November 16, 2006
| Public Affairs | Media Relations | |||
|---|---|---|---|---|
| E-mail: | publicaffairs@imf.org | E-mail: | media@imf.org | |
| Fax: | 202-623-6220 | Phone: | 202-623-7100 | |
| View a Webcast of the press briefing |
MR. HAWLEY: Good morning and welcome to this one of our regular briefings to the media at the IMF. I am David Hawley, Assistant Director in the External Relations Department for the Fund.
Welcome to those of you who are joining us through the Media Briefing Center. I look forward to your questions and as far as possible answering them.
Before I move to questions, let me remind you that today's briefing is under embargo, and it is under embargo until 11 o'clock Washington time. That is 1600 GMT.
Let me make a couple of announcements before your questions, please. The IMF Managing Director Rodrigo de Rato is attending this weekend's meeting of the G-20 Finance Ministers and Central Bank Governors in Melbourne, Australia. Before that meeting he will on Saturday, which is November 18th, address the Energy and Minerals Business Council in Melbourne. This I believe is a closed event. However, the Managing Director's address which is on energy policy and the global economy will be made available to the media under embargo. It will be posted on our Media Briefing Center at around 5:00 p.m. Washington time, that is 2200 GMT on Friday, and I believe that the embargo, which we will confirm at the time of posting, will be lifted at 2:30 a.m. Saturday, Washington time. That is 730 GMT.
In this speech, the Managing Director will argue that well-functioning energy markets are a key element in promoting global economic and financial stability and that enhancing transparency in oil markets would help to reduce price volatility.
The Managing Director will then deliver two further speeches, this time in Spain. On November 21st he will speak at the Foro de Cadiz in Spain, he will talk about the outlook for and the challenges facing the global economy and structural reforms that European countries can make to raise potential growth and at the same time contribute to reducing global imbalances.
Following that he will speak in Madrid on November 23rd at a session of the Colegio de Economistas de Madrid where he will speak about the interaction of global financial markets and capital flows on the macroeconomy, which draws on some of the recent themes of the World Economic Outlook and the Global Financial Stability Report. These events are open to the press and the speeches will be posted on the IMF's website. Details will be available from the Media Relations Division.
Finally, Raghrum Rajan, the Economic Counselor and Director of Research at the IMF spoke today at a conference on global imbalances organized by the Bank of Indonesia, and that took place in Bali. The speech, which is about to be posted on the IMF's Web site, reviews major forces that have resulted in both the large global imbalances, but also in the benign conditions needed to finance them.
As those of you who follow the Fund may know, the Executive Board on Monday, that was November 13th, discussed the IMF's Work Program. The Work Program is set twice a year following the meeting of the IMFC. This year this Work Program focuses heavily, as you might imagine, on issues connected with the implementation of the Fund's medium-term strategy. We expect to release the Work Program shortly, that is to say in the days ahead, and perhaps it will be Masood Ahmed at his next regular briefing on November 30th who has the opportunity to discuss this in more detail with you.
With those remarks, please allow me to take your questions.
QUESTIONER: The IMF mission said nearly 3 weeks ago that the IMF Board was expected to meet on the fifth review of the program in December provided that the Turkish authorities took a number of prior actions or completed work in a timely fashion. Now do you have a clearer time frame on your mind like early- December or mid-December? And what does the Turkish government need to complete from this point on? Thank you.
MR. HAWLEY: Let me take the last part of your question first which I think is about prior actions needed to complete the review. These include submission to Parliament of a satisfactory budget consistent with achieving a primary surplus of 6.5 percent of GNP, and that is certainly a crucial step. The authorities are also working on other aspects of the policy package that are needed to safeguard the achievement of the agreed fiscal targets and to keep the momentum on tax and banking reforms.
As we have said before, the authorities are currently working to firm up these policy undertakings to pave the way for the completion of the review by the Board. Once these safeguards are in place, the understandings reached by the mission will be considered by the Board and that meeting remains scheduled for December. I do not have a further precision as to timing.
QUESTIONER: I was wondering if you could update with the status of a successor to Mr. Rajan. In addition, I was just curious what the search is like, where names come from, who submits them, who ultimately makes decisions, and who needs to approve to fill that role.
MR. HAWLEY: I do not have any information for you about the names of possible successors to Raghrum Rajan as Economic Counselor of the IMF. The recruitment is an open one in the sense that qualified candidates are invited to apply for the position, and the appointment is made by the Managing Director.
QUESTIONER: The Board does not approve?
MR. HAWLEY: The Board is consulted of the Managing Director's decision, but it is the decision by the Managing Director.
QUESTIONER: Just coming to the G-20, is Mr. de Rato giving a speech at the G-20 as well?
MR. HAWLEY: Perhaps if I may I can wrap this up with a question received on the Briefing Center from Cesar Munoz of EFE who also asks what we expect to accomplish. Perhaps I can answer that question by saying that this is a G-20 meeting, a meeting of Finance Ministers and Central Bank Governors of countries who are a part of the membership of the IMF and we attend as their guests and the participation of the Fund reflects the fact that they have discussion of the future direction of the Fund on their agenda.
The Managing Director will speak at the G-20. I do not have further details of his participation. As you know, the direction of the Fund's work is set by the medium-term strategy which has been endorsed by the entire membership at recent meetings of the IMFC.
QUESTIONER: May I follow-up?
MR. HAWLEY: The IMF has long called for this transparency. If I remember the last two meetings, the Spring Meeting and I think the one before that, they talked about transparency on energy, and the Fund is also going to increase its work on energy transparency, if I remember correctly. Do you have anything on that for us on generally just what the stance is?
MR. HAWLEY: If I may, I will wait until the Managing Director speaks and we will get you his remarks under embargo, and that I hope will respond to the question you are raising.
QUESTIONER: Do you have any comments on the Congo election, the DRC? I know it only came up really late last night, but it has been a long election and there is a lot of hope in Africa that this could be a major turnaround for this region by ending if there is some sort of outcome, which of course it looks like Mr. Kabila has won.
MR. HAWLEY: Yes. I do not have a specific comment on the outcome of the election reports. We have had the same reports as you, but if I may, I will refresh you on where we stand in our relations with DRC. The current position is that there is a staff-monitored program in place and implementation of that SMP has been difficult. Government overspending has led to an expansion and mounting pressure on the Congo franc and inflation. The Fund's staff is concerned about the deterioration of the macro situation.
A fuller expression of these concerns came at the end of a mission to Kinshasa in mid-October when the mission members urged the government to tighten spending in order to reduce recourse through banking financing and thereby relieve inflationary pressures. The timing of the next review of the SMP will be discussed with the next government. If one is looking forward, completion of the first review under a new PRGF arrangement and one year of implementation of a PRSP, which was adopted in July and the implementation of triggers would allow the Democratic Republic of Congo to reach the completion point under the HIPC initiative and benefit from debt relief under the MDRI, the Multilateral Debt Relief Initiative, possibly before the end of 2007.
QUESTIONER: While in Australia for the G-20, is the Managing Director expected to have meetings with any Finance Ministers regarding the reapportionment of voters? How much of this is supposed to be on the agenda for the G-20 or is this his reason for going?
MR. HAWLEY: I am not aware that he has specific discussions on that issue. As you know, at the Annual Meetings which were recently completed in Singapore, the membership encouraged the IMF to work on the so-called second round of reforms which focus in particular on steps to achieve a new quota formula. That work is being carried out at the staff level in the light of the instructions by the membership given in Singapore.
If there are no more questions, I will close this briefing, and the embargo is at 11:00 am Washington time.
Thank you very much.
