Transcript

Thursday, May 4, 2000
Washington, D.C.

MR. DAWSON: This is another of our regular press briefings on the record, embargoed until 10 minutes after the conclusion of the briefing. And as usual, I would ask that people identify themselves when they ask questions so it makes it easier for us to transcribe it, and for me to know who you are.

This week, obviously, for those of you who are not insomniacs like Janet, the new Managing Director did arrive at approximately 8:05 on Tuesday morning, May 2nd, and is at work. I think we probably have photos available for those of you who want verification of that, and he has started quite actively, has met with both the Executive Directors on Tuesday and the office or department heads yesterday, again, another meeting in that regard. Today he will be meeting individually with all of the department heads, all of the Executive Directors. And so is, I think, quite active.

I do not have anything at this point in terms of an initial press availability, or whatever for you, but when we do have something on that, we will let you know.

In that regard, I should also note in response to requests from a number of you, we are working at making available to you - I guess I would call it a tentative/expected, speaking/traveling schedule for members of management, both the Managing Director and the Deputy Managing Directors. And I hope that we will have something for you in that regard in the next week or so.

I guess that is all I have to start out with, and I'll be happy to take any questions.

QUESTIONER: I guess the Ukraine Pricewaterhouse audit is now posted to the NBU website. And when will it be on the IMF website? And what have you got to say about it?

MR. DAWSON: We actually have conflicting opinions as to whether it's actually on the (NBU) website or not. I know that some have been able to get it, but others have not been able to get it. We do hope to have it out posted on our website as soon as we possibly can - and I don't think that should be very long.

What I guess I would have to suggest to you is to get hold of us later in the day. I don't have anything for you right now, but we know that that's probably - you may prove me wrong with your other questions - that's probably the topic of most interest today. And when I have something, we will let you know.

QUESTIONER: The Ecuadoreans talking to the creditors, have they passed on any updates as to how things are going?

MR. DAWSON: No. I mean, I understand there have been those discussions, and, in addition, there are possibilities of some get-togethers between creditors and the Ecuadoreans. But in terms of passing on to us, no, I think it's at a more - I wouldn't say preliminary stage, but we have not been getting that kind of a feedback. But we are encouraged that they have been discussing, and it looks like we'll have further meetings.

QUESTIONER: About a month ago, the IMF was advising Europe not to raise interest rates. They did and the euro fell to new lows. Do you have any comment on either of those two?

MR. DAWSON: No. No, I don't. I mean, I've had as a policy from the beginning here not to be discussing exchange rate developments or interest rate developments in that context. You know, as and when there are possible appearances by either Mr. Fischer or Mr. Köhler, possibly Mr. Mussa, that might be a forum in which to direct it. But I have resolutely stayed away from that issue. I still like my job.

QUESTIONER: Could you provide some sense of the state of play with Russia, seeing that there will be an inauguration soon of the President-elect? I was wondering, for example, if the IMF is looking more at resuming the old loan program or beginning a new loan program altogether? And if there is a new program, will it be possibly precautionary?

MR. DAWSON: I think it's too early to answer the latter part of the question, as well as on the former, although clearly, as you know, we had a recent visit there, and an additional visit is planned probably in the latter part of this month, the month of May. But in terms of negotiations and so on, I think it's premature to talk about that because the new government needs to be in place, so that I think what we're talking about at this point are policies. And once the government is formed, then we'll be able to have more serious discussions. But at this point, it's a discussion with policies with the people who are there at the moment.

QUESTIONER: [inaudible.]

MR. DAWSON: Yes. Same with the region, yes.

QUESTIONER: A question on Moldova. Is there a time frame for resuming the talks with Moldova?

MR. DAWSON: I'm not aware of anything. I think if there were, I would be aware. Just don't try to ask a follow-up question.

QUESTIONER: South Korea looks like they may be getting up to their old tricks again of the days of bailing in money into companies, as in a unit of Hyundai that I think they're looking at injecting some funds into. There's speculation that the IMF not only has told them not to do it, but, you know, is there any sort of further steps the IMF would take to express its chagrin at this development?

MR. DAWSON: There actually was a statement in Seoul this week indicating our concern in that regard. I'm just looking here. I think I read it on my computer at home this morning instead of having it with me here. But it's along the lines of what you said.

QUESTIONER: From one defaulter to another, Ivory Coast seems to be having problems with paying its debts. How do things stand with Ivory Coast, and do you have any comments on that? And in the same region, not very long ago Mr. Fischer was saying that a loan to Nigeria was imminent. It doesn't seem to have happened?

MR. DAWSON: Well, let's deal with Cote d'Ivoire first. Obviously, there is - there was a new government there, and there were some problems in terms of making payments, and various reports have come back and forth on whether Brady payments have or haven't been made and how much has been forwarded. I don't really have anything on that because we are not directly involved in that, and we have made it clear that we are anxious to work with the government there. But at this point, it is something of a transition government, and we're waiting to see what the developments there are.

On Nigeria, we have had very good discussions with the government and had a discussion particularly on the budget. Unfortunately, the budget that was passed by the parliament was not consistent with what those discussions had been. So, we're having to take another look at it, and the government knows well that we are anxious to work with them. But as I say, the budget that was adopted was not consistent with the understandings that we had had with the government itself. So it's an issue that we need to continue working on.

But as I say, our relationship with the government, we had had a pretty good understanding, but, unfortunately, what came out of the parliament was not consistent with that.

QUESTIONER: Recently, China launched a kind of strategic plan to explore the west. I'm interested in whether....

MR. DAWSON: I'm sorry. To...?

QUESTIONER: Exploration of the western part of the country. And I'm interested in whether IMF have ever, you know, talked about this, discussed about this, or any opinions?

MR. DAWSON: I'm not aware. We'll have to get back to you and post anything we have on that. I'm not familiar.

QUESTIONER: I just wanted to follow up on Nigeria. I just want to understand if you mean that it's not imminent anymore. And then....

MR. DAWSON: Well, there was an understanding on the budget. The budget that was passed was not consistent with the understanding.

QUESTIONER: Okay. I just was wondering....

MR. DAWSON: That's pretty clear, isn't it?
We want to work with the government to reach something, reach an agreement. But it requires a budget, and the budget that came out of the parliament was not consistent with what we'd agreed. I think that's pretty straightforward.

QUESTIONER: Okay. And then on Pakistan, what does that country have to do to get a new program? And how could the U.S. position on Pakistan's support for terrorism affect a possible loan?

MR. DAWSON: I think you should talk to the U.S. about the latter part of that question. We had the discussion and the release that came out last Friday in terms of the discussion in the Executive Board of the problem that we've had in terms of the data. We've had a very good dialogue with this new government, and we're looking forward for that to continue to see what kind of support they need and then can get from us.

But the latter part of your question is directed - should be directed toward the U.S., and the former part of the question, I think we have been quite impressed with the government's resolve in trying to work with us, both to deal with the old problems and the new ones. We have nothing to announce, but I think we're satisfied with the progress that we've been making particularly to deal with the old problems.

QUESTIONER: Can I just follow up? Do you have a date for when you're going out there?

MR. DAWSON: No, I don't have one now. I'll see if we have one for you later.

QUESTIONER: The new Evaluation Department, is that up and running already? And how will that be organized, and who is leading it?

MR. DAWSON: The establishment of it was approved by the Executive Board, and someone can give you the precise date, and the expectation. It is not up and running in that sense of the word yet, but it is expected that it will be up and running prior to the Annual Meeting this fall. It requires identification of staff and so on, precise terms of reference. But the decision to establish the unit is one that, in my previous capacity when I was here, was an item of some controversy. That decision is, I think, the breaking of what had been an impasse. I expect that there's no difficulty in terms of establishing it getting it staffed up and so on. The target date for that is before the Annual Meeting.

QUESTIONER: [inaudible].

MR. DAWSON: I think it is not necessarily. That is an issue to figure out exactly how to do it. It's an issue that's come up, as I'm sure you know, at the Bank in terms of what the re-employment issues are for staff and so on. So those are all issues where we're looking at it and hope to have something that's acceptable to all parties. But we're well aware that that is a matter of some controversy.

QUESTIONER: In his meeting with the department heads, did the new Managing Director set forth any objective that he wanted to accomplish, say, in the first hundred days to show that he has taken charge and might be leading the IMF in a new direction?

MR. DAWSON: Well, I think it's quite clear he's taken charge. But there are a couple of items that I think are high on the agenda. One is, in a sense, taking stock of the various reform ideas, both internally generated as well as externally generated, and seeing where to go in that regard. And that is certainly a major priority.

The second priority that I think I would identify is, while it has some relationship to that, I think it probably has more relationship to the recent spring meetings and the prospective meetings in Prague, which is, I guess, for want of a better phrase, the globalization issue. The role of the Fund in globalization, what is the nature of the Fund's role in it? I think the general view of the institution, and certainly of the Managing Director, is that globalization in some sense is a reality. The question is how do we work to make the process one that is smoother, and that spreads benefits to all elements in all economies and all sectors of economies.

So I think in that sense of the word, assessing the reform proposals and determining the direction to go forward and then the globalization are two issues that have come up already. There is a pretty full plate, but I think those are two reasonably broad issues that encompass a good portion of it.

QUESTIONER: Just in terms of Nigeria again, can you tell us what the specific elements of the budget were that the IMF was surprised by, doesn't like?

MR. DAWSON: I think the way to look at it is the budget that the government proposed and the congress or parliament approved. That is the distinction that I would draw, and that's the differences to look at, because that was the optimism that was cited at an earlier point. It had to do with an agreement, an understanding with the government, and the budget that came out of the parliament was not consistent with that.

QUESTIONER: So you're saying that during the parliamentary process, that's where....

MR. DAWSON: Yes, yes. And I think - we can provide you more information, but that's the context of it because it's not a matter of our micro-managing something. We had an understanding and a sense of comfort and agreement with the government, and then what came out was not that way. Now we have to see what we can in a cooperative fashion do, both with the parliament as well as with the government.

QUESTIONER: Coming back to Russia, I was wondering about the difference in figures and projections of economic growth in Russia. The Fund, if I am not mistaken, in its latest assessment in the spring meetings said something like 1.4 for this year, and the Russians are now saying 4 or even greater than that. Does it mean that the Fund was kind of trying to err on the side of caution in its latest projections or..

MR. DAWSON: You can never err on the side of caution.

QUESTIONER: Whatever. I mean, do you have a more optimistic scenario hidden somewhere?

MR. DAWSON: No. I mean it's a dynamic process, and certainly we have in the last year or so been impressed with the macro stabilization, and the growth has in a fairly consistent fashion exceeded expectations. So I think that by itself that's not surprising.

On the other hand, it may well be that projections are produced more often within the country than are necessarily done by staff. So I don't think it's a matter of a conflict, but I think that it's a dynamic process.

QUESTIONER: A few seconds ago you used the phrase "the IMF micromanaging."

MR. DAWSON: I said it was not a case of micromanaging.

QUESTIONER: Right. Just the phrase I'm coming back to. Would you agree, as one of the critics of the IMF said this week, that an example of IMF micromanaging was holding up the HIPC to Uganda because of the aircraft purchase?

MR. DAWSON: That was an issue that was of concern to our membership, the membership in both the Fund Board as well as the Bank Board. It was an issue that was raised by a wide number of Chairs, and I don't think the Fund management nor the Bank management in any sense were engaged in doing anything other than responding to questions that our Board members raised.

It is entirely natural. It is, in fact, something that perhaps our critics should take a look at, those who have the view that our Board only rubber stamps proposals from management. This is clearly a case where a number of our Board had serious questions that were resolved, I might add, in a fairly timely fashion, because I think the announcements came out either yesterday or the day before.

QUESTIONER: Going back to the earlier question about priorities, is reviewing the Board's - you just mentioned how there are some people - some people look at the Board as a rubber-stamping institution. That probably comes in part from the fact that you don't get written - there's no account of who supported what, so it's hard to know what's going on in the Board when you're not on it.

MR. DAWSON: Oh, you do a pretty good job.

QUESTIONER: Is there any discussion on the Board at this point, any serious discussion of changing the way the Board - the Board composition in terms of how many seats there are per region or in terms of the relative voting weights?

MR. DAWSON: That certainly is an issue that can be categorized under the rubric of IMF reform. I would, however, also note that there was - has been and I guess is still a committee, headed by Professor Richard Cooper of Harvard on the quota formula issue. While it is somewhat technical, it nonetheless goes to the heart of the issue of representation in the institutions, and looking at that range of membership, participation in the board. So that is an issue that has been teed up in a quota formula sense. It's an issue that obviously was also teed up in the context of the recent selection of a Managing Director.

So that certainly is an item. I would cite the Cooper report as one that was a case of our soliciting outside views on that subject. That will then be part of a review process. The Managing Director has noted, for example, his belief that that selection process needs to be looked at again.

It is part of the overall reform process, but I think it is worthy of sort of a footnote on its own because it is an issue that will be getting - in that sense - a more formal discussion.

QUESTIONER: Is that going to be in weeks, months, in the coming year?

MR. DAWSON: The report of the committee was only made available to staff and the Board, I believe - it might have been last week, but I believe it was early this week. So it will be scheduled at some point for Board discussion. Precisely when I cannot tell you, and I would not be at all surprised if it's not discussed in the broader context as well. But it is an item that has been presented to the Board for their consideration. It is not a simple - in a technical sense, it is not a simple matter. In a political sense, it is obviously even less simple. And so it's not an issue that is going to be resolved in the near future. I am quite certain that Executive Directors will have submitted the reports back to their governments for their reactions already.

QUESTION: [inaudible].

MR. DAWSON: Frankly, I'm not certain in that regard. Certainly the discussion of the issue will be very public. The report itself - I don't want to get your hopes up too high. The report is not, `This is the formula that should be followed.' That's not the kind of report it is. It is a detailed, at times extremely statistically complex report of formulas as well as concepts that should be used going forward that I think would provide very substantial input for people to then decide the conclusions that they wish to draw from it.

Is that it? Thank you very much, since I have a 9:30 meeting. Thank you. The embargo will be lifted at 9:35.

[Whereupon, the press briefing concluded.]