Transcript of a Press Briefing by David Hawley, Senior Advisor, External Relations Department, International Monetary Fund

Washington, D.C.
Thursday, July 12, 2007
View a Webcast of the press briefing

MR. HAWLEY: Good morning. My name is David Hawley. I am the Senior Advisor in the IMF's External Relations Department. Welcome to this, one of our regular press briefings. Welcome to those in the room and welcome to journalists online via the Media Briefing Center.

I do not have announcements to make at the start of this briefing other than to note that as usual it is under embargo and the embargo time is 11 o'clock Washington time; that is 1500 GMT. Our next press briefing will be on July 26. That will be the last briefing before the Executive Board goes into its recess, and the recess will be between August 4 and August 17. So with that I am happy to take questions. When you make a question, please identify yourself.

QUESTION: David, has Mr. de Rato given a date for his departure?

MR. HAWLEY: He has announced that he will be leaving after the annual meetings which this year are held in October.

QUESTION: But he hasn't said if it is going to be October 30 or October 20?

MR. HAWLEY: No, he hasn't said that.

QUESTION: May I have a follow-up to that?

MR. HAWLEY: Sure.

QUESTION: He says he's got a lot of work to do and he wants to complete a lot of the reforms, not complete, but progress on the reforms. What exactly does he want to do, or has he indicated that to you?

MR. HAWLEY: As you noted, Mr. de Rato has said that he intends to pursue the work of the Fund actively in the period before he leaves the IMF. As far as emphases are concerned, I would refer you to the work program of the Executive Board which has not changed by the announcement of Mr. de Rato's intention to step down. And if I were to pick a couple of highlights there, I would note the ongoing work on reform of the Fund's quotas and voice and of the consideration of a new income model for the Fund, among other things.

QUESTION: On the income model, up to what point would that go? I know it's coming around the Board.

MR. HAWLEY: On that question, the work on the income model, I should note that management has continuing discussions with the Executive Board on developing a new income model based on recommendations on the report by the so-called Crockett Group. And we are following-up these discussions and in due course there will be the proposal by management of the new income model to the Board, but I don't have further details at this stage.

QUESTION: As you know, the selection process has kicked off. We have seen some buzz in Europe. Is there any indication yet how that selection process is going to work and if it is going to be any different from it has in the past? The Fund is an important juncture now on reforms, where the developing countries are looking for more say. Is there anything that you can see that is going to change that and make it a lot more representative?

MR. HAWLEY: Let me bring you up to date on that to the extent that I can. The Executive Board met on Monday, this Monday, July 9, to begin the process of selection of a new Managing Director to succeed Mr. de Rato. They made a statement after that meeting in which they noted two things. First, that the Board would meet again to finalize the selection procedure expeditiously. And this is what I draw your attention to in the context of your question, to reach a decision in an open and transparent manner and consistent with the Fund's medium-term strategy. The latter point is a reference to the Medium-Term Strategy adopted by the membership in April 2006 where the membership agreed that a transparent procedure for the selection of the Managing Director was worthwhile.

In terms of follow-up, and here I am also going to take a question from [the Media Briefing Center], he asks when is this next Board meeting going to take place. On that point I can say that Executive Directors of the Board, which is responsible as I should underline for selecting the Managing Director are expected to continue their discussions on the selection process today around lunchtime, and should there be a statement following that meeting, it will be brought to you I assume later in the day.

I will take another question if I may from the online Media Briefing Center. His question is the following: "The Fund said that the IMF supports in Nicaragua key elements of the authority's macroeconomic framework for 2007 through 2010. Does this mean that you are very close to an agreement on a new program with President Ortega?" I will bring you up to date on Nicaragua.

The position is that the IMF staff mission reached an agreement with the country on a program that could be supported by new PRGF. This of course is the case in any program agreement that needs to be approved by the Fund's Executive Board. In the coming weeks the authorities and the Fund's staff will work to complete the remaining technical details of the proposed program that would be supported by the Fund. So that is the situation on Nicaragua.

I am not at this stage in a position to tell you exactly when the Board discussion or approval of the program would take place, nor at the moment do I have information on the size of the program. Lesley?

QUESTION: Coming back to the Board issue. Have you had any sort of indication if the next meeting is going to be before the recess or if this is all going to continue during the recess?

MR. HAWLEY: I had better go back to what I said, that the Board is meeting I expect around lunchtime today to continue its discussion on the selection process. Let us wait to see what comes out of that meeting before moving on to more precision on timetables.

QUESTION: Is there any indication from the MD or anybody else whether they want a candidate firmed up before the annual meetings or do you think afterwards?

MR. HAWLEY: Let's wait for the Board which is responsible for the selection of the Managing Director to make its next statement on this subject which could include some indication of the timetable.

QUESTION: Sorry. There's a lot happened this week, the last 2 weeks.

MR. HAWLEY: Yes, indeed.

QUESTION: The other question is Gordon Brown has resigned. How does that process actually work? Is that also a European or is that process open to more countries? I have never had to cover it before.

MR. HAWLEY: Just as the Managing Director of the IMF may be selected from any country member of the IMF, so too the Chair of the IMFC can be of any nationality. In terms of procedure, let me remind you that the Board of Governors, which is the membership's highest representative body, says that the Chair of the IMFC is selected to serve for a period as long as the membership determines and in line with the practice for the selection of the Chairman of the IMFC and its predecessor policy-guiding committee, the Interim Committee, the process of selecting the Chair begins with consultation among the IMFC members at the level of Executive Director until a consensus emerges on the identity of the IMFC Chair.

QUESTION: Something completely different, on China, do you have anything for us regarding the news earlier this week of China's trade surplus?

MR. HAWLEY: No, I've got nothing on that.

QUESTION: Do you have any idea when the China PIN is coming out?

MR. HAWLEY: May I just check my information on that? I don't have a date for the China PIN are there other questions? This is a question from the Media Briefing Center. "What are the Board's or the membership's criteria for transparency in the selection process? And is the traditional format of having a European nominee head the IMF in keeping with this transparency?"

In response to the question I go back to the Board who is as I have said responsible for this matter, on Monday they made a point of emphasizing that any Executive Director may submit a nomination regardless of the nationality of the nominee which means that a national of any one of the Fund's 185 members is eligible for the position of Managing Director. The Board have made a point in their statement of proceeding with this decision in an open and transparent manner, and it is in that respect that they issued a statement immediately after their first meeting and intend to continue the practice of keeping people up to date as their discussions first on the selection procedure and then toward identifying a candidate continue.

Another question through the Media Briefing Center, "How many if any candidates to replace Mr. de Rato have been presented to the Board so far?" I am not aware that a candidate has been, to use Ruben Barrera's word, presented to the Board. I am only aware as you are of names that have been discussed in the public. But it would be premature for me to speak beyond the discussion of the selection procedure which is where the Executive Directors are presently at.

QUESTION: For the ones like me who are following for the first time the selection and the discussion about the selection of the Managing Director. Would you be so kind just to explain to me technically what is going to happen from now to the selection?

MR. HAWLEY: What is going to happen from now to the selection is what I hope I indicated earlier, that the Executive Board has begun a discussion which I expect them to continue today on the selection procedure and they have identified in their statement on Monday how they see the procedure, and let us wait for their subsequent meeting and statements made after it for more precision on procedure. I've got another question via the Media Briefing Center, "Is there a deadline for the selection of the IMFC Chair? Do they need to have one selected by the annual meeting?" I don't have a specific answer to Heather's question. I will be bold enough to say that I assume there will be an IMFC Chair in place by the time of the annual meetings.

If there are no more questions, I will conclude this press briefing. As I say, the embargo is at 11 o'clock. Thank you very much.



IMF EXTERNAL RELATIONS DEPARTMENT

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