Transcript

Tuesday, March 14, 2000
Washington, D.C.

[TRANSCRIPT PREPARED FROM A TAPE RECORDING.]

MR. DAWSON: Good morning, everyone. Welcome to the latest of our regular press briefings. I am Tom Dawson, Director of External Relations at the Fund. As usual, this briefing is on the record but embargoed until 15 minutes after the conclusion of the press conference. I only have one housekeeping matter which is that press accreditation applications have been mailed out to those who have been previously accredited at Spring or Fall meetings; this is for the Spring Meetings, though. If any of you are new to this and wish to be accredited for the Spring Meetings, please, contact Bill Murray, either at his e-mail address, wmurray@imf.org or at (202) 623-7064.
That having been said, we will be happy to take questions as usual. Will you, please, identify yourselves and your organizations prior to the question. Thank you.

QUESTIONER: Are you still expecting the nomination of Mr. Köhler to be lodged with the IMF formally today; have the Germans given you any indication on that?

MR. DAWSON: Yes, I do expect that at a Board meeting probably this afternoon, Mr. Köhler's nomination will be put forward; in all probability put forward by a Portuguese Representative representing the European Community as a whole, but with a statement by the German Executive Director as well. And I do expect that I will have one or more statements available for the press shortly thereafter and you should just stay tuned.

As I say, my understanding is that the meeting will be around 3 o'clock this afternoon. I don't think the meeting will be very long so we should be able to make most of your deadlines.

QUESTIONER: What happens after then? What are the next stages and how soon will it all be settled?

MR. DAWSON: As you know, the Board makes its own rules in terms of the procedures. Previously, of course, there had been straw votes and so on. I would not necessarily think there would be a straw vote at this point. I would guess in all likelihood, the next step would be the already announced intention and visit of Mr. Köhler to Washington. I do not have a date for you. At that point, as soon as I do, I will let you know, but I know it will be in the not too distant future.

QUESTIONER: And then are there any plans for Mr. Fischer to withdraw?

MR. DAWSON: I have nothing on that in that regard. I presume most of you noticed that around 7 o'clock this morning the Japanese Finance Minister, Mr. Miyazawa, did issue a statement indicating that Mr. Sakakibara's nomination would be withdrawn. And, so, I suspect in some formal sense that may happen at this meeting this afternoon as well. But I have nothing regarding Mr. Fischer.

As I say, I think the next event after this afternoon's meeting is likely to be the visit of Mr. Köhler. And I would also expect that there would be some form of press availability. But at this point, as I say, we don't have a date yet.

QUESTIONER: Can you talk a little more about what you expect Mr. Köhler's visit here to entail?

MR. DAWSON: I don't think it is for me to comment on that. I just would draw you to the joint statement by President Clinton and Chancellor Schroeder in that regard.

QUESTIONER: If there is not going to be a straw vote, when do you expect the Board then to vote formally?

MR. DAWSON: Again, the joint statement that I referred to made an indication that there would be a visit here by Mr. Köhler, to meet with a number of Board members, and I suspect it would be after that visit.

QUESTIONER: These are early days but a lot of people have indicated that they believe the process of choosing the Head of the IMF is not exactly perfect.

MR. DAWSON: I think that is one issue in which there is a consensus.

QUESTIONER: Have you received any indication from the Board that they are likely to take up this matter in the near future rather than wait until some future time when there may be yet another Managing Director to choose?

MR. DAWSON: Well, I have noted a couple of Board Members on the record in that regard, Tom Bernes, the Canadian Board Member, as well as I believe, Mr. Morais or at least his constituency, representing Africa in that regard. So, that is certainly an issue that has come to a number of people's attention.

The next Managing Director will, of course, have a five-year tour of duty. So, I think that while it is something that needs to be looked at I am not sure it is necessarily the highest priority but certainly in the nearish future, maybe not the near future.

QUESTIONER: Can I change the subject. I understand Mr. Meltzer is going to meet with the Executive Board in order to present his report. Is that correct?

MR. DAWSON: Mr. Meltzer, I do not believe will be coming to the board. Two members of the Commission have requested the opportunity to address the Executive Board. The Board, or at least some members of the Board are aware of this and will be considering it. The problem is that the two Commission members who requested the meeting represent the majority view, and there has been the view expressed that the minority view should be represented as well and that is the issue that at the moment we are trying to consider.

The proposed visit, because they actually did propose a particular date, would be for next week.

QUESTIONER: And is there any intention on the part of the Fund to issue some kind of a formal rebuttal of the Meltzer Commission report?

MR. DAWSON: Well, you know, the issue of reform of the IMF is one that we have been working with, the Fund has been working with before I arrived, but certainly is an issue that has gotten greater attention now.

And we are actively engaged in a number of reform efforts, whether it relates to the transparency issues, the financial standards, issues contained in the Meltzer Commission Report, the surveillance process, the streamlining of Fund facilities, all of those are issues that are currently on the plate, as it were, here at the Fund. And we are already engaged in that process.

In terms of a response, in particular, to some of the issues raised in the Meltzer Commission Report, yes, I think we will have some material both in terms of an overall response--which would be posted on the Web, of course- and probably an Op-Ed type response, as well. But I think we view the process as not responding to one particular report or another but looking at the need to modernize and to reform the Fund and that is an effort that has been going on for some time and will continue.

QUESTIONER: Just in terms of specific countries, Romania, what is the progress there on the consideration for an extension that they had been asking for?

MR. DAWSON: We are considering a technical extension at this point, and then the Romanians have requested a completion of the review but there are still some outstanding issues to be resolved. So, the issue of extending the program and then negotiating or agreeing on what the outstanding issues are in terms of what we call completing the review which is the step necessary for disbursements.

QUESTIONER: I have a question about Ecuador. Next week large protests are planned by Indian and labor groups against dollarization. Does that mean there could be a delay in terms of approving and disbursing the money that was pledged last week?

MR. DAWSON: I don't think that--I mean I'm not sure how the demonstrations would or wouldn't affect that. There are some prior actions that are required for consideration of the stand-by by the IMF Board, including Congressional actions, in particular, as well as some bank sector issues. So, in that sense of the word there are prior actions that are built into the support package that was announced and if the actions take place on the time line that we are expecting, we could expect a Board action in late March or early April.

QUESTIONER: Since we are on the question of protests, I know that there is a press conference after Wolfensohn's speech today about the Spring Meetings. And what is the Fund going to do about the planned protests or do you have any plans about that?

MR. DAWSON: Well, we certainly are active in trying to talk with, reach out, contact the various NGOs that are interested in our activities, critical of our activities and so on, and we have had a very active outreach programs with them. For example, we have a seminar we are organizing this week for a number of NGOs here at the IMF. We have a number of other smaller meetings taking place and will be having a number of public events prior to the Meetings. So, you know, we are reaching out and we are looking forward for any of them who wish to talk with us to contact us. And, I'm sure that goes for our colleagues across 19th Street, as well.

QUESTIONER: On this same issue, do you have contingency plans for what will happen on the day of the IMFC Meeting if people can't get into the building, if the G-10 can't meet?

MR. DAWSON: Of course, we have contingency plans.

QUESTIONER: I see that there is the issue of Bank Bali coming back into loan considerations for Indonesia. I guess it never really went away. But I had imagined that perhaps it wasn't as great a concern now as it had been; that apparently is still not the case. What is the view in terms of Indonesia at the moment with progress on Bank Bali? How do you consider that?

MR. DAWSON: I am sure you are referring to statements made this morning by Mr. John Dodsworth, the IMF's senior resident representative in Indonesia; also there were some statements regarding energy and electricity pricing as well. And I think the best way to go at your question, is to say that you are correct; it had not gone away and, indeed, I think that Mr. Dodsworth was indicating that it continues to be something that we are concerned with and sustained recovery is going to require dealing with Bank Bali. So, I think I would take your--accept what was, I think, your premise, it's not particularly new news but it does show that we continue to be active and concerned about getting that situation resolved. It was reminding me of my own press conference.

QUESTIONER: Is there any development from the Ukraine and any results obtained from the audits that were instituted?

MR. DAWSON: I don't have anything for you now. Of course, the audits that the National Bank of Ukraine has commissioned at our suggestion, the first sort of round of results is due around the end of the month. I would, however, draw your attention to this morning, I don't know whether you noticed, the National Bank of Ukraine put out a statement regarding some of the earlier press stories. I believe they even made an explicit reference to your august publication. So, you might want to take a look at it. It was within only the last 45 minutes, so, you are not slacking off on your job. But it does continue to be an issue that we are quite concerned with, and it is one that we know there is a lot of public interest, and we are trying to make sure that we understand everything that has been going on. And as I say, I think the key external event from our point of view is to get the initial audit results. There are, of course, two audits that have been commissioned.

QUESTIONER: Would you expect that the new IMF Director will be installed by the April Meeting?

MR. DAWSON: It's hard for me to say. I don't know. I mean the time frame in which we are working if the visit happens next week, that is, itself, still just about four weeks prior to the meetings. And, so, I assume and presume that to be the case. But, you know, we have missed predictions before. But there are no requirements in terms of lapse of time or anything like that. So, I think things seem to be moving a little bit more quickly now.

QUESTIONER: Back on the protests, signs are starting to show up around town saying, "Shut Down the IMF and the World Bank", and given that these are the same groups that were in Seattle how concerned are you that this could be a repeat of Seattle?

MR. DAWSON: Well, obviously, you know, we are concerned that given the important work that we have to do that we need to continue to be able to do our work. And I think that the authorities, the D.C. authorities are concerned and recognize that as well. And I think to some extent your question should be directed to them as well.

We do, indeed, back to an earlier question, we have, indeed, attempted to maintain a dialogue with as many of these groups that have been reaching out and talking to us and we are trying to do that. We don't see any reason why it's necessary to shut us down on a Sunday or Monday. I think the important thing is to have a discussion and find out how we can do the serious work that we've been charged with by our owners, the Governments, who represent the peoples around the world.

QUESTIONER: Have you gotten any kind of pledge of nonviolence from these groups or do you intend to do that?

MR. DAWSON: I am not quite sure how we can get a pledge of nonviolence from them. I'm not quite sure I understand the question, but we certainly--

QUESTIONER: Like the one they gave in Seattle.

MR. DAWSON: I wasn't aware that they had given one in Seattle. Well, we communicate with lots of individual groups but if you look, of course, at their Website and so on, I'm not quite sure the authority on which pledges are given. It seems to be sort of a giant community bulletin board which is very interesting and informative but I'm not quite sure what the decision making structure in the group is.

QUESTIONER : In Seattle, the groups that were probably the hardest to deal with were the ones that were least interested in talking to either the city authorities or the WTO officials. They were basically interested in shutting down the organization permanently, not on just one day. There are groups like that, I believe, that might be coming here. Are you making any effort to be very proactive, reach out to the people who don't even want to talk to you?

MR. DAWSON: I don't know how to answer that question. I mean we will talk to anyone. I have been saying that for nine months and we encourage anyone to contact us. We do regularly--I mean, for example, we communicate at least twice a year--this year it will be more--with an established mailing list of 900 addressees of NGOs and individuals from NGOs, not different NGOs, of course, and we have had a communication going with them. These are individuals and organizations that have expressed an interest in being on our mailing list. We will continue that process, other more focused efforts as well.

So, we are trying to reach out and to discuss and some groups do respond, as well. While I mean we have serious differences with, I would note, that the Friends of the Earth came out with an analysis of some of our programs in the poorest countries the other day. That's a serious document. Our people in the Fiscal Affairs Department in particular, are looking at it and we look forward to having a dialogue with them on those issues.

And I think that is exactly the sort of thing that is and, hopefully, will continue to be a productive effort. We even have dialogue with the Meltzer Commission.

QUESTIONER: A question on Russia. The President of the World Bank, Mr. Wolfensohn, who has just gone to Moscow and presumably he has come back to speak at the National Press Club. Do you view this visit as a sort of a sign that the Bank is taking a slightly different approach to Russia than the Fund? And second part of the same thing, will he be sharing, to the best of your knowledge, will he be sharing his impressions and conclusions with the Fund?

MR. DAWSON: No, to the first question; yes, to the second.

QUESTIONER: And how will that be arranged?

MR. DAWSON: Well, 19th Street is a pretty narrow street. There are lots of conversations both among staff and among senior management.

QUESTIONER: I know you have no date for Mr. Köhler's arrival but do you know how much time he is going to spend here and what his schedule is going to be?

MR. DAWSON: No. I mean there are discussions going on and there are a number of steps in the proposed visit. So, it is not like a lightning visit, but I think that there are a number of people he would be meeting with. And as I indicated, it is our expectation that there would be some opportunity for a formal press contact of some sort.

I understand that there are press staking out the Berlin Airport at this point for him, so, we're trying to introduce a little order into the process.

You are awfully easy today.

QUESTIONER: Recently there was some reports saying that Mexico sent a letter of intention to the IMF asking for relief of more than a $1 billion dollars According to this report, Mexico promised to privatize more state companies, totaling more than $37 billion dollars. I was wondering if you had any comment on that?

MR. DAWSON: I don't think it would be appropriate to comment today on that. This coming Friday we have both the Article IV Consultation and the first and second reviews under the current Stand-by Arrangement with Mexico. And, as is normal, we will have both the press information notice and other information available at the time on the results of that meeting. So, that is three days from now.

QUESTIONER: In the light of the Meltzer Report and what you just said was the discussion going on within the Fund about reform, can I ask you whether you feel that there is sufficient consensus now among the main members of the Fund and the Fund management on the one hand as to what they should be doing, what their mandate is in the beginning of the 21st Century and as between the Fund and the Bank, what the division of responsibility should be, sufficient for the new Managing Director coming in to feel that at least he has a mandate and a direction in which to take the Fund?

MR. DAWSON: Well, I would hope that it is an open enough work of progress that the new Managing Director has the ability to put his own implant and influence on that. I think, indeed, it's fair to say that there is not a clear consensus among shareholders in terms of what should be done.

I think if you do a diligent search of reactions to the Meltzer Report which is, of course, just one of a number of reports--the Council on Foreign Relations put out a similar report, a group in Geneva, you know, put out a similar report, the UK Parliamentary Committee just within the last month or so published its report--so, we have lots of suggestions given to us and, no, they are not all consistent. So, clearly, that is something that is a task that will take some time and I think the new Managing Director would have a key role in shaping our response to that. So, no. I think there is not such a consensus.

On the issue of the division of labor between Bank and Fund, that is obviously to some extent a related issue but on a continuing basis we look at how to work on the division of labor between the two institutions. And I would cite, for example, the recent establishment of the Poverty Reduction and Growth Facility (PRGF) as an attempt to more clearly delineate the core responsibilities of the Fund and the Bank, a facility in which the Fund is responsible for the core macro advice and the Bank deals with the detailed sectoral work, particularly in the social health sectors and so on.

So, I think this is very much a work in progress but if you were to do a rackup of the recommendations of the various commissions that have talked about us, as well as the suggestions from the organization or the grouping that formally gives us our instructions, which is the new IMFC, formerly the Interim Committee, I think you will see there is a lack of consensus. And what we are trying to do is work toward getting more of a consensus and, frankly, the Spring Meetings are a place where hopefully the ball will be advanced at that point.

Okay. Thank you very much.

Thank you.