Press Briefing by Masood Ahmed

Director, External Relations Department
International Monetary Fund
Friday, November 3, 2006
View a Webcast of the press briefing

DIRECTOR AHMED: Good morning, I am Masood Ahmed. Welcome to our regular press briefing, as always, embargoed until 11:00 here but to remind you, it is now 1600 GMT because of the time change for those of you who are watching this on the Media Briefing Center. Let me also just welcome those of you who are on the Media Briefing Center and encourage you to send in your questions.

Before we get to questions, just a couple of announcements: First on travel, I would just like to tell you that the Managing Director will be meeting on November 4th with the Finance Ministers and Central Bank Governors of the Gulf Corporation Council in Jeddah. The Managing Director will join their discussion of the GCC's common challenges and the ways to address them.

He will then meet on November 7th with the Ecofin, the E.U. Ministerial Finance Ministers body, in Brussels. This will be an opportunity for the Managing Director to brief ministers in the Ecofin on the agenda and follow-up after the Singapore Annual Meetings.

Let me also announce that we now have a formal start date for Murilo Portugal who will be starting as Deputy Managing Director here at the IMF on December 1. For those of you who haven't been tracking this, as you know, Mr. Portugal was appointed to be Deputy Managing Director after the departure of Mr. Carstens, and many of you probably know Murilo Portugal. He was, of course, an Executive Director at the IMF before he went back to Brazil, and we look forward to his rejoining us on December 1.

A couple of other announcements: We noted last time around that the First Deputy Managing Director, John Lipsky, would be visiting Turkey and Africa and, in particular, Mali and South Africa. That mission is now underway. There is press availability during the course of the mission and for those of you who are tracking that, I am happy to give you more information through Media Relations on when and how you can access that.

Finally, let me remind everyone that the public comment period on revisions to the IMF's Code of Good Practice on Fiscal Transparency, which has been updated to reflect recent practices, closes on November 17th. Those of you who are interested in commenting on the code, I will encourage you to do that by visiting the IMF web site which is www.IMF.org and a survey is available on that web site for you to fill in.

I will just say that our next briefing will be on November 16th. So we will revert back to our Thursday schedule and apologies for this time around, having to do this on a Friday rather than our regular Thursday.

With that, let me turn to see if you have any questions.

QUESTIONER: This is just a scheduling question. With the Managing Director's travels to Brussels, is there going to be any press availability there or is he just meeting with officials?

Mr. AHMED: He is meeting with officials, and the only open press availability we will have is going in and out of that meeting. There will be a number of reporters routinely at these ECOFIN meetings.

QUESTIONER: At the end of the mission with Turkey the last time, the IMF staff mission to Turkey made a statement on October the 23rd, and at the end of the statement, it says: "In the period that the government intends to firm up some of their policy undertakings and implement a number of actions to help on the program objectives. Provided that these steps are taken in a timely manner, the IMF Executive Board is expected to consider the completion of the fifth review in December." Could you give more information on what you mean by these steps? Could you say anything more specific, and is there any update since that time?

Thank you.

Mr. AHMED: Thank you. I am sorry I am not going to be able to give you any more on that than what we have got as of October 23 on that. That is what we have put out in terms of the follow-up actions. I am happy to try and get more specific information on what those specific steps are and the state of play of them in time for our next briefing when we come back to it.

I have one from the Media Briefing Center. I will take that and then come to you next.

The question I have from the Media Briefing Center says: Mr. Da Silva was just reelected as President of Brazil. Would you expect from him a deeper distance from the IMF programs and bigger opposition to Mr. de Rato's reform proposals?

Well, my answer to this question is that we have been working on the IMF reform programs with the broad membership including with the Brazilian Authorities over the past few months, and we look forward to continuing to work with all membership and with the Brazilian Authorities to move the reform agenda to the next stage.

QUESTIONER: My question is about the WTO. The Russians seem to be getting closer again to completing their bilateral discussions on the WTO accession, and simultaneously, within the country, the debate has restarted on the benefits of joining the WTO. So, from the point of view of the IMF, what would you say to those in Russia who claim that the country is better off without the WTO?

Mr. AHMED: That is, obviously, a decision Russia going to make. But from our point of view, we think that accession of Russia to the WTO would be a very good thing, and we think so for the following reasons: First of all, accession would bring about some liberalization of trade. This should be a boon for Russian consumers, and it will also help to build more competitive industries. Secondly, WTO membership provides a framework of rules, and that gives greater certainty to both exporters and importers. Also, looking at the experience of other countries that have joined the WTO, the membership is often an ability to leverage necessary domestic reforms in a variety of areas, but including in areas such as services and in competition policy. I would also say that one key advantage of the WTO process is that it provides a benchmark for legal, regulatory, and transparency reform, plus a monitoring device and an implementation mechanism through the dispute settlement process.

So I guess our perspective of this is that, for all of these reasons, there are strong advantages for countries, including Russia, to join the WTO.

Do you have a follow-up question?

QUESTIONER: Yes; in that case, does it make sense for trading partners of Russia to hold out against their joining?

Mr. AHMED: I think accession to the WTO is a process whereby countries that join it have to make a set of commitments that they are going to

be following the rules and existing partners then agree with them to terms in which new members join the WTO. We have taken a view, historically, that for the world multilateral trading system, it is good to have membership of more and more economies in that, but the ultimate decisions and the terms under which individual countries become members is made by the process within the WTO not within the IMF. Obviously, we are not going to be able to comment on the specifics of that.

QUESTIONER: Masood, Mr. Pascal Lamy of the WTO is in town. I believe he is meeting with Mr. de Rato. Can you confirm, and can you tell me what the discussions have been about?

Mr. AHMED: I can't confirm when he is meeting, but I will be happy to give you that specific information before the end of this briefing.

QUESTIONER: Okay; can I then have a follow-up?

We know that the MD has been pushing for the WTO talks to resume. Would that be part of the discussions?

Mr. AHMED: Without the benefit of having talked to them, but what I can certainly say that our view of this -- I can basically use this to reiterate our view -- is that we believe that speedy and successful conclusion of the round is good for the world, it is good for establishing an approach of multilateralism in the trading area where that is important to have a set of rules along the lines as I just answered for Russia, and we think that it is good for developing countries. So we have been strongly in favor of pushing for a round. Mr. Lamy is in the best place, of course, to make the judgment on where that process now stands, but you have seen his editorial, the commentary he has written today, and I think the point that he makes, we couldn't agree more, that the stakes are high and time is short.

I will come back to you on the specifics of when that meeting is taking place. I will come back to you on that.

QUESTIONER: Do you have any results to give us on the meeting Wednesday between Mr. de Rato and Mr. Padoa-Schioppa, the Italian Economic Minister, and do you have any element on the mission of the IMF to Italy?

Mr. AHMED: As you know, the mission is there now, and they are looking at the set of things that we have talked about in previous briefings which is to say they are looking at the draft budget for 2007; they are looking at the agenda going forward on structural reforms in expenditure areas; they are looking at the government's plans, looking at debt and deficit reduction over the medium term. So there is a range of issues on which the mission is working. At the end of that mission, they will put out a statement, and I think that will be the best time for us to give you an update on where the mission is.

I have nothing specific to add on the meeting that took place between the Managing Director and the Italian Finance Minister.

QUESTIONER: The Italian press or the Italian sources have attributed to Mr. de Rato the judgment of being very impressed by the Italian financial efforts. Is that true that Mr. de Rato is very impressed or was that a very polite expression or something he really feels?

Mr. AHMED: I don't comment on comments in the press on that, but as I said, I have nothing in particular to add on the meeting that took place. As to our view on the Italian economy, I will be happy to do that as soon as the mission is finished.

QUESTIONER: Masood, just one quick issue on Turkey; do you know when that is going to the Board?

Mr. AHMED: Sorry, on what?

QUESTIONER: The Turkey mission, it is going to the Board, right, sometime?

Mr. AHMED: Yes.

QUESTIONER: Do you have a date on that yet?

Mr. AHMED: My understanding is it is during the month of December, but I can't give you an exact date. I don't think we have an exact date, but it is during the month of December. So we anticipate it before the end of the year.

QUESTIONER: The other question I do have is there is a lot of confusion out there about the whole multilateral consultations. We had the Bank of England's Deputy talking, saying this week that the discussions between the U.S. and China were ongoing now. We know that the second phase is happening. There seems to be some confusion about who is taking part and how it is happening? Is there anything you can say on it, although I know that you don't really want to talk about it?

Mr. AHMED: I won't say as much as you would want me to on it, but what I can say is, and none of this is really going to be terrifically new stuff but just to give you clarity on where we stand.

The first started after the Spring Meetings. As we said then, we were going to do this in two phases. First we were going to try and meet with each of the individual members in that group, and then we were going to move to a second phase where there would be discussions among the members of the group, facilitated by the Fund.

That first phase is over. We are now in the second phase. How far advanced we are in the second phase, what the exact set of meetings is going to be and when they are going to take place is not something that we have taken a view on making public. That is where we stand now on the exact state of the second phase.

QUESTIONER: Can you remind us who is taking part in this process?

Mr. AHMED: I am very happy to remind people who takes part in that process. The five economies that are taking part in that process are the Euro Area, Japan, Saudi Arabia, the People's Republic of China, and the United States.

QUESTIONER: Will you say something at the end of that, Masood? Will the IMF say something at the end of that process? I thought this was going to be a transparent process on global imbalances.

Mr. AHMED: I will be happy to come back and give you more. I will be happy to give you more on that which is, as we have said, once that second phase is over, there will be a discussion where the whole of the membership has an opportunity to contribute their perspective to a discussion in the IMF Board. At that time, we will be in a position to give you more information on where things stand, but while the process is underway, I think the analogy that people have used before is this is not a soccer match where we are going to give the blow by blow commentary on it. I appreciate that some of you would like more information on it as it progresses, but that is as far as I am able to go on it now.

Can I just come back and clarify the point about the meeting that you had indicated with Pascal Lamy? My information is that there isn't a meeting scheduled because the Managing Director is already on his way to the meeting that I indicated earlier of the Gulf Corporation Council in Jeddah. That is not to say that they haven't spoken. They talk often because this is a very important issue in which whatever we can do to support the efforts of the WTO to bring this round to closure in a successful way, the Fund has indicated it would be happy to do.

If there are no further questions, thank you all very much. See you in two weeks minus a day, that Thursday. Thank you.
[Whereupon, the press briefing was concluded.]



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