Transcript

Washington, D.C.
Friday, October 10, 2014

Speaker:
Masood Ahmed, Director, Middle East and Central Asia Department

MS. AMR: Good morning, everybody. Thank you for coming to the press conference on the economic outlook for the MENA and Central Asia. I'd like to present Mr. Masood Ahmed, Director of the Middle East and Central Asia Department. He will give a short presentation and then we'll take questions from the floor and online. Thanks.

MR. AHMED: Thank you very much, Wafa, and thank you, good morning to all of you. And welcome back to many of you who we see at least once every six months, sometimes more frequently. What I'd like to do this morning is perhaps start off by giving you an overview of our current assessment of the outlook and risks facing both the Middle East and North Africa, but also Central Asia and the Caucasus countries and then we can go into specific questions.

So let me start off with the Middle East and North Africa. And before I go into individual countries or groups of countries let me make a couple of general remarks. And the first one really is that if you look at what's been happening the region, the deepening conflicts in Libya, in Iraq, continuation of civil war in Syria, conflict in Gaza, have obviously had in the first instance a very high humanitarian tragedy for the countries themselves. And they've also had an impact on those countries directly. Their direct impact so far, the spillover effects to other countries in the region in terms of numbers is not yet showing up in terms of the numbers, but it's very clear that when you talk to policy makers and you look at what's happening in these other countries that there has been an effect in terms of refugees. As you know that of the 11 million people that have been displaced by these conflicts a number of them have gone into neighboring countries. There's been an impact on labor markets and on social cohesion in the neighboring countries, on their budgets. And particularly I'm thinking of Lebanon and Jordan which have had to bear a big cost on their own economies because of the refugees that they are very generously hosting, as well as in Tunisia which has been affected by what's been going on in Libya. Let me also say that when you look at broadly what's been happening to the oil importing countries in the region, what we call the Arab countries in transition, this set of regional tensions has added to the difficult environment in which they have been trying to manage their own economies and certainly has been a damper on confidence and as a result on economic activity. But nevertheless I think it's very important to recognize that these countries have managed despite the difficult environment to maintain a degree of economic stability and some of them have also taken very difficult decisions over the last year to reallocate their public spending towards social transfers and investment and cut back on their budget deficits. And they've done this by taking some decisions on cutting back generalized energy subsidies. You will remember those of you who were here at previous briefings that this was a topic that we raised a number of times about how energy subsidies in our region, which you know accounts for half the subsidies in the world as a whole, how energy subsidies were not only a big fiscal drain, but they were also not very equitable because the benefits go mainly to rich people and they were not a very efficient way of supporting the poor. So I mean some of the countries, Egypt, Jordan, Tunisia, Morocco, Yemen, have all taken actions to try to move away from that model. And I think you're beginning to see an effect of that. Nevertheless although there has been stability in the region what you don't see yet is the growth rate that are going to tackle unemployment and that is going to give more jobs to young people and therefore give a sense of hope. And then really the agenda for these countries is to try and continue to make progress not just on sustaining their macroeconomic stability, but also in undertaking the reforms that will bring about more private sector activity that will create jobs. And there's a range of issues they can act on.

Finally on the broad point I want to make is that as for the Fund in terms of our own engagement with these countries, we continue to be actively engaged with all of the countries pretty much in the region. You know, we have programs of financial support for the economic programs that are now underway in Jordan, in Tunisia, in Morocco and most recently also in Yemen. And we have been working with the Egyptian authorities as well on technical assistance as well as on policy work. And we look forward to doing what we call in the Fund an Article IV report which as you know is a consultation of looking at -- like a health check of an economy and which we do for all of our members. And for Egypt we will be planning to do this in the month of November and that will give us an overall assessment of the economy.

Now we've also finally as an institution and despite some of the security issues which affect everyone working in the region, despite that we have also been able to provide both training and technical assistance. And training and technical assistance is very important because many of these countries are trying to embark on new areas. And over the course of the last few months we have trained over 600 participants, have participated in our training courses and there have been over 60 technical assistance missions focusing on everything from how to strengthen the VAT system in Egypt to central banking in Tunisia. So across the range of areas we have been working.

Let me just give you a couple of numbers before we move on to the Caucasus and the Central Asia. Now let me first say that in terms of numbers let me start with the oil exporting countries in the region which is of course the GCC countries and others. Overall for this group of countries we expect growth to remain about two and a half percent this year, which is actually a downward revision from what we were saying in April. So we've actually brought down the growth numbers for the oil exporting countries from what we were saying in April to about two and half percent. Why is this? Mainly because of the impact of conflict in the countries that have been affected, Libya and Iraq particularly. This is the main reason why we have brought down the growth numbers for the oil exporters. For the GCC countries they continue to register a robust rate of growth, a little over four percent this year, a little bit higher again expected for next year. And for them the challenges are more medium-term rather than short-term. There of course as you know the challenges for the GCC countries are mainly twofold, how to try and get a deal with consolidating the strength of their fiscal buffers which has helped them a lot in the past and which are now a little bit being eroded by the fact that they're spending has been increasing and consequently despite higher oil process that's putting a little bit more pressure. And second challenge for those countries of course is to create jobs for nationals, and that is an issue around diversifying their economies and making jobs in the private sector for nationals both more attractive and more feasible.

Let me make one point on the oil exporters because I know this is a question that some of you have already raised, which is including in countries which are oil exporters, oil prices have actually counterintuitively been softening somewhat. And if you look out at the projections for the next 18 months or 2 years from the futures market what you see also is a fairly steady oil price. Of course there's always a wide band of uncertainly around oil process, that's the base line. Now why is that? There are really three reasons for it. First because in Iraq and in Libya oil production has held up more than people feared at the beginning of the year. In the case of Iraq for example oil production this year is expected to be almost the same as it was last year. So that's one of the reasons. Second reason is that there's been of course ample spare capacity in other producers in the region as well as the production of oil outside the region has turned out to be more than people expected. And the final reason is of course that the world economy. And some of you were probably in the briefing that Olivier Blanchard did earlier on this week on the World Economic Outlook, you'll remember that the world economy itself has been growing less than there had been anticipated. Recovery has been weaker in some ways and including in some emerging markets, and that has translated into a lower demand for oil.

Now let me just say a couple of words about the oil importing countries, the numbers for them. So overall economic activities in these countries is relatively modest at about three percent this year. Some countries have been higher, some a little bit lower. You have the table; you will see from that the exact country numbers, but it's about three percent per year. Next year we expect the numbers to improve a bit but that's contingent on a continuation of the favorable trends, some of which we're being to see in terms of both domestic economic and political transitions moving forward, but also some improvements on exports that you're seeing in some countries which are good. I should say also that however for this to happen it is important that these countries move forward with some of the difficult challenges that still exist in terms of the reform agenda for creating jobs and encouraging private sector development and exports.

Now in terms of risks I do want to mention a couple that face this group of countries. First is that I mentioned earlier on that they have taken some decisions that will help to reallocate public spending away from subsidies and towards more targeted spending and towards investments, and also that they've started to bring down their budget deficits, but more needs to be done to contain these budget deficits going forward. Why? Because for many of these countries their debt levels are already quite high. So if they continue with the deficits at the current level then their public debt will continue to increase and of course public debt as it goes up has a long term cost which is that future generations have to pay it back, but it also has a short-term impact on the assessment by markets of the credibility of the countries and consequently makes it harder for them to move to a market based borrowing. And also of course the large public deficit means that you take up money from the local banking sector which could be used otherwise for the private sector. So that's one of the risks that they need to manage going forward. And the other risk I do want to reflect is that there is this risk of spillovers. If the tensions and conflicts that I mentioned earlier on intensify further or spread further this could have an impact on the oil importing countries as well. And this is not just a direct impact, but also these increased social tensions sometimes make it a bit harder for countries to take the sorts of economic decisions which they need to take to move ahead with their own reform agenda.

And let me end on that by saying that it's very clear that the oil importing countries in the region, not just the Arab countries in transition, but all of the oil importing countries in the region, as they move forward have to take a number of measures themselves to reallocate resources, but they will need financial support for the next few years from outside. And this financial support can come partly from the private sector, but we know that the private sector has so far been a little bit in the wait and see mode because they're waiting for the transitions to come to an end, they're a little bit held back by the uncertainties that come from conflicts and tensions in the region. So we also know as a result that a lot of this financial support will come from the official sources. Now so far many of these countries have benefitted from financial support from the neighboring countries, from the GCC for example. And just to give you one number, for the Arab countries in transition they have received since 2011, over the last three years, about $80 billion -- 8 - 0 billion dollars of financial support, and nearly half of this has come from the GCC countries. The international financial institutions are also providers of support as are other agencies. And this financial support will need to continue not just for providing financing for stabilizing their economies, but also financing for investment so that they can become more self sustaining as they move forward.

So let me now just say two words about the countries of the Caucasus and Central Asia and then I'll open it up for questions. On the Caucasus and Central Asia the first point I want to make is that what we are seeing in this group of countries is the impact of the spillovers from the slowdown in Russia. These countries are very connected to what happens in the Russian economy and as a result we're seeing growth in the countries of the Caucasus and Central Asia come down by about one percentage point this year to five and a half percent for this year and next year. So there's about a one percentage point impact of the slowdown in Russia on the countries in the Caucasus and Central Asia. Oil importers in this group of countries are more affected than oil exporters. And of course the key transmission channels through which this has taken place is remittances and investment flows. I should also say that if you look at the outlook for these countries and look at the balance of risks, the risks are tilted more towards the downside. A further deepening of tensions, if it leads to a slowing down or prolonged slowdown in Russia would have a significant impact in the region. And there are also domestic risks which come from delays or reversals in some of the reform programs that they have underway, particularly in the areas of governance and corruption. Now I should also say for this group of countries that if you look at their fiscal balances they are also deteriorating in part because of this spillover effect from the outside. And this does require therefore an effort to strengthen gradually their fiscal positions. Some of the countries have the possibility to deal with the slowdown that they're facing by undertaking some countercyclical fiscal stimulus and where they have the space our advice to them is to take advantage of it, but do it in a way that only if you have the fiscal space, and of course in the context of a medium-term plan that would then bring your fiscal situation back to the trajectory that was assessed. Others need to move forward more urgently in dealing with their fiscal situation. And finally I should say for this group of countries that as with the group that we were talking about earlier, the countries of the Middle East and North Africa, for this set of countries also the big challenge is going to be how can they make their economies more diversified and more inclusive, and create more jobs. Because again young people, the demographics in many of these countries means that there are young people coming into the labor market looking for a job. And for this group of countries the kinds of actions of course vary country by country, but the kind so factions that would deliver some of those improvements would be moving ahead with comprehensive reforms in governance and regulations, in diversifying way from commodity exports to their kinds of businesses, and improving access to finance as well as moving forward with more regional and multilateral integration of their economies into the rest of the world.

So let me stop with that overview. And as I said I'll be happy to answer any specific questions you have.

QUESTIONER: My first question is last April the Fund talked about continuation of the state of political uncertainty in Egypt. The state of political uncertainty, to what extent it still exists or it has changed? And why have the Article IV Consultations with Egypt been delayed so far, for four years? The last one was in 2010. The second question, we need explanation of the increase of unemployment and inflation, and also the increase or expected increase in the growth rate which will be three point five percent. Thank you.

MR. AHMED: Thank you very much. So on Egypt the couple of questions that you raised, the first one is so where are we in terms of our assessment of the political uncertainty that you mentioned and also in terms of the Article IV. I think if you look at what's happening in Egyptian economy, clearly, compared to a year ago it's in a much stronger place.

But there is both -- it's been moving forward. It's a political transition, it's a -- there's more stability on that front but also it's an economy that has benefitted from some important decisions that have been made by the Egyptian government recently to try and contain their budget deficit by taking some difficult decisions on raising energy prices and reallocating these resources to other more productive uses.

And it's also benefitted from more confidence and more financing coming in from neighboring countries. And that's the explanation why you see the improvement in the growth rate in Egypt this year projected to be about three-and-a-half percent. And next year, of course, could be higher still if this trend continues.

For the same reason, because of some of these decisions to raise energy prices and other factors, you see temporarily an increase in the level of inflation for this year and possibly next year. But if you look out to the medium term, then you see that the inflation levels begin to come back down, reflecting more the trends rather than the one-off impact of increases in prices.

Then let me say a word about the Article IV that you mentioned in terms of our own engagement with Egypt. As the managing director said, we have been actively supporting Egypt through technical work particularly in the area of tax reform, the reform of the value-added tax in particular and we've also been discussing with them, more recently, the timing of the Article IV mission which, as you said, had been postponed because of the difficult transitions that Egypt's going through over the last few years.

And the Egyptian authorities have now requested an Article IV mission from the IMF which we anticipate will take place in the month of November and this timing is quite fortuitous because it would then allow us to, all going well, report based on the work of this team which could be discussed by our executive Board and be ready in time for the Egyptian economic conference summit that they are planning in the month of February next year.

And it will be a good -- we hope it will be a good contribution to the analysis of the economic situation of the reforms that are being undertaken, of the challenges that lie ahead and of the way in which not just Egypt but its partners can help it in the years to come.

MS. AMR: Please, could you introduce yourself?

QUESTIONER: Can you kind of walk us through the impact you anticipate from the recent decline in crude oil prices? I know that's a broad question so perhaps if I can put it into three areas. First of all, the impact on crude-producing nations, secondly, the impact on the US which is obviously a big consumer of crude but at the same time, increasingly a major supplier and finally the impact on Europe. Would you anticipate any difficulties for them given their struggles with deflation, the threat of deflation?

MR. AHMED: I think, let me talk a bit about the effect of oil prices on the oil producers of the Middle East and perhaps, also on the oil importing countries of the Middle East. On the broader effect on the US and Europe, I'm going to defer on that, if I may, and get my colleagues who are following this to come back to you on that one.

I think on the oil-producing countries, there's an obvious effect, immediate effect if you like, which is a financial effect in terms of the revenue inflows that they would see. But if you look at the countries in the GCC, for example, they all have built-up, for the past more than a decade, financial reserves that allow them to continue with their programs, with their spending plans in the short term notwithstanding short term movement in oil prices because they can essentially dip into those plans, those financial resources.

So while it'll have a financial effect, in the short term it should not disrupt economic spending plans by countries unless they decide that they want to adjust them for other reasons. However, what it also means is that today, with the exception of the GCC and in the GCC, Bahrain is separate in what I'm going to say. All of the oil-producing countries in the Middle East and North Africa are already running a fiscal deficit today.

So every oil producer outside the GCC and Bahrain are already running a fiscal deficit. And what this decrease in oil prices, to the extent that it's part of a longer term trend, means is that the projections that were made for the next three or four years of fiscal deficits in those countries will clearly be higher unless they adjust their spending. And even for the GCC countries, for some of them, their break-even prices are already pretty close. Their fiscal break-even prices are pretty close to oil prices before the fall.

So again, for them, that issue becomes more urgent. So as I said, for the oil producers it's not so much an immediate issue but it does raise this longer term issue.

For the oil-importing countries in the region, the big effect of course of lower oil prices, even if it's for a few months, is that it helps ease one source of pressure on their finances, on their balance of payments. And to the extent that they are still subsidizing oil products, even if by less than before, it has also an impact not just on their balance of payments but also on their budget. Because remember, the budget was picking up the difference between the price, the market price of oil, and the price at which those products were being sold to consumers; whether they're domestic consumers or to households or to industry.

And to the extent that that gap is shrinking now, because the import price is going to be lower, that will help the budget as well as the balance of payments for those countries.

QUESTIONER: Thank you, Wafa. Mr. Masood, When is Tunisia going to have its next -- let's make it as easy as possible. When is Tunisia getting the money? That's the first question and in case there could be a delay on that or maybe because I'm sure you know that there are the four reforms that should have been made. The government prepared all that and it went to the Parliament but they're not going to be working and we're having the elections for the new Parliament on the 26th of October.

So maybe this Parliament wouldn't be the one working on those four reforms. So in this, maybe it's an unusual situation, maybe even different from Jordan situation. What's going to happen? Are you going to review things? Are you going to ask reforms as small laws? What are you going to ask from Tunisia? Are you going to give half the money and do you know that Tunisia needs the money before the end of this year? Or otherwise we would go on the markets, we have the American guarantee, the Japanese guarantee but it wouldn’t worth nothing without the IMF giving the money because that would be weird. So and in case you don’t give the money, what are the future of the relations between our country and your institution?

MR. AHMED: Thank you very much.So on Tunisia, maybe just a couple of things. First is that I should say that as those of you who have been following this will know, we have been supporting Tunisia now with a financial program for some time. And we've been working with them for over a year now with that.

And already, under that program, the Fund has provided over $1 billion of disbursement to Tunisia and over a number of reviews. And the team now is in the process of discussing with the Tunisian authorities what, how to move forward with the next review. And this is part of a long-term program.

And I want to say also in this context, Wassim, before I come back to your question of this review is that in terms of the timing of individual reviews in the context of a Fund-supported program in countries, that's a function of how the authorities move forward on individual areas of reform that have been discussed as part of their overall program with individual dates. And that's a discussion that the team has with their counterparts.

But the overall relationship with the Fund and between the Fund and Tunisia is one that is a close and very multifaceted relationship where we're not just focusing on an individual review but really how to make Tunisia's current historic transition successful. And you were there at the conference that was organized in September by the Tunisian authorities which was about moving from the current phase in Tunisia to the next phase. Not just politically but in terms of moving from a macroeconomic stabilization effort to a growth effort.

And you know that in Tunisia there are many challenges because the recovery remains fragile. This year the growth rate for Tunisia has been revised down and it's about two-and-a-half percent. We hope it will be stronger next year. There are a number of challenges in how you can continue to build the exports that will drive that growth agenda for next year and manage the financing needs for next year. The IMF has indicated while we were in Tunisia and other places that we are, not only have we been supporting Tunisia during this past period of transition, but we'll also be ready to support in the coming years if the Tunisian authorities ask us to do that.

Now to come to your very specific question of what is the process of this review, I think that is exactly the discussion that my colleagues are having with their counterparts. And I'm sure that once they have advanced on it we'll be -- you'll be the first to know where we are on that. Thank you.

QUESTIONER: I wonder if you could give us a few words on the threat from Islamic State. It's a simple economic question. Does it in itself mean that developmental goals might be threatened but also economic forecasts, might they be impinged upon by the spread of this group? What's your forecast for how that could affect the regional economy?

MR. AHMED: Thank you very much. Well, let me say two things about that which you're looking, just coming out of the numbers on the economic impact. The first thing is that if you look at what is happening to the economic forecasts in the countries, let's take Iraq, let's talk also other countries in the region where there's conflict. But if you look at Iraq, you see that the economic forecast for those countries have been marked down.

In the case of Iraq now, for example, we're expecting a slight contraction in the economy this year. You also see the consequence of that in terms of the pressures of the budget. You see some reduction in the external reserves that Iraq has. They're down by about 10 billion in the month leading, you know, and the latest numbers that we have are about 68 or so billion.

So clearly, there is an economic impact and I don't want to suggest at all that the economic impact is the dominant issue. Clearly, there is a much bigger social, humanitarian, political which I am not getting into but I don't want to ignore it.

When you look at the numbers, however, of other countries in the region, say Jordan or Lebanon, to take two which are affected by what is happening in Iraq, you don't see in the projection yet any marking down of growth rates for this year. What you see is pressures in terms of refugees. What you see is pressures of the budget, what you see is pressures in terms of housing markets and of social tension sometimes. But so far, it's not showing up in the projections of economic growth.

Now, why is that? And perhaps one reason is that the numbers that were there even before these recent advances of the terrorist groups, even before that, the numbers were already low. Say for Jordan it's about three percent some weak recovery from last year. For Lebanon it's only less than two percent growth rate. But that's one reason.

The second reason is that domestic factors are affecting the growth outlook as much as what is happening outside in those countries. So in the case of Lebanon, for example, fiscal situation has been deteriorating. The country has been having difficulty making decisions because of the political vacuum. And these things are all tied together but that may be another reason why they are having it.

The final thing I'll say to you on this is that looking forward, the risk that these -- this advances of ISIL could pose not just to economic numbers in the country where they're active but also in the neighbors is clearly one major dimension of the overall risks that I mentioned earlier. So as I said, in the case of Iraq, oil production so far has more or less held up because the areas where oil is produced have not yet largely been affected by this conflict.

But if it were to spread, then clearly, that would have an impact on oil production in Iraq. That would have an impact on the economic activity in Iraq. Today the impact has been more outside of oil especially in terms of the effect on infrastructure, on energy, on the private sector activity, but you could see that spreading.

QUESTIONER: Through the reviews made by the International Monetary Fund over the past two years, have you been aware of the expenditure of grants given by the GCC countries and how they are spent? And would you release the fifth and sixth disbursement of the credit payment to be made especially as the mission to mission from the IMF to Jordan have their comments regarding the tax on income despite the reforms that have been taken? And or then we are still suffering from high deficit in the trade balance. The debt also is increasing to more than 86 percent from the GDP and growth rates are very low.

So how would you advise us in this respect?

MR. AHMED: Thank you. Well, let me say that, first of all, on the numbers that you mentioned, yes, to the extent that there are grants which are being provided to the government of Jordan that go through the budget, those are things that we do, obviously, take into account in the calculations that we have. And in the case of Jordan, I should say, that grants for neighboring countries have been one of the reasons that have helped Jordan over a difficult period, over many years to finance expenditures and to close some of the gap between their expenditures and their own domestic revenues.

Now, in terms of where they are on the economic priorities facing Jordan, as you said, I think it's important to recognize not only the challenges that lie ahead which you accurately listed. That they have still a large budget and current account deficit that they still need to accelerate growth, that all of those points are true. But I think it's also important to recognize that Jordan has had to deal with some very difficult challenges that have come about on the one hand from the spillovers from Syria by dealing with the refugees.

There is at least 600,000 refugees registered. There is probably many more who are in Jordan that are not registered as well as by the impact of the disruption and the supply of gas from Egypt which they have had to substitute for by buying more expensive oil.

So the combination of those has had an impact on Jordan. They have made some very difficult choices including by trying to raise energy prices so that the electricity company can become viable over the medium term and in terms of not make losses over the medium term. And as a result of those things, you see some recovery in economy activity. You also see an improvement in both their fiscal deficits and in their reserve situation.

So I do want to acknowledge what the Jordanian authorities have done as well as point out the challenges that lie ahead. One of the challenges that does lie ahead, of course, is to move forward with having an income tax system where people pay their fair share in supporting the economy. Where people who are currently evading taxes are brought inside the tax net and where unproductive exemptions are then closed off.

Now, that's a discussion that's going on in Jordan and that's why we've been supportive of moving forward with that agenda. In terms of the review that you mentioned, the team did go out there. They made -- they had very good discussions. As you know, they issued a press release at the end of their visit and those discussions are continuing now. The Jordanian authorities have just arrived and I'm looking forward to discussions with them which will then help us to bring this process to what I hope will be a good outcome.

QUESTIONER: I'm wondering if you could elaborate on some of the measures to be taken to mitigate some of this downside risk for economic growth in countries most adversely affected by Syrian spillover. You've just talked a little bit about Jordan but in particular, about Lebanon. What more can be done?

MR. AHMED: Well, I think there's perhaps two groups of measures. One is what can be done in terms of dealing very precisely, narrowly, with the cost to the country of hosting refugees. So that's, if you like, a sort of targeted effort. And there, as you know in the case of Jordan, in the case of Lebanon, there have been studies done in the case of Jordan actually by USAID if I understand correctly. Andin the case of Lebanon by the World Bank and the UN working together have come up with a study that assesses the impact, the direct fiscal costs and also the broader economic costs.

And I think in both cases, perhaps it's the first starting point is that we have to recognize that these costs cannot be borne by the countries alone. They are too large for them to bear alone. And as you know, there was a trust fund in the case of Lebanon that was set up to provide financial -- to provide an instrument for financial support from the rest of the world to help Lebanon defray the costs of supporting the Syrian refugees which they've so generously hosted. And as far as I know, I don't keep track of the exact numbers in my head. I have the -- but my recollection, and you probably have a better number than I do, is that so far the contributions into this trust fund are really a small fraction of what was hoped for and what the costs are that are associated with Lebanon's hosting the Syrian refugees.

I think the last number I had was somewhere in the neighborhood of $30 million or so but --

QUESTIONER: It's quite low.

MR. AHMED: Yes and it was really nowhere near the kind of numbers that were initially hoped for. So I think the first message I would have on that front is that these countries have opened up their societies and their arms to their neighbors and I think that they have paid a price in terms of financial costs for them. Not to mention the impact this has in terms of labor markets and housing markets.

And the rest of the world needs to help them with that. In our own program in Jordan, for example, the financial program that we have in supporting Jordan, we have adjusted the program to take into account the cost to Jordan of hosting the refugees by adjusting all the fiscal numbers to be able to allow for that.

MS. AMR: Any more questions? We have time for one more question. Please.

QUESTIONER: My question is about Syria. Destruction in Syria today is on the scale of the destruction that occurred in Europe after World War II. We have figures about the need for $100 to $150 billion to rebuild the country.

Is the IMF or the World Bank Group thinking of have a strategy once the situation stabilizes to reconstruct that country or to think GCC countries will pick up the bill?

MR. AHMED: I think it's a very important question that you've raised because clearly, at the moment, everyone is focused on the tragedy that's unfolding in Syria. But we do need to look ahead to the point at which there is -- you go past the current conflict and you focus on rebuilding the -- not just the society but simply the economic infrastructure that would underpin in the future.

And that cost is going to be enormous and we don't have a very good estimate right now. I don't think anybody has a very good estimate but there are estimates that have been made. You quoted one and clearly it's going to be in the high tens of billions of dollars and whatever that number works out to be.

As far as the IMF is concerned, I think what we do given our nature of our work is to be there immediately after the conflict ends to provide at least two things. One is a macroeconomic framework which ensures a degree of macro-stability, at least as you move forward with the reconstruction agenda. We're not a reconstruction agency but we can provide that macro framework for it, including some financial support to rebuild reserves in countries and to give them some breathing space while they move forward with reconstruction.

And the second thing the IMF can do is by having that kind of macro framework is then to provide also a degree of comfort to the other institutions who do provide reconstruction support that they can see how their help is fitting into a broader economic structure. This is what we have done historically.

In the case of Iraq, for example, we had a program of a support with Iraq from 2003 through 2013. This is what we did in Yemen right after the situation stabilized in 2012 and I can give you examples from other regions as well where we have done that. But the IMF's role in this context is more at the level of macroeconomic assessment and support but many agencies, institutions, partner countries will clearly need to provide then the kind of help on reconstruction itself that you referred to.

MS. AMR: Thank you. Thank you, Masood.