil resources. I want, also, to underline that some issues that were extremely complicated only last summer, like the banking crisis in Russia, have evolved in a positive way. So, all that are pluses.
From the point of view of risk, we see really the need to strengthen the fiscal stance, especially in an increasingly inflationary environment, and that is, for us, a cause of concern. We see the need to strengthen the business climate —wanted or not, the Yukos affair had consequences —and we think it would be in the best interest of the Russian economy and the Russian citizens. We see certainly the need for Russia to show that it will come from below average in most international rankings of governance indicators to be above average; I think that is certainly a challenge. We see also the need for some long-term reform and structural reforms. We have seen that implementation has been uneven. I certainly would mention the success in the banking sector, but we can have other areas in which things have not moved at the same rhythm.
So, we see a picture of great opportunities in the Russian economy and also on the role of Russia in the international economy. We will be ready to work with the government, to advise the government and help the government to seize the opportunity. Russia is going to be the Head of the G-8 next year. That is a very good chance for some of these issues to be put at the top of the agenda. Traditionally, there is no secret in this; every G-8 Head has its own agenda and usually has to do with legitimate but very concrete interests. I think the G-8 presidency will be a very good opportunity for Russia to show its leadership on some of the issues that I think would be to the benefit of the G-7 and the benefit of Russia. We certainly are very near the government in respect of the challenge of making that presidency a success.
QUESTION: A follow-up on Italy. The Italian delegation will be here with serious difficulties. Is it your opinion that the weakness of this situation could affect also the image of the whole euro area and the confidence of markets in the recovery in the country?
MR. DE RATO: Well, political crises are happening in many places in different moments. I am sorry personally by the resignation of Mr. Siniscalo, whom I have known personally for a long time and have a high regard for. But I also have to say that my personal experience is that Italy has very, very good, high-ranking people in the Ministry of Finance, so I think it is a very equipped country in that respect. I cannot make any judgments on political decisions.
The agenda in Europe is not a question of one person or not. The agenda in Europe is very clear. Europe needs overall a clear economic policy that will gain credibility with its people, which I think a question in Europe is to make domestic demand stronger, and that has to do, as we see in Italy but also in countries, with people increasing their savings at very, very important rates. So, in that respect, we believe that the structural reform agenda in Europe is clear. I mean, the Lisbon agenda is there, so it is completely homegrown. It is not a question of anybody telling the Europeans what is the agenda. The agenda is not only known but has been written more than once, and the question is to implement it.
I believe that recently we have seen that reform can win votes, so all the debate in Europe that reform is something that is dangerous from the point of view of electoral results, in my opinion —and I am European —is false. Reform can win votes and the question is to present reform with clear leadership and to implement it.
QUESTION: Your colleague, Mr. Rajan, spoke yesterday of the robust growth this year in sub-Saharan Africa. Your own figures point to 4.8 percent being slightly above the world average. However, this is still well below the 7 percent needed to achieve the MDGs that you yourself speak of insufficient levels of investment in many developing countries, and I suppose that this would include sub-Saharan Africa. So, what changes in the IMF strategy in either emphasis or approach do you anticipate in order to push levels of investment upwards?
MR. DE RATO: Not necessarily changes, but we are going to be deepening our advice to African governments. First of all, Africa is very big, and I think that we should differentiate between different circumstances. You have countries growing at 7 percent; you have countries growing for a long time in a sustainable manner; and you have countries that are benefiting strongly from oil prices. Many of them have subscribed to transparency initiatives, like the Extractive Industries Transparency Initiative. So, you have a lot of different things.
If you want to have a general point of view, we are increasing our relationship with governments to help them, first of all, continue what has clearly been an advance, which is a more stable macroeconomic environment in most African countries, a reduction in inflationary pressures, and better managed macroeconomic frameworks. Certainly, it is very important in Africa to increase the effectiveness of expenditures, so management of expenditures is going to be key both in the actual circumstances and also in the scenario of the increase of aid.
Expenditures and well-targeted social expenditures are a key question, as also to move into a more sustained effort in infrastructure building, and that requires not only resources but also quality of the investment. In many African countries, the quality of investment has been lacking very often.
The evolution from social policy based on subsidies to a social policy based on direct help to the Fund is important in most developing countries, I would say even in all developing countries that have strong subsidies, but it is essential in Africa, as is certainly the increase of an environment that will help the private sector to flourish in Africa, with the change of regulators, the rule of law, transparency of the markets, and certainly intra-regional trade in Africa. Africa is certainly suffering, in some cases, by the protectionist measures of the developed world, but more and more we see evidence that as big as that problem for the growth of Africa is also the extreme restrictions on intra-regional trade in Africa. Africa is probably the most expensive place in the world to move things around, sometimes because of lack of infrastructure, but sometimes because of administrative barriers which we can count by the hundreds; between every thousand kilometers you might face 100 or 160 different checkpoints.
In the continent, we have more human resources devoted to it. We have had a lot of progress in Africa, from post-conflict programs to the future of PSI that I mentioned before. So, we have a wide range of instruments and people working in Africa with all types of governments. We are working, also, with the donor community, who has a very important role in Africa, not only because of the important role of aid but because of the quality of aid. We see a lot of merit in increasing aid and we have been advocating it, but we see as much merit also in having predictable aid, less onerous in terms of red tape aid, and better targeted to the needs of the country aid. We have had some really sad examples of countries that just cannot cope with the amount of red tape that aid comes with. So, the agenda is a very important part of work.
MS. KRUEGER: The only thing I would add really would be that there are a lot of things that feed into accelerating growth rates, some of which the Managing Director has mentioned. In the case of Africa, the countries that have gotten into more macro stability, lower inflation, and so on, are growing more rapidly than average in Africa. As others get there, the average rate of growth will obviously go up. As some of the benefits of macro stability feed through, we expect even more rapid growth than is now happening in the countries that are already there.
In connection with that, the other thing to remember is that, of course, the problems of Africa started with macro instability, because you cannot really do very well until you get that under control, but there is a lot that is development, the infrastructure needs that the Managing Director mentioned, and so on. We used the Poverty Reduction Strategy as a central focus, and we do this in collaboration with the World Bank in the sense that they take the lead on the non-macro part and that is very important, too.
MR. DAWSON: Thank you very much.