Transcript

Washington D.C.
Saturday, April 28, 2001

Participants:

Dr. Joseph O. SANUSI, Chairman of the Ministers of the Group of 24, Governor, Central Bank of Nigeria

Mr. Alain BIFANI, First Vice-Chairman, Director General, Ministry of Finance, Lebanon

Mr. Gerald YETMING, Second Vice-chairman, Minister of Finance, Trinidad and Tobago

Dr. Ramsey O. MOWOE, Permanent Secretary, Federal Ministry of Finance, Nigeria

Ms. Mboto FOUDA, External Relations, IMF

Proceedings:

Ms. Mboto FOUDA - Good afternoon ladies and gentlemen, and welcome to this press conference of the chairman of the Ministers of the Group of 24. The press conference is on the record, the simultaneous interpretation channels are number 4 for English, number 2 for French, and number 3 for Spanish. Now let me introduce our guests today. In the middle of the table is Dr. Joseph Sanusi from Nigeria, the chairman of the G-24 group. On his right is the First Vice-Chairman, Alain Bifani from Lebanon, on the left side of the chairman is the Second Vice-Chairman, Mr. Gerald Yetming, from Trinidad and Tobago. On the far left side of the table is Dr. Ramsey Mowoe, the chairman of the Deputies who is also from Nigeria. Before we take the questions in the room I would like to ask Mr. Chairman to offer his opening remarks.

Mr. SANUSI - Thank you very much. Ladies and gentlemen of the press, I wish to thank you for honoring the invitation to this press conference and to thank you also for your interest in the working of the G-24.

During the deliberations, ministers had extensive discussions on the content of the communiqué and other issues relating to the activities of the group. We were pleased to have the Managing Director of the IMF and the president of the World Bank, as well as representatives of other institutions and observer countries participate in our deliberations.

Let me highlight some of the key issues the ministers addressed in the communiqué.

First, in reviewing the World Economic Outlook, the ministers expressed concern about the downward revision of growth prospects of the world economy, stemming from the slowdown in the U.S. economy, failure of recovery efforts in Japan and slower growth in Europe. These developments present uncertainties and risks for the economic performance of developing countries. The implications of these developments are severe in terms of lower exports and resource flows for the developing countries, against the backdrop of weakening demand from industrial countries and a secular decline in non-fuel commodity prices.

Second, the ministers addressed issues relating to the World Bank/IMF support to enhance growth, reduce poverty in low income countries, particularly the enhanced HIPC initiative and the preparation of poverty reduction strategy papers, PRSPs. While welcoming the progress made under the enhanced HIPC initiative, the ministers note with concern that only one country has reached the completion point. In this regard, they emphasized the urgent need to bring more eligible countries to the completion point and to ensure access of these countries to adequate and additional concessional financing so as to facilitate the attainment of objectives of high growth and long-term debt sustainability.

The ministers also noted the progress made with the PRSP process and emphasized the need to keep conditionality simple, realistic, and focused on a few key issues, and to ensure that the modalities for the preparation and approval of the PRSP are designed to be consistent with the existing institutional framework in the country concerned.

Third, the ministers noted that the developing countries have become major players in the global market, as their share of the world trade has increased substantially in the last three decades. However, many of these countries, particularly the low-income countries, are yet to benefit from this trade expansion, as a result of protectionist mechanisms, such as antidumping and countervailing duties, as well as subsidies in developed countries and the slow implementation of trade liberalization agreements, particularly with respect to agricultural products. These barriers continue to hinder access of exports of developing countries to international markets and inhibit their competitiveness.

Fourth, ministers observed the significant progress made in strengthening the international financial system through the development of international codes, standards, and best practices to be applied by both developed and developing countries. They underscored the need to ensure that the observance of these standards and codes remain voluntary, duly recognizing the country-specific circumstances and stage of development, including administrative and institutional constraints.

Fifth, the ministers welcomed the review initiated by the Managing Director of the IMF on the scope of conditionality in Fund-supported programs and the decision of the Fund Board to implement proposed shift from broad coverage to a more selective application of conditionality. They emphasized that the objective is not to weaken, but to streamline and make it better focused, more effective, and less intrusive.

Sixth, the ministers noted that negotiations for the 13th replenishment on IDA resources are currently underway and urged donors to ensure that IDA-13 is adequately funded to meet the increasing needs of the poorest countries, many of which are reactivating dormant programs as they emerge from conflict and indebtedness.

The ministers also noted that Africa deserves special priority and urge that IDA lending to the region meet the 50 percent target agreed under previous replenishment.

Ministers also urged that the developing countries be given greater voice in the decision making processes of the Bretton Woods institutions. Thank you, ladies gentlemen of the press.

Ms. Mboto FOUDA - Thank you, Mr. Chairman. I would like to ask reporters to identify themselves as well as their media before asking their questions.

QUESTION - Minister, in relation to trade and agriculture, was there discussion of the launch of a new round of trade negotiations at Fatah in late this year under the WTO? Could you give some indication of discussion that may have taken place in the committee on that.

Mr. SANUSI - We did not discuss details relating to the WTO arrangement. You have with you the communiqué which we have issued which I believe you must have had time to go through.

QUESTION - I'm from the Press of India. You mentioned in the last paragraph of your final communiqué that Africa must have 50 percent of IDA. What is the percentage now as compared to the 50 percent you now want and also what exactly do you have in mind when you say that developing countries must have a greater voice in the affairs of the Bretton Woods institutions? Is it the quota issue you have in mind?

Mr. SANUSI - Well, on the question of IDA-13, what we discussed relates to the need for the donor countries to make greater contribution to IDA. Of course, we observed that the current contribution to IDA by the donor countries represents only 0.24 percent of GNP, whereas the accepted standard is 0.7 percent, and therefore we think there is need to make greater contribution to the IDA, and then of course if that is done then IDA is certainly going to be better replenished. Your second question?

QUESTION - On the first, what is the percentage of IDA which Africa gets now as compared to the 50 percent you want? Secondly, what exactly do you have in mind when you say that developing countries must have greater voice in the affairs of the Bretton Woods institutions? Do you have in mind increased quota?

Mr. SANUSI - Well, increased quota is one of them, but what is more critical is getting the developing countries involved in decisions that are taken by the Bretton Woods institutions, so that the developed countries don't just hand over a decision, so that the developing countries can also have the feeling of ownership in whatever decisions are taken by the Bretton Woods institutions. We believe that the developing countries have capacity to make contribution to decisions, and therefore you would believe that issue would be involved in whatever decisions are being made by the BWIs. Let me emphasize this, we work in the G-24 as a group, so I have both on my left and on my right the First Vice-Chairman and the Second Vice-Chairman, and I also have at my far left the chairman of the Deputies of the Group of 24, so while I will answer some of your questions, I will also ask them if they have contributions to make so that you get full answers to the questions, and to that extent I will now ask them if they have anything to add to what I've said in respect of those two questions that I was asked. Mr. Bifani?

Mr. BIFANI - Not for the time being, Mr. Chairman.

Senator YETMING - Nothing.

Dr. MOWOE - Except on the proportion of IDA points going to Africa, it's roughly about 50. The intention is to retain the proportion going to Africa and not to reduce it.

QUESTION - I'm from Bloomberg News. Two questions for you, Sir. One is that Nigeria has been a frequent country that has called for more and greater debt relief, and yesterday Mr. Wolfensohn said that move could actually bankrupt the World Bank. Are you concerned about that and have you adjusted your call for greater debt relief? In the communiqué you mentioned that bilateral development should contribute to the large bailouts that happen for countries, and in the recent one for Turkey, obviously that didn't happen, apparently at the behest of the U.S. Is that a concern to you also?

Mr. SANUSI - Well, I think when countries call for debt relief, I will refer to my own country, for example, the debt relief in many cases, except for the case of IDA, are not particularly related to the multilateral institutions. I think in our own case it relates more to the Paris Club, and of course when you look at how the Paris Club debt was incurred and the manner the debt has grown over the years, you will discover that we really are justified by asking for debt relief, so that the type of debt relief that Nigeria is asking for is not the type that the president was referring to that could possibly bankrupt the Bretton Woods institutions. I think what he was referring to was the IDA debt, and then of course what he said was if such debts are forgiven, the flow that could have been possible to enhance what we could get on IDA would to that extent be reduced.

QUESTION - Ellen Freeman, Washington. I wonder if we could go back to the question of agricultural commodities and developing countries not benefiting from the trade agreements as expressed in your communiqué. Was there any discussion of the next round of trade negotiations in the WTO, the World Trade Organization?

Mr. SANUSI - Can any of you help me to answer that question?

Dr. MOWOE - Well, as our distinguished chairman has said, we did not go into specifics of trade negotiations. We're talking of the principle that would apply in these discussions, so I think the answer to your question is that there was no discussion of such a detail in the meetings that we have had so far.

QUESTION - Peter Willis, Social Development Review. Did you discuss in any way either in general terms the outcomes of the south summit or more particularly the financial recommendations for new south institutions from the south summit?

Mr. SANUSI - No.

QUESTION - Did you discuss the battle going on now between countries like Brazil and drug manufacturers, when you talk about the HIV/AIDS disease here, there is no mention to patent, and I was wondering if there was a division of the G-24.

Mr. SANUSI - Well, I'm afraid of that too we don't discuss things that are political and particularly affect conflicts between countries, and as such we did not discuss the issue you are mentioning, but of course we did discuss the question of the sort of assistance that has been provided in respect to the problem of AIDS all over the world, and we particularly appreciate the initiative which has been taken by the Bretton Woods institutions in assisting countries, especially in Africa, where this is becoming a very big problem.

QUESTION - Jeannie Zurlow with International Securities Outlook. You say in your communiqué that you hope the newly established international capital markets department within the IMF will help developing countries gain better access to the international capital markets, and I'm wondering if you can say more specifically what you hope the new department will provide.

Mr. SANUSI - Yes, of course we talked about that, and we believe that if you have a healthy financial system and therefore the result that generates confidence, it will be possible to assist the capital market developments, especially in the developing countries.

Ms. Mboto FOUDA - Thank you Mr. Chairman, I would like to thank you so very much as well as your team for taking the opportunity to speak to those reporters. Thank you, ladies and gentlemen.