Transcript of a Press Briefing by Thomas Dawson, Director, External Relations Department, IMF
September 7, 2001
Argentina and the IMF
Japan and the IMF
Turkey and the IMF
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Transcript of a Press Briefing by Thomas Dawson
External Relations Department
International Monetary Fund
Friday, September 7, 2001
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MR. DAWSON: Good morning, everyone. I'm Tom Dawson, Director of External Relations at the IMF. This is another of our regular press briefings. For those of you briefing junkies, you will note that this is Groundhog Week. We're doing it two weeks in a row, and I think we will continue that next week as we head into the Annual Meetings. I detect there's a little more press interest.
For the record, today's ground rules are the same. The briefing is embargoed until about 15 minutes after conclusion, and we'll set a precise time when we wrap up. Before taking questions, I have a number of observations. I would again applaud you all in the journalistic community for your relentless pursuit of Fund WEO numbers. The Media Relations Division reports many inquiries, including from the Research Department, which wanted to know where you got some of the numbers. But I do think we do applaud your endeavors. I think this week, focused on the German economy, but we don't, of course, confirm WEO leaks, and as I mentioned at last week's briefing, the WEO won't be published until 11:00 a.m. on September 26.
Meanwhile, this year's meetings are fast approaching, and as I've said, we all know, we've taken steps to consolidate the meetings. These steps were driven by concern about the safety of the people attending the meeting, the safety of the local community, and while we fully understand the long tradition of peaceful demonstrations in the nation's capital and elsewhere, we do urge people, who intend to exercise their right to protest, to also understand that there are valid security concerns.
And I have to say I'm a little struck at the lack of reporting, I guess I would say, on some aspects of the Movement for Global Justice that is organizing many of these demonstrations. I would suggest that many of you may wish to visit their websites, which is open in the spirit of globalization, and notes some of the descriptions that they have made about things such as unpermitted activities and the possibility of opening up the meetings wherever they may be, or confronting delegates wherever they may be. I would just suggest you go and look at the website yourself to see that, for those who think that security concerns are perhaps overstated, there really are quite a few indications that people are planning activities that do not fit in the peaceful category.
I'd like to review a couple of events that are planned in the near future.
The Managing Director, who is now in Suzhou, China at the APEC Finance Ministers Meeting, will be in Berlin on Monday, September 10th for a meeting with European NGOs. There will be a press conference after that arranged with the German Finance Ministry. This is part of our continuing outreach, of course, within the NGO community.
After his return from Berlin, the Managing Director will be speaking on Thursday, September 13th, at the National Press Club here in Washington, and his luncheon address will touch on some of the key issues facing the Fund and the global economy in the lead up to the annual meetings, including the debates surrounding the pros and cons of more open global economies.
The MD will also have a press conference at Fund Headquarters on Thursday, September 27th, to review the specifics of the meeting agenda, and the press conference is timed to assist you all, and it's timed for the journalists that are visiting the meetings as well as those of you who are here full time.
Another date you should have on your calendars is Wednesday, September 19th, when Anne Krueger, the First Deputy Managing Director, will hold a press conference at 9:30 a.m. here at Headquarters, on the latest IMF Annual Report. The report will be available on an embargoed basis to the press, as well as the long-awaited WEO, and they will be distributed shortly to the media.
At this point I'd be happy to take any questions. Oh, I should also note that the Fund Board, our college of cardinals, will be meeting, I think at 10 o'clock, to start the discussion of the Argentine review, and we will have a report for you all whenever that is concluded, but at this point I don't expect we'll have a press briefing, per se. It will be the normal sort of press line or statement that we put out.
QUESTIONER: A question about Turkey. Today the IMF Mission began work on the tenth review in Turkey. What are the main points under consideration?
MR. DAWSON: You're correct, the mission is beginning the discussions of the tenth review, and as I indicated before, if things go well, the Board Meeting on the review would be held late this month or early October. The Mission, of course, is reviewing compliance with the program conditions, in particular the performance criteria for end August, which we think were likely met. It's also going to discuss the 2002 budget, preparations for the move to inflation targeting, and progress and structural reform including the banking sector.
As I said last week, recent developments in Turkey have been encouraging, and if these trends continue, I think we have some reason to believe that Turkey will indeed have turned the corner. Of course, to insure that this scenario is realized, the Turkish authorities need to continue to implement their program vigorously.
QUESTIONER: Just wanted to know if the brainstorming on the debt restructuring is continuing, if there have been new meetings since we last saw you?
MR. DAWSON: Since the effort is to develop a voluntary market-based debt restructuring, which means proffered opportunities for investment bankers, I am certain that the brainstorming continues. I think question, however, is best directed to the Argentine authorities, since it's their debt that is being restructured.
QUESTIONER: Mr. Dawson, my question really relates to the coverage of the meetings. The year before last, despite the fact that I had the press credentials, the D.C. Police would just not let me through. I got through the demonstrators somehow, talked my way past them, but the D.C. Police stopped me. They said, "We couldn't give a damn about your press credentials." So, you know, obviously, the liaison, at least the year before, was quite poor, or at least there were people and I ran into the wrong guy. But I'm not the only one to whom this happened. There were a number of other journalists who were unable to gain access to the conference because of D.C. Police.
MR. DAWSON: Well, I think, as I recall, we suggested people come in very, very early in the morning, and that I think that will be the likely recommendation again. We are quite sorry about that, but unfortunately, these things happen when you have people who are trying to shut down meetings, and I think it's inevitable that these difficulties will happen.
We, of course, do try to learn lessons, both in this matter as well as in other matters in the Fund, and we are trying to learn lessons from those previous experiences, but there is quite clearly a serious security threat, and I think that anyone who thinks that access is going to be easy, may well wind up being disappointed.
But we did have a few complaints in that regard last time, not only from journalists, from Governors of the Fund, who were blocked by demonstrators blocking their buses and access, and this is very, very regrettable, but I'm not quite sure what we can do about it, other than to do our best. The reality is, people are trying to make your life inconvenient. It's not us. It's the consequence of people who are trying to shut the meetings down.
QUESTIONER: There have been suggestions by some members of the Congress, as well as some other organizations, that the meetings of the Boards of the IMF and the World Bank should be held in public. I was wondering if you regard the Board of the IMF and the World Bank like a bank board, not open to the public, or they should be treated like the U.N.Security Council, where you decide things in public. What's your feeling on that?
MR. DAWSON: Well, these are decision-making meetings of lending organizations, and I'm not familiar with any organization, public or private, that has public meetings of their decision-making meetings. At the same time, I would note we publish our schedules in advance. You know when our Board meetings are taking place. We put up summaries in a timely fashion immediately afterwards. The loan documents, which is sort of a letter of intent, are in general published ahead of time.
So I think that's a record of quite substantial transparency and openness. Remember, we are an governmental organization, 183 member governments, and the governments choose the context in which they meet, but I would again note, compared to, say, three or four years ago, the degree of openness in this institution is the difference between night and day, so I am--I think my own view is that some of these calls--I mean if we started having the meetings open, I suspect they'd be asking to have their own Board seats.
QUESTIONER: Members of the Mobilization for Global Justice has sort of insisted over and over again that they are a completely peaceful organization, I suppose, implying that the more violent elements that travel to these meetings are completely unrelated to them. Can you talk about some of the evidence that you've seen to the contrary?
MR. DAWSON: Sure. Here's the evidence right here. Mr. Robert Naiman, who is a prominent member of the Center for Economic and Policy Research. This photograph is from February of last year-of Mr. Naiman being apprehended, having thrown a pie at Michel Camdessus, the then Managing Director of the IMF. Mr. Naiman is the individual, who last week, organized the demonstrations in front of the Bank on disclosure policy. He is a member of this group. This group claims to be nonviolent. I believe that's evidence of a violent act.
QUESTIONER: Any other examples?
MR. DAWSON: There are many examples. I suggest you look at the websites. I shouldn't be doing your reporting. You should be doing your own reporting.
QUESTIONER: What's the name of the group?
MR. DAWSON: The Mobilization for Global Justice is the umbrella group, but this is an interesting group, actually, now that you ask. The Center for Economic and Policy Research which is often referred to as CEPR. It's a Washington-based group. They have a website, and I suggest you take a look at it. It is, however, quite coincidental that it has the same acronym, CEPR, as the Center for Economic Policy Research, an organization that's based in London, has some 378 research fellows, according to their website. This group seems to have a slightly different orientation. It was founded, I believe, in October of 1999, unless I'm mistaken. It says so on the website. You know, we have a problem on occasion with these groups, where these coincidences seem to happen.
Mr. Naiman's group seems to have this double identity. Mr. Naiman happened to be on the local Channel 7 News, what, about 2 weeks ago. Asked a question about the Gary Condit affair, and launched into an attack on the World Bank. He didn't identify, nor was he identified as being that. The next speaker just happened to be the head of media relations for the Mobilization for Global Justice.
We had the letter in The Washington Post a couple weeks ago by Soren Ambrose, also a leading member of--in his case, 50 Years is Enough, which is also part of this coalition. He wrote a letter to the editor, attacking, complaining about the cost of the meetings to the D.C. Taxpayer, without quite disclosing that he was in fact one of the organizers of the demonstrations that were incurring the costs.
So these is examples of, I think, where the media has a certain obligation to do its own due diligence. We are an open organization, and we would expect to be scrutinized, and we would expect you to carry out at least the same scrutiny of other organizations.
QUESTIONER: Japanese Minister Yanagisawa told the MD that Japan will accept the Financial Sector Assessment Program, but he also said that Japan cannot start it soon due to a shortage of staff. So is the IMF really satisfied with Japan's response to the problem, and does the IMF have any target date for starting the program?
MR. DAWSON: Well, we certainly are quite pleased that the Japanese authorities have agreed to participate in the so-called FSAP Program. You are correct that the details of the timetable have yet to be worked out, but I think the commitment of the authorities is welcome, and I think indicates that they are taking this quite seriously, and I expect, as soon as they are able to, they will be meeting with Fund staff in the context of an FSAP program.
QUESTIONER: On that same issue, the US has said that it doesn't want the IMF to probe its banks because it thinks the resources could be better spent elsewhere..?
MR. DAWSON: That's not quite what they said. They said "at this time." My understanding is that indeed support the FSAP Program.
QUESTIONER: My understanding is they say they support the program, but feel the time is just not right now for the IMF to probing it?
MR. DAWSON: Right now, but that was not what your question was. Yes, okay.
QUESTIONER: The IMF said in its recent Article 4, that the U.S. should submit to this. Where do you go from here with the US, and are you concerned now that the two largest shareholders in the IMF are at odds with the institution?
MR. DAWSON: I don't believe that's a fair statement at all. The Japanese have agreed to do an FSAP, so that's not the two largest shareholders. And I don't believe the U.S. position is at odds with the importance of the FSAP program and the fact that it should be a universal program. There are questions as to when and which countries get looked at at which particular time. The G7 Finance Ministers endorsed the FSAP during their 7 July meeting.
The FSAP, like the Fund, is a universal program/institution. So I think I would not describe the Fund as being at odds with either of our two major shareholders, or indeed, of our shareholders as a whole. I would note, of course, that Canada has already participated, and the UK and Germany have also slated their participation. So I think the process is well under way.
QUESTIONER: A second Turkish state minister has resigned a couple of days ago on charges of corruption. This is the second in a row. And so far, IMF Managing Director Mr. Köhler, has been critical about the way Turkish politics has been conducted. Do you think that this sends a signal to the markets? Do you have any elaboration on that?
MR. DAWSON: I don't believe your comment about the Managing Director is at all accurate. There was an exchange of correspondence some two or three months ago with the three coalition leaders, but I'm not aware of any statement by the Managing Director since then.
Indeed the coalition leaders responded. Then First Deputy Managing Director, Mr. Fischer, has been to Turkey and so on. So I think the latter part of your question is simply not true. The first part of the question, there are changes within ministries. As I think my statement made clear, all signs we have is a substantial amount of progress in the Turkish program.
QUESTIONER: The French Prime Minister, Lionel Jospin recently endorsed the Tobin tax. What are your views?
MR. DAWSON: The Tobin Tax is a hardy perennial. Professor Tobin first suggested it, I believe, in 1972. He has continued to advocate it. I am sure we will continue to hear a lot about it, and certainly the Fund would expect to be part of a dialogue as people look as to whether and how such a proposal might be implemented.
I would direct your attention to an interview just published I think over the weekend in Der Spiegel, but we can provide for you English translations if you wish, of an interview with Professor Tobin, on indeed--on the Tobin Tax. And he gives in it his assessment of the likelihood of the implementation of it, which in his political judgment is that it's not as likely. He goes through, quite strongly, his reasons for advocating such a program, and he also makes it clear that he thinks that the anti-globalization folks, the movement folks, to quote him, "They are abusing my name." And to quote him again, "I have nothing to do with these anti-globalization revolutionaries." And to continue, he thinks that the answer to the concerns in the world now is a stronger Fund and a Bank.
So I think we need to take the context in which the Tobin Tax comes up, coming up as governments take another look at it, as academics take another look at it. I think that's something that's natural, and we certainly would expect to be part of that. Professor Tobin expects us to be a part of that effort.
But to the extent to which the Tobin Tax has also been coming up as a rallying cry of many of the protestors of these groups, I would direct you to Professor Tobin's comments on that. I think he makes quite an eloquent case for why the Tobin Tax is an idea that has, in his view and other views, has a certain attraction, but it has very little to do with what's going on in the streets.
QUESTIONER: Moving back to Argentina, some people on Wall Street are raising the question of whether or not the $3 billion from the IMF can in fact be used as part of any bond swap or bond buy back. What are the legal limitations on how that money can be used, and is that part of the brainstorming that's going on now?
MR. DAWSON: I don't quite understand the question. The money is being made available from later disbursements to the Argentines. The Argentines have to pay back the money under the terms of the Fund agreement, but they do get the use of the money in the meantime. That is, that provides a net present value to them that they can use to enhance through any variety of financial techniques, often the broad rubric of financial engineering.
We have made it clear that if you look at the $3 billion component of this, that doesn't look like it's enough on its own to finance a substantial debt operation, and that is why we have indicated from the beginning other multilateral institutions, governments, private sector, Argentine Government's own resources, all might be expected to be part of a package, and we've made that clear from the beginning.
QUESTIONER: What about the debt swap?
MR. DAWSON: This is a voluntary debt exchange that's to be worked out between the Government of Argentina and its creditors. So, again, to answer the earlier question, that's a question on one hand to ask the government of Argentina, but certainly some of you cover the financial sector as well, and you can ask some of the private financial sector their views of it. But the whole essence of it being a voluntary market operation is it's not something the Fund is dictating.
QUESTIONER: Is there any discussion of an IMF guarantee for the fund swap?
MR. DAWSON: I occasionally read market descriptions of that, but it is still is my understanding that the IMF does not have such guarantee authority.
QUESTIONER: This year, having only just one day for the meetings for the World Bank and IMF, I was wondering, with all the 183 members, how do you pack all the speeches into it? Will they all be speeches and how will they be able to deliver them? And also, can you walk us through the general atmosphere of the meeting? So far do you see any contagion from what has happened in Argentina, Brazil and Turkey, or these have been more or less isolated?
MR. DAWSON: Well, in terms of the first part of your question, certainly since the formal meeting is confined to one day, I think you would expect to see an acceleration of what had already been a trend of grouping of speeches by either constituencies or regional groups. I think you can expect more of that. You may well see some speeches submitted for the record. You might even see some shorter speeches. So I think all of that is a logical consequence. In terms of what the atmosphere of the meeting is, I'm not quite sure how to answer. That's a pretty open-ended question. Our views on contagion are unchanged, obviously there are neighborhood and regional and market effects, but we don't see that there's sort of the broad-based contagion that people have worried about or have witnessed at times in the past. We clearly are in a situation of a global slowdown that provides reasons for policy makers to seriously look at what the options and the scenarios are. The WEO process, in a sense, kicks that off. The meetings will discuss that as well.
It is though, to repeat my earlier points, quite unfortunate that the forum and format that we have is going to force these discussions to be held in a less open fashion than they've done in the past, fewer meetings than they have done in the past, and quite conceivably, under conditions of threats to physical security. But, you know, we have a job to do, and we are working with our members to try to do our job, and the Annual Meeting is an important part of the multilateral process.
QUESTIONER: What kind of recommendations, if any, have you made to your delegates about what kind of precautions they should take if they're coming from far and wide?
MR. DAWSON: I mean we have obviously communicated with the delegates in terms of the changes in format, which by themselves will restrict the number of people coming and the nature of activities. And at the same time I think it would be wrong for us to tell people not to come to a meeting that they have a legal and formal responsibility and right to attend. So, clearly, there are going to be restrictions on what happens, but the delegates did go through a smaller version of that in the spring of 2000, and they will do their best, but I'm sure--you know, we trust the US authorities working with the institutions to provide as much opportunity to have as many of the meetings that we need to have as possible.
But I don't think people expect to be able to waltz down Pennsylvania Avenue to the meetings on Saturday or Sunday. You know, they will probably have to do as they did in the past, be bussed in. I mean it is unfortunate, but there's someone who's responsible for it and it's not the institutions, nor the US Government.
QUESTIONER: Can you tell us about the security system that you use, in terms of how you arrange that, the internal in-house activities of the Fund and the Bank during the meetings?
MR. DAWSON: I don't think we have an internal security system.
QUESTIONER: But I mean there are guards around the buildings.
MR. DAWSON: That will become apparent as the meetings take place. You will--you all will--assuming you wish to come to the meetings--be credentialed and we will make every effort for you to have access in the fashion that you are accustomed, but I think it's totally inappropriate to talk about security arrangements.
QUESTIONER: How many journalists do you expect, and how many officials with delegations do you expect, more than usual?
MR. DAWSON: Well, we certainly expect more journalists than usual. I believe the number is something like 1,400 registered already and we would note that a number of you in this room have not yet registered, even though the deadline has passed. We don't take that as an expression of lack of interest, but we will of course play favorites with you all if you get your applications in on a timely fashion.
In terms of government delegations, clearly, there will be fewer people, and in terms of private sector visitors, clearly there will be fewer people as well, but I don't have numbers for you at this point.
Thank you very much. For those of you who wish to come and look at the picture, feel free. I will have to say though, you may recognize the individual apprehending Mr. Naiman. It is in fact me. But this picture was taken, as I recall, from a wire service. We found out about the picture because it appeared on the front page of a Danish newspaper--and I was identified as a U.N. Security Official. I wish to deny that. Thank you.