Transcript

Transcript of a Press Conference by IMF Managing Director Michel Camdessus

September 23, 1999

Also Present:
Stanley Fischer, First Deputy Managing Director
Thomas C. Dawson II, Director, External Relations Department

Joining us are Stanley Fischer, First Deputy Managing Director, to my right, and Graham Newman, Chief Press Officer for the Fund, to my left.

Before the Managing Director offers a few opening remarks and takes questions from the floor, I have a few housekeeping items to attend to.

The press briefing is embargoed until 15 minutes after its conclusion, and we will fix a specific time when the briefing ends. We're also preparing a transcript of the briefing and hope to make it available to the press within a few hours.

When asking questions, please identify yourselves and your affiliations.

Along with the transcript of today's briefing, the Fund will provide an audio webcast of this event, which will be broadcast about an hour after the conclusion of the briefing. Visit our Website at www.imf.org to listen in.

Thank you.

Mr. Managing Director?

MR. CAMDESSUS: Thank you very much, Mr. Dawson. Good morning, ladies and gentlemen. I'm impressed by the post-modern methods of communications Mr. Dawson is bringing to this institution. And, indeed, I'm sure you will make extremely good use of all of that.

You have certainly heard of the press conference yesterday of Mike Mussa describing to you the improved outlook for the world economy. I will not enter on these issues too much, at least in my opening remarks, because as you know, I always share the views of Michael Mussa, and frequently he shares my views. So it's fine, and you have also the transcript, indeed, of what he told you yesterday.

But, nevertheless, a point on which I want to insist at the outset is that there is always something very bad that comes with good news, which is that they create conditions for relaxation, for complacency, for resting on laurels. And then, of course, the best and quickest of recoveries can be just aborted. And, indeed, our message--I see a few messages which must come out from these Annual Meetings, but this is the first one--is that this is not a time for complacency. One of the mottos of the IMF, and I presume that this is on the www., et cetera, is, we have this motto, no?--"There is no room for complacency." This is a time for pushing ahead with structural changes, I'm afraid in almost all countries of the world, but particularly in those where we see the initial success of the programs we have supported.

I told you about the messages of these Annual Meetings. I see two other things which will probably be very prominent in what we will do. Let me mention only these two.

One, and I hope we'll succeed--it is not yet certain--concerns our very intense work now to finalize the strengthened debt reduction initiative following the initial HIPC work and then the Cologne Summit.

We must do two things--one, which is well advanced, is to put in place the instrument for making this debt relief broader, quicker, deeper, faster. All of that is being more or less defined, in extremely good cooperation, I must say, with the World Bank and the regional development banks. But the issue is to put in place the financing.

I believe that we are now--as far as the IMF is concerned--truly within striking distance. We have on our side--the management of the institution--put in place, proposed, the methods for using our gold, using reserves we have accumulated, and calling for bilateral contributions of a certain amount.

We are now in the business of convincing bilateral donors to provide us with the needed resources. All of that takes time. We are now at the end of the process. Always the end of climbing is difficult, and tensions can emerge. I believe, nevertheless, that we will be able, following the meetings we will have this afternoon and possibly in the following days, to say at the time of the Annual Meetings that the financing is completed. And, indeed, it will be a great thing to do and to announce.

And, second, and in parallel, we will proceed with the transformation of our key instrument to help the poorest countries, the so-called ESAF, which will certainly change its name, although that is not so important. More important is that it will be much more and better centered on social issues, better linked to debt reduction, and, we believe, more efficient in promoting high-quality growth. These are certainly big things, and for this institution indeed extremely important, as they will determine the nature and the quality of our work in the coming years.

And, of course, in parallel, we are continuing our work on architecture. Here we are entering, I hope, into the phase of implementation in important areas such as transparency, setting standards for many sectors of financial life, reform of the financial sector, strengthening of Fund surveillance. The key principles are there, adopted; we must now turn to effective, quick implementation.

But there are domains where the work is lagging a little bit behind: the definition of the key principles of involving the private sector in the fight against crises, the broadening of our mandate for capital control liberalization, the choice of exchange rate regimes. On these issues we are not yet there. We are continuing to work, and I hope that these Meetings will give us an added impetus to try to complete our work.

So that is the picture, more or less, and now I would like very much to give you the floor, not without insisting on our effort to--on our commitment to--more openness and transparency, which is reflected by this panel behind me. Please note this www.imf.org, where you will find high-quality information, possibly overabundant, but high-quality, indeed. Read well what you find there because from time to time by reading too rapidly you may get the opposite information to what is actually there. But, okay, use that, and we are very proud to be able to offer you that. And we believe, indeed, that information flows have some relationship with capital flows, and we believe in particular that when good information flows in a regular way, it can be a factor stabilizing capital flows, so that in this way it serves our purposes for international financial stability.

Now, before turning to the floor, let me tell you our sadness in hearing of the tragic death in East Timor of one of your colleagues, Sander Thoenes of the Financial Times.

Now, ladies and gentlemen, the floor is yours.

A QUESTIONER: Mr. Camdessus, since Mr. Wolfensohn the other day criticized Mr. Stiglitz publicly, I will try to provoke you in criticizing Mr. Mussa today.

Yesterday in his press conference--

MR. CAMDESSUS: I have criticized Mr. Mussa? I have not.

QUESTIONER: No, you have not. I will try to make you do that.

[Laughter.]

QUESTIONER: Yesterday, talking about Brazil, he surprised some of us in the Brazilian press by highlighting the progress that Brazil has made on the fiscal side. It's true that Brazil has achieved some of the Fund program goals for this year and, according to official sources, too,for next year--primary surplus, principally.

Now, this very idea, this very notion has led politicians in Brazil to conclude that the adjustment has been completed and it's over, and we should just now relax and be happy.

I wanted to ask you this: Is the IMF just trying to be diplomatic considering the situation, the political situation in Brazil? As you know, the nominal fiscal deficit in Brazil is higher than the government's approval rating. Or is it still the feeling here, as you said last year in this press conference, that Brazil could succeed itself in becoming the next crisis if the reform process is not advanced?

MR. CAMDESSUS: Well, let me briefly touch a few points you have mentioned.

First of all, I know pretty well that President Cardoso is relaxed with the approval ratings. These things fluctuate and all mature politicians know that all of that must be taken with a few grains of salt. This reminds me, as a matter of fact, of a very consummate politician in one of the G-7 countries who used to say to me, "Look, I am the guy who has an approval rating below its rate of inflation." So, fine, politicians know how to live with these kinds of realities and to do their job.

What worries me--and I think you properly touched on that--is this danger of complacency when the first results of a program--adopted, remember, only last March-- give the impression that the problems are over and that we can go back to business as usual.

Of course, in Brazil, it will not be business as usual, because the government has adopted significant measures of a structural nature which are there. And, of course, there are still more to come, and more considered in the program. But political leaders in Brazil should be attentive to what goes on.

And I was very impressed this summer that when indications were starting to be given that the budgetary stance might be relaxed somewhat, that there was less support in the congress for for the fiscal program, immediately the markets started to be nervous and financial conditions for Brazil started to deteriorate. So those kinds of indications translate immediately into a cost for the financing of the country and, indeed, a cost indirectly for the budget.

So Brazil is certainly not at the stage where complacency would be justified. Brazil must be satisfied by the remarkable turnaround created by this program, which was so difficult to assemble, but it's time for perseverance if Brazil is to stabilize itself, grow more rapidly, and start addressing its fundamental issues which are, as you know, of a social nature, basically the very bad distribution of resources in the country.

A QUESTIONER: Mr. Camdessus, you mentioned the mechanisms for the sale of gold and presumably the repurchase of gold. Can you tell us, first of all, what would be the amount generated by the sale that will go to finance the fund for the poorest countries? And it appears that the mechanism will produce some kind of liquidity crisis for IMF funds. How will you fund that lack of liquidity, by increasing the rate to apply to debtor countries or by decreasing the rate of the creditor countries?

And, finally, can you confirm that the central bank that is interested in the acquisition is the Mexican central bank?

MR. CAMDESSUS: Thank you very much. Briefly, first of all, I must tell you that we are in the midst of these negotiations. Hopefully a little bit more advanced than the midst of the negotiation--we are at the end of the negotiation--but the negotiation is still going on, and you know that the last phases of any negotiation are difficult ones. And so I urge you not to consider that the deals are closed. But we are within striking distance.

What we have proposed--we, management--is to sell 14 million ounces of gold or, to put that more properly, to have off-market transactions with 14 million ounces of gold which would allow us to utilize the capital gain which is embedded there to invest in the markets and, with the resources so generated, to provide the ESAF/HIPC trust with the needed resources.

We add to it--but for that we need the consent of each individual country--the resources accumulated in one of our reserve accounts, the SCA 2 account, which was a reserve created at the time we were fighting with the problem created by arrears to the IMF. We had at that time--it was the end of the 1980s--a special procedure created, the rights accumulation procedure, to try to reduce, and we did that dramatically, the number of countries with arrears to us. But as our member countries were not sure that we would succeed in doing that, they started accumulating reserves here in the Fund, paid at the same time by contributors and debtors, but these reserves are not necessary as we have been able to solve the problem. Now that these reserves are here, we are asking the countries to accept to give us this money to finance part of our contribution to HIPC.

It's true that by proceeding with this complex operation with gold we are creating a limited--very limited--problem of increased cost for the Fund, and that we must decide how we will face it. I have made proposals to the Executive Board, after consultation back and forth, which consists in having a slightly diminished rate of remuneration for the creditor countries in the Fund, and for the Fund to renounce the increase in its income put in reserve up to the amount corresponding to 4 million ounces of gold.

It's a complex financial compromise, but out of it you will see that the creditors will contribute more than, or in lieu of, the debtors.

Mexico is one of the potential buyers. We can have more, but they have accepted to do that. It is a purely instantaneous operation with no cost or risk for the interested central banks. But we need to discuss with central banks having important financial transactions with us because it is the occasion for making this deal.

A QUESTIONER: The IMF say, quite rightly, that India needs more rapid reforms. But at the same time, there also appears to be a problem in that in case India wants any IMF help--fortunately, it does not now--then you come under the U.S. sanctions. In other words, has the IMF begun to lose its independence under the charter to consider issues purely on economic matters, or do you feel that national governments have forgotten that and make the IMF and World Bank and other institutions more or less an annex of the State Department?

MR. CAMDESSUS: I really don't understand your point. And I don't see anything in the recent history of the IMF which could substantiate your allegation.

A QUESTIONER: Mr. Managing Director, earlier this week the Bank of Japan decided not to ease aggressively, saying that the foreign exchange rates themselves are not an aim of their monetary policy. Now, in the absence of a policy change on the part of the Bank of Japan, do you support G-7 countries' coordinated intervention to stop the yen's appreciation against the dollar? How large do you think is the possibility of the yen rising further and choking off the economic recovery in Japan without G-7 intervention?

MR. CAMDESSUS: You are putting a complex question which would require very detailed comments. I would suggest that you refer to what Mr. Mussa said yesterday in great detail when he responded to this point.

The world needs a solid recovery in Japan, as does Japan, of course. Recovery has started, with two consecutive quarters of positive growth.

Now what is needed in Japan is, indeed, to maintain this recovery and help it gain momentum. For that, no doubt, it is important that the government--and they intend to do it through a supplementary budget--maintain its fiscal impulse through public sector investment and spending. This is fine, and we support it until the moment the recovery will be really in place--then they will have to shift rapidly toward a more stringent budgetary stance in view, of course, of the demographic situation of your country. But this is only part of the story.

Another part of the story is the need to maintain a very accommodative monetary policy, something which is not that easy when interest rates are already at a zero rate, but it implies that the central bank continue providing the market with abundant liquidity.

And then comes the problem of the yen appreciation, which, particularly if it were to continue at the rate we had particularly a few weeks ago, could derail the recovery. As you know, the appreciation of the exchange rate contracts liquidity and tends to diminish internal demand.

Then what should be done? Of course, immediately you think about intervention, and preferably coordinated intervention. But here you should remember that the conventional wisdom in the international community is that intervention is a kind of last-resort instrument, and that the good thing in order to stabilize, to get stable and steady conditions of growth in Japan, is the proper liquidity of the economy.

So if intervention were needed--if this process of appreciation were to continue dangerously--then what should be considered is probably unsterilized intervention or intervention accompanied and preferably preceded by increased injection of liquidity into the economy. This is the picture. I tend to believe that too much importance has been attached, in the international debate, to this issue of intervention, which has been given prominence when the prominence should be elsewhere.

A QUESTIONER: I have two questions for you, Mr. Camdessus. The first is, if you could give a little bit more detail on the total size of the package you are trying to put together through the gold sale and the other aspects of the HIPC initiative.

The second question I'd like to ask you, which is slightly more fundamental, is this. The IMF is pushing very hard for the HIPC initiative to be brought to a conclusion, and it seems, you know, it reminds me a little bit of the sort of "Spirit of Dunkirk," that you congratulate yourself on a successful exit from what must, in the final analysis, be an indictment against previous policies. I have to ask you the question why have debts of this order been allowed to build up and proved so unsuccessful over the years in bringing the countries to whom the money was given into a better economic position?

MR. CAMDESSUS: Thank you very much.

First, the size of the package we are trying to put together corresponds to the share of the IMF in the overall strengthened HIPC initiative. The package is of the order of magnitude of 4 billion SDRs, and we are trying to finance the most important share of it, to take the language of the Lyon Summit, by optimization of the management of the IMF's reserves. At that time, you will remember possibly that to use even the concept of selling gold was taboo in several countries, and we had to fight hard to be able to refer to "selling gold." And, of course, all of that took time, but now you have these off-market transactions in gold which are an important part, but not the only one, of the almost 4 billion SDR package. I have given the details of it to your colleague.

Now, you are telling me, well, okay, you are satisfied. You are now ending these battles. But after all, you are only fighting a problem you had created through your bad loans, if I simplify a little bit what you have told us.

I would urge you to remember that our loans are the good loans there, the loans which have helped these countries progressively emerge out of the black hole where bad loans by others--be it irresponsible private bankers,or public agencies making loans to facilitate their own exports, for instance where countries did not really have priority needs--all of these bad loans have truly created an unbearable situation for these countries.

The problem had to be addressed, and somebody had to take the lead for this problem to be solved. We are proud in the IMF to have taken the lead for the HIPC, together with our friends of the World Bank. And now we are proud to do this job and hopefully to finalize this job to provide resources in a way which could really contribute to higher quality growth in these countries--namely, applying this money coming from the debt relief operation, not for any kind of spending in the country, but to increase human development investment.

MR. DAWSON: Thank you. And let us try to hold ourselves to one question, so we can get the maximum number of questioners.

A QUESTIONER: Argentina is definitely one of the countries that is not yet out of the woods. Could you please pinpoint what troubles you most in the Argentine political and economic situation these days. And also, please, there are now very substantial discrepancies between the IMF projections for growth in Argentina and the government's. What will you be recommending the Argentine government in terms of belt-tightening measures?

MR. CAMDESSUS: Well, we have a long story of working together with Argentina. I must tell you that Argentina was the first file I opened here when joining the IMF in, alas, a long time ago, January '87.

And then we went with them through all this agony, seeing them going to the depths of a black hole--another one--and then helping them to assemble the policies which have allowed a remarkable recovery of this country, which has allowed very substantial modernization of its structures, remarkable stabilization, and, indeed, the recovery of growth.

Now, due, in great part, to external factors, Argentina is in the depths of a severe recession. This has not helped to maintain fiscal performance at the level we would have preferred. But there are things you can do when the economy is in an upturn and things you cannot do when it is in a downturn. So there is, yes, an agenda for the new government. And to tell you the truth, we are talking not only with the present government, but with the contenders there in the political fight, so as not to lose one single week after the election to start talking about what should be done in a longer-term perspective to consolidate the recent--or not that recent, it's a story of almost ten years--achievements, to create a new economic basis in Argentina.

And I am confident that whoever is elected, this very trustful dialogue between your country and the IMF will continue.

A QUESTIONER: Next week is the deadline when Ecuador has to either reach a deal with its creditors or default on its Brady Bonds. Is the IMF encouraging Ecuador to default on Bradies, and if no deal is reached with creditors, what will that mean for IMF lending to Ecuador?

MR. CAMDESSUS: Well, we are certainly not--and we have been talking about that on many occasions--we are certainly not encouraging a country to default. We are encouraging Ecuador, as with all countries in a similar situation, to open a dialogue with its creditors to try to find a friendly and comprehensive solution to their problem.

This dialogue has started, and this grace period in which Ecuador is now has, I hope, been used to narrow the gap between Ecuador and its creditors, and we will see what finally is decided. What we are fighting for and what we are trying to support is a comprehensive solution to the problems of Ecuador. A comprehensive solution to the problems of Ecuador is, of course, a comprehensive solution to its debt problem.

By that I understand a solution which embraces all forms of credits which have been granted to this country and, indeed, a solution respecting the need for sustainability. Because it wouldn't make sense to agree on something now which wouldn't be ratified in the future, which would be out of line with the resources of the country. So we are trying to work to this end. Comprehensiveness means also that Ecuador continues restructuring its banking sector, continues to restructure its financial basis, its tax system, and this is what we are trying to support through the standby arrangement on which we have already an agreement, but which is, of course, conditioned by a set of prior actions involving, in particular, this strengthening of its banking structures and of its financial basis.

We are supporting any form of mature, constructive, friendly dialogue with the private sector, and we will continue doing that.

A QUESTIONER: The zero growth in Latin America this year, on the one hand, and then the fact that our country Colombia, which was an example during the last 18 years during the crisis, now needs help from the International Monetary Fund. What does that tell you? Have we failed somewhere? What is happening during these negotiations, where we have the impression, as we Colombians look at it, that things have been delayed and that there have been obstacles on the road? What can you tell us about that?

MR. CAMDESSUS [Interpreted from Spanish]: You are asking two questions--one on Latin America in general and the business of the zero growth rate, and the second question has to do with Colombia, and I suppose you are more interested in Colombia, specifically. So let me focus on Colombia.

It is true, and I greet and welcome the prudent macroeconomic management and financial management in Colombia for years and years in the past, and it has really been truly exceptional to see that Colombia, during the debt crisis of the '80s, did not need any special type of support. Colombia has continued to handle things reasonably well. But when the other countries in the region have started to handle things in a better way, Colombia, which had been ahead in its macroeconomic controls, found itself lagging behind. For years and years, the inflation rate in Colombia was between 20 and 30 percent, which was low, when others had rates of 100 percent. But when others got their rates below 10 percent, then Colombia appeared to be a weakened country compared to the others.

Colombia, and we all regret it, has these gigantic difficulties of security, terrorism and, of course, drug trafficking, which is a problem it shares with others. I admire President Pastrana's efforts in attacking these problems in a decisive way. You know perfectly well, because I have said this publicly in Colombia myself, what would be the main elements of a medium-term program to really get Colombia to get over its current difficulties and what structural changes would be needed right away.

Much progress--we've moved ahead considerably in our discussions with your country. In our negotiations, we have had a very competent, a very determined team, and we're really very close to achieving an agreement in the next few days which would supplement agreements that are being negotiated with the World Bank and with the IDB and would bolster them.

We would come in with significant financing to show that Colombia can really count on our support.

A QUESTIONER: Could you respond, particularly following the remarks by the President of the World Bank to the criticisms by Mr. Stiglitz of the IMF strategy in tackling problems around the world, could you particularly comment on your attitude to his suggestion that the IMF's responses to crises have been flawed, in that they have pursued the so-called "Washington consensus," that they perhaps apply an economic orthodoxy with some preconceived notions of a dogmatic kind about the sort of solutions that should be favored and do you see any prospect--

MR. CAMDESSUS: Wait a minute. I will tell you, because this is almost a kind of point of order. There is a saying in my country which goes "Ne tirez jamais sur l'ambulance: "Never shoot at the ambulance." I see that my friend, Mr. Stiglitz, has problems with his boss. I will not add to his problems.

A QUESTIONER: Could you say whether you see any prospect of change in that approach?

MR. DAWSON: No, next question.

A QUESTIONER: I am the U.S. correspondent for the Vatican Radio, and the question is about the amount of the debt reduction. There are some personalities, some countries, some scholars that are asking for not just a reduction of the debt, but of a total cancellation. I would like to know if you think that it is possible to go in this direction.

MR. CAMDESSUS: I don't want to go into the details of something which will be explained in great detail after the joint meeting of the Interim Committee and Development Committee, and the meeting of the Development Committee, during the next weekend or, I should say, next Monday.

You know already that the purpose--starting from the HIPC, which is seen as a very successful experience--the purpose is to broaden it to a larger number of countries; the purpose is to speed up the disbursement of the relief which is granted; the purpose is to make sure that the relief so granted to the countries applies to the best spending, in terms of human development. This is what we are focusing on.

Of course, it has a cost. It will more than double the cost of the facility for our institutions and for the creditor countries. But it is a good thing to do provided the money, which will be freed in that way, goes to social spending--education and health, in particular. And we, in the Fund, in order to be able to be even more focused on that direction, we are transforming the facility we have been utilizing for these purposes, the old ESAF, to adapt it much better to these purposes. This is what I can tell you today, and I tell you with a great degree of hope, because this can really make a difference provided countries, the interested countries, are ready to fulfill the conditions for their economic policies to fit with what the international community sees as the requirements for high-quality growth. This will not be time for them to relax and to wait for things to fall from heaven, and I tell you because you have the keys of Heaven, no?, in the Vatican.

[Laughter.]

MR. CAMDESSUS: But the change must come from the hard efforts of the people we are supporting. And the old principle of the IMF--namely, that the stronger the efforts of the countries, the stronger the effort of the international community--should particularly apply in these cases.

A QUESTIONER: Do you expect some new medium-term agreement between the IMF and Bulgaria?

MR. CAMDESSUS: Well, we are continuing working successfully with Bulgaria, as you know. A lot has been changed. Stabilization is really taking hold. Structural changes have continued and are being implemented. But a lot remains to be done.

The Bulgarian people will decide what they want with us. We can continue only monitoring their efforts through the surveillance we extend to all our members. We can also continue giving them, on top of that, technical assistance, which we are doing particularly in the domain of financial restructuring. We can also continue with our financing, be it on a precautionary basis or a more operational basis.

This will be discussed with the government when this agreement comes to an end. And I can tell you that our conversations are friendly and constructive, and I don't see major difficulty on the horizon.

A QUESTIONER: I would request you to throw some light on the present policy of IMF towards lending to Pakistan.

MR. CAMDESSUS: Well, as you know, we have a program with Pakistan, subject, as all our programs are, to periodic reviews. In each of the reviews, we must check if Pakistan has fulfilled the conditions Pakistan has pledged, as we do with all countries.

In the case of your country, we are in this dialogue, and there are difficulties with a few conditions. This is why the disbursement which was expected has been somewhat delayed. We continue talking with them. I will see the authorities on the occasion of next week's meetings. We will see if we can clarify things and continue extending to Pakistan the support it needs.

MR. DAWSON: We only have about five more minutes, as promised.

A QUESTIONER: [Interpreted from Spanish] Yesterday, Mr. Mussa said that you were about to sign a new agreement with Argentina, a 3-year agreement. What would be the terms for the signing of the agreement? And secondly, you told my colleague from La Nacion that the Fund in Argentina could not waste even a week. Does that mean that Argentina must now make adjustments on a shock basis, now quickly before the end of the year to do this?

MR. CAMDESSUS [Interpreted from Spanish]: I may have misspoken when I said that. I said that we were willing to start working with the new team the week after the elections. I said that merely to show how committed we are to continue our work. But I am sure they will be quite busy the week following the elections to do that, celebrating perhaps. So maybe it will take somewhat longer. But we will be ready to begin, and we will waste no time in doing that.

What the terms and conditions will be, well, you know that with a Fund program, the Fund does not set the conditions. It is part of a dialogue with the country, and the country and the Fund will have to identify the conditions that we both consider are necessary for the program.

But it is like dancing a tango in your country. It takes two to tango.

A QUESTIONER: I have two questions. The first is: What will be the outcome of this Annual Meeting in the case of Russia?

The second question is: What is your experience with the cooperation with the ECB?

MR. DAWSON: I think we're limited to one question. Would you like to pick which one?

A QUESTIONER: Russia and ECB.

[Laughter.]

MR. DAWSON: No, no. Just one. Unless you can link the two within the next ten seconds.

MR. CAMDESSUS: I will link the two.

MR. DAWSON: I'm overruled.

MR. CAMDESSUS: ECB, tres bien, merci. Fine, okay, thank you.

Russia. Russia is one of the 182 countries which will be there. Russia for the Fund at this moment is a program which works. Of course, a program which has a very important component for us, which is, inter alia, to make the financial integrity of the central financial institutions of Russia unquestionable. It is important to do that in view of all the campaigns and all the allegations, many of them totally unjustified, which have flourished recently. We will discuss that with the authorities, but remember that for us Russia is a program which has worked and on which Russia, for the time being, is overperforming.

Of course, we are extremely attentive to any indications we could have that things have not been okay, that money of the IMF could have been involved in all these transactions which are now under judicial scrutiny. The only thing I can tell you on that at this very minute is that nothing has been discovered to justify these allegations.

MR. DAWSON: Thank you. One last question.

A QUESTIONER: I wanted to ask you, Mr. Camdessus, about the current status of the suspended mission to Jakarta. Whether a decision is going to be made on that. And what exactly is it dependent on? Are you now waiting for the PriceWaterhouse report before you actually make a decision on the Bank Bali case? Or are there other factors? And when will the decision be made?

MR. CAMDESSUS: Well, Jakarta, East Timor, here we have in reality two problems, very serious indeed: one being the corruption problem which has been discovered in the Bank Bali and for which we have asked investigations to be speeded up and the results of the investigations to be published as a condition for us to continue with our disbursements; and, second, we have had the very tragic developments in East Timor which have indeed created, as you know, this formidable rejection, protestation, of the international community, which has led all bilateral donors to suspend their contributions.

We in the IMF, even if we have our own programs, our own programs can only make sense when they play their catalytic role. It means that money from the IMF cannot be disbursed in isolation when all the others suspend their own contribution.

I hope that what we see now in East Timor, with the blue helmets there and Australia in the lead, with a more acceptable situation being progressively re-established--I understand that this morning or yesterday the state of siege has been suspended--the normalization there will certainly be a very important factor for the international community to start its own disbursement, then allowing our own disbursement.

But even if this is the case, the case of Bank Bali is an important development, and we hope that the authorities will soon release these documents in order to allow us to continue with our work.

But let me tell you that we take these decisions with a great degree of concern because, after having done all that we have done to help this country out of a black hole, we are quite impatient to be able to continue and to restart--with our support, our cooperation--and finalize what has been started in a really impressive manner.

MR. DAWSON: Thank you very much. If I may note, we are lifting the embargo, since the Website was broadcasting with a shorter lag, all in the interest of transparency.

Thank you.

[Whereupon, at 10:03 a.m., the press conference was concluded.]