Transcript

Transcript of IMF Press Briefing

February 7, 2019

MR. RICE: Good morning, everyone and welcome this briefing on behalf of the International Monetary Fund. I'm Gerry Rice of the Communication Department. And, as usual this morning, this briefing will be embargoed until 10:30 a.m. That's Washington time. Also, as usual, I'll make a few announcements regarding schedule, travel of senior management here at The Fund, and then I'll turn to my colleagues in the room and take some questions online as well.

So this weekend the Managing Director the IMF, Christine Lagarde, will be in Dubai to participate in the annual World Government Summit. And then on Saturday of this weekend, February the 9th, she will deliver a keynote speech at the Arab Fiscal Forum, as well as a number of bilateral meetings. And we will be able to get those remarks to you in good time.

Then the Managing Director moves on to Germany next week for the Munich Security Conference, as well as the Munich European Conference going on the same time. And there she will give the keynote speech on Thursday the 14th, and will also take part in discussions throughout the conference, including a panel and so on. That's all going to be broadcast and live webcast, and we can give you information on that if you'd like it.

And then let me just mention our Deputy Managing Director Tao Zhang will visit the Caribbean, Dominica and Grenada in particular between February the 11th and the 15th, and Mr. Zhang will be visiting areas affected by the hurricane and looking at the progress made in the wake of that natural disaster, and meet with high-level officials and so on.

Finally, let me just mention that our director for the Middle East and Central Asia Department Jihad Azour will launch a departmental paper on the topic of financial inclusion for small and medium sized enterprises in the Middle East and Central Asia on February the 12th. And he'll be doing that at the American University in Cairo. That's an open event. Again, and we can get you more detail on that.

It seems very early to say this, but press registration for the Spring Meetings is open. So it's on IMF.org. It's on the website, and you're welcome to register. We look forward to seeing you there. Let me take any questions. Good morning.

QUESTIONER: Morning, Gerry. On Venezuela has the IMF had any contact with the interim acting president Guaido? And, also, is the IMF designing or have any design of a program for future assistance to Venezuela in the case it's asked for?

MR. RICE: Look, Venezuela's much in the news. I'm wondering are there any other questions on Venezuela and I'll take them? And, you know, if there's any follow up I'll take that too.

QUESTIONER: Thank you. I was curious if you could talk about what type of pools the IMF has available that it would be able to use in the case of the situation in, like, Venezuela. I mean, I understand there's some procedural things that need to happen before any sort of program could actually begin, but I wondered if you could discuss the options that would be available in a situation like this, and maybe some information about their scale and what types of partnerships would be needed for them to happen.

MR. RICE: Okay. Good morning.

QUESTIONER: Good morning. Thank you very much. and I would like to know whether the IMF already has had talks, conversations with the Central Bank since January 23? I understand those talks stopped last year when they delivered date. Also wanted to know how many IMF member states have already recognized Guaido and whether that's -- that number is what the legal affairs office, department of the IMF needs to make a decision on whether the organization recognizes Guaido or not? Thank you.

MR. RICE: Okay. Let me take that collection of questions, and as I said, if there are follow ups we can do that too.

So maybe just stepping back a bit. Our First Deputy Managing Director David Lipton made some statements a few days ago on Venezuela where he stressed, as we have been stressing in the past the, you know, first and foremost the devastating humanitarian and economic crisis that is facing Venezuela. We see the reports of widespread food and medicine shortages, and worsening health and social conditions. Our director for the Western Hemisphere Department gave a briefing a short time ago where he also pointed to growth projected to contract further this year in 2019, bringing the cumulative decline since 2013 to over 50 percent.

There's hyperinflation and outward migration, and we are anticipating that those will intensify in 2019 as well, unfortunately. We have not had a policy dialogue. By that I mean the annual Article IV surveillance that we conduct with virtually all of our member countries each year. We have not had that with Venezuela or with the Venezuelan authorities for quite some time. In fact, since 2004 we have not had an Article IV. We've not had the opportunity for that kind of policy dialogue.

So, against that bit of background, our work has been focused on following the situation as closely as we can, and again, in light of this lack of dialogue. And more recently, as we have said, our focus has been on the issue of official date provision by the authorities. We've talked about that here in past weeks.

So let me turn more directly to some of your questions. So regarding the issue of official government recognition our position has not changed from what we said a few weeks ago. We're following the situation in Venezuela closely and as in all such cases the international community guides official recognition, and we will be guided by that. So that really is the first step in terms of, you know, the IMF position on Venezuela would be the establishment of the guidance on official recognize where we rely on our membership, on the international community. And before any other action could be taken by the IMF that step would need to be taken. So in terms of the sequencing that's the way it would work. And we're still in that process of consultation with the membership.

There was a question about -- so that kind of answers the question about, you know, possible design of a program or assistance. There are, clearly, a number of tools, financial instruments, technical assistance, analysis, and so on that the IMF uses, can use with our member countries. But it would be premature to, you know, begin to talk about any specifics because again, we are following the guidance of the international community and that would need to be established.

In terms of our -- so I think, you know, that also I hope answers the recognition issue.

In terms of our contacts, our contacts with the Venezuelan authorities have been on recently as I have mentioned here before, have been solely on this issue of data provision which we have talked about before. The IMF has been looking for more updated data from Venezuela over the past several years and the most recent discussions have been focused on that issue.

And in terms of our, you know, discussions with others, you know, in every country we have discussions with various stakeholders, with a broad group of stakeholders and, you know, we have tried as much as we can, given the constraints which I have just described in Venezuela. We have attempted to do that as well over the past years as part of our work to try and better understand the economic situation in the country.

But as I say this is pretty much in line with what we do across our membership. So that’s where we are on Venezuela. Are there any follow ups on that?

QUESTIONER: Yes. But what I want conversations with new government, Guaido's government. We are not talking about a civil society, we are talking about the new government that was confirmed, proclaimed on the 23rd of January. So has there been any conversation with widely when he was here in December or with some of their envoys here like (inaudible)? MR. RICE: You know, I'm not aware of any specific discussions with the IMF. But again, in every country we have -- we try to have a dialogue with a broad array of stakeholders and, you know, we have attempted to do that in the case of Venezuela as well in as much as we were able to. And, I mean, over the past several year is what I'm talking about, you know, we try to have a dialogue with board group of stakeholders. But on you specific question, I'm not aware of the -- any discussion there.

QUESTIONER: And the --

MR. RICE: Let me just take one more on -- are you on Venezuela as well?

QUESTIONER: Yes.

MR. RICE: Let me take one more on Venezuela.

QUESTIONER: You said that contacts with central bank have been solely on the issue of data provision. Has that contacts have taken place after January 23?

MR. RICE: Yes, I don’t have a, you know, I don't have a specific date on it but the -- sorry. The dialogue that we have -- we have been having with the Venezuelans was the Venezuelan authorities was on that issue of data.

QUESTIONER: But that was last year. There was, has there been dialogue this year at all? No contact with the Venezuelan authorities this year?

MR. RICE: I am not, I'm not aware of any contact. I'm not aware.

QUESTIONER: I know they put a board meeting.

MR. RICE: I don't have any timeline on a board meeting, no.

QUESTIONER: Thanks.

MR. RICE: You know, on the board, just the way the IMF works, we regularly update our board and keep our board informed of relevant issues, relevant country cases, so, you know, there are briefings that take place. But I think you're asking about a specific board date where there would be a discussion and a decision regarding official recognition. And --

QUESTIONER: Do you have a date for that?

MR. RICE: Oh, okay. Well, I'm glad we clarified that. No, I don't have a date for that. It, you know, it relates to what I said earlier about clearly the fluidity of the situation and the issue of recognition. Until these things are clarified, it would be difficult to have a date for discussion of the data issue. So I'm glad we clarified that.

QUESTIONER: Thanks.

MR. RICE: Good morning.

QUESTIONER: Good morning. I have a question on Argentina. And, Gerry, there is an ongoing litigation here regarding the state owned oil company YPF and the attorney general for the treasury met with some IMF officials. I wanted to ask you what are the chances that the IMF supports Argentina in this litigation before the Supreme Court presented an Amicus brief.

MR. RICE: Yes, you know, I don’t have anything specific on that. You know, we meet including our legal department meets with representatives of member countries on a regular bases but I don't have any guidance on for you on this specific issue.

QUESTIONER: Can you perhaps comment on -- can you perhaps comment what are the regular conditions under which the IMF would, you know, express its opinion on litigation involving one of its member states here in the U.S.?

MR. RICE: You know, it really, it varies and very much depends on the country and the case, the circumstances. So I wouldn't want to generalize but, you know, you're asking about a fairly technical issue and maybe what I can do is arrange that I would have someone from the legal department maybe brief you a bit on those technicalities. But again, I would think it's very much case by case and depending on the issue but let us try and help you afterwards. I understand it's an important question. Good morning.

QUESTIONER: Good morning, Gerry. On Argentina too. And regarding the next mission, IMF technician Cardarelli team. I wanted to know if they're planning on meeting with opposition leaders taking into account the concerns about the future of the program with Argentina.

MR. RICE: Yes --

QUESTIONER: After the elections I mean.

MR. RICE: So I want to confirm that yes, Roberto Cardarelli and the IMF staff team will be in Buenos Ares February, on February the 11th for the discussion of the third review of Argentina's economic plan and the support being provided by the IMF. There will be -- there will, you know, it relates a bit to what I said earlier.

You know, we try to meet with the broad range of stakeholders so I don’t, you know, I don’t know, I don't have the specific whether there will be meeting with opposition leaders or representatives but we do try to meet with a board range of stakeholders in every country, government fiscals as well as private sector academia, civil society and, you know, sometimes the opposition as well. But I don't have a specific meeting or representatives in mind.

I mean, what has happened since we last met here is of course that Christine Lagarde met with Minister Dujovne and with Central Bank Governor Sandleris and David Lipton also, the first deputy managing director for that matter. I think, you know, we issued a statement a couple of weeks ago on that. And then we have the mission upcoming. In her statement after her meeting with the minister and the governor, Madame Lagarde emphasized that the implementation so far of the program have served Argentina well and we think that continued implementation will enhance the economies, Argentine economies resilience to shocks and preserve a macroeconomic stability and bolster growth.

So there will be an update on that assessment after the Cardarelli mission, the Cardarelli visit to Argentina. We will communicate again in terms of an updated assessment of where we think the Argentina program stands. Good morning.

QUESTIONER: Good morning, thank you. So my question is about Ukraine. As we know, Ukraine, the Ukrainians are preparing for the presidential and parliamentary elections and we also have a program from the IMF but some candidates and parties argue there is an ability of cooperation between Ukraine and the IMF.

MR. RICE: I’m sorry, I didn’t catch -- there is some -- I didn’t catch the word, that’s all.

QUESTIONER: Candidates and parties in Ukraine --

MR. RICE: Yes.

QUESTIONER: Who are participating in the elections.

MR. RICE: Yes.

QUESTIONER: They argue there is an ability of cooperation between Ukraine and the IMF.

In particular, they speculate that the Ukrainians need to pay more for gas, that the external debt of Ukraine is constantly increasing because of IMF programs, so the question is do you have any concerns of that -- any explanation for the Ukrainian people?

And what is the real goal of your cooperation with Ukraine?

MR. RICE: Okay, I don’t really have news for you in terms of the Fund’s cooperation with Ukraine because it’s been ongoing now for some years, as I am sure -- I know you know.

I mean where we stand is that in December, the IMF approved a new standby arrangement for Ukraine. There has been a disbursement under that arrangement already. Then, again, Madame Lagarde and David Lipton met with President Poroshenko a few weeks ago when they were in Davos and we issued a statement after that meeting where we again reiterated our support for Ukraine along with other international partners and just looking at what she said, she highlighted the urgency to continue to accelerate reform and the bottom line, in terms of our cooperation is to get Ukraine on the path of sustainable growth and improve people’s living standards.

I mean that’s the bottom line. That’s the aim of the cooperation.

So that’s the mode that we are in. We are actively supporting Ukraine and its economic program and we are in regular touch with our counterparts on the Ukrainian side but as I said, I don’t have really much more news on that.

QUESTIONER: But do you have any concerns regarding the rhetoric of political -- of politicians which want to be a new government in Ukraine? That they say there is no necessity to cooperate with the IMF.

Do you have any concerns and --

MR. RICE: You know, I’ve said here before many times, we don’t do politics, we do the economics so our focus is -- and this is true for all countries, our focus is on what is in the best interest of the country’s economy and to benefit the people of that country so we work with all complexions of government and political systems and we try to stay focused on the economics.

QUESTIONER: Thank you. I have a question about the Greek banks Top government officials in Greece like the Vice President of Greece, Mr. Dragasakis, warned about the seriousness of the issue of the non-performing loans and they support that a new bank recapitalization may be needed.

I want to know, do you believe that the Greek banks will need a new support?

This is the first question.

And the second question, are you worried that Greece has fiscal consolidation could be (inaudible) by a wide range of state support of the Greek banks?

Thank you very much.

MR. RICE: Thank you, Michael.

Look, we issued a statement on Greece just a few days ago.

So the context of that was -- Michael knows this but others may not but we are now in a post-program monitoring mode with Greece.

The IMF does not have a program with Greece and in fact we haven’t had a financial program with Greece since 2014 but we don’t have a program with Greece so we are in this post-program -- what we call post-program monitoring mode whereby we visit the country from time to time and discuss with the authorities the various issues and try to be helpful.

So we had one of those missions just recently, led by our mission chief, Peter Dolman, and we issued a statement after that.

So that was just a very short time ago.

What happens then is the board will discuss that report.

That’s going to happen in early March and then we will publish the whole -- so we will publish the concluding statement and we will publish the whole staff report later, as we always do.

So I say all that, because I don’t have much to add to what we said in the staff concluding statement. That we actually see growth accelerating further this year in Greece.

We project 2.4 percent and we said that but we said that we also see sometimes that side risks have intensified and that included fiscal risks as you asked about and I see we have a paragraph on the fiscal issue in the concluding statement so I’ll just refer you to that because I don’t have that --

I don’t have an update on it.

So, I am referring you to that statement, also, Michael, on the question of banks because I am seeing what we said in that statement is that restoring growth enhancing bank lending will require swift, comprehensive, and well-coordinated actions to help prepare balance sheets and went on to say, and this is the question you asked about, coordinated steps by key stakeholders are needed to support bank’s efforts to achieve a faster reduction of non-performing loans so I don’t have an update on that beyond what we said just a few days ago.

Is there anything else in the room? Or I’ll turn to things online.

Then let me take a few calls from this -- there is one on Zimbabwe asking about -- what is our comment on reports that Zimbabwe has cleared its arrears with the IMF but the country still owes, he says 687 million to the African Development Bank, 1.4 billion to the World Bank, 322 million to the European investment bank and on recent developments including the crackdowns in the country.

We have talked quite a bit about Zimbabwe here in the past but just to answer the question, it’s -- I can confirm that -- and I’ve said it before here, that Zimbabwe has cleared, indeed, its arrears to the IMF but arrears remain outstanding to other multilateral creditors, including the World Bank and that severely limits Zimbabwe’s access to international financial support -- Zimbabwe has no arrears to the IMF. Our rules preclude lending given the arrears to other financial institutions.

And on the crackdown he asks about, I don't have too much to add beyond what I said here before, which is that we encourage all stakeholders to collaborate peacefully -- and I think that's the word I would want to stress, is the "peacefully" -- and, you know, try to develop policies that will stabilize the economy and promote sustainable and inclusive growth. It's clearly a very difficult situation there in Zimbabwe and we recognize that.

There is one other -- a couple of other questions on line I'll take. One is on Barbados where, again, Matthew Lee is asking the former co-chair of Jamaica's EPOC, Richard Byles, has said the circumstances which forced Jamaica to turn to the IMF were very similar to those currently faced by Barbados, very high debt levels, low foreign reserve. Any IMF comment, has Barbados reached out to the IMF, the answer is clearly yes because last October our Board approved a program, a financial program for Barbados under our extended fund facility, one of those instruments that we can use when countries are in difficulty. So just confirming that.

There is a question also about just the status of Jordan, where we are, to which I can say an IMF team is just finishing up a visit to Jordan led by our mission chief, Martin Cerisola, conducting the second review there under the reform program that we are -- Jordan's reform program that the IMF is supporting. I expect that mission to conclude today actually and we will communicate that.

I'm going to take a last question on line and it's from our colleague who is usually here, he apologizes for watching remotely, but he says that -- that's perfectly okay, We're happy to have you. He says I'd be grateful for any comment you have on the fed's new he says patient policy stance, to which I would say that we support the fed's recent policy decision to be patient in determining future changes to the federal funds rate. In our view the fed continues to adhere to the principles of data dependence and clear communication, which helps to minimize market disruption and spillovers from its policy decisions. So it can be fairly clear on that one.

That's it on line. Is there anything else in the room? I'll take Josh and Delphine and then we'll wrap.

QUESTIONER: I just wondered if you had anything to say about -- the United States has put forward its candidate to lead the IMF's sister institution and it's, you know, David Malpass, who the IMF has worked with for quite a few years. And just wondered if you had any thoughts about the relationship that you've had with him, that the IMF has had with him before and what you'd look to in the future with that relationship.

MR. RICE: As you'd expect me to say, this is clearly a World Bank process where the membership will decide on the next President of the institution.

What I would say, though, is that our collaboration with the Bank over history has been very strong and that we fully expect that collaboration to continue.

You get the last word.

QUESTIONER: Actually, I need a clarification on Venezuela.

MR. RICE: Okay.

QUESTIONER: When you say that the first step for IMF's position about recognition, do know what is the guidance -- sorry -- can you hear me -- yes -- you need to get guidance for your members. So what does it mean exactly? Does it mean that you need a majority? Because if we follow what the countries are today, so you have the U.S., you have the EU, you have Brazil and other countries, so about 40 countries, so what are you waiting for exactly? The majority of your members?

MR. RICE: So what I think we're waiting for -- I mean as we see on almost daily basis, and you've just referred to it, I think countries are still establishing their position in terms of recognition. So that process is ongoing. So, as I said, we are watching that closely and we will be guided by the membership once we feel and they feel that there's an established view with which they could guide us. So I think we're just watching it very closely at this point.

I'm going to leave it there. I want to thank you for coming and I will see you in two weeks' time.

Thanks very much.