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

October 20, 2004

Transcript of a Press Briefing by Thomas C. Dawson
Director, External Relations Department
International Monetary Fund
Wednesday, October 20, 2004
Washington, D.C.

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MR. DAWSON: Good morning, ladies and gentlemen. I'm Tom Dawson, Director of External Relations at the Fund, and this is another of our regular briefings. The briefing is embargoed until 15 minutes after conclusion, and we'll set a precise time when we conclude. This, of course, applies to our viewers on the World Wide Web as well.

I should also note that sound bites and video of today's conference will be available for download at broadcast quality—although I do not warrant that, but I'm told that it's of broadcast quality—this afternoon from the following website, I'll speak slowly, unitednations. This is a new service that I note has just started and makes available clips of briefings such as this.

This is, of course, the first briefing after the conclusion of the Annual Meetings of the Fund and Bank on October 3rd. I would repeat, as I've had to on other occasions like this, our plan is to have briefings on a biweekly basis on Thursdays in the downstairs auditorium, as we have done. However, today's deviation from our schedule is because of travel plans. In that regard, I have some management travel to make note of for you.

Managing Director Rodrigo de Rato will be traveling October 21st and 22nd to Geneva, Switzerland, to participate in the WTO General Council meeting. I do expect we will have further travel plans to announce shortly, and Media Relations—for the Managing Director, and Media Relations will provide information as soon as they are finalized.

Deputy Managing Director Carstens will also be in Geneva on October 22nd. He will be at the WTO Council meeting, but he will also be participating at the World Council of Churches meeting. This is a joint meeting with World Bank President Jim Wolfensohn. On October 25th, he will proceed, will be in Madrid, Spain, for the sixth annual Conference on Latin America Country Risk.

Finally, Deputy Managing Director Kato will be traveling November 1st and 2nd to Luanda, Angola, for meetings with the authorities, NGOs, and private sector to familiarize himself with the situation in the country. And then Mr. Kato will proceed to Kenya November 3rd through 5th. Once the schedule of this trip is finalized, Media Relations will provide further information.

And now I'll be happy to take any questions that you may have.

QUESTIONER: During the Annual Meetings, Rodrigo Rato said that the IMF will be ready to help poor countries to cope with the increase in the oil prices, and I wonder if you could elaborate on that, whether something has been done or in which way the IMF could help.

MR. DAWSON: Well, I mean, this takes place most generally under our surveillance mandate for all of our 184 member countries, and then in the context for countries adversely affected in terms of the—those that are under programs as to whether there's a needed adjustment either in the program or in policies, for that matter. So it's a matter of basically detailed work with the individual countries that might be affected. And, of course, the situation for our 184 member countries differs tremendously, and within even the low-income group, for example, it differs tremendously. There are natural resource and, in particular, petroleum exporters in that group, and there are, of course, importers. And so the assessment has to be done on a case-by-case basis. It is not one-size-fits-all.

QUESTIONER: Tom, what's happening with the Haiti mission? You know, there's been an outbreak of violence, and I wanted to know if the mission has been delayed or where it stands.

MR. DAWSON: We did move to assist Haiti following the political turmoil early this year, early 2004, and had a six-month staff-monitored program April through September that helped provide the framework for what was a highly successful donors' conference in July. Fund staff last visited Haiti in August and were generally impressed by the authorities' adherence to the structural and quantitative measures under the program.

We are committed to continuing to assist Haiti in coping with the effects of the political conflict and the devastating floods of May and then September. Formal discussion of the authorities' request for emergency post-conflict assistance was scheduled to begin next week. However, because of the recent deterioration in the security situation in and around Port-au-Prince, our resident representative has been relocated to Washington and the mission has been postponed.

We remain in close contact with the authorities, and as soon as security conditions permit, we'll promptly re-engage our work in the field to further assist the authority in the difficult tasks ahead.

QUESTIONER: I want to know if you have any update on Argentina and if they have made any advancement regarding the conditions in order to proceed with the Third Review. And I also wanted to know regarding Uruguay, there are going to be elections at the end of this month, and if you intend to work with the next government.

MR. DAWSON: With regard to Argentina, you know, as I indicated the last time we spoke, the authorities are focusing their efforts on making progress in the proposed debt exchange offer. We, therefore, did agree with them to resume formal program negotiations following completion of the exchange offer.

We do remain in close contact with the authorities. We have our resident representatives down there, and they're discussing the full range of issues. As you'll recall, on September 17th we approved the request to defer repurchase expectations of about US$1.1 billion, and this was a—we characterized it and do characterize it as a routine request. Executive Directors did urge Argentina to address the outstanding structural issues in their program and to complete a comprehensive and sustainable debt restructuring.

The last point would be what the precise timing would be is when the offer is over, the general expectation is we'd be talking about a December-January time frame, but I don't have anything more specific than I would have had a couple of weeks ago.


MR. DAWSON: On Uruguay, I don't have anything more recent. Repeat the question. Maybe I might be able to—but, I mean, we're obviously well aware of the upcoming elections. The Managing Director met with the three presidential candidates, but I'm not sure that we have anything more other than, of course, waiting for successful conclusion of the elections.

QUESTIONER: The favorite for the elections is a leftist candidate, and it would be the first time the left wins in Uruguay. So I was wondering if you would be ready to—I know you've met him here and—

MR. DAWSON: As well as in Montevideo at least twice, both the last Managing Director and the present Managing Director. But we don't comment on subjects like that.

QUESTIONER: I wonder if you could give us an update on this Brazilian proposal for the contingency, this creation of a new contingency line. The Brazilians said during the meetings that there was division within the Board, and I wondered if you could give us sort of a view of what's the next step, what is going to happen with this. Thank you.

MR. DAWSON: A large part of that is speculation. I can confirm certainly what the Brazilian authorities and the Managing Director and others have indicated, that there is not a consensus in how to go forward, and indeed there's not even a consensus on whether to go forward with something that would be a facility of a contingent nature to some extent. In some regards, some conceive it as a follow-on to the CCL; others view it as an adaptation of precautionary arrangements.

It remains under discussion. Different options, the Board will be returning to the subject, I know. The problem is, of course, for any move like this, the Fund does require a consensus to go forward with a new approach, a new facility. So that's where we are.

Yes, the Brazilians are certainly interested in it. Other members are. Other members have skepticism about it. I would suggest if you want a rundown on that, you might take a look at the Annual Meeting speeches because that was covered by a number of speakers, of Governors.

QUESTIONER: [inaudible].

MR. DAWSON: There's no timetable on it. Those who are interested in the facility are obviously interested in pursuing the work, and the staff, you know, is happy to pursue work. But on this area, as on other controversial areas, we can do the technical work, but the political decisions need to be made by a consensus.

QUESTIONER: [inaudible, off mike].

MR. DAWSON: Mr. Kato's visit should not be construed as being, you know, program related. As you probably know, the three Deputy Managing Directors do have responsibility for the different member countries. Angola is indeed one of the member countries that Mr. Kato has responsibility for.

In the broader context of where we stand with Angola, the discussions, you know, are continuing in the context of the Article IV discussion and the possibility of agreeing on a staff-monitored program that could cover late 2004, 2005, you know, that then prospectively, if going on toward the end of 2005, then you might consider a traditional Fund program. But the visit itself is more familiarization, and Mr. Kato has been at the Fund six or eight months, I guess it is—maybe a little longer than that—and is having the opportunity because of his trip to the region to visit Angola.

We'll go back and forth.

QUESTIONER: About Ecuador, I remember there was a delegation of the government that came here before the meetings, and my understanding is that they wanted to have some kind of surveillance program with the IMF so that they could continue to receive money from other international organizations. I wonder if you could give me an update.

MR. DAWSON: I recall exactly that same background, but I don't have anything since then, so I will have to get back to you on that. We'll let the others know as well.


QUESTIONER: Could you confirm the imminent mission to Italy for Article IV, and can you give any details on that?

MR. DAWSON: Yes, I can confirm the imminent—as well as eminent, probably—mission to Italy. The mission is expected to start October 27th, will also overlap with the first stage of the FSAP, the Financial Sector Assessment Program. The consultation is going to look at the present fiscal outlook, the new elements of Italy's fiscal framework, including the so-called 2-percent rule for public expenditure growth that has been recently announced by the authorities and, of course, generally will be discussing Italy's macroeconomic outlook, including in the context of oil prices. I don't have a concluding—I think you were also asking about the conclusion. I don't have that. But as is traditional in Italy—in fact, I think Italy was one of the first countries where we have concluding mission statements, so I think you can expect that.


QUESTIONER: Turning to Asia, two questions, one regarding Burma. I know that the IMF has no direct dealing with the Burmese Government, but the ousting of the Prime Minister, has that affected the IMF's assessment of the country's—

MR. DAWSON: I don't have anything, anything in terms of that recent development. I mean, we continue to think that their potential is undermined by the chronic economic mismanagement, and the near-term outlook has worsened as a result, you know, including problems in the banking sector. We view that substantial reforms are needed, and we have proposed some steps to be implemented. But I can't sincerely—simply cannot report any progress.

QUESTIONER: And another one, if I may.


QUESTIONER: Japan. There's talks within Japan that the country is now ready for a tax hike, especially a consumption tax. Does the IMF actually have any recommendation or any advice on that?

MR. DAWSON: I don't think it's appropriate to kind of intervene in any domestic considerations like that. We did have the Japanese Article IV—I think it was in August, I believe—and I just would direct you toward the staff report and the summing-up and so on.

QUESTIONER: Liberia has overdue financial obligations coming to the Board today. Do you know where that stands? Is this the next process in the next lengthy one or is the starter one?

MR. DAWSON: It's a lengthy—Liberian arrears are a lengthy process, and the review of it is a lengthy process as well.

QUESTIONER: So do you know [inaudible]?

MR. DAWSON: No. I think it's a review. I believe it's a review.

Okay? Well, thank you for attending. Since I was going to be gone next week as well, I figured we needed to do the briefing this week. And we will lift the embargo at five minutes after 10:00. As I say, be in touch with Media Relations, and Media Relations will be in touch with you, because we will have, I believe, some travel-related announcements and there may be some other releases coming out as well later today. We are beginning to come out of our post-meeting doldrums, even though that may not be reflected by the attendance here. You will all get brownie points for attending.

Thank you.


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