Transcript

Transcript of a Press Briefing by Thomas C. Dawson
Director, External Relations Department
International Monetary Fund
Thursday, April 8, 2004
Washington, D.C.

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MR. DAWSON: Good morning, ladies and gentlemen. I am Tom Dawson, Director of External Relations at the IMF, and this is another of our regular press briefings. This will be my last briefing before the Spring Meetings on April 24-25 here in Washington. Before I open the floor to questions, I would just like to touch on a few points regarding the meetings.

Press registration is open, and if you haven't registered, please do so. The IMF website currently lists the schedule of events related to the meetings, and I would recommend everyone visit the site to familiarize themselves. However, there will be a few events that are not on this schedule which I will cover.

On April the 14th, which is next Wednesday, the Fund's Economic Counselor and Research Director Raghu Rajan will conduct a telephone conference call with journalists to review the analytic chapters of the latest World Economic Outlook. The conference call is open to all journalists, and I believe details have already been circulated by Media Relations, I believe yesterday, regarding embargoed access to the analytic chapters essays.

The Media Relations Division will be launching the IMF Media Briefing Center at the end of next week, I believe, that will create a new permanent password-protected website for journalists. The first document scheduled for posting on this website will be the World Economic Outlook forecasts that are scheduled for public release on April the 21st. Media Relations will be sending out a note within the coming days to detail the Media Center facility.

I also understand the press room at the Fund headquarters will have wireless Internet capability, so we are starting to see some technology gains here at the Fund.

Let me now turn briefly to the agenda for the Spring Meetings. The basic agenda will include a review of the state of the global economy, status of crisis prevention and resolution efforts of the Fund, and will look at the state of multilateral efforts to attack poverty in the world's low-income countries. The last item will certainly be a theme that will carry through the April 24th meeting of the IMF's International Monetary and Financial Committee and the joint IMF-World Bank Development Committee, which is scheduled to meet on the 25th of April.

A number of staff-prepared papers will also be published around the meetings. The papers are part of the supporting documents to the IMFC and Development Committee discussions, and I expect these documents will be available publicly on the Fund website during the weekend meetings, as well as, of course, the transcripts of press briefings. And we will continue our Web stream—in fact, there is a Web streaming of press events for public consumption.

I would also like to draw particular reference to what has now become a traditional press conference that we help to organize with African Finance Ministers, which will be happening again at the Spring Meetings. And, again, all these schedules and information can be obtained either on our website or through the Media Relations Division.

With that, I would like to take any questions that you may have. Thank you.

QUESTIONER: I would like to know what do you think of the request of South American countries made in Lima last week to regard as expenditure the investments.

MR. DAWSON: Well, the issue of the treatment of public investment in the fiscal accounts is not a new issue. I think you are probably aware that last Friday the Fund Board had an informal seminar. We had a paper that was prepared for that that will be made public in due course. This is something that has been under way, under consideration for some time. Our former Managing Director, Horst Köhler, spoke publicly about this while in Brazil in early March. This is an issue that has been going on for some time. It also relates to public-private partnerships where there are issues of accounting treatment and comparability of treatment.

For example, for the present Brazilian IMF program, special treatment has been accorded, for example, for certain public enterprise investments in terms of how it fits in with or doesn't fit in with the primary surplus.

So the issue of both a comparability of treatment in terms of how public investment is handled, because some countries have complained that different regions have different standards, that issue is of importance. The reality that in Latin America in particular public investment has been a relatively low and, in fact, declining share of government activity and of the economy has been an issue of some concern.

So the idea of promoting investment, including public investment, is one, I think, that all parties share. However, it is not a simple matter of redefining investment as an expenditure, because the investments do indeed create in most of these cases debt, and the debt needs to be financed. And the Latin America region in particular, but other regions as well, are ones where deficits and debt levels still raise questions of sustainability.

So it is an issue we are looking into, both in a global sense and, in particular, in a Latin American sense.

You made reference to the meeting in Lima. Actually, there had also been an earlier meeting in Bolivia where much of the same came up. I believe Kofi Annan was actually at that meeting as well.

So this is a matter—and it came up in Monterrey, as a matter of fact, at the recent Summit of the Americas meeting. So this is an issue that is under active consideration. It is not an issue—for example, this informal Board seminar that I mentioned, it is not an issue where there is a simple decision that can be made. There actually is a lot of work that needs to be done in terms of how one tries to get a better understanding of what the problems are and how one can accommodate higher levels of public investment. But there are still tradeoffs. Resources are still scarce. And so it is not a question that has a simple answer, but it is a question that we are looking into on a number of levels, not just in the Latin American context.

That was my short answer.

QUESTIONER: Also at that meeting, 18 Latin American countries issued a statement saying—you know, were backing Rato as a candidate for the Managing Director post, but also calling on more transparency in this whole process, something that has been echoed within the IMF by some Board members, and if I'm to believe some press reports, also by some staff.

What is your comment on that? What is the staff feeling on this call for sort of more transparency?

MR. DAWSON: Well, I don't think it is appropriate for me to characterize staff views. Staff, you know, is—there is, in fact, a Staff Association. The staff, I am sure, has a diversity of views.

A little bit of history. Four years ago, after the year 2000's Managing Director selection process, the Boards of the Fund and the Bank did do a joint report on the MD selection process and made a number of recommendations.

That report was presented to the governing bodies but was never actually acted upon. However, a number of the principals in the report, I think enjoy wide support in terms of openness, transparency, looks at a number of candidates and so on. And the Executive Board, the Fund Executive Board-I am speaking of the Fund at this point—has that report on its own, and I am sure will be taking its recommendations into account as it goes forward.

You have seen the statements put out by groups of Directors and another statement by an individual Director. It would not at all surprise me if you have other kinds of statements made either by Directors or by authorities. Ultimately, as I said at the last briefing, the selection of the Managing Director is formally, legally, and solely the responsibility of the Executive Board.

I should also note, with my tongue only slightly in cheek, that one element of transparency is, of course, press reporting, and there is no lack of reporting on potential candidates, actual candidates, reaction to candidates, et cetera.

I caution everyone, as I did four years ago, that not all of these reports are always accurate or they may, in fact, reflect particular snapshots of it. But this can hardly be described as a secretive process at this point with the European Summit coming up, with some statements out of that, as I said, statements from Directors here and so on.

In terms of timing, I don't have a sense of what timing we are under. The Executive Board is, I know, having their own consultations among themselves about it. As and when the Board takes any particular actions in terms of its responsibilities in the process—and, of course, which ultimately would lead to a final decision—we will be keeping you informed. I have been in touch with the Executive Board, and they are committed to letting the public know of any developments from the Board's point of view.

In my defense, I should also note I am only back today from a trip out of the country, and so I haven't had a chance to check this morning in terms of whether there are any new developments. If there are any, I think we've got a pretty good track record the last few weeks of making statements available on behalf of people, if they so wish.

You made particular reference—you alluded to but did not identify a particular statement by one former department head, a very respected staff member here, whose statement was reported publicly. And, I can confirm that statement existed and the stories about it are largely accurate. I just don't think it is appropriate for me to be characterizing that statement or the position of the staff when the staff has not taken any formal position.

But as I say, Mr. Boorman is a highly respected staff member, and I think his views do reflect that of a number of the staff.

Anything else?

QUESTIONER: Back to the spring sessions, a few points. There will be a press conference, or does Mrs. Krueger plan any press conference before the meetings?

MR. DAWSON: Yes. We will have the traditional schedule of briefings. I believe it is on Thursday. The Managing Director press conference, in this case the Acting Managing Director press conference, will be on Thursday, and there will be the normal Saturday evening or late afternoon joint press conference with Gordon Brown wrapping up the IMFC meeting. So we are following the traditional WEO, Managing Director, in this case Acting Managing Director, concluding press conference, as we always have.

QUESTIONER: And is security this time a special concern or are there less concerns than in the past?

MR. DAWSON: I don't have a barometer on security concerns. Certainly with the history of demonstrations here and after events around the world, security is certainly a matter of concern whenever you have a meeting of this sort. We have been in touch or are in touch with the U.S. authorities, who are, of course, our hosts, and they have indicated they will make the necessary arrangements and precautions.

I should also note there is a very large demonstration planned for that weekend on a different subject, so the town is likely to be a bit crowded on—I believe it is the Sunday—is the other demonstration. So I think for your own planning, you might want to make sure you have your access routes and timing down, particularly on the Sunday, where there is, as I say, a major demonstration planned here in Washington, unrelated to us.

QUESTIONER: Tom, I want to find out if there is anything public that you can say about the meeting, the closed-door meeting on the Middle East that was going on for the last two days. There was a lot of interest in it, and is there any single message that came out of that meeting, in particular about the region or about Iraq?

MR. DAWSON: There was, indeed. I am just trying to catch on—it was yesterday and today, right? Yes, the Fund has been sponsoring a conference on the Middle East/North Africa region on challenges of growth and globalization. And, you know, to go over sort of the issues under review, discussion, et cetera, on the policies needed to accelerate growth rates in the region, particularly with a focus toward creating sufficient jobs given the burgeoning, expanding labor force in the region, how to better manage the integration of the region into the global economy.

The conference itself consists of officials and experts from central banks, governments, academic institutions, as well as regional and international organizations, both from within and outside the region.

It is fair to say, as you characterized it, that it is a closed-door conference. It was by invitation only. However, a number—many of the papers for the conference are going to be made available on the website, and you can check, I think, with Bill Murray for such information.

A little more detail, besides reviewing the record of growth in the region, are factors that might have helped or might in the future help—might have in the past impeded, might in the future help the region's growth performance; how to examine public sector reform, again, with a goal of fostering higher rates of growth, financial sector reform and how that could promote growth and investment, integration, as I noted, as well as lessons learned from other regions, which is why other regions, as I say, are represented at the meeting.

I would hope that later on after this meeting, which is, of course, halfway done now, we could provide some sort of a summary of the main themes of the press conference. My notes here actually suggest I provide it at my next press briefing. Since that is not likely to be for three or four weeks, I think we will try to get it for you prior to that since I won't have a press briefing until after the Spring Meetings.

QUESTIONER: Yes, I would like to ask you a philosophical question, if I may. This is a—

MR. DAWSON: Last time, I was a humble bureaucrat. I am supposed to be a philosopher now?

QUESTION: Yes, I hope so. This year is the 60th anniversary of the Fund, and, you know, since then a lot of things have changed, and the critics have said that the Fund has lost its way, basically, that it has adopted this market fundamentalism that was not intended at Bretton Woods. I wonder if you could reflect on the path that the IMF has taken.

MR. DAWSON: Well, I think, in fact, the way I would look at the 60 years is that the Fund is now closer to the goal of its founders as being a universal institution. In the post-war period, we were not a universal institution because of divisions in the world, the Cold War and so on. We now are an institution of 184 member countries in which the member countries who do have varying political systems, economic systems, are, in fact, all members of the institution. So I would say there is much more of a diversity in the institution than there was in the earlier stages.

The reference to market fundamentalism, I know that is often popular rhetoric or sometimes also referred to as "neoliberalism." I like to remind people the Fund is a governmental organization. Much of what we are doing is strengthening the effectiveness and role of governments in helping economies manage themselves.

You know, in some countries, some regions, we do hear that accusation, and in this particular country, we often hear the accusation that the Fund is, in fact, an agent of some sort of creeping public sector.

So we get the criticism from both directions, and that doesn't necessarily mean we are doing everything right, because we indeed are trying to be, as I say, a learning institution to learn from mistakes that we have made and publicize our own self-assessments.

So I think I would conclude with what I said at the beginning. I think actually in a sense the Fund is closer to its original mandate than it had been through many of the 60 years.

I can tell people's minds are on other subjects this morning. Okay. I don't have a precise date for the next briefing, but it is likely to be in the first week of May, May 4th or 5th, something like that. But I look forward to seeing all of you around the Spring Meetings. Thanks.

[Whereupon, the press briefing was concluded.]