Transcript

Transcript of a Press Briefing with William Murray, Deputy Spokesman, IMF Communications Department

July 28, 2016

P R O C E E D I N G S

MR. MURRAY: Hi. Good day. I'm William Murray. I'm Deputy Spokesman in the Communications Department here at the International Monetary Fund. This is one of our regular Biweekly Press Briefings. As usual we are embargoed until 10:30 a.m. Washington Time, 14:30 GMT.

Before I get into housekeeping items and take questions from the press here at IMF Headquarters, and then those of you that are online, I want to introduce two experts on gender issues that are going to unveil a new IMF product which is related to an online gender database. They’ll step in and brief you on this in a moment.

So with that, let me start with introducing Janet Stotsky, a visiting scholar in our Research Department of the International Monetary Fund and Lisa Kolovich who is in the Strategy Policy and Review Department of the IMF. Both Janet and Lisa will have some remarks for you, and then I'll step in and finish this briefing. Thank you. Janet?

MS. STOTSKY: Good morning. I would like to present a few remarks on our recently published study which surveys and assesses gender budgeting throughout the world. Gender budgeting is an approach to budgeting that uses fiscal policy and administration to promote gender equality and women's advancement.

This focus on fiscal policy in our study adds an important dimension to the IMF's existing work and the macroeconomic consequences of gender inequality. Our study examines some 80 countries that have undertaken gender budgeting efforts, and we've highlighted those on the map for you.

The focus of that varied by region and level of development of the countries, in low-income countries, the focus of spending in gender budgeting efforts tended to be on education, health care and vital infrastructure.

These effort address equalizing growth, school enrolment, providing better maternal care, putting in place time-saving infrastructure that reduce women and girls time spent in unpaid labor in the home, and addressing violence against women. On the revenue side, some gender budgeting efforts looked at how adjustments to the structure of the income tax could improve women's labor supply and their participation in the labor market.

I would like to highlight a few countries in our study that stood up. Rwanda, a low-income country in Africa was one that integrated gender-related goals throughout the budget, and into its public financial management system. It also put in place an effective monitoring system which was very unusual in what we found in our study.

Austria and Belgium were notable for their incorporation of gender budgeting into their basic finance laws, also setting an example for other countries in the world. A number of countries implemented gender budgeting at the state and local level. This is very important because these governments are often responsible for providing key public services and help in education, so it's useful to have the gender budgeting efforts applied to these governments as well.

Now Lisa will highlight a bit about our data and the data mapper.

MS. KOLOVICH: Good morning. I'd like to briefly explain the data mapper, and our two datasets. First, let me present the data that we have collected as part of this project on gender budgeting. We have converted our qualitative analysis on gender budgeting into data that we presented in tabular form. This allows researchers to combine information on gender budgeting with other analytical data including that agenda and quality, to explore correlations and causal relationships.

And those are unique, in that they do require responses to an IMF questionnaire we sent to ministries of finance for all of our member countries, and about one-third of our members responded. We provide detailed information, and 23 countries have had prominent gender budgeting initiatives and these are highlighted in dark-blue on our map.

As you can see, there's been different regions, and levels of development, and include regions of the world where gender and equality tends to be more pervasive. The data mapper also highlights other countries to which we had less information on gender budgeting initiatives. Our study reveals that the most successful efforts generally had the leadership of the Ministry of Finance. And this is one of the most important points to emerge from our study.

Most successful efforts based their goals on the national development strategies that were generally tied to the Millennium Development Goals. Establishing a legal basis for gender budgeting was also important and the support of parliaments and NGOs was critical.

Now, let me point out the data that we put together on gender equality indices. We created a unique variation on the UNDP's to widen our indices of gender, equality and development by using its most recent formulation, and extending those indices backwards in a time-consistent manner for more than 20 years. As you may be aware, these indices incorporated education, health and women's economic and political empowerment.

At the bottom of the data mapper, we provide links to all of the working papers in the study and it's through datasets. And I note that this study is part of a larger research collaboration between the IMF and the UK's Department for International Development.

I'll close by mentioning that the IMF is hosting a conference on November 7^th on gender equality and fiscal policies; to which our Managing Director and the U.N. Women's Executive Director, among many others, who will be participating. Thank you.

MR. MURRAY: Thanks. If you have any questions we look forward to having (inaudible).

QUESTIONER: Thanks very much. That (inaudible) big story news. Can you explain to our general audience why it is that the IMF is doing this? What sort of results can countries expect if they do this kind of work, and map it, and try to improve their outcomes? Thank you.

MS. KOLOVICH: Yes. I'll explain that fiscal policy is a very important component of macroeconomic policy, and that’s what this study bears upon: how fiscal policies can be oriented towards gender-related goals. So, in that respect it very well fits into the program of the IMF.

Now, we hope that the policy implications of our research will be usable to our staff and to others, and also with government officials and all those who are interested, all those in the community who are interested in gender equality, in terms of learning what works best in terms of using the budget to the goals to gender equality.

QUESTIONER: Can I do a follow up. You mentioned Rwanda had some positive results. Can you expand on that, please?

MS. KOLOVICH: Yes. In fact, we felt that Rwanda really stood out, but not only in Africa, but worldwide for the seriousness with which it undertook, gender equality, incorporating gender-related goals into its programs of the budget, throughout the budget. And not only that, they got to put from the Ministry of Finance which is critical, but from parliamentarians from the nongovernmental organizations, this is a very broad support in the community.

What we also found very notably was that a number of independent scholars in Rwanda as well as the government itself, set up a mechanism for monitoring whether it was effective, and the government used this information to improve their initiative over time. So we thought that was very useful. They also incorporated into their program-based budgeting which was something they were putting in place, a system of public financial management, which is considered one of the best approaches to public financial management these days. So, altogether we thought it was a very impressive effort.

MR. MURRAY: With that, thank you very much, Janet and Lisa. Appreciate this. This is a very interesting taste of what is ahead in terms of work on gender. This is also an example, a real-life example of our starting to rollout some actual work on gender. You may recall that last month, Lisa's boss, the Director of Strategy, Policy and Review Department, walked us through the work program of the institution where gender played a prominent role, the macro criticality of gender in terms of the global economic systems. So, thank you both very much for joining us today and if there's any follow up from press watching, please contact Media Relations, and we’ll be happy to link you up with Janet and Lisa. Thanks again. Thank you.

Okay. So we are going to say again, thank you to our speakers. I think it's really interesting stuff, it's early days, and it's something that you should be watching carefully in terms of macro economy. Let me get set up here a little bit. Okay. Excuse me. I just have to set up my brief, and I'll run through just a few items, and then we'll take your questions.

Okay. So, again, we are still under the 10:30 a.m. Washington Time; 14:30 GMT embargo. This is the last press briefing that we'll have before the IMF Executive Board's Recess which starts next week. The Board goes into recess for two weeks each August, but the Media Relations Team will be readily available to you during this period. We will not have a press briefing until early September. So this is our last of the summer season, so to speak.

In terms of management activities, the one thing I want to point out, and this is something I want to direct you to the Indonesian Central Bank. On Monday, August 1^st, Deputy Managing Director, Mitsuhiro Furusawa, will be in Jakarta for a seminar jointly organized by the Bank of Indonesia and the Federal Reserve Bank of New York. The Central Bank, the Indonesian Central Bank is handling media access for that event. Mr. Furusawa, I don’t believe we'll be having speaking notes at that, but we can follow up on Monday regarding that.

Meanwhile, we have been releasing, as you know, a number of Article IV reports, including one at 10:00 a.m. So while this press briefing is underway, the latest Article IV Consultation with Ireland will be published and that’s at 10:00 a.m., 14:00 GMT. There was a briefing already this morning by the Ireland Mission Team.

Additionally, yesterday the China Article IV was concluded by the Executive Board of the Fund. I don’t have the precise publication date for the China Article IV Staff Report, but it will be coming out in the next few weeks and Media Relations will certainly update you on that.

Korea and Japan are before the Executive Board tomorrow for the Article IV Consultations with them. We expect Japan to be published next Tuesday, that’s August 2^nd, and Korea at some point thereafter. We do not have a precise date at the moment for the publication of the Korea Article IV Staff Report, but again, Media Relations will update you when that information becomes clear.

Lastly, as many of you already know but just for the record, the Independent Evaluation Office report on the IMF and the crises in Greece, Ireland, Portugal, which looks back a number of years, not the current programs, will be released today at 11:00 a.m. Washington Time; 15:00 GMT.

The report and all supporting documents, including the Executive Board's summary of the IEO findings, plus the Managing Director's statements responding to the IEO findings, are currently posted on the online Media Briefing Center, and are under embargo, as I said, until 11:00 a.m., 15:00 GMT.

With that, let me open the floor to questions and to those of you online. David, yes; sure. Thanks, David.

QUESTIONER: David Lawder with Reuters. I was just wondering if you could provide with more information about the Fund's engagement with Egypt. As you know, the Finance Minister had said this week that they were seeking a program, and the amounts that they’ve been citing are about $12 billion over three years. Today the Finance Ministry said that they expect to receive at least $2 billion. I'm just wondering if you can confirm any of these amounts, and any other details about the program itself.

MR. MURRAY: Thanks for that, thanks for the question, David. Just for the record we have similar questions online as well, so those journalists, I have actually a couple questions from Egypt related to this, so I want to alert you guys that I'll handle these questions now. Thanks for asking.

Let me just step back a second and give you where we stand on Egypt, and then I'll touch base a little bit on David's question.

The Egyptian authorities have asked the IMF to provide financial support for their economic program; they did this on July 26^th, that was Tuesday of this week. We welcome this request and look forward to discussing policies that can help Egypt meet its economic challenges.

As we've noted, our goals are to help Egypt return economic stability and to support strong, sustainable job-rich growth. An IMF team led by Chris Jarvis, the Mission Chief for Egypt, will visit Cairo starting tomorrow, that’s July 30^th. And the visit is expected to last about two weeks. We will communicate publicly on its outcome when that mission concludes. Media Relations will certainly keep you actively informed.

The scale, and this is appropriate to David's question, and also to others that I've received online. The scale of IMF financing will depend on the Mission Team's assessment of the financing needs, and the strength of the authorities' reform program during the visit. Beyond that, I can't get more specific about actual numbers. It's a little early in the game.

I would remind everybody, and this is public information. When you go to the Egypt page on our website, it lists the financial status of Egypt and all countries on the country pages. And it shows the quota. Egypt's current quota in the IMF is about 2.08 billion SDRs, our lending is based on quota, it's tied to quota levels. So, you know, I don’t have any specific numbers to offer you at this time, David.

QUESTIONER: But I mean, could it be sort of multiples of the quotas which often is the case?

MR. MURRAY: Multiple years, sure. It could be multiples of that, yeah, but I don’t have a specific number on what the program is going to amount to at this moment.

Anything else?

QUESTIONER: In terms of the reform program, obviously they’re going to go and fact-find and come to conclusions. But up until this point, what are the things, sort of headlines in terms of what advice you’ve been giving them up to this date?

MR. MURRAY: Well, I just talked about a whole bunch of Article IV consultations. There’s certainly been those. I don’t want to appear to be prescriptive at this moment in part because it might imply that these are the conditions that are going to be attached to IMF financing. But I’d certainly refer you to what we’ve published in the past on Egypt. I’d just feel a little reluctant right now to get into details. The country has a lot of economic challenges. We’re certainly there to help them with that.

QUESTIONER: Hi, John Carlin with NHK. I’m just wondering if the Fund has a stance on the Bank of Japan stimulus package being announced tomorrow.

MR. MURRAY: Okay, thank you, John. They have yet to announce it and we’ll see what they announce. But let me give you a flavor of what we’ve said generally about Japan. And don’t forget we have the Article IV discussions at the Executive Board and tomorrow’s the end of the Bank of Japan’s two-day discussions in Tokyo. We have our Article IV consultation at our Executive Board here in Washington. And as I noted, we will be publishing the staff report next week, so give that a close read obviously.

But let me give you a little flavor of what we’ve been saying on Japan. Fund staff has recommended that the authorities adopt the package of comprehensive reforms, including income policy, labor market reforms, and credible measures for fiscal consolidation over the medium term. In the context of such a package, a fiscal stimulus would be welcome and necessary to support other policies to boost growth and inflation.

Now in the context of monetary policy, as we all know, there’s been a lot of attention paid to various unconventional monetary policy measures. More unconventional policy packages have merit, but are riskier than the comprehensive and coordinated policy package that the IMF prefers for Japan consisting of incomes policies as I noted earlier, coordinated fiscal monetary support for demand, and further structural reforms, especially to address labor market duality, which is hampering wage growth in Japan.

Lastly, a monetized fiscal expansion engenders the tail risk of a severe adverse market reaction through a jump in inflation premiums. This would not only affect Japan, but also the rest of the world through Japan’s large net foreign assets position and the importance of the Japanese government bond market. Monetization of fiscal expansion poses difficult communication challenges as well and raises the risk of fiscal dominance. As a result, relying on a broad set of policy levers in a coordinated manner is preferable from a risk return perspective.

I’ll take another question from here and then I’m going to go online.

QUESTIONER: Hi, Salaya with Bloomberg. On Ukraine, is there any timeline that you can provide on when the next disbursement will be?

MR. MURRAY: Okay, thanks for asking that. We received I think a week or so ago similar queries. Actually at the last briefing we were asked about this. And just to be clear we don’t expect a Board review obviously before the recess, which is next week. And we expect that Ukraine will be taken up by the Executive Board sometime when the Board reconvenes. But beyond that I don’t really have a precise timing for the Board review of the Ukraine program. I would expect it sometime after the recess.

QUESTIONER: So maybe sometime in August?

MR. MURRAY: Yeah, possibly August or September. At this moment I do not have a Board date for Ukraine, but it will be sometime after recess. That’s the guidance I have for you right now. But again to be clear, as soon as we have clarity, we’d be happy to elaborate but I don’t have anything clearer than that.

QUESTIONER: And when is the Board reconvening?

MR. MURRAY: Well, they’re in recess for two weeks, the first two weeks of August the Board goes into recess. So the earliest would be the second half of August, but again I don’t have a precise date on Ukraine.

Okay, let me go to the screen here and then we’ll come back to the room, if necessary. This is from Matthew Lee. It’s a question on Zimbabwe. Matthew Lee from Inner City Press. “On Zimbabwe with the U.K. saying it would veto any IMF program, what is the status of the IMF’s program and discussions with Zimbabwe?” Thanks, Matthew, for that question. I think some of this will sound familiar to many of you, but let me comment.

There is no financing program under discussion with Zimbabwe at this point; however, the authorities have announced a plan to clear their arrears with the IMF and other international financial institutions as part of their reengagement with the international community. Once the arrears are cleared and the IMF Executive Board approves the normalization of relations with Zimbabwe, the authorities request for a financing program could then be considered. Beyond that, I don’t really have any guidance in terms of timing or when a program would be possible or likely.

We have a question here.

QUESTIONER: Can I just follow up on that?

MR. MURRAY: Sure, go ahead.

QUESTIONER: Wondering if the Fund has seen any evidence of Zimbabwe starting to clear those arrears. Obviously they’ve announced it, but is there any action that you can cite that has been taken?

MR. MURRAY: Well, there’s been an ongoing process for a number of years by Zimbabwe, but in terms of clearing arrears at this moment in time I don’t have any specific details on payment plans.

QUESTIONER: Another follow up. Has the mood changed? Has the atmosphere changed with Zimbabwe? Does what you’re saying suggest that things are about to happen?

MR. MURRAY: It really boils down expressly to Zimbabwe paying its arrears. Until that happens, we can’t do any financing with them.

Okay, I think that I don’t have any more questions online. Are there any others here in the room? We can wrap this up. And again the embargo is is 10:30 Washington time, 1430 GMT. The embargo on the IEO report is at 11:00 a.m. That’s 1500 GMT.

Thank you all for coming. Please enjoy your summer, and we look forward to seeing you again in early September. Thanks again.