Argentina and the IMF
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Press Briefing by Thomas C. Dawson|
Director, External Relations, International Monetary Fund
April 29, 2004
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MR. DAWSON: Good morning, ladies and gentlemen. I am Tom Dawson, Director of External Relations at the IMF, and this is another of our regular press briefings. We would like again to thank the U.S. authorities, particularly the District of Columbia, for helping us conduct our business in a sound and productive way. We also look forward to the Annual Meetings this fall and hope that you, the press, will continue to show interest in the agenda of the Fund and the World Bank, our sister institution. I think you play an important role in helping create a deeper public understanding of the work of our institutions.
Before I take questions, I have a brief logistical, operational announcement. Acting Managing Director Anne Krueger will be visiting Turkey next week for a series of public engagements. Full details of the engagements will be made available by the Media Relations Division to the press, but let me give you a little thumbnail of the visit right now.
On May 5th, Ms. Krueger will be addressing the Economic Congress of Turkey in Izmir, and then on May 6th, she will deliver the keynote address at the Istanbul Forum, located in Istanbul. I expect that she will have a press conference during her visit, but we do not yet have details of that. And I would recommend that the local press or your representatives there be in touch with our Resident Representative's office in Ankara to find out what the arrangements are, and Media Relations can provide you with those coordinates, if you wish.
At this point, that is all I have, so I would be happy to take your questions. And please observe proper etiquette and identify yourselves and your affiliation.
QUESTIONER: Could you give us an update on the process for the selection of the new Managing Director and also clarify something. There were some news reports indicating that this week could be some concrete step in that process. Could you illuminate this a little bit?
MR. DAWSON: Well, we did put out a statement the other day indicating that the Executive Board would be meeting this week with the two candidates. And, indeed, I can report to you that yesterday the Board as a whole did meet with Mohamed El-Erian of PIMCO. In addition, I believe Mr. El-Erian held some bilateral consultations, meetings with individual Directors. Rodrigo Rato is also here in Washington. I think you took note that he did have a meeting with the African Governors on Sunday evening where there was a press availability afterwards. Mr. Rato will be also meeting with the Board as a whole today, and I understand he is also having meetings with individual Directors as well.
In our statement the other day, we also indicated that the Executive Board is expected next week to gather to proceed with the process of the selection. I would hope within a day or so to be able to indicate to you when that meeting will be. I may not have a precise time of the day, but I would expect to be able to tell you what day the meeting will be. And I doubt I will have more than that.
But what is happening this week is the opportunity for the Executive Board, both as a whole as well as individually, to meet with the two candidates, and next week we move to a formal stage of the process.
Does that answer the second part of the question, too? Yes ? Okay.
QUESTIONER: On several occasions during the meetings, Mrs. Krueger said that Argentina will need to increase the surplus, the fiscal surplus. Two days ago, Mr. Taylor in New York said that the IMF should not intervene in the negotiations between creditors and Argentina and that the surplus will be fixed there in that negotiation.
I wonder if you had a reaction to that.
MR. DAWSON: I am not sure I interpret those two comments as being contradictory. I mean, certainly in terms of the negotiations with the creditors, we are not interfering, so I think there is a complete agreement with regard to that.
With regard to the primary surplus target, where there is a target for this year, there is also, I would direct you to language in the Letter of Intent that talks about maintaining the trend in the primary surplus. And I think it would not be surprising if, as the economy, as we have noted, had significantly better than expected economic performance, both in terms of growth as well as in terms of revenues, that these extra revenues then will go someplace. This is an issue that there obviously are a number of parties involved in as to what happens with the revenues, but it certainly is something the Fund is interested in because we do have a responsibility in working with the authorities to support their program in looking at what the primary surplus targets will be and what the various expenditure and revenue components are.
It is separate from that that the negotiations take place. We quite clearly--this program was designed so that we are not, in fact, indicating to a position as to what the settlement between the debtors and creditors--the debtor and creditors will be. This is, in fact, a change from how programs in past years have worked and was intended from the outset to be that way. And so as I say, I do not think there is a contradiction between the two positions.
QUESTIONER: I understand that Ecuadorean Minister Pozo is talking with the IMF officials. Do you have a readout about what are you talking about?
MR. DAWSON: I believe the meeting has already taken place, is my understanding. The authorities are seeking to negotiate a new 12-month Stand-By Arrangement which would be treated as precautionary, i.e., non-drawing, to provide a framework for fiscal discipline and the structural reforms needed for sustained growth in the context of dollarization.
As I said, the delegation was here in Washington this week, and we expect further discussions next month when there will be a mission to Ecuador. I do not at this point have a date for you, however, for the mission, but we will let you know when that happens.
QUESTIONER: (Western Hemisphere Department Director) Mr. Singh let us know last week that a mission will be going to Venezuela, and I wonder if you do have a date for that mission? And, also, can you give us a little summary about what are the issues that this mission is going to tackle with Venezuelan authorities?
MR. DAWSON: Unfortunately, I am not in a position to answer the second part of your question. But that is certainly correct: A mission will travel to Caracas. The mission is expected to last for about two weeks. The mission will start on May 19th, and this will be for the Article IV consultations, which is our regular economic review of a country's economic performance.
The last Article IV consultation was concluded in September 2002, which really means that the mission for that Article IV was approximately two years ago. So it has been some time since there has been a mission, which also explains perhaps why I am not as able to answer your second question.
QUESTIONER: Tom, could you give us some kind of idea how these interviews with Rato and El-Erian actually work? Do they ask them specific questions about certain things, or what--
MR. DAWSON: Well, there has been one group session in terms of with the entire Board. There will be--as I said, there will be another one today. There are also individual meetings, I know, that are taking place.
With regard to the format for the group meeting, which involved the entire Executive Board, based on the first one that took place the Board members come with a number of questions. The candidates come prepared to answer them, as well as to speak, and each of the discussions I think you can view as taking at least a couple of hours in terms of the group, the group sessions.
But as I say, there are a number of bilateral sessions that take place as well. I frankly do not know how many there are, but I am well aware that they have been meeting--that the individual candidates have been meeting with individual Directors.
But I did have the opportunity to be at the session yesterday, and I will be at the one today, and I can just assure you it is wide-ranging with lots of questions and lots of answers.
QUESTIONER: A follow-up. How different is this one compared to the last one in 2000? They just interviewed Mr. Kohler, did they?
MR. DAWSON: Despite what I sometimes read, I think both processes are characterized by a great degree of transparency. I mean, candidacies, nominations are announced, and when they are withdrawn, they are announced. There are numerous public statements; endorsements and so on can come out.
In terms of this time, you are correct. By the time the Board got to the process of meeting with candidates, the last time there was only one candidate. And, indeed, Mr. Kohler met with the Executive Board in an informal fashion prior to their consideration of the nominations, so it is consistent with how it happened this time.
There must be somebody who was here--you do not have to identify yourselves by age, but there was actually--in that particular case, since there was simply one candidate, there was actually a press briefing even by the candidate prior to his returning to Germany, and shortly thereafter, the Board met and voted.
My understanding of the session the last time was it was characterized the same way, with questions and answers by many Directors. But that is correct, there was only one such group session last time.
QUESTIONER: Going back to the same issue, the fact that this time we have two candidates, last time there was only one candidate, do you foresee maybe that this time the process will not be as smooth as the first time, or--
MR. DAWSON: I do not think anyone characterized the first process as being smooth.
I would also--not to do a history lesson, I think you can go back--though this is a history lesson. You can go back 13--I am sorry, now 17 years ago and look at the selection process that led to the selection of Michel Camdessus as Managing Director where there was a process that has been written about publicly. I had the good fortune to not be at the Fund, so I cannot possibly be violating any internal rules or any of our strict secrecy rules--none of which we have anymore, of course.
But at that point in time, there were, in fact, two candidates that were considered by the Board. I do not believe they actually went through the interview process at that time, but I will have to check. Check the Leo Van Houten piece that I have referred to in the past, because he goes into the detail. But there were two European candidates at that point that the world as a whole had the option--the Board as a whole had the option to express views on, not in a formal voting sense but in kind of a straw vote sense of the meeting sense. So that was a process that, while it certainly was not as transparent as the process has been the last two times, was one that was certainly highly competitive.
Back to the question, is this going to be smoother or otherwise than the last time? I think it is hard to imagine it will not be smoother than the last time.
QUESTIONER: I just need you to clarify this. Yesterday the Board met with both of them?
MR. DAWSON: No. The board met with Mr. El-Erian, but both candidates, to my understanding, had bilateral meetings with Directors. Today, the Board will be meeting with Mr. Rato. And presumably there will continue to be bilateral--
QUESTIONER: Okay, and I have another question. When you say in a day or two you are going to be able to tell us when the--
MR. DAWSON: We have already indicated in a press release that the Board--we expect the Board will be meeting next week. I hope to have a little more flesh on that statement.
QUESTIONER: And do you expect that would be after 6 o'clock on Friday when you have that?
MR. DAWSON: Well, I am actually hoping to not be here tomorrow. So I would hope it might--it might be after 6 o'clock, but it is more likely to be on Thursday than on Friday.
QUESTIONER: How worried is the IMF with the gas and energy crisis in Argentine and the impact this could have in the economic growth?
And, second, when are you expecting the next mission to go to Argentine?
MR. DAWSON: Actually, there actually was an announcement on the part of the Argentine authorities about a mission that will be coming down in--I would call it the early-middle of May, yes. And, indeed, we did during the Spring Meetings talk about this upcoming review, you know, looking at performance, which I think is well known to have far exceeded expectations, updated the progress on the fiscal, structural reform side, and similarly on banking strategy, talked with the authorities about their work in pursuing the negotiations with the creditors, on which I think there has been a fair amount of reporting and news on that side.
And then in consultation--to answer your specific question about energy, in consultation with the World Bank, you know, we are talking with the authorities and assessing the policy actions on the emerging energy difficulties that involve Argentina, as well as in the region. I do not have anything more specific at this point. Certainly that will be an issue that comes up during the mission, and it did come up during the meetings.
Just a couple more questions. We are getting a little repetitive.
QUESTIONER: Only for clarification. Do you expect a new Managing Director next week?
MR. DAWSON: I cannot commit to a particular timetable, but go back to look at the language in our press--we do expect the Board will do something in a more formal fashion next week, and I hope to have a little more indication of the timing, in particular, of that, you know, hopefully today.
QUESTIONER: Second, why this kind of session between the Board and the candidates are not open to the press and the public?
MR. DAWSON: I think this was something that both the Board and the candidates wanted. I mean, I will perhaps make this a rhetorical question: I am not sure of very many organizations that do open processes quite like that. This is, by the standard, I think, of international organizations, a remarkably open and transparent process.
In terms of--those are national governments that follow certain rules. Some national governments do not follow those rules. And we are an international organization that tries to, you know, balance the needs of all of our members. We have, in fact, a legislative process. That is what the Board does. So the Board is, in fact, exercising that process.
But in terms of openness, it could hardly be more open, and hopefully, in terms of neatness, it will be more neat than it was the last time.
IMF EXTERNAL RELATIONS DEPARTMENT