Transcript

Transcript of a Press Briefing By Thomas C. Dawson, Director, External Relations Department, IMF

September 12, 2002

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MR. DAWSON: Good morning, everyone. I'm Tom Dawson, Director of External Relations at the IMF, and this is another of our regular press briefings.

As usual, it will be embargoed until approximately 15 minutes after conclusion, and we will set a precise time at the conclusion.

Now, I understand from Media Relations that we've been or will be doing deliveries to you of a great deal of embargoed information this week. Earlier today, we had the first ever briefing in London on the Quarterly Global Financial Stability Report, so that embargo is now off. But we will be supplying the press with advanced text of the World Economic Outlook's analytic chapters around 10 o'clock tomorrow morning. These chapters will be embargoed for release on September 18th.

The global forecast chapter, or the one that I regularly challenge journalists to obtain on a leaked basis, will be published on September 25th and available under embargo starting on the 24th.

Ken Rogoff, our esteemed Economic Counselor, will take questions on the analytic chapters via a global telephone conference call starting at 9:00 a.m. Washington time on the 18th, so you'll have plenty of time to read up on the WEO analytic chapters. Ken will hold a press conference on the global forecast at 9:00 a.m. on September 25th as well.

There's also the latest IMF Annual Report, which will be released publicly on September 17th. If you don't have advance copies, please contact Media Relations and they'll make arrangements, and we will have our traditional Annual Meeting press conference by the First Deputy Managing Director.

This is my last briefing until the 57th Annual Meetings of the IMF and World Bank, along with related events, on September 28th and 29th here in Washington. Let me briefly mention the general areas of interest at this meeting, and then I'll be happy to go on to questions.

The IMF's policy guiding International Monetary and Financial Committee will meet during the morning through lunch on September 28th, Saturday. The Finance Ministers and central bank Governors on the committee will review the state of the global economy and discuss how the Fund can deal more effectively with crisis prevention and resolution. I would expect that the Ministers will also discuss efforts to combat money laundering and the financing of terrorism and take stock of efforts by the Fund and the World Bank to address poverty and related issues such as debt sustainability of the world's poorest countries.

The Development Committee, which is joint of the IMF and the World Bank, will follow in the afternoon. Both committee meetings will conclude with communiques and press conferences. On Sunday, September 29th, the Annual Meetings will be held.

As you know, this year's actual Annual Meetings have been shortened by a day due to security concerns. We announced this decision in July, and concerns about security remained a factor with the decision in August to shift the meetings' venue downtown to the IMF and World Bank headquarters buildings. This is an unfortunate set of circumstances, but we are confident that we can at least conduct business and address some of the critical issues that are facing the global economy, developed and developing countries alike.

Remember, the autumn meetings are really the only gathering each year of economic leaders from not only the world's most industrialized but the poorest countries of the developing world. The meetings serve as a sounding board and as a mechanism for the exchange of views about the range of issues facing the global economy. For that reason, the 184 member nations of the Fund and the Bank are committed to continuing to meet and conduct business.

A final tally on press and attendance is not yet possible, but so far journalists from 31 countries have registered to cover the meetings. The number of delegates is likely to remain little changed from past years, but we expect that given the format change, the level of visitors attending will be down.

As we get closer to the meetings, and while the meetings are underway, Media Relations will be in a position to update you on turnout.

Now I'd be happy to take any questions you may have.

QUESTION: I'd like to ask for your Turkey update, and in the last few months, growth and inflation figures are much better than expected. For example, growth rates this year was expected to be something like 3 percent, and it looks now that it'll be larger than that. Do you see a need to review the figures?

MR. DAWSON: I think you both asked and answered the question, for which I thank you. But recently released favorable economic growth and inflation data do suggest that the program's macro targets for 2002 are secure.

You asked about discussions or reviews. A mission to hold discussions for the fourth program review is scheduled to start in early October, which will, however, follow preparatory talks here at the headquarters at the time of the Annual Meetings. So we expect during the Annual Meetings to be consulting with the authorities as well.

QUESTION: Could you comment on some talk in the Turkish press that Turkey was going to request that you move that mission forward in time a little bit so that they could get the next $1.6 billion before the November.

MR. DAWSON: And I also saw some press reports this morning that the date of the elections being questioned. No, I don't have anything to say. There has been no request and I certainly sense from my reading of the press this morning that there is some uncertainty about these issues. But nothing has been requested of us.

QUESTION: Could you elaborate a bit on your use of the word "unfortunate" in your opening remarks? How do you expect these meetings to be different from Annual Meetings in previous years? And what sort of thing that used to get done won't get done?

MR. DAWSON: I think certainly the active dialogue between public and private sector that traditionally has been an adjunct to the meetings here is going to be less easily accomplished because of the condensing of the time for the meetings, and because of the security restrictions that are necessary. So certainly the public-private aspect of the meeting where member governments have traditionally used these meetings as the opportunity to meet with people ranging from journalists to the financial community and the business community, that clearly will be less easily accomplished.

Similarly, the condensation, again, of the meeting will require speeches to be shorter, and people may have differing views as to the desirability of that. But, on the other hand, I do think it does to some extent inhibit the give and take that we hope these meetings can accomplish.

Contrary to the expressions by some of our critics, one of the consequences of the meetings is that they will be less transparent. There will be fewer visitors and special guests who have the ability to observe the meetings. There will not be fewer reporters allowed that access, but it clearly will make it more difficult.

On the other hand we remain committed to accomplishing as much as we possibly can.

As another example, a joint Fund-Bank program of seminars that has attracted not only the business financial community but NGOs, civil society, which normally has run over a two- or three-day period, is going to be condensed into one day.

So a number of things are having to be shortened or dropped. So it is unfortunate because we are committed to openness and transparency, and we think maximum exposure of the activities in the meetings and people attending, the ability to exchange views in an open fashion should be in everyone's interest.

QUESTION: I was wondering what is the reaction of the Fund to the last measures that have been taken in Buenos Aires, the measures concerning the "corralon". And, second, if you could tell us about the meetings that are taking place now.

MR. DAWSON: I don't really have much to say with regard to either. I certainly do confirm that the President of the central bank I believe was here yesterday. He remains here today, and the Secretary of Finance, Mr. Nielson, is here as well, and they are meeting with Fund staff. I believe they will be meeting with Ms. Krueger later in the day. I don't have a precise time. We are engaged in conversations with them, and this is an active dialogue that continues.

With regard to the measures that were announced yesterday, we have been informed of the measures, and this is a subject that is being discussed with the officials who are here for these meetings yesterday and today.

QUESTION: There have been some reports that certain senior people here in the Fund are keen to wrap the Argentina talks up before the election cycle gets into full swing. Are we to read anything into the fact of this trip here from the Argentines of any effort to speed things up or reach a conclusion sometime around the Annual Meetings?

MR. DAWSON: I don't think there's any basis to your first premise. With regard to the presence of the group here we do have an active dialogue with the authorities, it's not surprising that they are here fairly regularly.

Mr. Nielson was in London on Monday at the IMFC Deputies meeting that took place then, and for him to stop by here on the way back strikes me, as it might have been even a little surprising had he not come back.

And I would then, in conclusion, make the point that I have on a number of other occasions here. We are trying to get an agreement done as soon as it is possible, but it is equally important to have the right kind of an agreement as to having it done quickly. So we are trying to pursue it with both factors in mind.

QUESTION: Do you know if the subject of Iraq will be one that will be discussed in the upcoming meetings? Are any studies or any preparations being made for the discussion?

MR. DAWSON: I am not aware on either a formal or an informal basis that Iraq will be a subject of the meetings.

QUESTION: And on a different subject, can you confirm that Mr. Kohler will be traveling to Ukraine in October?

MR. DAWSON: I do understand that there have been some reports in that regard, and I cannot confirm it. And that should give you some indication that perhaps some of the stories were not completely well founded.

QUESTION: Also the Ukrainians are saying they are ready to open discussions with the IMF on a new program. What is the IMF position on that?

MR. DAWSON: The developments have been reasonably positive. However, the seventh and eighth reviews under the program could not be completed and the nature of our future cooperation with the authorities we expect will be taken up in the near future. Whether that would involve an arrangement or not at this point I cannot tell you.

QUESTION: Just to clarify, going back to Argentina, a couple of weeks ago you mentioned a series of concerns that the IMF had with regards to Argentina on the political front and on the judicial front and the legislative front as well. Have any of those been addressed since your last briefing? Have advances been made?

MR. DAWSON: I would note that in the two weeks since the last briefing, I have seen both Minister Lavagna and the President make some of the same points that I made. So the difficulty of the fluid economic and political situation is clear. I would say we are continuing to work as closely as we can with the authorities, but the difficult situation that they are facing in terms of being able to make progress internally we recognize is a problem, and we're doing the best we can to try to help them.

QUESTION: To dwell on Argentina some more, there's been some suggestions that Argentina is seeking, although perhaps not in name, a form of an interim agreement that would allow it to be confident it can achieve an extension of loans without having to request it on a regular basis. Is this something you're familiar with?

MR. DAWSON: I have seen some speculation about the possibility of an agreement that somehow would facilitate rollovers. I have not seen any indication of how that would actually work, so I think you perhaps should address that question to the people who might be suggesting that because I'm not quite sure how that would work.

We are trying to see if we can have the basis to work with them to develop as strong a program as possible, and this effort is continuing literally as we speak and will continue into the time up to the Annual Meeting.

I think one of the earlier questions implied that there was possibly a deadline of some sort involving the Annual Meetings. Sooner is better than later, but better is better than worse.

QUESTION: Back to Annual Meetings, is there any plan to move both the Spring Meetings and the Annual Meetings in the years to come to a less central and more remote location?

MR. DAWSON: No.

QUESTION: On Ecuador, the Minister has come to Washington. He says he has the letter of intent and that the agreement is very close. Could you comment on that, please?

MR. DAWSON: Yes, negotiations do continue on a new stand-by arrangement. While good progress has been made on a draft letter of intent and toward framing the fiscal objectives for 2002 and 2003, there are still important issues that need to be settled, including defining steps to re-establish control over the wage bill and the timing and scope for starting the government's structural reform agenda. Pending completion of these issues, the draft LOI would then be circulated internally for comments and for further progress.

QUESTION: Regarding the uncertainty about the election date, this and other political uncertainties, do they jeopardize the program?

MR. DAWSON: No. It was difficult to respond to the earlier question because I didn't know what the schedule was. No, the program remains solidly on track. And performance indicators have been quite strong.

QUESTION: I wanted to go back to Iraq for a moment. Why wouldn't you discuss it? It's the biggest issue of the day. Maybe you could--by way of explaining, describe to us how these issues do come up in discussions.

MR. DAWSON: We are an economic and financial institution, and we deal with programs and with prospects for the global economy, assisting our member countries. And while certainly in the forecasting process people take account of different scenarios as a subject in the Annual Meetings this is a group of Finance Ministers and central bankers, and I think they have a fairly full agenda, an agenda that in some sense is even fuller because the meetings are constrained.

I can't guarantee that people won't be discussing the issue in the corridors. But I don't see that it is a significant, even a noticeable aspect of what our agenda is for these meetings that are going to be taking place over a fairly short, condensed period of time.

QUESTION: Given that the negotiations have taken so long and there is no light in terms of that it's closer to an agreement, but Argentina has very important payments to make to all the multilaterals, are you considering the scenario of no payment by Argentina to the IMF, World Bank, IDB, or which would be the consequences of that?

MR. DAWSON: The authorities have made clear their commitment, and they have a track record of paying the multilaterals. So I don't think I should answer a hypothetical question.

QUESTION: Also on Argentina. Assuming that they could put together a good letter of intent, assuming that they could display some sort of political consensus, would you, as you did in the case of Brazil, given that they have elections coming up in March, need as one of the final hurdles some sort of political understanding, which is what you called it in Brazil, before you could sign a deal if it were to happen before March?

MR. DAWSON: It is far too hypothetical, including that we don't know what the nature of the agreement would be. We certainly have learned the lesson, and I think our current experience in Argentina demonstrates the importance that any kind of a program that the authorities develop and present to the Fund to get Fund support, needs to enjoy a broad degree of political support within the country. Exactly the format of making that determination is different in every single country.

QUESTION: Do you have a readout on Brazil this time?

MR. DAWSON: Certainly, since my last briefing we've had the approval by the Board and certainly a number of the economic indicators in terms of spreads are showing an increased degree of support from the market. Fraga has indicated that some lines of credit being restored. But the reactions to the program and the reactions to the Brazilian authorities' strong demonstration of a commitment to act is what we had expected. We'd hoped for it and we also had expected it. We are confident and fully supportive of the authorities in their efforts to deal with this difficult situation. They have shown a remarkable determination, and so far the performance is quite solid.

Thank you very much. The embargo will be lifted at 10 minutes after 12:00. Thank you.

[Whereupon, the press briefing was concluded.]