Transcript

Transcript of a Press Conference by Thomas Dawson, Director External Relations Department, IMF

October 31, 2000

MR. DAWSON: Good morning, everyone. I'm Tom Dawson, Director of External Relations at the Fund. Welcome, again, to one of our regular press briefings. I really don't have any announcements, particularly. I would note, however, that next week, the Managing Director will be in Europe. There will be two public events that he will be participating in on Monday evening, November 6th, he will be addressing a joint conference of the Austrian National Bank and Joint Vienna Institute on transition economies, and, on Tuesday morning, he will be appearing in Brussels for an informal session with a couple of committees of the European parliament. Both will be open events with press allowed to attend. I believe we will have a text available for the Vienna appearance, and I think we will also have one for the European parliament appearance. But as I say, they both will be on the record.

With that out of the way, I'll be happy to take any questions that you may have.

QUESTIONER: I believe the Article IV for Russia was discussed in September and it hasn't been released yet. Are there any plans to release it, and if there are, do you know when that's likely to be?

MR. DAWSON: We don't have anything precisely to say on that, but we do hope a decision will made on that in the next few days.

QUESTIONER: Is the decision with Russia--and presumably with the Russian government--and they have to decide whether to release it?

MR. DAWSON: Correct; that's correct.

QUESTIONER: Can you tell us what the situation is with Pakistan at the moment? They've made a loan request, but--

MR. DAWSON: Well, I think the draft program is still being reviewed, the documents are being prepared. In one sense of the word, I don't think there's an update beyond that joint press conference that the minister and Eduardo Aninat had given in Prague. But at this point, I think our expectation is that the request for a stand-by would be considered by the Executive Board in the second half of November. So in that sense, it's on track from the schedule that was basically laid out on the closing day of the annual meeting in Prague.

QUESTIONER: When are there going to be more HIPC countries reaching the decision point?

MR. DAWSON: We believe we continue to be on track for the twenty by the end of the year, and I don't have a precise schedule since, board schedules are always subject to change. But I think it would be reasonable to expect that starting in November you'll see quite a steady stream of them coming up. In fact we have been discussing adjusting the board's schedule to make sure we can accommodate the requests. So I think it's a matter of, in the post-annual meeting, getting the document prepared, but we still are reasonably optimistic that we'll reach the twenty figure that's been cited.

QUESTIONER: How many countries do you have left?

MR. DAWSON: I think it's nine.

QUESTIONER: So are, are you telling us that within the next two months that you will complete the negotiations with nine countries?

MR. DAWSON: Yes; that is correct.

QUESTIONER: Are you satisfied that the policies are all in place?

MR. DAWSON: There's an enormous amount of effort being put into that. If the policies are not there, then they won't go forward. But we believe that we will be able to get the twenty. We have a slightly larger number than nine that we're working from, so there is, there is some possibility of adjustment in that.

QUESTIONER: Belarus. Are there expectations of a program for Belarus any time soon?

MR. DAWSON: I don't know that we would go quite that far. Just let me check, I don't have anything in terms of any news on that. There will be some discussions in the near future but I would not say that we're anticipating a program at this point.

QUESTIONER: Argentina's Secretary of Finance Daniel Marx was here last week. He had a meeting with the Deputy Managing Director Mr. Fischer, and he said that Argentina is actively involved in the redesign of the contingency line, and he suggested that Argentina wants to change its stand-by to a contingency line, and that that could happen as soon as in a couple months. Do you agree with that time frame, and what do you have on that?

MR. DAWSON: As people know, we have been discussing streamlining Fund facilities, the improvement of the CCL to make it more useable, and the Argentine authorities and representatives have been actively participating in that, and have as a matter of record, expressed an interest in having a workable CCL.

In terms of your specific operational question, no, I don't have anything on that because we're not at that point yet with regard to having a facility that would meet those criteria, although we believe we have the basis for that but I think the formal decision is being submitted to the board in the next few days or couple of weeks.

So I'm not challenging in any sense what he said, but it's not something where we have a facility that is ready to be used, and I don't have any information. As I say, I was unaware of that statement that you referred to. I don't have any information in terms of anything with regard to any kind of a formal request, since there's no facility that is of that nature yet-an improved facility. In terms of the present agreement, it is on track, and by all indications, the performance criteria are being met.

QUESTIONER: When is it going to be discussed by the board?

MR. DAWSON: The board has already agreed on the streamlining of the facility. Formally, the board needs to put that in effect, and that will be coming up in the near future. I've seen the documents that are being circulated for people to review, to make sure it's correct. It will be in the next few weeks, I believe.

QUESTIONER: On the CCL?

MR. DAWSON: On the CCL. Right.

QUESTIONER: So you expect to have it approved in which time frame?

MR. DAWSON: The next few weeks.

QUESTIONER: Next few weeks?

MR. DAWSON: Yeah; for the overall. But in terms of the Argentina interest, I don't have anything for you on that. What I do stress, however, is that they have the present precautionary arrangement, which they have been meeting the criteria on, and as far as we know, they are reasonably confident, are still on track.

QUESTIONER: Would you say there are ongoing discussions or just Argentina's participating in the design of the line?

MR. DAWSON: They are certainly participating on design of the line. I'm not aware of any discussions on the use of it.

QUESTIONER: I'd like to come back to Belarus for a moment. The figures. You recently had the Article IV discussion with them and in the PIN you cite their growth figures, their official statistics. I notice that some of my colleagues, when reporting on that PIN, operated with a different set of figures, citing IMF, IMF forecasts, like minus six, for instance, for this year, which seems strange because Belarus should be lifted by the upturn in Russia.

So my question is what is the operative set of figures?

MR. DAWSON: I'll have to get back to you on that.

QUESTIONER: Can we go back to debt relief?

MR. DAWSON: Sure.

QUESTIONER: Given the congressional approval for debt relief, and the fact that there are two months left in the year 2000, and that you said that you expect a steady stream in, in November, do you feel--

MR. DAWSON: --and December.

QUESTIONER: And December. Do you feel as though the IMF has sort of "gotten over the hump" on this issue and that it's not going to be as much of a problem for the institution as it has been?

MR. DAWSON: Well, I'm not sure what problem you're identifying.

QUESTIONER: Well, Jubilee 2000 and all that.

MR. DAWSON: Let me try to identify some of them and if I don't cover it, you come back. In terms of providing the funding that is necessary for the HIPC process to go forward, the recent congressional action and U.S. ability to fully participate in the funding, certainly removes the concerns we had as to whether we would have an effective, financed HIPC program going forward. So in that sense of the word, yes, we have the ability to go ahead. That does not, however, mean--I think you may have used the word, "clear sailing" or something like that. As the other questioner sort of asked: Are you really going to be able to get all this work done in the next two months?

I mean, the premise of his question is quite correct. There is a lot of work, a lot of details that have to be done, so there's a lot of hard work to be done in that regard. So it's not a sense of it is all "clear sailing," as you say, because we do have to work to get the programs implemented, and working with the authorities in that regard.

So, yes, that particular stumbling block has been removed but there is still a great deal of work, and then we do have, following on, the countries that are not expected to be able to participate in it this year, which are the countries that won't make it by the end of the year, plus we have the conflict and post-conflict countries that are still having to be dealt with.

So there's a great deal of work to be done, but it's less on the funding side and it's more on the program side.

QUESTIONER: On the same subject: What's the rush? Why do you need to promise to be there by the end of the year, because the IMF, at least in my experience, in watching you work with Russia, my experience was always that you worked on a different set of principles--policies first, aid next.

MR. DAWSON: Well, I think we're still operating on the basis of policy first, but I think it's quite clear there's been a very strong belief in the international community reflected by our own--originally called Interim Committee, now IMFC Committee, as well as in communiques of various groups of ministers, whether it's G-24, G-7, that they would like the institutions, both the Bank and the Fund--after all, it is a joint process--to work as expeditiously as possible, and that the goal--this is all following up, essentially, from the Cologne summit of a couple years ago--the goal of twenty by the end of the year is one that I think enjoys broad support in the international community.

QUESTIONER: Have you heard from North Korea? The last time we were here, you said that you had expected to hear from them shortly. I wondered if you have.

MR. DAWSON: I didn't mean to leave quite that impression. As you may recall, they were invited to be special guests at the meetings in Prague, and had indicated that because of the short notice and lack of time for preparation, they had been unable to accept that invitation, and we do continue to expect to be in touch with them.

I'm not aware--and I think I would be--of any further contacts. But I don't think that's particularly surprising. But we do expect to be hearing from them.

They've indicated a desire to learn more about the institution and that would be the next stage. It would be some form of contacts, whether it be visits here, or a mission, or whatever, quite likely to be jointly with the Bank of course.

QUESTIONER: Beyond Argentina's involvement in the design of the facilities, there are no requests?

MR. DAWSON: That's correct; absolutely correct. The program is on track and I think Daniel Marks was quite clear in denying reports, in the last few days, about possible emergency. I mean, it's quite clear.

QUESTIONER: And they continue to have no plans to draw on the loan?

MR. DAWSON: That is correct. It continues to be a precautionary arrangement; yes.

QUESTIONER: What advice are you giving them on changing their currency regime?

MR. DAWSON: As I said, the program is on track and that doesn't seem to be an appropriate question or answer.

QUESTIONER: I'm sorry. A follow-up. Actually, Secretary Marks did not deny the fact that they were interested in the contingency credit line.

MR. DAWSON: That is not what I said. There were reports about requesting emergency financing, et cetera, and that's what he denied.

QUESTIONER: With U.S. Treasury and all that.

MR. DAWSON: Correct.

QUESTIONER: But he did say what you seem to deny now, that-

MR. DAWSON: No, they have an expressed an interest in a contingent credit line; absolutely. I have not said that.

QUESTIONER: What about the IMF? How do you, as the IMF, view that interest? Do you think it would be an unusual line for the actual situation in Argentina, or not?

MR. DAWSON: I mean, at this point they've expressed an interest, in general, for this. There is absolutely nothing going on in terms of the specifics. When we have a facility that is possibly active, we may take a look at it. But there is no need. There's no desire. There's nothing going on in that regard at, at this point. I mean, we believe we need to have this facility. The Argentines believe that the Fund needs to have this facility right now. But at the moment, we are on track. We're on track with the present program, so there is just no need to go in that direction.

QUESTIONER: The fact that Argentina is involved with this--they say they're interested and they're involved in the design of the line, has to do with the actual requirements, or the previous requirements, Argentina would not be able to get into the--

MR. DAWSON: It's not Argentine-specific. Nobody has been able to use the CCL in the past. We are trying to make it generally more attractive. There is nothing specific about it except for the fact that Argentina is playing, as it has, for the ten years that I've known this institution, an active role in the discussion. But there's nothing Argentine-specific about the review of the CCL.

The CCL itself has proven not to be as attractive to potential borrowers as had been expected when it was established two, or two and a half years ago.

QUESTIONER: But the CCL has been changed in the last month?

MR. DAWSON: I thought I made this clear. The board has discussed in the streamlining of Fund facilities making the CCL more useable. Broadly speaking, they've agreed on what needs to be done, but the steps to formally implement it have not yet been adopted and that's what I referenced is going to be reviewed in the next several weeks, formally, by the board. This is all old news. I mean, we have press releases describing what we did.

It is simply we have not yet formally, legally, adopted the measures that we agreed, in principle, just before the annual meeting.

And Argentine's Executive Director--Mr. Zoccali takes an active role in that, as do a number of other directors.

QUESTIONER: Would you give us a report on the mission, the joint mission to Belgrade, and what progress is being made in their membership, and what arrangements or progress has been made on a bridge loan to repay their debt. And have they approached you about helping develop a currency board system?

MR. DAWSON: I have nothing at all on the latter, on the currency board issue. The mission was in Belgrade October 24th to the 30th. It was a Fund mission. At the same time, there were visiting delegations from The World Bank, EBRD, EC, as well as bilaterals.

The mission has just left Belgrade and is on its way back. In terms of the status of the membership discussions, which is, I think, the other part of your questions, I would draw you to the press release of 1992, Press Release No. 99, which set forth the three criteria for the Federal Republic of Yugoslavia assuming its portion of the Socialist Federal Republic of Yugoslavia's membership in the Fund, and those criteria, first, included that the authorities would have to accept the conditions set forth in that December 1992 decision, and the authorities have informed us that they accept that decision.

The second issue, which you also raise, which is in terms of the clearance of arrears, is something that is being looked into, and I can't get into details, but it would likely require some sort of a bridge financing of a sort to clear the arrears, and that is sort of a next issue to be discussed in more detail, and we would expect a mission would be returning to Belgrade to discuss that subject, once we have the government in position to sort of formally agree with us.

There is an issue in terms of their accepting the conditions. As I understand it, a Minister of Justice has to be in place to be able to make the commitment on their part, and, then, the final condition for membership is a finding by the executive board that the Federal Republic of Yugoslavia is able to fulfill its obligations under the articles of agreement, and that's the last stage, that's sort of the board assessment, and I don't have any sense of timing as to when this would be.

I do repeat what I'd indicated in the last briefing, which is that there are no particulate deadlines in this. There had been, I think at one point, a misunderstanding, because we do, as a matter of course, review the membership issue, status of membership issue every six months, but that is not a requirement to make a decision changing that at the six month period. We will be able to do it at whatever point the authorities are ready to meet the conditions and the executive board is ready to review it.

QUESTIONER: The World Bank has said that they are confident about the new government in Mexico for the first time in 70 years, that there is a big chance that the country won't have any financial crisis at the end of this government. But Mr. Fox still has to take office, and he has not named yet his Cabinet. There is still some political instability and now there are some people who fear that by the end of the year, the peso will be one dollar for ten pesos. So I wonder if, at this point, the assessment of the Mexican situation at the IMF has changed. Do you know, if you still have the same confidence that things will be okay with the next government?

MR. DAWSON: Yes. I think we continue to have the same confidence. More questions?

QUESTIONER: I have a question on Romania. I believe the Article IV for Romania is due to be discussed in November, and the loan may also be discussed at the same time, but that's not sure yet. Do you have any indication as to when the loan will actually be discussed?

MR. DAWSON: The Article IV is going to be discussed by the board in mid-November. We don't have a firm date since, as I think you all know board schedules are subject to change for a variety of reasons.

The Fund and the authorities are still discussing issues that would need to be resolved before the release of the second tranche of the SBA. If the issues are resolved by the time of the Article IV discussion at the board, it could be part of the discussion, but we do not know at this point, and the unresolved issues including disagreements on wage policy, arrears, budgetary policies and privatization, are still subject of the ongoing discussions with the authorities.

QUESTIONER: Since we last met, has the Fund moved any closer to any program for Ukraine?

MR. DAWSON: Yes. I have some news for you, but I don't think I'd quite be able to say yes or not to that. So let me give you what we have. John Odling-Smee, and Julian Berengaut, who's the mission chief, have been invited to visit Kiev by the Ukrainian authorities and will be there November 3rd to 5th, and so after that, we will have an assessment as to whether a mission would be appropriate, and if it were appropriate, we would be in a position to put together a mission on reasonably short notice, and the mission would be the vehicle in which discussions of a possible program would be.

But I think we need to wait for the results from the visit of John and Julian.

QUESTIONER: Can I just come back to Argentina?

MR. DAWSON: Sure.

QUESTIONER: I'm still not clear. Did anyone from Argentina ask you about getting a disbursement from that credit?

MR. DAWSON: No; absolutely not. Absolutely not. We have a precautionary arrangement and there's been no discussion, no request, whatsoever, about the CCL.

QUESTIONER: I'm not asking about the CCL.

MR. DAWSON: There's been no discussion about drawing under the present arrangement; none. It remains precautionary.

QUESTIONER: Is it possible to actually change one program into another? That's what Mr. Marks was talking about--changing that into a CCL. Is that allowable?

MR. DAWSON: I mean, programs can be ended; new programs can be started. I mean, it would be conceivable, but that's not on the table at this point. But program are quite often changed from stand-bys to EFF's, et cetera, et cetera. I mean, nothing like that's happened with the CCL because one of the problems with the CCL, to date, is it has not been found to be a useable facility, which is why we're changing it. Of course "useable" doesn't mean you actually use it.

Okay? Thank you very much.