Transcript of a Press Briefing by Thomas C. Dawson, Director, External Relations Department, IMF

April 22, 2003

Director, External Relations Department
International Monetary Fund
Tuesday, April 22, 2003
Washington, D.C.

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MR. DAWSON: Welcome, everyone, to the latest of our press briefings. I'm Tom Dawson, Director of External Relations.

As usual, we will embargo the briefing until about 15 minutes after conclusion, and I will set a precise time then.

I have just one announcement to make. I might anticipate I'll get a question on the country anyway, but I'll just preempt it. In agreement with the Argentine authorities, Mr. John Dodsworth is going to assume the position of senior resident representative in Argentina. The stationing of Mr. Dodsworth, who has recently been the mission chief for Argentina, should contribute to the ongoing dialogue with the authorities at a time when discussions will soon focus on a medium-term program to support continued structural reforms and growth.

Mr. Dodsworth is currently the Deputy Director of the Western Hemisphere Department at the IMF. Previously, he was senior resident representative in India, Korea, and Indonesia, and immediately prior to joining the Western Hemisphere Department, he was the mission leader, IMF mission leader, for Russia.

That is the only announcement that I have, and I'll be happy now to take any questions.

QUESTION: If you could just expand a little on Dodsworth, exactly what does this mean, senior representative for Argentina? Will he be based there? Will he be working out of Washington?

Also, I understand that a mission is heading towards Argentina on Monday. This is part of their review for the program that they have ongoing, but I was just wondering, this is a day after they've had their elections. Will they be contacting the economic teams of the winner or winners of that first round? What else could be on their agenda for that visit?

MR. DAWSON: I may have spoken too rapidly. He is the senior resident representative, so, yes, he will be living in Buenos Aires. I believe there actually is an additional Fund staff member stationed there. The title "resident representative" refers usually to the level of the individual within the Fund hierarchy, but also on occasion, in many experiences that I'm aware of, there also is a second Fund person there.

You're correct. There will be a mission going to Argentina I think early next week or possibly over this weekend. It is part of the—as I think you implied in the question, it is part of the regularly scheduled review. There is a timetable for reviews that was set up when the program was approved, and so this is a process that runs independently of the electoral calendar. And so in that sense it is routine.

Because it is such a review mission, I don't believe that it will be having contacts with the part candidates—candidate—either successful candidate or the two candidates into the runoff, if there's a runoff afterwards. But, if something like that develops, I'm sure it will come out of Buenos Aires rather rapidly. But at this point, I think we're best describing it as what it is, which is the regular review mission.

QUESTION: Is it normal? When does the IMF have these senior resident—senior resident representatives and why is—

MR. DAWSON: Well, he was the senior resident representative in the three countries I mentioned, so that is not—that is not unusual. He is a person, I think, of great experience in a number of regions, and given the importance of our relationship with Argentina and I think the same view by the authorities of their relationship with the Fund, it seemed the appropriate thing to do.

QUESTION: Also to follow up on that, will Dodsworth be leading this mission next week? And if not, when will he be going to Buenos Aires?

Also, on another topic, I understand there's a mission scheduled for Ecuador. Is Anne Krueger going to make a trip to Ecuador or participate with that mission in some way?

MR. DAWSON: In terms of who is leading this mission, I'm honestly not certain. We'll have to get back to you as to who is leading it. He has been leading them, so that would imply yes, but I actually just don't know. We have—there are a number of issues that sometimes affect scheduling of travel. When he will be taking office, it will be quite soon, and I think we'll let people know when it actually happens.

With regard to Ecuador, there is a review mission for the stand-by arrangement with Ecuador scheduled to visit Quito during the first two weeks of May. I have taken note of the speculation in the press about a possible visit by the First Deputy Managing Director. I would note that this visit, this review mission, is, in fact, scheduled. As and when we have an announcement regarding the First Deputy Managing Director's travel, we will let you know. We're not in the practice of having secret visits, so that once something is established, we will let you know.

QUESTION: The President of Uruguay will be in town tomorrow. Would you have an update on that country?

MR. DAWSON: We have been quite and remain quite supportive of the country's, of Ecuador's—I'm sorry, Uruguay's economic program, and I think that was most recently reflected in a letter April 10th by the Managing Director to what is referred to as the international financial community, i.e., the commercial and investment banks, a letter expressing our recognition of the positive goals and intent of the debt exchange that is presently underway.

We have had a couple of questions on the debt—I'm sorry, on this letter, which I think we will probably go ahead and post on the website in the next hopefully—the letter, as I say, was April 10th. It was not a secret at the time in the sense that it was sent to all of the international banking community, and I think Bloomberg, at least, picked it up. But I think we will put the text on.

As far as the debt exchange goes, its successful completion with a higher participation rate would help achieve the goals of eliminating the near-term financing gaps and the medium-term debt—and improve the medium-term debt sustainability, which is a core goal of the stand-by arrangement.

Now, with regard to the visit of the President, I frankly was unaware of that, I'll get back as to whether we have an involvement with that.

QUESTION: When are you sending a technical assistance mission to Iraq?

MR. DAWSON: I do not have a time for a mission. We are continuing to work both internally within the Fund and with other institutions and with interested governments on possible assistance, technical assistance for Iraq. As I think people know, we have had an internal task force working for some time on this issue. We have, I think as is known, some experience in recent years in post-conflict situations and helping get central banks, finance ministries, treasuries and so on established and up and running.

I do not have any time about a possible mission. Again, this was sort of—I anticipated the question in my earlier answer. We are not in the habit of sending secret missions to places. When we do have a mission, we will certainly let you know in a timely fashion. And I would also perhaps, if I could, steer you away a little bit from thinking that a mission is somehow a sine qua non for work. Missions aren't necessarily that. Work can be done remotely or not necessarily in countries.

But, again, we will—as we have something to report in terms of activity, particularly if it involves travel and so on, we will let you know.

QUESTION: I thought the interested governments gave you permission to send a technical mission at the Spring Meeting, so why are you continuing to discuss it with them? I thought there was no question anymore about—

MR. DAWSON: There's no question that when the time is appropriate we will—we will, you know, engage in the fashion we can. I don't understand that there's a contradiction with that with what your premise was. The timing is just, you know, not quite right yet.

QUESTION: Well, why—

MR. DAWSON: But, again, as I indicated, I think focusing on a mission is simply looking—you know, it's focusing on something that is not necessarily an indication of progress or lack of progress.

QUESTION: What would be the right timing?

MR. DAWSON: When there are—

QUESTION: Okay. What conditions need to be in place?

MR. DAWSON: There is not a set of conditions. I mean, there's work going on. When there's a point at which for further work to go on, you know, a mission is necessary, that's when it will happen. It is not—I mean, there's nothing—there's no checklist and there's no timetable, and it will be done when it seems like the best next step.

QUESTION: [inaudible-off microphone].

MR. DAWSON: No, I didn't say that.

QUESTION: Will the sending of the mission be tied at all to a UN vote on the sanctions issue?

MR. DAWSON: The Fund will, in consultation with its members, you know, make a decision in terms of how to proceed, and we work here, as I think is well known, on a consensus basis. And the Managing Director certainly will be consulting with the Executive Board. We have a traditional way of working in post-conflict situations, and we will continue in that fashion.

As I said earlier, there is no particular checklist.

QUESTION: But I specifically asked about a UN vote.

MR. DAWSON: There's no checklist.

QUESTION: So it's not tied to a UN vote?

MR. DAWSON: There's no checklist. I mean, go back and read the communiqués. They were quite clear they want us to go at the appropriate time. There is need at a time for UN action on certain issues regarding lifting of sanctions and so on, but our course of action for the foreseeable future is pretty well laid out.

QUESTION: Following on Iraq, do you have a counterpart in Iraq with your counterpart in—

MR. DAWSON: To my understanding, not at this point.

QUESTION: And do you need a counterpart to have a dialogue with the country?

MR. DAWSON: A great deal of work can be done before there is counterpart/authority or whatever. So we're not in a bind—there's no binding constraint at this point in terms of the work we are—that we are doing.

QUESTION: Thank you. On Turkey, when do you think the fifth review will begin? And, secondly, what are the significant risks mentioned in the previous release? And can you specify those policy slippages mentioned also in the same release?

MR. DAWSON: I think the press statement as well as the background interview that was—I'm sorry, the PIN as well as the background interview were pretty clear on what the views of the Board were in terms of endorsing strongly the program and indicating the need to persevere. And I don't think I need to go beyond that.

There were issues, concerns raised by the Board in terms of on the debt side, but I think the authorities have clearly made significant progress and when it—and the references you have to slippages, I think if you read the Board—the PIN, you can see the Board statement there, which I think was a strong endorsement of the great progress that Turkish authorities have made.

I smiled a little bit when you asked me when the fifth review was going to be since we have just, as of last Friday, concluded the fourth review. It's my understanding that the Fund mission to conduct or initiate the review is scheduled, I believe, for the middle—no, sorry, the second half of May.

QUESTION: Because—sorry—Ms. Krueger is going to Turkey. What is the purpose of—

MR. DAWSON: She has been invited—I don't have the precise name of the event, but she has been invited for a speech of a forum that's taking place there.

QUESTION: Will she—

MR. DAWSON: It's not—you know, it was not related to the program per se.

QUESTION: You noted several times that the sending of a mission isn't a sign of progress or lack thereof. But what has the IMF task force been doing in its work in regards to Iraq? What does it intend to do? Are there any efforts that will bring it closer to an assessment of the financial system there or—

MR. DAWSON: I mean, clearly, we're trying to collect what information there is about the current economic situation in Iraq, and, clearly, the lack of data has been and remains a problem. We are also—in the context, as I indicated, of our experience in working in post-conflict situations, they are also trying to sort of gather those lessons so that they're in a position to be able to move forward, which, as I say, would be on a range of issues—central banking issues, currency issues, finance ministry, treasury issues.

QUESTION: Will you be—

MR. DAWSON: And that is a process of collecting information as well, including from those who may have some information about the state of the economy, but also—and, you know, recent data, but also we are clearly, as I said, trying to draw the lessons from what has in the last few years been quite a bit of post-conflict experience.

QUESTION: To what degree will you be involved in the Paris Club discussions? And what-

MR. DAWSON: Well, I think—

QUESTION: —purpose if you would—

MR. DAWSON: The Paris Club—questions about the Paris Club are best addressed to the Paris Club. Traditionally, the Fund does make a presentation on the economic situation and program of a country when the Paris Club has a meeting.

QUESTION: Have you already decided who's going to replace Mr. Aninat? And is it somebody from the region or from outside the region? Who are the candidates?

MR. DAWSON: I can guarantee you, I will never have any role in deciding who's going to replace Mr. Aninat.

But, no, this is an issue the management and the Executive Board are presently engaged in reviewing, and I don't have anything for you on that.

QUESTION: Can't you say who are the candidates?

MR. DAWSON: No, I cannot, for a couple of reasons.

QUESTION: The Brazilian currency, the real, has had devaluation of 15 percent so far this year. In your opinion, does it represent the real fundaments of Brazilian economy or its volatility? And I also would like to ask if you would think that this represents a risk to the export sector.

MR. DAWSON: I think we view the news coming out of Brazil as wholly positive. I mean, the program remains firmly on track, and we view the recent market developments as being quite positive, reflecting the maintenance of a disciplined monetary and fiscal policy as well as progress in their structural reform agenda. So I think we would view this as a vote of confidence in the markets as to the strength of the Brazilian economic team and their economic program.

QUESTION: And what about the export sector?

MR. DAWSON: The exports, I haven't looked at the figures in the last couple of days, but the export sector has been booming and is highly competitive. And I think that's a very strong reflection on the ability of Brazil to compete in global markets. And I think that excessive focus on exchange rate, you know, fluctuations in the context of your question, I think Brazil is well positioned to take advantage of their strong competitive position, and I would leave it at that.

QUESTION: Back to Iraq, just to clarify an answer that you already gave, does the fact that the United Nations sanctions are still in place prevent any actions of the IMF or not? And there are precedents in which IMF acted in a country when the United Nations sanctions were still in place.

MR. DAWSON: In terms of the work we are doing and the work that is anticipated in terms of both fact finding and working in a post-conflict situation to try to help establish new institutions, we are in a position to continue in that regard.

If one hypothetically got to the point of talking about issues such as lending operations, which is by no means clear the Fund would be in such a situation, or one were talking about Paris Club—someone talked about Paris Club, it's pretty clear that UN sanctions affect those issues. But neither of those are issues that at this point involve the Fund at all, and those are questions that are best addressed to the institutions that it might affect.

But as I indicated earlier, you know, we have an ability to continue working and to—in terms of assisting in this post-conflict situation, you know, when the conditions merit.

Maybe one last question. Okay. You get a two-for-one.

QUESTION: A follow-up on Iraq again.

MR. DAWSON: It still counts as a question.

QUESTION: Is the IMF team talking with the treasury team—

MR. DAWSON: We have been in touch with a number of governments, including the U.S., yes.

QUESTION: But the team that...[inaudible]...Treasury officials out there in the region.

MR. DAWSON: I don't know who—I don't know which particular individuals that they are talking to, but certainly they have been talking to the U.S. authorities, including the U.S. Treasury.

QUESTION: So are they providing any advice on currency and what—

MR. DAWSON: I don't think it would be appropriate for me to talk what advice they are giving, but they are certainly discussing a wide range of issues, yes.

That's it? Okay. Thank you very much. We'll lift the embargo at 10 minutes after 10:00. Thank you. See you in two weeks.


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