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Transcript of a Press Briefing by Thomas C. Dawson|
Director, External Relations Department
International Monetary Fund
Tuesday, March 4, 2003
View this press briefing using Media Player.
MR. DAWSON: Good morning, ladies and gentlemen. I'm Tom Dawson, Director of External Relations at the IMF, and this is another of our regular press briefings.
Before I take questions, I'd like to outline some of the press arrangements for the Spring Meetings, which are scheduled for April 12th and 13th here in Washington. On-line press registration for the meetings started today. The registration form can be found at www.imf.org, under the site index reference for meetings.
Also, the Fund and Bank Media Relations Offices will be circulating more detailed information about the precise sign-on procedures today, and I expect there will be further media advisories issued as we near the events next month.
The deadline for signing up for the meetings will be April 9th, and this should give everyone in the media plenty of time to preregister. Preregistration, however, is required.
As for some of the press events leading up to the meetings, the latest Global Financial Stability Report will be released on March 27th, with a press briefing planned to be held in Frankfurt. We expect to release the analytical chapters of the latest World Economic Outlook on April 2nd. Ken Rogoff, our Economic Counselor and Director of Research, will conduct a global conference call to review the chapters, as well.
Details will be circulated to the press in a few weeks, including information regarding embargoed access to the text.
The WEO Global Forecasts will be released on April 9th. Ken and his staff will hold the regular press conference at IMF headquarters to review the forecast and related issues.
On April 10th, World Bank President Wolfensohn and Managing Director Kohler will have separate press conferences here at IMF headquarters to review the meetings or preview the meetings.
Of course, we will have a press conference following the IMFC meeting on April the 12th, and there will be a Development Committee press conference on April the 13th. Stay tuned for updates in the coming weeks, and if you have further questions about the meetings, please contact the Media Relations Division.
Now, if you have any questions, please.
QUESTIONER: Yesterday, there was a statement of the IMF on Argentina, a joint statement, saying that the revision has been approved or that it's going to be presented to the Board. I wanted to ask you about the court that is going, today, to establish a verdict on the revitalization of the economy and if that could be a problem.
MR. DAWSON: I don't think I should be commenting on the judicial proceedings in another country, particularly when they haven't happened yet.
QUESTIONER: A few traditional questions about Turkey. First of all, now that it seems that there will be no U.S. assistance package for Turkey, what kind of an effect would that have on the economic situation?
And secondly, I know you don't like to comment on inflation figures, but the first two months have really bad figures, causing some doubts about how the program is going. Do you think there's a need for reviewing these targets and, third, what can you say, in general, do you have a time frame in mind for the Board's review of the situation?
MR. DAWSON: I think the further on you got in your questions, the more likely I was to give answers to them.
First of all, I'd like to note that Prime Minister Gül's policy announcements yesterday were a welcome step forward. Discussions on the Letter of Intent are continuing in Ankara, but it is too early to set a time line for a Board meeting on the review.
With regard to the linkage that you cited in your question to the vote in the Turkish Parliament, we don't see what the linkage is. We've been continuing these discussions with the Turkish authorities on a program, and the program has the same broad parameters that it has had from the beginning. So I would question the premise, politely, but I would question the premise that there is a linkage.
With regard to the inflation figures, you almost answered the question in asking it, in that indeed we monitor those, and other developments, as well, in terms of indicators, but that we see ourselves in a process working to develop a program, and the developments at this point, inflation or other developments, are not such as to change the broad parameters that we have been operating under.
QUESTIONER: Can you educate us on this Turkish situation, us who are not so familiar with it? Is there an ongoing program, is there negotiations on some new program, and what actually is—
MR. DAWSON: It is a review of the existing program, the details of which can be obtained from the website and recent statements, including a statement yesterday from the Mission Chief. There is a mission in Ankara now. Juha Kahkonen, the Mission Chief, is there. As I mentioned, he made a brief statement yesterday. So this is a regularly scheduled review of the existing program, and I think that's where I would leave it.
But if you visit the website, there's quite a pretty clear track record in terms of the status of the discussions, the timing, et cetera. Our tradition in the Turkish program, perhaps more than in some other programs, is that we have usually pretty complete press statements and/or press conferences at the end of each mission and so on. So I think we've got a record out there.
But this is an existing program. It's been going on for more than a year now, so it's not something that has developed because of any recent actions elsewhere.
QUESTIONER: At the last G7 meeting in Paris, Japanese Finance Minister Shiokawa said the exchange rate of China's yuan is too low, given China's economic growth, and he said China's dollar-backed exchange rate system should be liberalized, as the cheap exports from China is fueling deflationary pressure worldwide.
He also said that at the meeting Managing Director Köhler said he is willing to ask China to liberalize the exchange rate system. So is Managing Director Köhler interested in discussing the issue with China? And what is the IMF's position on China's exchange rate system?
MR. DAWSON: We have been in close and continuing contact with the Chinese authorities on their exchange rate system and have, I think, an understanding of what the authorities' position is. I think it is clear the authorities do have a view toward a longer range, medium-term development of the exchange rate system for greater flexibility, but the actual process, the speed and pace of the process is something the Chinese are—it's their decision, and it's something that they're working on, and we are in regular contact with them.
I don't believe the statement, I mean, regarding the Minister's statement, that's fine. As far as what the Fund's position is, I think the Fund's position has been quite clear that we think the objective, in the longer term, should be a more flexible exchange rate system, but that each country needs to choose how to approach it in their own fashion, and I think the Chinese economic performance has been quite strong and has shown that they've got a system that seems to work and move in a deliberate fashion toward a more open and flexible system, not only in the exchange rate, but elsewhere.
So I don't think there is any particular news in that position. I would suggest you might want to take or look forward to the World Economic Outlook discussion that I mentioned, in terms of the press conference with Ken Rogoff, and ask him if he wants to get a treatise on exchange rate systems.
But in terms of the Chinese approach, it's one that seems to have worked well and one which I think we share with them what the longer term objectives are.
QUESTIONER: I was just wondering what's the latest on the IMF staffer, the Peruvian, Baca Campodonico, in Argentina? I may have a follow-up question, depending on your answer.
MR. DAWSON: I think we put out a statement ten days/two weeks ago, when he was detained. We remain in touch with him and his attorneys as they follow the legal procedures there, and I think I just would leave it with what our statement was previously. So now you can ask your follow-up.
QUESTIONER: Yes, of course. I was just wondering how is it that this person was hired, given the fact that he was on the lookout with the—
MR. DAWSON: That is an assumption that he was on the lookout. I don't believe that, and you might want to check whether that's true.
QUESTIONER: I have a follow-up on that one. But he was looked for by Interpol, that was true. I mean, that's why he was captured, so there was—
MR. DAWSON: That wasn't what the question was. The question was why was he hired.
QUESTIONER: Yes, why was he hired, but then you said—I didn't understand, then, your answer. Why was he hired if he was indicted in Peru?
MR. DAWSON: Do you know that he was indicted in Peru when he was hired?
QUESTIONER: Because—well, or afterwards. But if you have someone indicted, you have to know.
MR. DAWSON: But you don't necessarily know if he was, in fact, indicted. I mean, there are a lot of facts that need to be looked into in this case, but I think the premise is, from what I understand, the premise is not at all clear and may not be true.
QUESTIONER: But why was Interpol looking for him then?
MR. DAWSON: Because, obviously, the Peruvian authorities put a, whatever it is, you know, a watch or whatever out for him. But anyway, it's a matter for the Peruvian authorities with the Argentine Government and with Mr. Baca and his attorneys, and obviously we are concerned because he is a Fund employee and was on a Fund mission.
But I think that the history of what happened at what point in time, in the past—in other words, not the actual apprehension or detention of him in Argentina—is I think not at all clear, and I think that might be subject for somebody to look into to see, but my understanding it's not quite clear that he was, in fact, on any kind of list at the time that he was hired at the Fund.
QUESTIONER: Just to clarify this.
MR. DAWSON: I may be wrong, but the point is I have tried to look into this, and I have not found evidence as to when that happened, and my suspicion is what I just told you.
QUESTIONER: When people are hired by the Fund, just as a matter of policy, do you run background checks on them?
MR. DAWSON: I mean, we certainly do reference checks, et cetera, on individuals when they are retained from the Fund. A background check is sort of a U.S.-centric phrase, and I'm not sure I would want to make that connection.
Certainly, we do extensive reference checks on individuals when they are hired, yes.
QUESTIONER: I just wanted to ask you I understand the mission is back from Brazil. Do you have an estimate on when they will have their report ready and when the report will be discussed by the Board?
MR. DAWSON: Just to confirm what you just said for others who may not be as much up-to-date as you are, the mission that conducted the Article IV discussions, and the second review under the standby, did return from Brazil late last week, after successfully completing its discussions with the authorities, and the Board meeting is scheduled for mid March. I don't want to give you a precise date right now, but as we get closer, you'll know what the date is.
QUESTIONER: First off, on Russia, I have a feeling that lately the pronouncement from the IMF, mostly from Moscow itself, have been more of a cautionary character, rather than the celebratory character that used to sound earlier, maybe two years ago or a year ago. Is it a sign that you are seeing a resurgence of the Dutch disease in Moscow, in Russia? Maybe the reforms have stalled a little bit? But I don't want to put words in your mouth, sir.
MR. DAWSON: Clearly the performance of the Russian economy has been quite strong. And our advice has been on trying to take a sort of medium-term perspective that with the relatively strong, for example, fiscal situation at this point, there's a need to take a look at the longer term to see what's sustainable and so on, in terms of a balanced fiscal approach.
So I'm not sure, and I think it's been a good relationship. We've had a couple of statements from the recent mission that was out. So I think I would characterize the whatever you sort of call the "quiet time" is not a matter of a distance, it's just that things have been doing really pretty well.
It is our job to worry about things that don't necessarily appear right as immediate front-burner issues, and that's why a number of issues we have been raising with the authorities, including the issues involving taxation and the oil sector and so on, but it's part of a normal sort of a dialogue, and it's kind of, as I said, it's more medium-term oriented. The performance has been very strong.
QUESTIONER: On Ukraine, very simply, are you closer to a new program with Ukraine?
MR. DAWSON: We put out a statement on Friday, and clearly—fairly extensive from the Res Rep's Office. So I think I would leave it at that, so that others who may not have seen this, and the statement is available on the web, but it is clear that differences do remain on a number of policy issues, and we specified them in the statement. The mission was also to do the Article IV consultation. So that process will be going forward as well, but we are not at a point of having any kind of framework for a precautionary standby, which is what they had been interested in.
QUESTIONER: Any plans for a further mission or something like that?
MR. DAWSON: No, I don't believe so at this point, no.
QUESTIONER: And one last thing. U.S.-centric that you mentioned, are there any plans of moving the IMF to Europe? Are there rumors of moving the IMF to Europe that you are aware of and do want to share with us?
MR. DAWSON: Now, I'm not sure it's my job to share rumors with you.
MR. DAWSON: I think my job is to dispel rumors. As I recall, the Articles of Agreement state that the Fund shall be headquartered in the country of its largest shareholder, and I think the idea of a move to Europe would require European Chairs to combine their shares, and I have not heard any rumors on that one, though I—I won't say what I was going to say. I'll get in trouble.
QUESTIONER: Just to clarify something which I may not have understood about my question—
MR. DAWSON: You mean about my answer.
QUESTIONER: Yes. Did you mean to say that the planned U.S. financial assistance package, was that part of the program, and you don't want to comment on something, a factor, a potential factor which is not part of the—
MR. DAWSON: We had been working on the review of the program, on the program end and the review of the program, prior to the potential U.S. package being considered, and we are continuing on that basis.
Obviously, if there were a package, it would be taken into account, but we have been operating on the basis of a program that had not assumed the financing package. So that's the context in which it's not related. It's not that it's not an issue that we are aware of; it just was not part of the, in that sense of the word, it was not part of the program.
A couple more questions.
QUESTIONER: Would you say that, in the case of Turkey, that review is really an accurate way of describing your consultations? Wouldn't you say it's more of an encouragement for the government there to fall more in line with IMF requirements?
MR. DAWSON: No, review is, in fact, "Fund speak." It is a required part of the process that we do on a regular basis, review the program. Targets are established. Established targets are reviewed and new targets are established for going forward. So it is a review, as it were, with a capital "R." It is not a review in the sense of, well, I think I'll look at this country that day. It is part of the normal process when you have a program.
QUESTIONER: Just to follow up. What is the time table, then, if this is a formal, very well-laid-out review? What is your time table? When will the review be complete? When do you expect an answer?
MR. DAWSON: The review will be complete when the review is completed.
MR. DAWSON: The mission is there.
QUESTIONER: And what is the date of that completion?
MR. DAWSON: No, because missions go, and when they conclude, we indicate when they are concluded, and then you, typically—assuming they're concluded successfully, which is usually what the word "concluded" means as well—then we go on for setting up a Board meeting.
So the mission is there. When it concludes, we would be able to indicate to you what the time table is. Much as in response to the question, when the Brazilian mission concluded, and I was just able to indicate the expected timing. And that usually, assuming the mission concludes, that's pretty, more or less, simultaneous with the conclusion is when you make an announcement of your expectation. The Latin American cases we have done recently have been along that line, too.
Two more questions.
QUESTIONER: Since we're talking about completing reviews, in the case of Brazil that you said would go to the Board mid March, how much money would be distributed then, next tranche?
MR. DAWSON: Francisco is scratching his head there. If Francisco doesn't know the answer,...
Mr. BAKER: I think it's $4.6 billion—
MR. DAWSON: It's on the website. We'll check. That sounds right to me.
QUESTIONER: Could you just elucidate that I assume that the Brazilian review went well, and if you could just give us some comments about how well it went.
MR. DAWSON: Yes, I would say that the Brazilian review went well.
MR. DAWSON: I agree. You have a firm grasp of the situation, and it was—
QUESTIONER: The question was whether you could elucidate on how well it went.
MR. DAWSON: It did well. I mean, the authorities, in continuing the record of strong commitment and performance by the Brazilian authorities when they have a program relationship with the Fund, they approached this in a very determined fashion. They indicated early on their views in terms of the adjustment of the primary surplus target for 2003, and the negotiations were concluded in a pretty efficient and effective fashion. I mean, this is the record of our relationship with Brazil, and I think it continues to be quite strong.
This is the last question.
QUESTIONER: Brazilian Finance Minister Antonio Palocci said that he wants to take off some targets from the agreement that you made with Brazil before. He said that the agreement now looks like a Christmas tree. I'd like to see if you had some comments about this and about the raise of inflation as well.
MR. DAWSON: I was not familiar, I don't think, with those comments, but I would note that since we have reached agreement with the authorities on their program for the review, I would believe that the Minister is satisfied with those conclusions.
With regard to the inflation rate, I would steer you back to the indications or the answer that I gave on Turkey. We do obviously keep an eye on it, but I think our view is that the authorities are committed to maintaining the kind of sound macro policies that will give confidence to the markets and lead to an improved inflation performance.
Thank you very much.
[End of Press Briefing.]
IMF EXTERNAL RELATIONS DEPARTMENT