Transcript of a Press Briefing by Gerry Rice, Deputy Director of the External Relations Department, IMF

Washington, D.C.
Thursday, August 23, 2007

MR. RICE: Good morning everyone, and welcome to the IMF. I am Gerry Rice, Deputy Director of the External Relations Department, and this is another of our regular biweekly press briefings. Before we get started, let me welcome journalists participating via the Online Media Briefing Center. Today's briefing is embargoed until 11:00 a.m. Washington time, that's 1500 GMT.

Before taking your questions this morning, I have a few points of information, which I would like to make to you. The first one is regarding the ongoing selection process for the position of Managing Director of the IMF to succeed Mr. Rodrigo de Rato. I would like to confirm that Mr. Josef Tosovsky has been nominated as a candidate for the position. This means that there are currently two candidates, Mr. Tosovsky, and Mr. Dominique Strauss-Kahn, whose candidacy has already been confirmed. I would like to remind you that the responsibility and decision for selecting the Managing Director rests with the Fund's Board of Executive Directors.

From the beginning in its communications, the Board has emphasized that this would be an open and transparent process and the nomination of another candidate is in keeping with that spirit. The Board has made clear that candidates can be nominated by anyone and can come from any country within the Fund's membership, and earlier communications from the Board have explicitly welcomed open nominations.

The Board has also indicated that nominations can be received up until August 31 of this year of course. Thereafter, the Board will invite candidates to Washington for discussions. We anticipate that the Board will meet shortly after August 31 to discuss further the process and the timetable going forward. Further communication will be forthcoming at that time.

My second point relates to the travel of the Managing Director, Mr. de Rato. Last Monday, he attended a meeting of the African Consultative Group of the IMF in Maputo, Mozambique, to exchange views with a group of African Governors of the IMF on the progress made to date on IMF reform, in particular, reform aimed at improving governance of the Fund and the representation of developing countries. A press release on this meeting was issued on Monday and is posted on our website.

Yesterday and today, the Managing Director is visiting Brazil. He spoke last night at the Third International Derivatives and Financial Market Conference in Campos and he made a speech there which is now available on our website and in fact, I believe was made available to the media in advance. I would like to draw your attention to that speech by the Managing Director. It represents, amongst other things, our most recent statement on developments in the financial markets. Today Mr. de Rato will be meeting with President Lula and senior government officials in Brasilia, and he will be making a further statement to the press at that time.

The third point I would mention relates to the upcoming Annual Meetings. Let me mention that online press registration for the meetings to be held here from October 20 to 22, is now open. You will find on our website other relevant information including a tentative schedule of events for the Annual Meetings. On that schedule, let me alert you to the fact that the press conference by our Chief Economist, Simon Johnson on the World Economic Outlook, is a day earlier than usual, that is, on Tuesday, October 16. On Wednesday, October 17, Jaime Caruana, the head of the IMF's Monetary and Capital Markets Department, is scheduled to brief on the latest Global Financial Stability Report, so you may want to mark this slight change in your calendars.

Having said this, let me now take your questions and remind those participating through the Online Media Briefing Center to submit their questions at this time. And can I ask that as usual you would please identify yourselves. Thank you very much.

QUESTIONER: On your first point, I would like to ask you what the reaction was to the emergence of an alternative candidate among the staff. I would not presume to ask about the reaction from member countries, but was the staff annoyed, was the staff welcoming the emergence of a new candidate? What was the reaction?

MR. RICE: I wouldn't comment on the specific reaction of the staff. What I would emphasize again is that this is an ongoing process and that from the beginning of this process, the Board which is responsible for the process, not the staff, the Board has emphasized that there should be an open and a transparent process and has made some communications to you already including the communication that open nominations were welcome.

Beyond that, given that it is an ongoing process, given that we do have until August 31 for further nominations, I would not wish to go further at this time.

QUESTIONER: A follow-up. Do you expect any further nominations to appear?

MR. RICE: Again I would just repeat that the process is ongoing and the date for nominations to be submitted is August 31. Thereafter we expect that the Board would meet and there will be further communication on process and timetable at that time.

QUESTIONER: And also on the same subject, I wanted to go into the candidates who have already been presented. Both have had distinguished careers in public service. I assume you are familiar with them. One was a finance minister, another was a prime minister and the head of a national bank. But appointments can be political sometimes, so I wanted to ask you about their professional records. What are they known for? Can you give us some highlights about what they are known for in professional circles as professional economists?

MR. RICE: Again, given that this is an ongoing process, given that this is a process where the responsibility and decision lies with the Executive Board, it would simply not be appropriate for me to make any comment at this point.

QUESTIONER: Frankly, I don't see why. I'm asking basically for something that I cannot judge for myself, and I'm not even asking you to compare them or anything, I'm just saying that are they known for anything other than being appointed to a high-level position at one point?

MR. RICE: Again, I really don't have anything for you on that beyond again repeating what the Board has said and what the Board has clearly communicated, including this morning.

QUESTIONER: I know you mentioned that the schedule is still a bit up in the air, but I wonder if you can give a few indications as to when this process on the leadership is expected to be wrapped, with the nominations closing on August 31. Is there likely to be a gap before the candidates are invited to Washington? Any more details you can give would be very helpful.

MR. RICE: As I mentioned previously, we would anticipate that the Board would meet shortly after the August 31 deadline for submission of nominations to discuss further the process going forward, and a more specific timetable along the lines you're asking. Until that time, I really don't have more specifics for you.

QUESTIONER: Since we're asking multiple questions, de Rato said that you might be revising your economic forecast. Do you have any idea how that process is going to work and when you might have the revisions out?

MR. RICE: Again, I would draw your attention and everyone's attention to the speech that Mr. de Rato made within the last 24 hours in Brazil, and beyond that, I don't think it's very helpful for me to comment. In terms of updates of specific numbers, that will be done via our usual process which I know you're familiar with, and that is via the World Economic Outlook and the Global Financial Stability Report. As I mentioned, the World Economic Outlook numbers are going to be available October 16. So in terms of numbers, I think we're looking at that data.

Let me turn to online in which I see some questions are beginning to come in. The question he is asking is, if there are any sovereigns that may need emergency multilateral financing if special grade issuers cannot access international market for some time? I think my take on that question is that it's much too early to respond, it's hypothetical, and I think it's premature at this point to assess.

QUESTIONER: What are some of the more significant spillover risks for countries such as Russia?

MR. RICE: Again can I draw your attention to the statement the Managing Director made last night which I think is our best and most recent assessment? I would not comment on specific countries, but as the Managing Director said in his speech, we expect the global economy to continue performing well even in the face of recent financial market turbulence. The economic fundamentals, he went saying, in both the large industrial countries and in most major emerging economies remain strong. Our latest projections anticipate sustained global growth with major emerging markets leading the way. However, around this baseline, the balance of risks has tilted to the downside when compared to a few months ago in part reflecting increased financial market risks.

MR. RICE: There is another question online. Do you think that the home mortgage crisis in the U.S. will have a major impact on unemployment? There are already announcements of more than 40,000 layoffs in a few days. I would again refer to the Managing Director's speech last night which I think would help to provide some context. He clearly indicated that we continue to see the U.S. economy continuing to grow this year.

QUESTIONER: I have a question related to the market turbulence and your forecast for the global economy which, if I understand correctly from your quoting Mr. de Rato's speech, your forecast keeps being pretty positive and there is no precise indication about how much you are going to revise your estimate of growth at 5 percent. What do you think in this context is the role of the central banks? What do you think is going to be the next move? What do you think would be useful in this moment?

MR. RICE: Again I think as the Managing Director indicated in his speech last night, we believe the central banks and other authorities have taken appropriate actions to facilitate the orderly functioning of financial markets and we are confident that they will implement additional measures if needed in a timely manner.

QUESTIONER: Sir, if not from this podium, then where do I get an appraisal from the IMF of the professional careers of the candidates? Again, I emphasize that I am looking for praise for the candidates rather than criticism.

MR. RICE: Again the Board of Executive Directors is really the entity responsible for managing this process and we will have further communication once the process for nominations is concluded which is August 31.

I would like to wrap this up. Again, let me remind you that the embargo is for this morning at 11:00 a.m. Washington time, and thank you for coming to the IMF.