Transcript

Transcript: Press Briefing of The Managing Director

October 8, 2015

Christine Lagarde, Managing Director, IMF
David Lipton, First Deputy Managing Director, IMF
Gerry Rice, Director, Communications Department, IMF

Webcast of the press conference

MR. RICE - Welcome everyone to the 2015 Annual Meetings on behalf of the IMF. I am Gerry Rice, and I'm pleased to see you all this morning. I'm very delighted to introduce to you this morning the Managing Director of the IMF, Madam Christine Lagarde, and to her right is the First Deputy Managing Director, Mr. David Lipton.

I hope you have all received a copy of the Managing Director's Global Policy Agenda. If you can keep your questions short, to the point, we will try to take as many as possible. I know you are all anxious to ask a question.

With that, I'm going to ask the Managing Director if she would kindly introduce this press conference.

THE MANAGING DIRECTOR - Good morning to everyone, and welcome. Buenos dias!

We are all very, very happy to be in Lima, Peru. This is the first time in 48years that the IMF and the World Bank are holding their Annual Meetings in Latin America. I would like to convey through you our immense gratitude to the people of Peru, to the authorities of Peru, and to all the young volunteers who are helping us put together these Annual Meetings and make it friendly and hospitable. We have nearly a thousand young Peruvians, young girls and boys, who are tremendous and very helpful.

As the ministers and the governors are arriving in Peru, they are going to be totally seduced by Peruvian cuisine, as many have been.

I would like to use the Peruvian cuisine analogy for what our policy recommendations are to the policymakers who are coming to Peru.

The Peruvian cuisine to my understanding is a mixture of best practices from around the world, refining, updating traditional recipes, and upgrading them on the basis of a variety of ingredients. I'm not going to go back to the WEO, GFSR, and Fiscal Monitor presentation. Many of you were there yesterday and the day before, and have heard us in that respect. Our forecast for growth in 2015 is 3.1, with an upside in 2016 to 3.6.

Some would argue that it is not big enough a dish to respond to the global unemployment and poverty levels around the world that policymakers would like to reduce. So, my key message to global policymakers is that they need to apply those recipes of Peruvian cuisine, look at the best practices around, and upgrade their policies in order to reinvigorate growth. So at these meetings we will discuss and share experiences, how to create a better policy mix with stronger, more durable, and more inclusive growth.

We have summarized our recommendations for stronger growth in the GPA, the document that I think that has been made available to you. It includes also how we are going to focus the IMF in order to help and respond to the membership needs.

Today I want to go into three key ingredients.

First of all, manage the economic transitions. There are many transitions occurring at the same time. First of all, on everybody's mind, China's shift to a new growth model. Second, the normalization of U.S. monetary policy. And third, the adjustment to potentially prolonged cycle of low commodity prices.

They need to be managed, and they can be managed with a policy mix that includes demand support through the arm of monetary policy and fiscal policy; financial stability measures; and structural reforms.

Second recommendation in our policy mix, watch out for spillover effects. For example, central banks in advanced economies should, and might actually already, give consideration to the risks of spillovers from their policy decisions. And emerging economies should firmly address the buildup of corporate leverage and foreign debt.

So, manage the economic transition, watch out for the spillover effects, and take them into account.

Third, clearly international cooperation is key. And what we are seeing around the world in terms of challenges, in terms of headwinds, are of an international nature, whether it is economic spillovers, whether it is the refugee crisis and not just from the Middle East, whether it is international development, whether it is climate change, no country can go it alone. And international cooperation is more needed than ever.

So, for those of you who took a little bit of time to look at the GPA that we will be discussing with the membership, we want the IMF to be focused on agility, integration of advice, and focus on the membership. Conveniently it forms three letters that mean AIM, agility, integrated advice, and member-focused. That is what we are applying, whether you look at Ebola in terms of agility, quick response, cash in the bank, whether you look at the macroprudential advice and the analysis of the financial linkages that we include in our analysis in terms of integration, and how we rely on other sister international organizations' data and experience in order to build up our own recommendations. Or whether we focus our technical assistance and capacity building to what countries actually want and need in order to improve their position. We will continue to apply this AIM principle going forward.

With that, I turn it over to you. And Mr. Rice, you are going to monitor questions and both David and I will respond. Thank you.

MR. RICE - Again, please raise your hand, identify yourself, make the questions short and we'll try to take as many as we can.

QUESTIONNER - The Fund over the past couple of days has painted a rather dark picture of the world economy. Data coming out of Germany over the last couple of days tells us that the impact of the slowdown of China, the contraction of other large emerging markets may already be having an impact elsewhere on growth, especially in Europe where the recovery was already quite tentative. What would be your policy advice considering also that maybe some of the ingredients of your recipe are getting exhausted? I'm thinking in particular of monetary policy.

Very briefly, if I may, on Greece, from your contacts with European partners, are you feeling that there is some progress on the debt sustainability issue that will allow the Fund to have a program of its own to support Greece, and when will this happen, and what will it take?

THE MANAGING DIRECTOR - Do we take one question at a time? Okay.

On the current state of the economy, I think first of all we should just remind ourselves that growth is at 3.1, so there is continued recovery. We are simply saying it is decelerating a bit compared with previous years. We are also forecasting an improvement in 2016. So it is a process that has slowed down a bit, which we forecast to be improving next year. That is point No. 1.

Point No. 2, what we're also saying very strongly is that if the recipes that I have indicated are actually applied, and if these economic transitions are managed; if the spillovers are embedded in the policy decisions made by policymakers around the world, there is definitely a good way out toward strengthening of the economies, improvement of the potential output, because structural reforms clearly would have those consequences. We are not suggesting that those policies are exhausted. I think that monetary policy in particular continues to apply for both Japan and the euro area, for instance, where clearly the targets that have been set by the monetary policy, with great authority and databases to support their decisions, continue to stand, whereas on the other hand, clearly the U.S. monetary policy will most likely shift in the future, which in and of itself is an indication that the U.S. economy is strengthening its own recovery.

So, I wouldn't paint a dark picture. I would simply insist on the policy mix that can be applied in order to move from an uneven and modest recovery, which has decelerated to something that is definitely stronger.

You are seeing also significant rebalancing here, where the advanced economies are producing and contributing more to global growth, whereas the emerging and low income countries, emerging economies and low income countries are slowing down relative to what they have done so far.

On Greece, our position has not varied at all. We have not yet produced another debt sustainability analysis and the one that dates back to July still holds. So is our position. We clearly respond to our members' requests. Greece has requested the support of the IMF under a program and we have indicated that a program has to walk on two legs. Leg number one is significant reforms that are actually embedded in the legislation and implemented, particularly on the pension front and bank governance. Among others. And second a debt operation that renders Greek debt sustainable under our assessment. So that position hasn't varied at all.

QUESTIONNER - Madame Lagarde, thank you.

In the last two, three days economists from the World Bank and IMF have divided Latin American countries that have followed the rules and those not performing very well. I would like to ask you two questions regarding those countries.

The first one, what those countries who are not in a good position economically should expect from the Annual Meetings. And not long ago, 15 years maybe, IMF and World Bank were literally the devil for many people in Latin America. Tomorrow is the demonstration here in Lima. What would you say to those who are still skeptics to those type of policies from IMF and the World Bank? Thank you very much.

THE MANAGING DIRECTOR - I'll go to the second part of your question.

Compared with 15 years ago, one, the world has changed; two, Latin American countries have changed significantly and for the better. They are much more solid, both economically, financially and socially. Whether you look at their debt to GDP, whether you look at their fiscal position, whether you look at the reserves they have available and the tools they can use as well as the reforms that many of them have implemented, they are on a much, much more solid footing than they were 15 years ago.

Equally, the IMF has changed.

The relationship that we have with many Latin American countries, not all, granted, but many Latin American countries is a good cooperation, is a partnership. We provide an awful lot of technical assistance to Latin American countries. Two of the Latin American countries are users of our flexible credit line, which is a very innovative policy tool that is intended to help a country monitor its policy framework, and that is the case for Colombia, that is the case for Mexico.

So, added to that, I think the relationship we have with members around the world is much more aligned with the principles of a partnership rather than a programmatic set of prescriptions. And, we will continue to proceed on that basis. We will continue to take into account the social imperatives, we will continue to take into account what is a needed social safety net for a country to continue to reduce poverty and to keep the great gains and benefits that it has developed over the course of the last few years. If I look at a country like Chile, like Peru, for instance, they have significantly reduced poverty. And, they have significantly reduced extreme poverty. They are reforming their education system to make it more open and accessible to all young nationals. So, that has to be secured in any relationships that we would have. I'm not suggesting here that I'm in any kind of negotiations with any of these countries. So I think it is not the old Latin America. It is not the old IMF either. And the relationship is that of cooperation and partnership.

Big recipient of technical assistance as I said: the continent is the second largest user of our online training tools, second after sub-Saharan Africa and the feedback we get from the membership is extremely positive in that respect, as well.

Drawing the line between a group of countries and another group of countries is always difficult. And I'm a bit reluctant because I think what we're seeing more and more is that each and every country has its own story, its own particular case, and deserves and requires specific tailored advice. But, there are at least two three countries that are in negative territory when it comes to growth. Venezuela, Brazil are the two prime examples. And, it is a different story. But, clearly, what we have seen as a success is reforms that have transformed the economies. You look at Chile, you look at Peru, you look at Colombia, you look at Mexico, they have produced very, very strong reforms that will transform for the better their respective economy, and they will reap the benefits of those reforms. Timing is a bit difficult at the moment because they have reformed and at the same time the commodity prices have been much lower, particularly recently. It is not a totally recent phenomenon, but it has been more serious lately. But those benefits need to be preserved and in our relationship with the countries we certainly make that recommendation.

QUESTIONNER - You mentioned China's economic transformation. What is your suggestion for policymakers in China, given the recent volatility in China's stock market and the depreciation of the renminbi? Also in the meantime, how can China meet the challenge from the Trans Pacific Partnership (TPP) PP, or maybe it can give help to China's economic reform?

THE MANAGING DIRECTOR - First of all, we will refrain from commenting in depth on the TPP because we have not yet analyzed the provisions of the TPP agreement, and it is going to be awhile before it is released and the lowers have done their job brushing it up and finishing the job. But, as a matter of principle, such a trade agreement is bound to unleash some potential, is bound to create some value, is bound to open up more borders and as such, historically, we have always seen that as a boost to economic growth.

And bringing 40 percent of world GDP together on that basis is bound to be beneficial for the global growth.

I would observe as well that China has trade agreements with many countries as well, and at the IMF we very much hope that these various regional, bilateral agreements can be reconciled and will not create too much by way of conflict or discrepancies between the rules and hopefully that will be the case.

On the Chinese economic transformation, two things. One is, the slowdown of growth is a phenomenon that was predictable, expected, anticipated and we believe that it is a good move. To only grow at 6.8 and next year at 6.3, with a growth model that is no longer based on either massive export relative to domestic massive investment projects as opposed to consumption is a good transition, but it is a massive exercise. And there will be little bumps on the road because no transition can be made absolutely smooth without any disruption, without any volatility. That is predictable and I think we all need to get used to this little bumps on the road in that transition process, which as I said we welcome, together with the principles of more market determined exchange rate fluctuation, for instance, which we also believe is desirable and has been called for by many economic operators for many years, actually.

QUESTIONNER - Just to get back to cuisine in the Global Policy Agenda, one of the things you talk about with the Fund is looking at its own cuisine, and the format and duration of programs to member countries in crisis. In there you talk about the possible need to extend that duration. Is that because you think we're entering an era of longer more protracted crisis, and second, the question, a personal one, potentially this is your last annual meeting at the IMF, your term runs out next July. Do you expect to pursue a second term.

And do you agree with David Lipton, the man next to you, that the next Managing Director is likely to come from an emerging market?

THE MANAGING DIRECTOR - On the format and duration of programs, I would say two things. One is, we constantly try to adjust our programs in order to make them more palatable, more user friendly, better owned by the constituencies in which they are going to apply. Which doesn't mean to say we move away from the principles of restoring stability, restoring market access, and setting a framework that is going to be sustainable going forward.

But how that is implemented, how that is determined, we believe should belong to the people who will be responsible for implementation. So that is an adjustment process that we are going through and will continue to refine and fine-tune.

On the issue of duration, it is a matter that we need to look at. I'm not suggesting that we should have longer term programs. As you know, the EFF, for instance, is for four years with a reimbursement period of ten. So that is already quite a long-term arrangement for an institution that is expected to lend in the short term. But we have seen with some of the advanced economies in particular difficulties in moving fast. I think we need to take that into account, and determine whether or not the length of programs we have at the moment is actually appropriate, or whether we should reconsider.

It is not something that is revolutionary, but as we have four years ago put in place the Flexible Credit Line and refined the precautionary arrangement, in the same vein I think we should look at our arrangements and see if they are fit for purpose, to use common jargon.

I'm not going to respond on behalf of David, David is a fantastic colleague and friend, and he has his views, he can explain to you. But, clearly, this could be my last annual meeting. I'm certainly open to the fact that it would not be my last annual meeting. But, this is not for me to decide. It is for the membership. And, I have served, done my best, prepared to serve. But it is not my call.

QUESTIONNER - (Interpreted).

My question will be around this situation in the Middle East. What are your expectations of the economic situation, particularly with the removal of sanctions on Iran and the crisis of migrants, particularly the Syrian migrants? Taking into account that 95 percent of those Syrian refugees remain in the Arab area and 5 percent only are in Europe.

Also, the situation of Libyan refugees, both in Tunisia and Egypt, as well as the situation vis-à-vis the so-called Islamic state.

THE MANAGING DIRECTOR - (English).

Thank you for your question. It is a massive development that has taken place that has a humanitarian side, which is tragic on many accounts, with people displaced, with overall in the world 60 million people who have been displaced and many of them in that part of the world.

First of all, in the vicinity of Syria, Libya, there is clearly a huge burden on the countries that are welcoming refugees. I'm thinking here of Lebanon, Jordan, Turkey, Djibouti, Chad, various countries that are really opening up and bearing a fiscal burden. What we're trying to help with is for those countries that have a program with the IMF is to give them more fiscal space under their commitment in order to accommodate this additional burden. That is certainly the case for Jordan, that is the case for Tunisia, and we will be open to continue to discussions with these countries, because they are taking a massive burden on their books, and in their population. It is a stretch for them, we know that.

Second, we are going to help with our analytical work, with our recommendations, to see how the flow of refugees can impact positively on those countries that have population aging, working population issues, and where the influx of refugees can actually be regarded as a positive. We are mindful that it will have a fiscal impact, as well, on those countries. And, we are certainly welcoming the discussions taking place in Europe, in particular, to accommodate and adjust to that exceptional burden that some countries luckily are prepared to accept.

I'm not going to comment on the political or military side of this situation, because this is not the vocation of the IMF, but we will certainly try to bring our expertise, bring our knowledge and bring our understanding and increase the dialogue with those countries to see how we can best help them.

On Iran, clearly the removal of sanctions, when they happen, will help the Iranian economy and will certainly create additional growth in that country. Will certainly have an impact on the oil market. Probably limited. And probably for a longer term. And, we are all very mindful of that. We have annual reviews (Article IV) with Iran and we continue to cooperate with the country, where the economy has suffered and is still suffering.

QUESTIONNER - Despite impressive growth over a long period of time, supposedly impressive growth and I use that word deliberately. The continent appears to remain on the wrong end of the stick every time. Can you tell me, what is in for Africa in these world economic summit, what are you doing? What legacy are you leaving behind, particularly for Africa? Against the backdrop that perpetually the country has home to the world's ten poorest countries for a very long period of time? What legacy are you leaving for this continent?

THE MANAGING DIRECTOR - I'm not sure I agree with you that Africa is always on the wrong end of the stick. I think that what we are seeing in terms of changes in the continent, in terms of reforms, and even in terms of performance, pure economic performance, is not the wrong end of the stick. Sub-Saharan Africa is still the second fastest growing region in the world, and the average 4 percent owes a lot to some of the sub-Saharan African countries. It is a case that eight African countries are oil producers, and therefore suffer like all oil producers around the world from declining revenue of the state, and from reduced growth. That is as a result of low oil prices, in particular, and it is affecting all oil producers, not Africa specific. It is very much felt in a country like Colombia, just very close to us, very much felt by the Middle East oil-producing countries. Russia, Norway, Canada are also bearing the brunt of that price change.

Now, we have about 20 programs in Africa. Some of them that are with financing, others without financing. Because, African policymakers wanted us to be with them to make policy recommendations, to monitor the policies that they have decided to apply for their country. And, I hope that this has helped, help, and will continue to help when needed. We have entirely replenished the PRGT which is the poverty reduction and growth trust, which is intended to finance low income countries which are predominantly in the African continent. And as part of the sustainable development goals, we have actually delivered by increasing by 50 percent access to financing for the low income countries, and by maintaining the zero percent interest rate for low income borrowers as well as those countries that are regarded as fragile states, and I think this is a focus that we will continue to have for those that need our help and support.

One more thing. We have also opened training centers in sub-Saharan Africa in order to get closer to the ground and make sure that civil service members of African countries can get closer to home instead of having to travel to Washington or to the Middle East where we havea center.

QUESTIONNER - First of all, the IMF has been recommending a number of policies that you have described for quite awhile now, and yet here we are in a gloomy outlook. What can you do, either this week or in the coming weeks, to get policymakers to actually heed the call?

Secondly, if I may, for Mr. Lipton, if we could go back to the question about whether we're in for a period of much greater volatility ahead, particularly thinking about much lower growth potential, low inflation, the zero lower bound, we're stuck to.

THE MANAGING DIRECTOR - On the recipe front, it is true that we have been recommending the trilogy of demand, financial stability, and structural reforms.

But it is a fact that it has not always been applied and listened to. When you look at the structural reforms, some countries have done it. Some countries have done a little bit of it, and some countries have not done much of anything, expecting somebody else to drive growth. So I think on that front, in particular, there is much more to be done.

On infrastructure, which we have recommended very clearly, more than a year ago, we are seeing some initiatives, but we are not seeing enough in terms of actual delivery. Now, what gives me some hope is on the third aspect of my recipe, as indicated earlier. The call for international cooperation,:no country can go it alone. When you look at the Sustainable Development Goals , when you look at the TPP, announced a couple of days ago, when you look at the national country commitment that has been unleashed in the last few days for Paris COP 21, however gloomy we tend to be, and that is the natural tendency, , there are some interestingly positive developments that we have not expected, that we had longed for. So it may well be that in terms of international cooperation, we will see that triad of moves toward better development, with associated financing, toward more trade, which has been a little bit stagnant when we compare the numbers that we were used to, and which actually takes into account climate change not just as a threat, but as an opportunity to move growth into a slightly different and more innovative direction.

So, I personally feel strongly encouraged by what is happening. I would be even more encouraged, as you well know, if on the top of it we could shortly announce that the 2010 reform of the IMF has been ratified by the U.S. Congress and we can move ahead with a reinforcement of the institution on a quota basis, and not just on bilaterals.

I said I wish I could also celebrate the implementation of the 2010 reforms, if it was ratified. Unfortunately, it is an "if."

David, over to you.

MR. LIPTON - I think it is right that volatility in global capital markets has increased. To some extent it has been suppressed by the quantitative easing of major central banks. To some extent it has come from the various changes in the global economy that we have been talking about. You know the Global Financial Stability Report lays out the vulnerabilities that countries face in coping with this volatility. But, I think the main point is that it is not inevitable that volatility becomes a problem. The policy upgrade that the Managing Director has spoken about here, the policy upgrades that are recommended in the World Economic Outlook, in the GFSR, are the best way to bring a more stable situation in the global economy, to keep volatility within reasonable bounds, and to cope with whatever volatility there may be.

There may of course be new shocks and surprises, which we would have to deal with. But I think our focus in the coming year is on the upgrading of policies around the world.

QUESTIONNER - I want to ask you, Madame Lagarde, about the role of the central banks and the recipe for growth you described. Is it the case now that central banks could actually do more harm than good given the little policy space that is left for further stimulus? And on the issue that you just mentioned, the quota reform, do you think the IMF should now maybe move ahead with interim measures, to move ahead with those even without action from the U.S. congress?

THE MANAGING DIRECTOR - On the role of central banks, I will not be able to answer your question, because there are 188 central banks around the world. All the governors are attending in the next few days. You just can't give a broad brush answer to that. It is clear that the central banks have been at the forefront of fighting the great recession. And, thank goodness they were around to actually carry that effort, whether it is the Fed, whether it is the ECB, whether it is the Bank of Japan, whether it is the Bank of England, and many other banks around the world have actually done that. So they have been extremely helpful in doing so, and we believe that in certain regions, such as Europe, such as Japan, those monetary policies that have been helpful should be continued, because they haven't yet reached their target. When you look at the volume of credit to enterprises, to households, in many of those countries, there is improvement, which also indicates that the channel to the real economy is functioning.

On the 2010 reform, this is absolutely the prime objective. We want that reform to be delivered upon. We want it to take place, because it is necessary for the institution to represent better the situation of the world and the balance of power between the various members of the institution. But, having said that, if it lasts for a little longer, we will have to look at alternative solutions, which absolutely would be interim measures and not substitute for what we regard as the prime objective, which is to complete the 2010 reform, which includes the 14th review, but we will have to move at some stage, obviously, to the 15th review.

QUESTIONNER - A British question, if you don't mind. Earlier this week the British government, the Finance Minister George Osborne introduced a number of measures to boost infrastructure spending in Britain, housing plans, road plans, so on. Do you think there is enough fiscal space and is this a good time for Britain to be doing that kind of thing?

Secondly, going back to your own personal situation, have you sounded out shareholders on how they would feel about serving a second term yet?

THE MANAGING DIRECTOR - If I had, I wouldn't tell you.

On the infrastructure spending, we have come out publicly very strongly in support of infrastructure spending. And I think the research work that we have done, most recently, indicates that it is a win-win option for an economy. It is a winning option for the short term, because it is going to clearly support the growth, support activity. When you build new roads, when you maintain existing infrastructure, when it is needed, you actually put people to work. And, that is a bonus for the short term activity.

And it improves the medium- to long-term potential for growth because when you have better infrastructure, whether it is hard equipment, or whether it is soft infrastructure, as well, it is an improvement of the growth potential of an economy. So, absolutely, yes.

I think there has been discussions around that, but if the fiscal direction that has been imposed by governments, is heading toward enough stability and can inspire confidence to the economic players, at the moment it is really an excellent choice.

QUESTIONNER - (Interpreted).

Latin America is at a stalemate. The treasury is basically empty. In the case of Peru, we don't know how to use our funds and basically we have no monetary policy left. However, the central bank is very concerned with inflation, and interest rates are 3, 4 percent. And, they can't find ways to contribute to growth or employment. So, what recommendations would you make to policymakers in Latin America?

QUESTIONNER - (Interpreted).

Good morning. First of all, I want to go back to the issue about the projections made by the IMF regarding Peru and its economic growth for this year. The Peruvian government says that first of all this is a pessimistic outlook. And then they said it was conservative, that this was taken as a discrepancy, saying it wasn't timely to make that statement at the time of this meeting.

Then, you said that the IMF does tailor-made studies of each country, looking at different characteristics, different conditions. The Fund in its outlook, did it take into account, for example, the El Nino phenomenon in Peru? Yesterday, the President of the World Bank said yesterday that Peru is the star in terms of economic growth, or one of the stars of Latin America in terms of growth. So, what did the IMF use as groundwork to prepare this study? Why do you think Peru has grown so much during the last two decades, basically during the last ten years?

THE MANAGING DIRECTOR - First of all, let me share a little secret with you. When I saw President Humala last night he told me he would try to prove me wrong with my numbers, and I welcome that greatly. I hope we are wrong. We look at the situation of an economy on the basis of what we know of it, and I think that where our assessment differ a little bit is on the volume of exports, in particular, and that is very much an external factor. How much demand is addressed to the Peruvian economy is a judgement call we make and that the authorities make as well. So, I hope we are proven wrong. It happens.

And, yes, we do take into account lower commodity prices. We do take into account the potential external factors, including weather related, but it is extremely difficult, actually, because if El Niño moves north, a bit more than currently forecast, the consequences will differ and will be reduced on the fishing industry, for instance. We do take into account the fact that some mining projects are going to develop in the course of 2016, which is why, by the way, we have a much more upbeat forecast in 2016 than in 2015.

It is true that the copper mines in particular will unleash additional growth and activity. So, we try to do as fine-tuned an analysis of the economy as we can and we come up with our best judgment for the current year and the coming years.

But, I would say that the reforms that have been undertaken in this country, like in a few others that I mentioned earlier, such as Chile, Mexico, Colombia, are really positioning the economy in the category of the best performers. It is not the end of it and there is always more to be done. But, when you look at the reform of education, when you look at the reform of civil service. When you look at the fiscal framework that is in place, Peru is well positioned relative to others. That there is no doubt about that.

More generally, Latin America is a very diverse mosaic of countries. And, if you look at the Venezuelan situation, if you look at Ecuador, if you look at Brazil, you can draw a certain conclusion, which would not apply at all to economies like Chile, Colombia, or Mexico, or Paraguay and others. So, I don't want to conclude broadly that Latin America is here or there. I think it is a multiple series of different cases that are depending on the economies, depending on the growth model that it has, depending on how much it depends on export of raw or semifinished materials, depending on the political situation. And, the governance and the rule of law and the security that is associated by investors with legitimate destinations for their investment.

MR. RICE - That is the last word.

Thank you.