Transcript

Washington, D.C.
September 10, 2009

MR. HAWLEY: Good morning, ladies and gentlemen. I’m David Hawley from the External Relations Department of the IMF and welcome to our regular briefing for the media. Welcome to journalists who are joining us online on the Online Media Briefing Center. As usual, the briefing is embargoed until 10:30 Washington time; that’s 14:30 GMT.

Before turning to questions, let me mention a couple of upcoming events. Next week, September the 17th, the Managing Director, Dominique Strauss-Kahn, will be speaking here in Washington at an event organized by the Center for Global Development. He’ll be delivering an important speech on low income countries entitled “Helping Low Income Countries Cope with the Global Financial Crisis.” He’ll be taking questions after the speech. A media advisory will be issued shortly.

Please note that we will be releasing the analytical chapters of the Global Financial Stability Report (GFSR) on Monday, September 21. And, on the following day, September 22, we’ll release the analytical chapters of the World Economic Outlook (WEO). As usual, we’ll hold press conferences for these events.

The main GFSR chapter will be on September the 30th at a press conference in Istanbul, on the eve of the Annual Meetings, and the forecast chapters of the WEO will be on October the 1st, also of course in Istanbul. All the Istanbul events are currently posted on the Annual Meetings web site.

Next week, the IMF will be hosting the World Diversity Leadership Summit for the first time here at headquarters on September the 16th and 17th. This summit is a gathering of senior corporate, government and non-governmental organization leadership for an examination of the challenges and opportunities related to diversity management. I should make clear that this is an event that the Fund is hosting. It’s not specifically about the Fund. The Fund Management, however, will be speaking to the meeting. For questions about this event, you should contact Media Relations.

Now one final announcement, the September issue of Finance and Development, the IMF’s quarterly magazine, was released, is released today. The theme is Where Do We Go from Here? It’s available on the web site.

So, with those remarks, I’ll take questions.

QUESTIONER: Will you be releasing anything that you prepared for the G20 Ministers of Finance meeting?

MR. HAWLEY: No, we’re not releasing anything right now. Some material may become available later. But, in terms of what comes next from the Fund, you should be focused on the GFSR and WEO.

QUESTIONER: That’s what I expected. Also, a question on Ukraine, the Ukrainians seemed to have reneged on their obligation to raise their gas prices, natural gas prices. So what comes next?

MR. HAWLEY: Well, as you may recall, it was agreed that the NERC, the independent regulator, would raise gas prices by 20 percent for households from September the 1st and utilities from October and continue with quarterly gas prices until prices were brought in line with costs.

The increase of gas prices for households was contested by trade unions, and the authorities are following up with the necessary legal proceedings to implement the measures. As far as gas prices for utility companies are concerned, it’s our understanding that these will go ahead in October as planned.

Let me make one point here. An important element of the agreement is that it, that gas prices increases for households would be complemented by a social safety net to protect the most vulnerable in society. Not much has yet been done in the regard, and so we have some concern about that.

QUESTIONER: So, basically, it means that you are waiting for the judicial procedures to be completed?

MR. HAWLEY: Yes, we’re following events.

QUESTIONER: I also have a question on Ukraine. I was wondering whether following the technical mission where it appears that the government and the IMF have agreed on what the budget should have in it and should that budget be passed by the end of the year. I don’t know if you have any update on that.

MR. HAWLEY: Well, I can talk to you about the status of our program negotiations since that seems to be the question. The Second Review was completed at the end of July, and a small mission visited Kiev last week to assist the authorities with preparation of the 2010 budget. The mission is planning to go for the Third Review in mid-October.

QUESTIONER: For further talks on the budget or do you what’s going on?

MR. HAWLEY: I don’t have details beyond what I’ve given you.

QUESTIONER: The other question I have is on Turkey. Any update for us on the Turkey discussions? I know EXR Director Caroline Atkinson is there right now, but I saw a story on the wire saying that a mission wasn’t going in October, and I would think that’s because the IMF meetings are going to be there.

MR. HAWLEY: Well, I can only refer you to what Caroline Atkinson, who was in Istanbul yesterday, said. But the basic point to take away from her remarks is that discussions between the Fund and the authorities are ongoing on how to address the economic challenges that Turkey faces and the medium-term solutions to those, that the program, that these discussions go on, of course, a separate track from the Annual Meetings. There isn’t a connection between the two.

QUESTIONER: I’m from Icelandic Broadcasting Radio. Is there any news on the review of the Icelandic economic plan, when the Executive Board will discuss the plan?

MR. HAWLEY: Your question is about the status of discussions with Iceland. I can only tell you that a date for the Executive Board meeting to consider the review has not yet been set but that we’ll be in touch with you when one is.

QUESTIONER: I wonder if you have an update for us on how the program talks with Iraq are going.

MR. HAWLEY: I’m afraid I’ve got nothing fresh on Iraq.

QUESTIONER: Just to follow up on Turkey because there seems to have been some interpretation that this open-ended discussion plus the absence of a technical team in October could be interpreted as a negative sign. So, just to clarify that, it’s not a negative sign? It doesn’t lessen the possibility of reaching an agreement? And, I had a second question if you can bear with me. Have members expressed interest or actually done something to transform the SDR allocation into hard currencies?

MR. HAWLEY: On your first question on Turkey, both the authorities, the Turkish authorities and the IMF, would like to reach a conclusion regarding a possible program as soon as possible. We, on our side, have stressed the ongoing discussions with the authorities are, as I was saying, separate from the forthcoming annual meetings which are a truly international event. The outcome of the discussion is not influenced by the timing of the meetings.

On your question on the SDR allocation, the allocation has gone into effect. I don’t have details on how individual countries have used their allocation.

QUESTIONER: David, the idea of creating a new international reserve currency doesn’t seem to die. The U.N. recently issued a report saying, in effect, that it is needed. Do you expect the issue to be discussed at the Annual Meetings?

MR. HAWLEY: I am not aware of a specific discussion on a global reserve currency at the Annual Meetings.

QUESTIONER: Well, can you comment on the U.N. report? I think it was the UNCTAD.

MR. HAWLEY: I’m afraid I don’t have a comment on that report.

MR. HAWLEY: I have a question from Heather Scott at Market News International who asks whether the WEO briefing and other events will be web cast from Istanbul.

The answer is yes.

QUESTIONER: Another technical question, if countries do exchange the SDR for hard currency, do they have to announce that or is it a private agreement between countries?

MR. HAWLEY: I’ll have to get back to you on that question.

QUESTIONER (online): Could you please clarify the conditions under which Honduras could access the SDR allocation?

MR. HAWLEY: Well, as we’ve already announced, the Fund recently approved a global allocation of SDRs of about $250 billion in special drawing rights. These are intended to supplement the reserves of all 186 members of the IMF. Honduras’s share of this allocation proportional to its quota in the Fund, is about $163 million -- $163 million. However, the present regime in de facto control is not able to use these SDRs until a decision is made whether the Fund will deal with this regime as the government of Honduras.

QUESTIONER (online): What is the progress of the mission now in Sri Lanka, I am asked by Assa Sermano Lanke online.

MR. HAWLEY: A staff mission is in Colombo, Sri Lanka, from September the 9th to the 22nd to assess the implementation of the program.

QUESTIONER: Along the same line as the Honduras question, do you know what the allocation for Ukraine is and can Ukraine use the allocation immediately?

MR. HAWLEY: The amount of Ukraine’s allocation is on our web site.

QUESTIONER: Can it use it?

MR. HAWLEY: As far as I’m aware, Ukraine can use its allocation, yes.

If there are no more questions, I’ll call this briefing to a halt. The embargo, as I said, is at 10:30.

Thank you very much.