Transcript

Washington, D.C.
Thursday, May 21, 2009

MS. ATKINSON: Good morning, everybody. I'm Caroline Atkinson, the Director of External Relations Department at the IMF. I'd like to welcome you and journalists participating via the online briefing center to this morning's biweekly press briefing. As you know, the briefing is embargoed until 10:30 a.m. our time, which is 1430 GMT.

I want to just mention a couple of items about management travel in particular before taking questions. The IMF's Managing Director Dominique Strauss-Kahn will be traveling to Africa, first to the DRC, then Cote d'Ivoire, and then Morocco, between May 23 and 29, to consult with the authorities in DRC and Cote d'Ivoire and to give a speech in Morocco. In Kinshasa he will be meeting with parliamentarians as well as government officials and with representatives of trade unions and civil society, and also will hold discussions with students and faculty at a local university. In Abidjan he will meet with Cote d'Ivoire's leadership and economic team to discuss the economic program and prospects. We have, as you know, a PRGF supported program, HIPC decision point was reached at the end of March, and the Managing Director will also meet with civil society organizations and students and university faculty there. In Morocco on May 29 he will attend a symposium to commemorate the fiftieth anniversary of the central bank and to discuss the role of the IMF in crisis prevention and resolution.

First Deputy Managing Director Mr. John Lipsky is traveling to Venice, Italy, for the Aspen Seminar for Leaders on May 22 and 23, and that is a closed event by invitation only. He will then go to Rome to attend the G-8 Energy Meeting on May 25. That is an open event. There will be a seminar on the reform of the international financial institutions. And he will also go to the St. Petersburg Economic Forum on June 4 to 6.

Finally, Deputy Managing Director Takatoshi Kato is traveling to Kazakhstan at the end of May, May 28, for a discussion with the authorities and to attend a meeting of the Central Bank Governors Club for Central Asia, the Black Sea Region and the Balkan Countries.

For those of you based here in Washington, my predecessor and currently the Director of our Middle East and Central Asia Department, Mr. Ahmed, will be participating in an event this afternoon at 3:00 at the Carnegie Endowment for International Peace on the Global Crisis: Will the Middle East and North Africa Emerge Stronger?

Let me now turn to questions and remind those of you on the online briefing center to submit questions.

QUESTION: Do you have an update on Turkey? Do you have a time for the mission visit with Turkey?

MS. ATKINSON: As you know, we are in ongoing and continuing discussions with the Turkish authorities and I have no further update on that.

QUESTION: What is the progress on the IMF loan for Sri Lanka and when will it come up for Board approval?

MS. ATKINSON: First of all I should say of course we welcome the cessation of hostilities and look forward to improvements in Sri Lanka. We are at an advanced stage in discussions with the authorities. We don't have a definite Executive Board date scheduled, but we look forward to being able to bring a program to the Board for its approval in the coming weeks.

QUESTION: Sri Lanka -- as you know, the U.S. has very openly said that it wants to oppose any loan facility for Sri Lanka. Does this come to play in these discussions or is this just when it gets to the Board? Also are there discussions with Sri Lanka regarding an emergency loan through the shock facility or Emergency Post Conflict Assistance? Or is it something larger?

MS. ATKINSON: Just on the second question, the EPCA, as you mentioned, is a more restricted smaller facility and we believe that we have been discussing with the Sri Lankan authorities a larger amount than that and a normal standby arrangement which we believe is more appropriate given the nature of their problems and the need for an adjustment and for sufficient financing. On your first question, I think that as I said we are at advanced stage in discussing with the authorities. We look forward to being able to schedule an Executive Board meeting in the coming weeks.

QUESTION: Could I just have a follow-up on that? With the political situation in Sri Lanka as it is now, is that really a good conditional foundation for a government to implement a program?

MS. ATKINSON: Obviously when we make, by we I mean the IMF Executive Board, a loan, we're also making a judgment on the ability of a government to carry out the policies that we see as necessary and that will be all part and parcel of what is considered. But we are hopeful that we will be at that point soon.

QUESTION: Could you update us on the latest state of play with the IMF bond issue? What do we know about the details? And will there be a secondary market?

MS. ATKINSON: As you know, a number of countries indicated, and China I think was one at the time of the Spring Meetings, and maybe even before, that they were interested in investing if you like or providing financing to the Fund in line with G-20 commitments in the form of bonds, using bonds as a vehicle. We do have the legal authority to issue SDR-denominated bonds. The Executive Board has been briefed on that possibility. And at the moment we are discussing and we're in quite intensive discussions with different creditors about the best ways to implement this legal possibility and framework and how much they would be in place. But until we have specific firm commitments, as soon as we have specific firm commitments and details nailed down, we will of course let you know, but until then we won't go into more specifics now.

QUESTION: As everyone knows, there is a crucial debate in Washington, taking place at the U.S. Congress, for the IMF's future. I know the IMF will not comment on domestic policies, but aren't you afraid of any consequences it might have if the Congress were not to pass this legislation?

MS. ATKINSON: As you know, the U.S. authorities have requested Congress to pass the legislation. I believe that they're working hard to win approval of the legislation, and so we look forward to that outcome. I think there has been some significant progress, but of course it's essential that the U.S. should support it, but I think we also note that there have been strong efforts. The President has written a letter to Congress and so on.

QUESTION: As a follow-up to that, the U.S. pledged about $100 billion for the IMF during the G-20 meeting. If this money doesn't come through, is there concern that that would be a hindrance, or it would make it difficult for other countries then to follow through on their pledges if there's already going to be this $100 billion gap?

MS. ATKINSON: That's a hypothetical question. As I say, we are looking forward to there being progress and certainly observe that the U.S. authorities are pressing strongly for there to be such progress. I'm not going to go further than that.

QUESTION: Is there a timeline for this money? Is there a timeline for the IMF to get these commitments and get firm commitments and get the money in this account? The second question is since the IMF meetings, what are the main priorities now for the Fund to get done considering what the G-20 agreed and just generally expanding its role?

MS. ATKINSON: On the first, first of all, we have $100 billion loan from Japan that is already in place and we also have a number of other commitments. We have another $100 billion commitment from the European Union countries, we have commitments from Norway and from Canada. Korea has said that they plan to contribute at least $10 billion to the NAB, Australia also [US$7 billion], and Switzerland. So there are a number of commitments apart from the $100 billion or so from the U.S.

As you also know, the NAB, the vehicle that the U.S. would plan to use, would provide for backstop financing. And we are hopeful that this money will be coming in place, I'm not saying anything different now from what the Managing Director has said, in coming months. It's important to get the money in order to provide security and confidence to markets, but also to be sure that we can fund the requests that we've had. But we are in a position now where we're able to fund obviously the commitments that we have, so it's important to keep going. We're not about to run out of money now.

On your second question, there is a whole range, and I think the last time I was here I'd spoken about the pretty full agenda that we have following the Spring Meetings. Obviously the NAB financing is one element. The NAB participants met and they are planning to meet again. Once they've agreed to expand the NAB, that is something that the Board would take up. There are all of the matters involving the gold sales and quota reform and everything that is in various stages of approval. In countries there's the bond issue that we're looking at. We're continuing to do a lot of intensive work on low-income countries. And of course we're discussing with many countries in these difficult economic times in our normal Article IV, in financial stability assessment missions and in our program and lending missions. So there's sort of a lot going on.

QUESTION: Earlier you mentioned an upcoming visit to Kazakhstan, and earlier this week the country had its third lender default. I was curious to know if during that visit there will be any discussion of a potential loan to Kazakhstan given the situation with their lenders.

MS. ATKINSON: Yes. I'm sorry, I don't have anything specific for you on that. I know that we have just had a team in Kazakhstan doing the normal Article IV report. If we have more, we can get back to you on that.

QUESTION: Please state whether, as the Sri Lankan government says, the proceeds of any IMF loan would support re-housing in the north, which some would describe as ethnic cleansing?

MS. ATKINSON: Perhaps it's helpful for me to clarify that when the IMF lends, it's not for specific projects. We lend to support a country's finances. We make a loan to the central bank to support reserves.

Is there any other question?

QUESTION: Just one more, a follow-up from the bond question. You said that not much more progress can be made until there are firm commitments. Were you referring to countries needing to make firm commitments to want to participate in the purchase of these bonds or is it creditors committing to this process?

MS. ATKINSON: I'm sorry. That sounds as if I gave a misleading answer. There's lots of work and lots of progress going on. The kind of work that's going on is discussions at the moment that we are having with different creditors and different creditor countries about the nature of the bonds that they would find appropriate to provide their financing. And we will make an announcement once we have specific information on that, but there is progress going on all the time.

QUESTION: I just want to double-check. How many countries have expressed interest in the bond? We've seen Brazil, Russia, China, India. Are there half a dozen or a dozen? Is there any way you can just give us an idea?

MS. ATKINSON: I don't know. You mentioned countries. There have been a number of countries that have expressed interest and of course others that may be watching and haven't yet expressed interest but we think will. And we expect there to be a significant amount of take-up in interest and that may be in particular a way that -- some of the G-20 countries that aren't part of the NAB, for example, have indicated that they might be interested in joining the NAB. Maybe they'd be wanting to do that through bonds rather than loans. We'd be very flexible on that within, obviously, our rules, but we are able to issue these bonds. So I think there will be fairly widespread interest in doing that.

QUESTION: The IMF staff said recently that it's possible for Ukraine to ask for additional money from the IMF. Is this a new program or an extension of the current one?

MS. ATKINSON: I believe the Mission Chief has announced that the mission will look at financing needs during the second review. We have just completed the first review. That was in early May. And then there will be a second review coming up after that where we will look at everything as usual.

Thank you all very much.