Transcript

Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations, IMF

August 27, 2009

Webcast of the press briefing

MS. ATKINSON: Good morning. I am Caroline Atkinson, Director of the External Relations Department at the IMF. I'd like to welcome you and the journalists contributing and participating via the Media Briefing Center to our biweekly press briefing. This is the first one we've had for a couple of weeks or a few weeks because of the recess.

Let me start with a couple of announcements. First, on the Managing Director and his travel, he will be in Berlin on September 4 where he will deliver a speech on sustainable growth and a stable international monetary system at a Bundesbank event. It's scheduled for 11:00 a.m. local time, and is an invitation-only event, but we hope to distribute an embargoed copy of the speech ahead of time to the press.

The Managing Director will then travel to London for the G-20 Ministerial Meeting on September 4 and 5, and we will give you further details about his press availability closer to the time. But please also contact Media Relations Division if you have any specific questions or requests. He will then be going to Brussels for a seminar and returning back here. We're not sure whether there will be prepared remarks, but of course if there are we will release those to you.

On the operational side, you've got used to talk about SDR allocation and we want to let you know that tomorrow, August 28, the IMF will officially implement the recently approved general allocation of special drawing rights, equivalent to about $250 billion. This was the allocation initially pressed for at the G-20 meeting in the spring in London. It was formally approved by the IMF's Board of Governors on August 7 and is designed to provide more global liquidity to the world economy by supplementing our members' foreign exchange reserves. And it is of course a prime example of the quick multilateral response to the financial crisis.

The equivalent of nearly $100 billion of this $250 billion will go to emerging markets and developing countries, and over $18 billion to low-income countries. This general allocation is made in proportion to members' existing quotas and will count immediately toward their reserves. Members can choose either to hold them in their reserves or if they wish to, sell all or part of their allocations to others in order to finance immediate hard currency imports. That is possible, and likewise it's possible to enter into an agreement to buy these SDRs from another member.

Separately, we are about to implement on September 9 a special allocation, a one-time allocation, of 21.5 billion SDRs, about US$33 billion. This allocation, which is sometimes called the Fourth Amendment Allocation because it required an amendment to the Fund's Articles of Agreement, will mean that every member country has an SDR allocation. Until now, countries—which is about a fifth of the membership which had joined the Fund after 1981, had not received any allocation, so now this will rectify that imbalance. More information and background on these two SDR allocations is available on our website at www.imf.org, and there are also fact sheets and Q's and A's there.

Lastly, on the Annual Meetings which of course as you know are going to take place in Istanbul in late September and early October, just to remind you that online press registration is open. A link to the registration feature is available on the home page of our website and on the journalist page. And we have also just this week put up a Road to Istanbul webpage.

Let me now turn to questions and ask people to submit questions also at this time.

I have a question here on Latvia asking for any more guidance on when the Latvia release will be distributed. Just to let you know that the Latvia review, as you know, is being discussed today by our Executive Board and we will let you know later today whether there will be a press release today or tomorrow morning. We plan a conference call tomorrow morning as we had done after the staff-level agreement and we will make all of those timing arrangements available to you as soon as we know them. Are there other questions?

QUESTIONER: I was looking at the Board agenda and there is something next week about an exercise with the Financial Stability Forum. Is there any way to know what's going on, what type of exercise it is?

MS. ATKINSON: I'm afraid I'll have to get back to you on that one. I'm not sure what it is. The exercise that we're doing with the Financial Stability Board of course is concerning early warnings, but I'm not sure if that's at the Board and I apologize. I'll get back to you on that one.

QUESTIONER: When the Managing Director will be in Europe at the upcoming G-20, is he going to present any paper there to the ministers, and what type of message is he going to give about growth or the economy in general?

MS. ATKINSON: He will be as I said giving a speech on September 4 which will lay out his key messages at the start of that process leading into the Annual Meetings. I don't want to scoop him on that. As you know, for the ministers there will of course be discussions on the outlook and I think that as John Lipsky and others have said recently and made clear recently, the global economy is of course improving and that's welcome, and today's U.S. GDP numbers I think support that. The outlook is improving, but we do feel that it's very important to stress that it's no time for complacency and that we expect that there are still vulnerabilities and policy support that is very important in cutting short or lessening the severity of the recession remains important. So it's a message that we do believe the recovery is in sight and is going perhaps to be a little better than we had at one time thought, but we expect a rather muted recovery. Obvious the Managing Director will have more details on that when he's talking to the ministers, and as I said, there will be some press availability around the G-20.

QUESTIONER: Exactly what you were talking now about, the signs of recovery and the last data on the U.S. GDP, could you articulate more? If I heard correctly you said something like it's important that the measures taken will be kept in place so there is no complacency. What are the main measures and efforts that the IMF believes it's important that the different governments will keep in place to assure a smooth recovery?

MS. ATKINSON: As we stressed before, the support in three areas where governments have taken measures on the financial system, the fiscal policy and monetary policy. And of course, going forward, at some point these extraordinary measures will need to be unwound and it be time to thinking about that now, but we don't believe it's quite yet time to be implementing exit strategies.

I might just refer you on these issues of the recovery. You may have noticed or you may have been informed that we have begun a blog called IMF Direct, and this week John Lipsky has been and is blogging including on topics like this, so you may well be interested in seeing what he has been saying about that.

I have a question online about Jamaica. It's asking, "In Jamaica there are protests about what's seen as the IMF dictating cuts in government spending as a condition for a loan. Please confirm what changes are being requested."

As you know, there are discussions that have been underway with the IMF and the Jamaican authorities. The authorities themselves are designing their macroeconomic program and that is something that they are very much in the lead on. I don't want to go into discussions about particular issues and I think that we've been having good discussions with the authorities. We are impressed by the fact that they are taking measures and considering measures and have committed as it is very important as we've been stressing recently to a program that will be very much their program.

Are there any other questions?

QUESTIONER: Just an agenda question. I hope I didn't miss it, but have you already started putting out an agenda or releasing documents on Istanbul for us journalists located here? Is everything going to happen there or are you going to release some report and prepare us here during the month of September?

MS. ATKINSON: Yes, all of that information will be available through Media Relations. There will be a run of certain let's say non-Istanbul-related reports such as discussing Latvia and there will be other country matters. Then the particular issues to do with Istanbul, we have a number of press availabilities and particular papers that will be released like the Managing Director's speech at the Bundesbank, and the Managing Director will also be speaking later in September on low-income countries, on September 17. Then of course there will be press availability in London and then again prior to his going to Istanbul, and in Istanbul there will be a major press conference and then various remarks that will be released.

So we have a number of things, and our Media Relations Division can tell you what the timetable of those will be. Thank you all very much indeed, and I look forward to seeing you in this intensive period going forward.