Transcript

Transcript of IMF Press Briefing

September 10, 2020

MR. RICE: Good morning, I’m Gerry Rice of the Communication Department and as usual, this briefing will be embargoed until 10:30 a.m. That’s Washington time. I want to begin by just wishing everyone well. I Hope everyone’s taking care and staying safe in these difficult times.

Starting today, we are accepting video questions via WebEx, so journalists can ask in real time. So a little bit of an enhancement to our technology here over the summer. So please raise your hand virtually (laughter) or use the chat function when you have a question and we will try and make sure it gets taken. The link, you can find on the IMF Press Center and instructions will pop up for you when -- when you log on. We’re also taking questions online, written questions as always. I’ve got a couple of those to start with and give you some time to log on onto and into the WebEx.

Okay, before turning to your questions and since we’ve had a little bit of a recess here over the summer, the IMF’s executive board was in recess for a couple of weeks, and we haven’t had a press briefing in -- in some time, so let me just update you very quickly on recent steps that the Fund has been taking including during the summer to help our membership address the COVID-19 crisis.

So a couple of things. As you know, who have been following the Fund, we have moved with unprecedented speed providing emergency financing to now 75 countries as of to date. With a total of over 30 billion dollars thus far. This includes assistance to 47 low-income countries totaling over 10 billion to those low-income countries. A reminder, this emergency financing from the IMF comes without traditional conditionality and the Fund’s financing is being used to support government spending, particularly with a focus on health sector and of course with the focus on helping to mitigate the pandemic.

Secondly, we have provided debt relief to all 29 of our poorest member countries who were eligible under the Catastrophe Containment and Relief Trust. That’s the CCRT, and that’s totaling over 250 million at this point. Our total lending commitments across the board stand at around 270 billion dollars with about one-third of that approved just since the end of March, so just in the last six months or so. And we have an additional 730 billion dollars in lending capacity that we could put to use potentially at the service of membership, so that takes us to that a trillion dollar number that you’ve probably heard us talk about before.

You can find much more information on IMF.org. Two places in particular that might be helpful, one is our so-called Policy Tracker, which describes government commitments, government steps, actions taken to help mitigate the crisis. I want to point also to the Lending Tracker, which actually details the IMF actions and lending under our emergency financing to help countries mitigate the crisis. An addition to that Lending Tracker over the summer has been that we now include commitments made by governments in the context of emergency financing from the IMF, to fight corruption and ensure good governance in terms of the emergency financing provided by the IMF. So you will find all these things on IMF.org.

Let me also point you to a couple of recent things that may be helpful. The Managing Director, Kristalina Georgieva, made a short but I think very useful speech on Tuesday at the UN Financing for Development, and I would refer you to that. Again, it’s very short, but it’s got useful information including on how we see the outlook, the global outlook at this point and on a number of other issues. Secondly, I will point you to something that was released just on Wednesday, yesterday, which is a short essay, again by Kristalina Georgieva, and by our Chief Economist, Gita Gopinath jointly authored by them. It appeared in Foreign Policy Magazine and it talks about how we see policies required to emerge effectively and for the benefit of all from the COVID crisis. So point you to those two things easily available online may be useful.

Finally then looking ahead, the Annual Meetings of the IMF and the World Bank are coming up fast. They will be held virtually this year, as had been previously announced, and that will be from October 12 to 18 and lots more information on the Annual Meetings on our website. For journalists, media looking to participate, please make sure you register on the IMF Press Center on our online Press Center.

You will hear more from Kristalina Georgieva on September 16. She will speak at an event hosted by the friends of Europe September 16. And on September 17, she will participate in the meeting of the G20 Finance and Health Ministers, and of course, that meeting will (inaudible) thorough actions being taken on the global pandemic.

So, with that, let me take just a couple of questions that have come in already, just a couple, and then I’ll turn to WebEx and we will test out this new technology. So, let me take the first question from AFP from Delphine Touitou and Delphine is asking can you give us a status update on Lebanon. Yesterday the Finance Minister said a forensic audit of the central bank has been launched as requested by the IMF. Given this development, any chance the discussions will resume with the IMF?

The first thing I want to say on Lebanon is of course is to reiterate our sympathies to the people of Lebanon in light of that dreadful explosion at the port some weeks ago. On the IMF and Lebanon, we stand ready to engage with the new government after its formation is completed and Kristalina Georgieva said recently we are ready to redouble our efforts to help Lebanon and the people of Lebanon overcome the social and economic crisis it faces.

In the meantime, getting to Delphine’s question, we’ve been in touch with the Lebanese authorities on some technical issues and we’ve offered technical assistance in areas that can help to face some of the challenges again following that terrible event at the port. And on the question of the audit, the Minister of Finance has recently signed the accounting, financial, and the forensic audits of the Central Bank as Delphine indicated. Our discussions have focused on the need for an accounting and financial audit of the Central Bank’s balance sheet, which will help assess its assets and liabilities and their underlying evaluations.

The audit will also help assess the impact of the Central Bank’s financing of government operations and the Central Bank’s financial engineering on its own at net worth. This is an important part of assessing past losses that are a part of the Central Bank’s balance sheet. So, that’s where we stand on Lebanon.

I’ll take one other question from Laura Gardner who is with Debtwire in London. Laura is asking about the Republic of the Congo. Has the government progressed in debt restructuring negotiations with the oil traders? Can we expect a first review of the extended credit facility from, that’s the program with fund with the IMF, and disbursement before the end of the year or this program essentially stalled? To which I can tell you, the Congo’s authorities and IMF staff are currently in discussions to update the micro economic framework to assist the authority’s request for a rapid credit facility and later the first review of the extended credit facility. So, the Congo’s authorities, in addition to the ongoing program with the IMF, have also requested emergency financing to help mitigate the pandemic. That’s the rapid credit facility. So, these discussions cover, amongst other things, questions related to debt sustainability and how fund emergency assistance could help the authorities to mitigate the effects of the COVID 19 crisis. At this stage, it’s too early to provide indication of possible timelines for the conclusion of these discussion. So, that’s the Republic of Congo.

Okay. Let’s try this technology. I want to turn to Lalit Jha. Lalit, are you there?

QUESTIONER: Yeah. I’m here. Good morning. Nice to see you.

MR. RICE: Good morning. Welcome.

QUESTIONER: Thank you for doing this through WebEx. This is helpful. I wanted to ask you about India’s economic situation. You know recently in the third quarter, India’s economy contracted, historiccally, for the first time that has happened. What is IMF take on what’s happening in India’s economy right now and are you in touch with Indian government officials who (inaudible) can go back to faster speed, faster growth rate which it was. Or, this is going to be a long term problem for the country. Thank you.

MR. RICE: Thank you. Yes, of course we are in close touch with the Indian authorities. Just, you know, taking your questions on -- one is our assessment. The preliminary GDP estimate for the 2020 second quarter performance in India came in weaker than expected at around minus 23.9 percent, that’s year on year, reflecting, of course, the severe impact of the pandemic and the ensuing lockdowns.

The contraction in economic activity reflected broad-based weaknesses in industries on services with construction, manufacturing, hotels, and transportation, sectors suffering the most. In our last WEO update, that's the World Economic Outlook, the IMF projected growth in India at minus 4.5 percent and 6 percent, respectively, for FY 20-21 and FY 21-22. And near-term growth outlook continues to be clouded by the global and domestic slowdown and uncertainties from the pandemic with significant downside risks.

Of course, this is true not just for India, but for most countries. We will be revising our growth projections for India and for many other countries in the next World Economic Outlook release which will come at the time of the Annual Meetings in October. So not too far away.

Clearly, the impact of the pandemic is significant in Indian on development and on poverty. Given the unprecedented shock, the immediate priority is a coordinated policy response to fight the virus. In that context, let me say we support the government's responses to the pandemic, including fiscal stimulus with a focus on low-income workers and households. We support the monetary easing and liquidity and regulatory measures for the financial sector for borrowers that have taken place. And maybe just to add, in this context, we believe further fiscal stimulus is warranted, especially expenditures on health, food, and income support for vulnerable households, and support for businesses.

Of course, moving ahead with that in the short term, a detailed, well-communicated and credible medium-term fiscal consolidation plan is also important alongside and increase in fiscal transparency. We think that would help boost market confidence, thereby helping to reduce the cost of borrowing, as well as help the economy overall.

I'm going to turn to Raphael Mathus. Raphael is normally one of our regulars here, and I guess Raphael has a question or some questions on Argentina. Raphael, are you there?

QUESTIONER: Yes. Hi, Gerry.

MR. RICE: Hi.

QUESTIONER: Very nice to hear you.

MR. RICE: Very nice to hear from you, Raphael.

QUESTIONER: It’s good to see you too. So, you know, there's supposed to be talk ongoing between the Argentine government and the IMF staff. Alberto Fernandez government, sent the new budget to discuss with the Congress. Has the Argentine government discussed the details of this budget with the staff, and could you provide us the detail on where we are exactly on the negotiations for the new program? Thanks.

MR. RICE: Yes. Thank you, Raphael. So the Argentine authorities sent a formal request for a new IMF supported program very recently. So we are in the initial stages of the process. In this phase, we're focused on, number one, listening to the Argentine authorities for their sense of priorities. We are fact finding by compiling more information on the current economic situation and establishing the modalities whereby we would work together.

And so all of this is taking place in what I would characterize as a very constructive climate. We look forward to continuing to engage with the Argentine authorities in the period ahead to discuss, again, their plans to strengthen macroeconomic stability, kickstart growth for job creation, and reduce poverty and unemployment. And, of course, to help Argentina fight to pandemic which is an additional serious challenge the country is facing.

On next step, an IMF mission and so on. Again, we're at the very initial stages of the process. At the moment, our discussions are taking place online. So I don't have a date or a time for a physical IMF visit to Argentina at this point. Likewise, on your question, Raphael, about the budget. We are in a preliminary stage of engaging, looking at the authorities' plans, listening to them.

But, of course, the authorities' fiscal plans would be and will be part of that dialogue. So we're looking forward to engaging further in the period ahead. And, again, I would characterize this as a very constructive climate for the discussions at this stage.

Let me see here. I have one question from Ariela Navarro who is also with AFP and she is asking about Ecuador. “I'd like to know if the board has a date to finalize Ecuador's program.” And on that Ariela, I can tell you that, well maybe just to step back for those who don't follow Ecuador so closely.

The Ecuadorian authorities and the IMF have reached what we call a staff level agreement to support Ecuador's economic policies. And that's going to be around the equivalent of $6.5 billion, subject to our Board discussion and approval. The Board always has the final say on these issues. And on that, I don't have a specific Board date, Ariela, but I would expect that to be in the coming weeks. So, I would expect that to happen quite soon.

I'm going to turn back to WebEx and I'm going to turn to Bloomberg. And Eric Martin, Eric, are you connecting?

QUESTIONER: Yes, Gerry, thank you so much.

MR. RICE: Not only can I hear you, I can see you which is fantastic.

QUESTIONER: Great. Well, I wanted to ask you a little bit about Argentina and some of the challenges caused by the pandemic. Is there a staff mission to travel to Argentina that is lined up? And on Ukraine, we saw that the constitutional court rules the appointments that the anti-corruption bureau had with the legal. Will this have an impact on Ukraine's cooperation with the IMF or will the Ukrainians resolve this issue before the IMF mission can be the first to review the program and to address the relationship with Ukraine.

And then finally on Angola, the conditions that are needed to approve the increase of the funds loans angle of the $4.5 billion to $7 billion. What are those conditions and with Angola's participation in DDSI debt suspension initiative help to pave the way for that? Is the IMF considering any other emergency lending with Angola? Thank you.

MR. RICE: Thank you, Eric and thank you for taking us around the world with those questions. Look, on Argentina, you probably heard my previous answer to Raphael where I talked about the status of the discussions. No date for the mission yet, Eric, and whether that mission would be virtual or physical.

At the moment, our discussions are taking place online. I stressed the listening. We are in discussions, we’re listening to the Argentine authorities, and their priorities. Clearly, we share the goal of stabilizing the economic situation including by developing plans that will underpin the recovery forced to resilience and help Argentina fight the pandemic.

So, that's kind of where we are. If you didn't hear it, Eric, I described all this as taking place in a very constructive climate. I don't have that much more on Argentina.

On Angola, I can confirm that the Board, our Executive Board meeting on the third review of our ongoing economic reform program supported by what we call an Extended Fund Facility is scheduled to take place on September 16th. So, I can give you that date. As you may know, two reviews of the program have already been completed with a total disbursement of about $1.5 billion.

As I said previously, of course, it will up to the Board to decide on the amount to be disbursed under the third review. And as to whether there might be an augmentation of our current financial support to help Angola address the challenges posed by the pandemic.

What else can I tell you? No additional conditions for the third review with Angola to be discussed. And we welcome the recent Paris Club decision to suspend debt service payments for Angola until the end of the year under the G20 DSSI initiative. That's the Debt Service Suspension Initiative.

Eric, you asked about Ukraine and the constitutional court. We never comment on judicial decisions. However, I can say this that on Ukraine that creating an effective anti-corruption framework has been a critical element of the IMF's engagement with Ukraine for the last few years. Maintaining the independence and integrity of the national anti-corruption bureau of Ukraine. The special anti-corruption prosecutor's office and the high anti-corruption court is a key component of structural reforms to unlock stronger and more equitable growth and a -- I would say a prerequisite under the current IMF supported program. The broader context, Eric, is that we continue our -- our engagement with the authorities and discussions on the program, its conditions and commitments are ongoing. I don’t have a date for a first review mission and that’s where we stand on Ukraine.

I’m going to go back to WebEx and I see that Matthew Lee is on the -- on the line. Matthew, are you connecting?

QUESTIONER: Sure, can you hear me?

MR. RICE: Not only hear you but see you. Welcome.

QUESTIONER: Okay, great. Thanks a lot. It’s a big technological advance. I want to ask you a couple of questions about -- about COVID-19 and -- and IMF. One is a pretty, you might knock it out of the park -- the President of Belarus, Lukashenko had said, has been quoted that the IMF tried to “bribe him to impose a lockdown by offering COVID relief funds” which was in Delta (phonetic) the telegraph has taken the media of Belarus. So I wanted to know what your understanding, what your response would be to those who would say that offering the aid is is trying to strongarm governments into taking the pandemic more seriously. And then I also wondered about corruption. It’s been -- there’s been investigation in Kenya about how supplies are being purchased and -- and distributed. And there’s some similar issues in Cameroon and Honduras and I just -- I wanted to follow up on countries you previously gave relief, just to know how active is the IMF in monitoring or in keeping its finger on the pulse of -- of corruption issues in some countries that arise in terms of the response to COVID-19 with IMF helps? Thanks a lot.

MR. RICE: Thank you very much for those questions, Matthew. On Belarus, what I can tell you is that in March, Belarus approached the Fund with a request to discuss possible emergency assistance, but no agreement was reached, and we have not found a way to bridge significant differences about the appropriate response to the present challenges. The Rapid Financing Instrument, which is our emergency -- one of our emergency financing mechanisms, does not carry hard conditionalities that I explained at the top of the briefing, but assurances of transparency and appropriate policy actions are required to ensure that the funds are used to address the pandemic and to facilitate economic stabilities. We’re actually getting into your next question a bit there, Matthew. But still on Belarus, I I can tell you, we did not demand quarantine, isolation, lockdown, but we sought assurances for steps to contain the pandemic in line with WHO recommendations, which is our standard operating procedure in all countries. So, just the same.

On your broader question, Matthew, and thank you for -- again for asking it, I mentioned at the top of the meeting that the -- the governance and -- the good governance and the anticorruption dimension of our emergency financing is a very important component of our efforts, so if you take a look at the Lending Tracker that I mentioned, you’ll see that we are now, and this -- this is an upgrade, an improvement in our website over the summer, you’ll find there that we are listing the measures that governments have committed to undertake in this sphere as a means of literally helping to track them. It's the -- the Lending Tracker. I won’t get into individual countries here, Matthew, but I will say that you will find the -- the kinds of actions, measures that we are calling for are audits of -- of procurement. We are asking for clear publication online. And you know, more broadly, you may have heard Kristalina Georgieva talked about used this phrase you know, “spend the money that’s needed to protect lives and livelihoods, but keep the receipts.” Meaning, we want to track how that money has been spent and we will be looking at that ex=post. But in the here and now we’re looking for commitments to audits and online procurement, and indeed I think the whole move to online and digital can really help us in this regard. So let me -- let me leave it there.

Matthew, thanks and thanks to your colleague who I see in the background, your younger colleague. (laughter) I take it that’s your son. You -- you’re training him early up there in New York.

QUESTIONER: Absolutely. I find that the UN is a particular focus.

MR. RICE: Good. Nice to see you, Matthew. Thanks for the questions.

We seem to have wrapped. I am personally very happy and relieved that our new technology has worked. I think it really makes a difference to be able to take your questions in real time and to have you participate in a press conference. We’ll be back in two weeks. In the meantime, please stay safe, stay well, and carry our best wishes with you. Thank you, everyone.