Transcript of G-24 Press Briefing

April 16, 2016

Washington, D.C.
April 14, 2016
Webcast of the press briefing Webcast

Mauricio Cárdenas, Minister of Finance and Public Credit, Colombia
Ravi Karunanayake, Minister of Finance, Sri Lanka
Marilou Uy, Director, G-24 Secretariat
Randa Elnagar, Communications Officer, Communications Department, IMF

MS. ELNAGAR: Hello, everyone, and welcome to the IMF and World Bank 2016 Spring Meetings. I am Randa Elnagar with the IMF Communications Department and this is the G-24 Press Conference.

We have with us here on the podium the Chairman of the G-24, Mauricio Cardenas, Minister of Finance and Public Credit Colombia; Second Vice Chair Ravi Karunanayake, Minister of Finance, Sri Lanka; and Ms. Marilou Uy, Director of the G-24 Secretariat.

Mr. Cardenas will give some opening remarks and then he will take your questions. Thank you.

MR. CARDENAS: Thank you very much.

We just concluded the G-24 Meeting. As you know well, the G-24 is comprised of emerging and developing countries that have been coordinating their views about issues pertaining to the monetary system, development issues, basically concluding our meeting with a statement that you have with you.

Let me emphasize some of the issues that we discussed today and the message that the G-24 is conveying to the Spring Meetings of the World Bank and the IMF. The views of the G-24 will be debated and presented at the World Bank’s Development Committee and at the IMF’s IMFC.

These are challenging times. The world economy is experiencing turbulence. That is especially true for commodity exporters that have been impacted by the decline in commodity prices, but it is not just limited to that. Many countries among the G-24 Group are dealing with lower economic growth than usual, and there is more tension.

The first line of response naturally has to do with our long agendas, domestic agendas, both in the fiscal front and in structural reforms. This is a country-specific agenda. Countries in the G-24 understand that very well and many of us are embarking on very significant reform processes.

But we also need external support and we need a Global Financial Safety Net. We need to have access to resources that need to be available, and that, of course, points in the direction of an adequately-resourced IMF so that the IMF is capable of providing the liquidity that countries require to deal with these exceptional circumstances. So, the first call is on the need of a very effective Global Financial Safety Net, and that, of course, takes the form of additional resources and a well-resourced IMF.

We also see that there are additional non-economic challenges, such as the refugee crisis that is affecting many countries like Jordan, Lebanon. We need to make sure that the multilateral development banks and the IMF are capable of responding to the needs of countries that are directly impacted by the refugee crisis.

We also have pandemics. In Latin America, we have had in the past few months issues related to the Zika, and that, of course, needs collaborative responses. The World Bank plays an important role in providing support to those pandemics.

We understand that we need to enhance our productivity and boost demand in our countries, and that has to do with investment in infrastructure. That calls upon the need of multilateral development banks to extend their facilities for infrastructure lending, including support to PPPs. The Group of 24, Intergovernmental Group of 24 has experience with PPPs. We are sharing our views and experiences on PPPs. It is very important that multilateral development banks increase their support through lending, concessional lending, equities, into infrastructure projects.

We welcomed the presence today at the G-24 of the President of the newly-created Asian Infrastructure Investment Bank, who basically explained to the G-24 the role that the AIIB is going to play in supporting infrastructure projects not just in Asia but beyond Asia.

But these projects—infrastructure, humanitarian crisis, social programs—require domestic resource mobilization. We also understand very well that the main challenge is to make sure that we mobilize resources domestically. That, of course, calls for strengthening our tax systems. That is an issue that generates a lot of attention today.

To strengthen our tax systems, we need international tax cooperation. That was mentioned in the very specific case of making a loud call so that we see an end to the existence of tax havens. Countries need to participate and engage in the exchange of tax information so that we can actually strengthen our own tax systems and that we collaborate at the global level with the information. So, the main message is to put an end to the existence of tax havens.

The Group welcomed the entry into force of the 2010 Quota and Governance Reform of the IMF and, very importantly, expressed the urgency for a full implementation. The Group looks forward to the 15th Review of Quotas to further shift the weight in these organizations in favor of emerging market economies and developing countries that want greater voice and representation. The same goes for the World Bank, the review on shareholding and voting rights to enhance the presence of emerging and developing countries.

So, those were the main messages today. I would now like to call upon you if you have questions or comments.

MS. ELNAGAR: Please identify yourself and your organization before asking a question.

QUESTIONER: I have a country-specific question for Mr. Karunanayake. Now the Sri Lanka is actually seeking some assistance from the International Monetary Fund, and we know that a high-powered Sri Lankan delegation is actually conducting negotiations after the Colombo talks, what is the current situation? Are we getting an extended facility, finance facility? What is the current situation?

My second question is, is the IMF actually imposing any conditions on granting this facility? The other one is, are we going to face austerity measures because of this issue? Another one is about these Panama Papers. Several names have cropped up, Sri Lankan names cropped up in these Papers. What action is the government is going to take regarding this issue? About this Bangladesh hacking scam, we know that Directors of the [Shalika] Foundation are at large but no such action has been taken.

MR. KARUNANAYAKE: Discussions with the IMF, as you know, have been going on from the 31st of March. They had the Officers Meeting come to a conclusion and we will be continuing discussions in Washington.

As for the conditions, there are no conditions that are imposed. It is just that financial discipline is what is expected and I am sure it is something the government has been embarking on. On the austerity measures, the discussions are still not at the end. Certainly, they will revisit certain things, but that would not be categorized as austerity measures.

On Panama papers, we have given the necessary authority to investigate all areas where Sri Lankan companies have been involved, which has not been disclosed. As you know, having a tax haven is not the problem; non-disclosure is the problem. So, we have been basically giving the authorities clear signals to get all the information possible.

As for the Bangladesh situation, as you know, we were the ones who ensured that it did not spill off to the rest the world. So, at this particular moment, we are basically looking at protecting the Sri Lankan central bank authorities and other commercial bank activities. The Monetary Board, and my Secretary was there, did discuss this matter and certain steps have been taken to help protect the measures.

On the company that is involved, investigations are going on.

QUESTIONER: In audible.

MR. CARDENAS: So, this is the right time to move forward on the infrastructure program and that needs long-term financing. If there is a new source of development aid and support and financing, that is very good news for the G-24. That is something that we see as complementing or supplementing the role that the World Bank and the regional development banks play.

QUESTIONER: You spoke about infrastructural development and the IMF lending money—having institutions to lend money. I know recently, for example, Nigeria, which is a member of the G-24, has gone to China to look for what it terms as inexpensive, cheap money.

Earlier today I was in a session where it was mentioned that Eurobonds, for example, are cheaper than whatever money China has, Eurobonds being at about 4 percent. So, what is the position of the G-24 in terms of getting these funds? Is it also looking to China, in addition to the IMF, or is that something individual nations are doing independently, or how does that work?

MR. CARDENAS: The G-24 takes no position on what source of funding is more suitable for each specific member country. I think the idea is to set up the stage so that all member countries have the information about what the World Bank is doing, about what the IMF is doing. Now we have information about what the Asian Infrastructure Investment Bank will do. We each take advantage of those opportunities.

Each country will make the calculation of what is the best source of funding, whether it is what you say, going to the markets, capital markets, bond issues, or loans from multilateral development banks. That changes from country to country. We just want to make sure that, for the grouping as whole, resources are available. That is why we welcome the news of the Asian Infrastructure Investment Bank.

But we also request that multilateral development banks are adequately capitalized so that they have the resources that are necessary to support the needs of our member countries in terms of infrastructure investment. So, we are very keen in calling for the World Bank to have the adequate level of resources, as well as the IFC, so that they can support these large infrastructure investments.

QUESTIONER: Mr. Ravi, you talked about how central banks together—on how, in light of what happened in Bangladesh, you were talking about taking steps. What exactly are you looking at? Will it be like a grouping of countries which will come together, or who is going to help whom in this?

MR. KARUNANAYAKE - As you can see, what happened in Bangladesh was a clear-cut case of hacking that was going on. It was the lack of awareness of the central bankers in the Asian region. So, it is grouping of knowledge, pooling resources, and working together to eradicate such things, because you do not know exactly at what level it has basically seeped in. That is the insulation that we are trying to get all the central bankers working together.

QUESTIONER - My question is, are you, are the Asian countries together doing it? Who is helping whom?

MR. KARUNANAYAKE - Yes, it is the Asian countries. Even the advanced countries are all getting together, because it is a menace that –in audible--to a particular central bank. So, everybody is working together, pooling the resources to eradicate this menace. Even the Minister of Finance in India was speaking the same today.

MS. ELNAGAR - Does anyone want to ask a question in Spanish?

QUESTIONER- I was wondering if there is any date for the negotiations with Panama. Is there an expected date or announcement or something that you expect to happen?

MR. CARDENAS - This round of negotiations that is taking place today will conclude tomorrow, and then we will make some comments to the press on what happened and what are the next steps. The view from Colombia is that it is time to reach conclusions and to really express the willingness to engage an agreement whereby Panama commits to the exchange of information. That is the main objective; that is the goal of Colombia; and it is completely in line with today’s world standards.

Exchange of information, that is what we need and that is really the message that the international community is sending to all countries in the world, including Panama, exchange of tax information, collaborate and cooperate on that front.

MS. ELNAGAR - Any more questions?

MR. CARDENAS - Thank you so much. We look forward to seeing you again in October in a new meeting of the G-24. Thank you very much.

MS. ELNAGAR - Thank you, everyone.


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