Transcript

Transcript of IMF Press Briefing

May 23, 2019

MR. RICE:  Well, good morning, everyone and welcome to this press briefing on behalf of the International Monetary Fund.  I am Gerry Rice of the Communication Department.  As usual this morning, our briefing will be embargoed until 10:30 a.m., that's Washington time. 

I'm going to make just a few brief announcements, then we will come to our colleagues in the room and take some questions online as usual where many are watching.  So, I will be brief with the announcements this morning.  Just a couple of things for your information, both related to Managing Director Christine Lagarde.

May 29 to 30, that's next week, the Managing Director will be in Mexico City where she will meet with President Lopez Obrador, finance minister, central bank governor and other government officials.  She will also make a major speech at the Mexican Senate. And on May 30 she will participate in a conference organized by the Women's Forum for the Economy and Society.  So that’s Madame Lagarde in Mexico next week.

And then following that, June 8 to 9, Madame Lagarde will be in Fukuoka, Japan to participate in this year's G-20 finance ministers and central bank governors meeting.

And in addition to that G-20 meeting, the Managing Director will deliver a major speech at the G-20 high level seminar on Financial Innovation, Our Future in the Digital Age and that will be on June 8.  And these major speeches that I've talked about will of course be open to you and to all media and we can get you that information.

So, Madame Lagarde in Mexico next week and then going on to the G-20 meeting shortly thereafter.  And around that G-20 meeting we will as usual have you for the G-20, what we call the G-20 surveillance note, our update on the global economy at that time and we will be sharing that with you in a timely way.

Okay.  Thank you very much for your patience.  Let's come into the room.  Good morning and welcome. 

QUESTIONER:  Good morning, thank you.  Gerry, may I start with the Ukraine?  There are a lot of talks or a lot of rumors and thank you very much for this opportunity to gather information from the first source. 

Yesterday, Ukrainian media reported according to some government officials that IMF mission is leaving the country.  I know that is not true so could you clarify the status of the mission?  Will it work two weeks in Kiev as it was planned? 

And secondly, I perfectly understand that you never comment on the ongoing talks, but could you tell about the key points for the Ukraine to continue the program?  Key reforms, key changes for the new government and new administration. Thank you.

MR. RICE:  Yes.  Thank you for your question.  What I can -- well, maybe just to step back a little bit for those who don’t follow Ukraine just as closely as you do.  Just a little bit of context. 

So, it was in December last year the IMF via our executive board approved the 14 month standby arrangement for Ukraine which amounts to U.S. 3.9 billion and we had 1.4 billion of that disbursed  following board approval. 

So, coming to your question, the mission is currently in Kiev.  They're having constructive discussions with the authorities on recent developments and economic policies, and of course the new government is incoming.  And once the government has been formed, after the elections, we stand ready to reengage to discuss our further cooperation with

Ukraine.

When I was standing here a couple of weeks ago, I also gave some detail on Madame Lagarde had written to President Zelensky and I mentioned that the last time I was here to congratulate him on his election and to underscore that the IMF stands ready to help. 

And also, I mentioned at that time Madame Lagarde had had a telephone call also with outgoing President Poroshenko.  So, I don’t really have a further update beyond those items.  That’s where we stand today.  Are we still on Ukraine?

QUESTIONER:  Right.  Hello.  My name is Yaris Slovdogopaul.

MR. RICE:  Good morning. 

QUESTIONER: My question is on Ukraine as well.  As we know, the new president of Ukraine took some decision regarding the dissolution of the parliament and resignation of the Ukrainian government.  Could we talk that these decisions have a risk to stop the current standby program for Ukraine?

MR. RICE:  You know, I don't have much to add beyond what I have just said on Ukraine.  We don’t comment on, you know, political developments in any country so I won't comment on Ukraine. 

And again, just to say, reiterate, once the new government has been formed after the elections, we stand ready to reengage and to discuss our further cooperation with Ukraine.  As you know, the IMF has had a strong partnership with Ukraine in recent years and as I say, we will be reengaging to discuss that further cooperation post the elections. 

QUESTIONER:  Do we talk about the current program or the next program?

MR. RICE:  You know, I wouldn't want to speculate, just to say again that we will be -- we look forward to reengaging once the government, the new government is formed, and we stand ready to help.  Good morning, sir.  

QUESTIONER:  I wanted to ask you about India where the world's largest democratic exercise in human history has taken place, just concluded, counting of votes is going on. 

As per the official election commission of India as for the leads, Prime Minister Modi is on his way to be reelected with a much stronger mandate.  How do you see his reelection as and what should be his priorities, economic priorities from the IMF point of view?

MR. RICE:  You know, I think we I would like to say that the IMF looks forward to working with Prime Minister Modi's new government and I think it would be inappropriate given where we are on the election and it's, you know, just happening as we speak.  I think it would be inappropriate to get into details of, you know, what the new government should and should not do so I won't do that. 

But broadly, I can tell you that, you know, as far as the IMF is concerned, we think that the reforms and the future direction should continue to focus on achieving faster and importantly, more inclusive growth with low inflation. 

So that broad direction is, you know, what we are supporting but again, I don't think it would be appropriate today to talk about the more granular details of policies and so on.

QUESTIONER:  So, I'll come back to you tomorrow for an update.

MR. RICE:  I'm sorry.

QUESTIONER:  So I'll come back to you tomorrow.

MR. RICE:  I'll be here.

QUESTIONER:  When the results are announced.  Thank you.   

MR. RICE:  Next time I'm here, I'll heave a bit more to say. 

QUESTIONER:  Thank you.

MR. RICE:  Thank you very much.  Good morning.

QUESTIONER:  Morning, Jerry.  I wanted to know if the IMF has had any contact or is planning to have any contact with Alberto Fernandez, Cristina Kirchner’s candidate. And if you are willing to work with him in case he wins?

MR. RICE:  So far as I'm aware, there has not been any direct contact yet.  And, you know, it's kind of too early to say exactly when and how that might happen.  But let me say it wouldn't be unusual for that, you know, if such a meeting were to happen. 

As I think you know, the IMF staff mission has already met with several members of the opposition party in Argentina in part of the previous reviews of the program and part of a broader consultative agenda that included meetings with government officials, the Central Bank, civil society groups, the private sector, trade unions, and academia, all of that again, to say, it's really not an unusual thing for the IMF to have discussions with opposition parties, opposition leaders, that happens on a fairly frequent basis in many countries, not just Argentina.  But again, so far as I'm aware right now, that meeting has not taken place.

QUESTIONER:  And one more, if I may?

MR. RICE:  Of course.

QUESTIONER:  When can we expect to know the results of the fourth revision of the program?

MR. RICE:  So, again, just stepping back for a minute, for those who don’t follow; we had the IMF Staff Mission in Buenos Aires quite recently, from May 8th to the 17th.  This is in the context of the fourth review of our program supporting Argentina's reform plan, and the mission has returned from Buenos Aires, but the discussions with the authorities continue, and we have characterized the discussions as "important progress having been made", and there will be more details once that mission concludes.

To answer your question, I don’t have a date right now for you on the conclusion of that mission.  The discussions are ongoing, and so I don’t have the Board date either.  I think you know by now how the IMF works, so we have the Staff level discussions and agreements, and then, of course, as always, we go to our Board for the ultimate approval.  So, we will have that process in the period ahead, but I just don’t have the dates for you today.  Good morning.

QUESTIONER:  Good morning, we are hearing gloomy messages about the prospects of the Turkish economy giving that there is a real chance that the country will face U.S. economic sanctions for the purchase of the S400 system.  Are you concerned about Turkey and what do you anticipate will be the impact of those economic sanctions?

MR. RICE:  You know, what I'd say on Turkey is that we continue to monitor the economic situation there very closely, and as we've said before -- not a new statement, but to reiterate -- we recommend a comprehensive, clearly communicated policy package to secure macroeconomic and financial stability.  Let me add, and again, this is not new;I'm emphasizing, reiterating.  We've received no indication from the Turkish authorities that they are contemplating a request for financial assistance from the IMF, so the recommendations that I just talked about, they don’t come in that context; just to be very clear about that.  On the sanctions and so on, I wouldn’t want to speculate prematurely on the possible impact. 

Is there any follow-up in the room?  If not, I will give you the opportunity for another round in a second.  In the meantime, I'm going to go online because there are a number of questions popping up there.  So, let me take some of these.  I won't take all those questions but let me take a couple.

There’s a question, amongst other things, about Canada and, you know, we issued our Staff level statement, just a concluding statement on the Article 4 Mission, just yesterday, and the question is about the IMF's advice broadly to which I'd say -- oh, let me correct myself, the concluding statement was May 21st, it was in recent days, May 21st.  And, of course, as usual, we will be following up that statement with the Staff Report which will be published in June, and that will have a lot of detail.

Just to say on the back of the Staff Mission, and the concluding statement, which was quite detailed on May 21, we support the Canadian government's policies broadly.  We think they are on the right course.  We highlighted, in particular, the housing price risks, but again, we support the government's policies in alleviating these concerns and appreciating that they are taking the right steps.

So, for further detail on that, and our position on Canada, we will have that Staff Report with a lot of detail in June.

There is also a question about Barbados.  The IMF recently approved a program, a financial program, to support Barbados.  In particular, referring to Senator Crystal Drakes in Barbados saying that the Administration, the Mia Mottley Administration, may have hit benchmarks under the IMF's supported program, but is ignoring sustained cultural damage to society; to which I'd say that we believe that Barbados' economic reform and transformation plan, you know, was actually designed in close consultation with the social partners, that includes the unions who have actually formed a monitoring committee to oversee implementation, to ensure that the burden of adjustment, the burden of reform, is spread widely with the domestic financial sector making a major contribution with the domestic debt restructuring that was completed late last year.

In addition, the program in Barbados does have a floor on social spending, and the December and March targets for social spending, I can tell you, were met with a margin, actually with fairly ample margin.  All of which goes to say, underlines the importance that the Barbadian authorities attach to maintaining adequate social spending in the context of the program.  And I can say the IMF fully supports these measures.

I'll take one more question, about Republic of Congo, Congo Brazzaville, to which it's sometimes referred, and he's asking, what's the IMF's comment on a May 15th letter addressed to the Congolese President, which said that the advisors to the Republic of Congo wish to make you aware of the major risk of the program's rejection by the IMF's Board, and goes on to say that Congo has hired financial advisors, including a firm employing former Managing Director of the IMF, Dominique Strauss-Kahn, to assist in the negotiations.  Is this not a conflict of interest? 

So that was a fairly long question, but that was the thrust of the question, to which I'd just like to state the fact of the matter that discussions with the Republic of Congo in respect of possible Fund support for Congo, have been exclusively between Fund Staff and the authorities, no one else.  It's an important point.

Let me go on to say that -- so that’s on that conflict of interest point -- on the point about the views expressed in that letter to which he refers, they do not represent IMF views, is the first thing that I would say.  And a reminder, on May 9th, a few weeks ago, we reached a preliminary staff agreement with the Congolese authorities on the program, and again, discussions continue on the next steps required for us to take that to our Board for discussion, and a decision on approval. 

Several questions on Greece.  Let me take them.  One is from Mega Channel asking, "If Greek debt had been restructured in early 2010, do you think that the tremendous loss of the 25 percent of GDP could have been avoided?”.

Well, let me take that.  You know, I wouldn't want to relitigate the history of the Greek crisis over the last going on nine years, eight, nine years.  We've had, you know, plenty of communication and analysis of the program, including rigorous post program evaluation reports, reports from our independent evaluation office.  All of which we published, all of which have touched on the issue of Greek debt and many other issues.

On Greek debt of course, I think it's fairly well recognized that the IMF was in the forefront of calling for strong debt relief for Greece, and we were very public in our support for that.  And of course a substantial measure of debt relief was agreed for Greece, and of course we continue to support Greece, we continue to have a good relationship with Greece, though no financial programs with Greece from the IMF now, and there hasn’t been for some time.

But we are of course continuing with staff missions, continuing with the post program monitoring, as we call it, and we've recognized the economic progress made by Greece.  And the credit there goes to the Greek Government, and to the Greek people.  And, you know, we like to think that the IMF has been a contributor to that, has helped Greece to get to the better position, better economic position that it's in today.

The second question on Greece it says that: "You published a document yesterday, emphasizing the importance of communication in economic policy, and so how would you respond to the criticism the IMF tried to hide its policy mistakes in Greece, through communication?"

You know, I don't agree, I don't agree with that, with all due respect, with that characterization.  I think if you, again, look over the past eight to nine years, the IMF has communicated quite openly, transparently, vigorously on various aspects of the support that we were providing to Greece and on the Greek situation.  So, I think that's fairly, again, fairly well recognized. 

The document to which the question refers is actually what we call here in the IMF a Departmental Paper, so it's not Fund, official Fund policy, or anything like that.  But it's an interesting paper that talks about the importance, the growing importance of communication being used as a policy too.

Is there anything else in the room?  Yes, sir.

QUESTIONER:  Just to ask you a follow-up on the Pakistan thing.  Can you given a further update on what you issued recently?

MR. RICE:  On Pakistan, there have been major developments recently of course.  In fact, since I was last standing here, we've had the agreement of staff level -- at staff level with the IMF on a $6-billion three-year extended Fund facility, that's an IMF program, to support Pakistan's economic reform efforts.

So that happened on May the 12^th.  Just prior to that, Managing Director, Christine Lagarde, had met with Prime Minister Khan.  And you know, we issued a fairly -- you know, I'm just looking at it -- we issued a fairly detailed statement at the end of that staff visit.

Ernesto Ramirez Rigo is the Mission Chief, and Ernesto issued a comprehensive statement.  I would refer you to that, I won't get into the detail.

But the program is aimed at improving Pakistan's public finances, reducing public debt and, you know, helping Pakistan get back on the path to a sustainable, more inclusive growth, and so on.

We hope that the program can also create fiscal space for a substantial increase in social spending, to strengthen social protection, as well as infrastructure and other human capital development.

That's an update on Pakistan.  Will that do for you? 

Good. 

Look, unless there's anything else, I'll let you go.  We have a long holiday weekend coming up here in the United States, for those of you who are here, and going to enjoy that.  I wish you well.  And to our other colleagues online, we'll see you -- we'll see you in a couple of weeks. 

Thanks for joining us today.