Transcript of a Conference Call by Thomas C. Dawson, Director, External Relations, with Journalists on the Multilateral Debt Relief Initiative
December 21, 2005
December 21, 2005
OPERATOR: Welcome to the MDRI conference call. At this time all lines are in a listen-only mode. Later there will be a question-and-answer session, and instructions will be given at that time. If you do need assistance during today's call, please press the star, followed by the zero, and an operator will help you off-line.
At this time I'd like to turn the conference over to Mr. Tom Dawson. Please go ahead, sir.
MR. DAWSON: Thank you very much. This is Tom Dawson, the Director of External Relations at the IMF. Thank you for joining me. This press call will be embargoed until 15 minutes after conclusion, and we will set a precise time at that point.
We've scheduled this conference call to update you on where the IMF stands on debt relief under the Multilateral Debt Relief Initiative. This is particularly important since the Board did, in fact, meet this morning and since there have been a number of press reports and other speculation as to what the meetings might or might not accomplish.
Let me start off by making it clear that we are on track to deliver 100 percent debt relief within the coming weeks to 19 of the 20 countries, mostly in Sub-Saharan Africa and Latin America, and we are optimistic that the one country that remains eligible will qualify for relief within just the next few months.
Today's Executive Board discussion of the Multilateral Debt Relief Initiative, which wrapped up a little after noon, took about two hours and involved both Board and staff presentations. The meeting was chaired by the Managing Director, Rodrigo de Rato, and we think it has led to a historic agreement in terms of the delivery of debt relief to the world's poorest countries.
Let me note at this point that the Managing Director will be releasing a statement. You all will receive it as soon as this briefing is concluded. And one of the reasons for our embargo is so you will have the opportunity to weave the Managing Director's quotes into whatever else you have gotten out of the briefing that I am doing.
I would say that the Executive Board has essentially completed its assessment of the first group of countries eligible for this historic debt relief initiative. For the 19 countries agreed today, debt relief, including the remaining HIPC assistance, will amount to approximately US$3.3 billion.
If I could, I think many of you may already have the names of the countries, but I will quickly go over the list of the countries: Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tajikistan, Tanzania, Uganda, and Zambia.
I should note that Cambodia and Tajikistan are not HIPC countries but do fall under the US$380 per capita income threshold for the Multilateral Debt Relief Initiative. The remaining countries are HIPCs.
I should also note that this relief, this action by the Board today, is contingent on the IMF receiving consent agreements from the 43 donor countries that have contributed to the PRGF trust subsidy account, which is where a significant portion of the debt relief is coming. So far, we have 37 of the 43 countries that have provided their consent. I would note, to give you a context, this is 37 countries that have provided this consent during the course of this month. So we are actually quite hopeful that we can get the remaining six consents if not in the next few days, certainly in the next very few weeks.
I think the Fund Board, Management, and staff have done our part, and now we are waiting for the remaining six countries to approve—to provide the so-called consent.
It is natural, of course, for you to ask who is the 20th country, and if you have your list, you will have noted that Mauritania was not included in the list. The Board indicated today that Mauritania will qualify for relief and receive relief once it demonstrates satisfactory progress in a few policy areas.
I should note that the agreement under the Multilateral Debt Relief Initiative approved by the IMF Board and published as a public document indicated that the Board would make an assessment for each of the countries to ascertain whether the macroeconomic situation continued more or less the same as it had been at the completion point under HIPC.
We are optimistic that once the required policy options are taken, Mauritania will be positioned to receive 100 percent debt relief. In that context, I would say the characterization of countries and the speculation that countries were being `dropped' or being `off the list' is simply not correct, and we are, as I said, quite optimistic that in this context, the 19th—I'm sorry, the 20th country will be added before too long.
Now I would be happy to take whatever questions you may have. Since I do not have the advantage of knowing who has called in, could I ask that you identify yourselves and your institutional affiliation? Now I believe the operator will switch this to a questioning mode.
OPERATOR: Thank you, sir.
And, yes, ladies and gentlemen, if you do wish to ask a question, please press the star followed by the 1 on your touchtone phone. You'll hear a tone indicating you've been placed in queue, and you may remove yourself from queue by pressing the pound key. So, again, if you do have a question, please press the star and then 1 at this time.
Please go ahead.
QUESTIONER: Thank you. I remember that Gordon Brown, when he made this announcement in September in the Annual Meetings, there was a question on whether there would be any new requirement or any new, anything else that the countries should do, and he said, no, this is final. This is approved for the 20 countries. So I would like to know your answer on what happened.
MR. DAWSON: Well, first of all, I would note the—it was the Executive Board that unanimously agreed that in terms of the provision of the debt relief, a look at each country's economic situation would be taken, that this would be done in the context of whether there had been any significant deterioration in the country's status. This was a position taken, as far as I know, unanimously by the Executive Board.
And I should add, contrary to what you may have been reading in the press, this is not some new condition. This has been known for some time and has been published, that the Fund Board—this is a decision by the Executive Board, representative of our member countries—that countries indeed would benefit from this relief. So I think it is not correct to call it new conditionality or anything that was a surprise. This is something that was supported, I believe—I know of no member country that opposed this approach. In fact, this was part of the original concept.
OPERATOR: Thank you. Please go ahead.
QUESTIONER: Hi, thank you. Yeah. Since you work so closely with the World Bank, I wonder if you—if this decision taken by the Board today will have any consequences on the relief that the World Bank will approve and [inaudible] in July?
MR. DAWSON: Well, I think the Multilateral Debt Relief Initiative is something that indeed applies to three international financial institutions, the IMF, the World Bank and the African Development Bank. I think questions about the World Bank's, the status of the World Bank and timing and so on are best directed toward the World Bank. Certainly, from our point of view, this is absolutely good news for the people of these poorest countries in terms of demonstrating the commitment of the international community to provide the debt relief that the membership of the institutions had indicated that they supported at our meetings in the fall.
But questions about the particular timing and so on of the World Bank should be directed to them.
I guess the simplest way to answer your question about implications, it certainly should be a good implication, since we have been able to get our work, as I say, substantially done. And also, as I indicated, we are quite hopeful that the six remaining donor countries will be providing their consent, so this relief can be provided very early in the New Year.
QUESTIONER: If I may ask a follow up.
MR. DAWSON: Sure.
QUESTIONER: I mean I didn't explain myself very well. I was referring whether you expect that those 19 countries will receive, you know, the debt relief from the World Bank, so that [inaudible] that they have passed with the meeting today of the Board, that will clear the way for them to get the World Bank relief as well.
MR. DAWSON: The decision is a decision of each respective institution, and so this will be a decision of the World Bank Board, just as it was a decision of the IMF Board. I certainly think the implication is of progress and of good news.
I think we might turn to the next question.
OPERATOR: Thank you, yes. Please go ahead.
QUESTIONER: Thank you. With the speculation on the last couple of days in the press about Nicaragua not being on the list, I would like to ask how satisfied the Board of the IMF on Bolivia and Nicaragua implementation of different IMF programs?
MR. DAWSON: Well, I think you will be—as time goes on, you will be getting a formal, the summing up of the Board discussion today as well as individual country-specific information, but I think it is fair to describe the decision of the Board today of being a strong decision by the Board without reservations, and that this is an endorsement of the policies of the countries, the 19 countries that are identified, including the two specifically that you ask about, Bolivia and Nicaragua.
QUESTIONER: Okay, thank you.
OPERATOR: Thanks. And again, if anyone does have a question, please press the star and then 1 at this time. We do have a question. Please go ahead.
QUESTIONER: Hi. Could you just give us a little bit of detail on Mauritania, what happened and what the sticking points were?
MR. DAWSON: Well, I think I did indicate indeed that the Board's view was that Mauritania will qualify for relief and receive it once it demonstrates satisfactory progress on some policy areas that have been identified. We think that this is a matter that is understood with the authorities as well as within the institution, and we are hopeful that this will take effect, as I say, relatively soon. I would think the best description is in a few months. A few months is less than half a year, but more than a few weeks.
QUESTIONER: And what are the policy areas?
MR. DAWSON: I think I would rather—you'll see it from the summing up in the Board, the detailed areas of concern, but they do involve public expenditure management as well as some of the financial relations with the Fund.
OPERATOR: Thank you. Please go ahead.
QUESTIONER: Yes. Tom—
MR. DAWSON: Hi, Marty.
QUESTIONER: Hi there. The press reports that talked about the six countries that might be dropped, can you describe at all what happened to change that status? Did the countries meet the qualifications that the staff was concerned about? Did the staff lower its—the bar for what they needed to do? Can you tell us what happened?
MR. DAWSON: I think I would sort of have two points. One is I don't think we would, under any circumstances, have agreed to the characterization of countries being dropped. I mean we are committed to working with these countries to provide the relief that was indicated under MDRI. And indeed, at the end of the session today, as I've indicated, 19 out of 20 did so qualify. We've also made it clear that this fundamentally is a decision of the Executive Board, and the Executive Board provided with all of the information provided by the staff, came to this judgment, and I say it was a strong judgment.
I would, however, also note that these are not sort of snapshots frozen in time. Indeed, as the decision points got closer, more information was available. I'm aware of in a number of countries there have been missions in the country just very recently, so indeed, it's not terribly surprising that additional information comes forward and that different decisions are taken.
Again, our summing up will perhaps have—when it is released, and we're hoping to get it out very, very quickly—I think we have a decent shot of getting it out this week. As you know, sometimes they take a week or more, but this was such a, frankly, a harmonious Board meeting, that I think there's a good chance that we will get it out in the next day or so. It will, I think, indicate in a little bit more detail the considerations in each of the countries.
Oh, and I should also note, which I haven't explicitly, we expect within the next, I would say, 24 hours, to have available country-specific descriptions of the state of play in each of the 19 approved countries, and as I indicated, the summing up itself will describe those as well as the situation for Mauritania.
QUESTIONER: Thank you.
OPERATOR: Thanks. Please go ahead.
QUESTIONER: I was wondering if you could tell us which six countries you're waiting on in terms of the—
MR. DAWSON: No, we are not waiting on six countries. We've approved 19 out of the 20—
QUESTIONER: No, sir, that wasn't the question I was going to ask. You were talking about the trust fund consent.
MR. DAWSON: Oh, oh, which of the approvals—
MR. DAWSON: I am not in the position right now to reveal that. We are in contact with the authorities. If you would like to know the list of the 43, which is—that is certainly publicly available and we can provide that to you. I believe you can find it in the Annual Report of the Fund as well, and it's on the website. But I think this is—we're not in the "name and shame" game at this point. I think the reality is that this has come up—the decision was made I believe early this month, and we've now gotten 37 out of 43, and we're quite hopeful that we will get the remaining six. And I think the Board made it clear, the Managing Director in the statement that you'll be receiving momentarily also makes it clear, and we are quite hopeful. We view this as something we need to get done, but we don't view it as, quote-unquote, a problem.
QUESTIONER: Okay. And just to confirm, you said it was—the total amount of debt relief approved is US$3.3 billion.
MR. DAWSON: 3.3. Now, you will see occasionally slightly different numbers because it's all keyed off of the SDR rate and the SDR rate does vary. But, yes, I did indeed say 3.3, and that is the number—billion dollars, and that is the number you will see in the Managing Director's statement shortly.
QUESTIONER: Thank you very much.
OPERATOR: Thanks. Please go ahead.
QUESTIONER: Earlier in the day, a number of the news agencies were running stories saying that the IMF was likely to boot six of the 20 countries off the list, and those six were listed, and there are also reports in one of the English national—one of the British national newspapers this morning. Would you have any idea where those reports came from or, indeed, whether there was any debate about whether six countries should not qualify for debt relief at this stage?
MR. DAWSON: I mean, I can't—you know, I've long since given up trying to chase where news stories come from. It's my job to sort of present what actually happens. I think there was perhaps anticipation as well as misunderstanding. And I would repeat again—you used the rather graphic, colorful phrase of "booting off the list." That wouldn't have been the case even had countries not been put in motion for the relief that 19 were today, because as we've indicated, for Mauritania, the one other country on the list, we are quite hopeful that it will be accomplished shortly.
But life is too short for me to be trying to figure out where inaccurate news stories come from.
QUESTIONER: Thank you.
OPERATOR: Thanks. Please go ahead.
QUESTIONER: On this issue again, I mean, but do you acknowledge that there was some concern about these six countries at some point?
MR. DAWSON: Well, I mean, I think there—I mean, the Fund—the Fund staff, Management, and Board take their jobs very seriously, and I would say that in the Board discussion today, many of the 20 countries were discussed, ones that speculation had been would be on the approved list, ones that speculation had been that they would not be on the approved list. The Board discussed many of the 20 countries in their discussion in the two-hour meeting this morning. But as I say, in the end it was a very strong consensus reached by the Executive Board.
QUESTIONER: Thank you.
OPERATOR: Thanks. And, again, if anyone does have a question, please press the star and then 1 at this time.
MR. DAWSON: If we do not have questions, which is sort of what I sense, we will be forwarding, hopefully within just seconds, the Managing Director's statement on this historic decision, and if you have questions, certainly feel free to be in touch with Media Relations with follow-up questions.
It is now approximately seven minutes before 2:00, so I would suggest we lift the embargo at 10 minutes after 2:00.
Thank you very much.
OPERATOR: Thank you. And, ladies and gentlemen, that does conclude our conference for today.