Transcript

Transcript of IMF Press Briefing

November 4, 2021

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

We haven't had a press briefing since our Annual Meetings. Very nice to see everybody again on the screen here, seeing colleagues pop up and on line we will take some questions as well. I hope everybody is doing okay.

Again, we had our Annual Meetings here in Washington recently –– a very busy time for us all –– followed by the G20 Leaders Summit last weekend and then, of course, the COP26 meeting in Glasgow that's still ongoing, and the IMF active on all those fronts.

Just on the G20 Leaders Meeting, just in case people missed it, they did issue in their communique over the weekend a welcome for the $650 billion SDR allocation from the IMF. As many of you know, that was implemented over the summer. And we are now working on actionable options for our members with strong external positions to significantly magnify the impact of that SDR allocation through voluntary channeling of part of the allocated SDRs to help more vulnerable countries. Now, at the weekend the G20 welcomed recent pledges of about $45 billion dollars as a step towards what they characterized as a total global ambition of $100 billion of voluntary contributions for countries most in need.

They also welcomed the ongoing work to significantly scale up the IMF's Poverty Reduction and Growth Trust and they endorsed the establishment of a new Resilience and Sustainability Trust, the RST, to provide affordable long-term financing to help vulnerable countries, including in Africa, small island developing states, and vulnerable middle-income countries.

So I just wanted to reference. I thought those were important developments at the G20 at the weekend and included in their communique.

At the COP meeting in Glasgow, the IMF again very active in the discussions there. They are ongoing. We took part in various events there, adaptation in Africa, the Carbon Pricing discussion, mobilizing the private sector towards net zero, and promoting the IMF staff proposal on the international carbon price floor, which we had published in the run up to COP. We also published some new research that we had done on the climate issue in the run up to COP. And you can find all of that on IMF.org.

So just because those two events have been very much in the news and top of mind for us, I wanted just to highlight a couple of things there. Bear with me and I'll just mention a few other key events upcoming and then turn to your questions on screen. And I see them coming in online as well.

So today and tomorrow is the IMF's annual research conference; that's the Jacques Polak Conference that we do every year. You can find details on IMF.org. I hope you'll be able to look in on that. A couple of highlights, Gita Gopinath, our chief economist, will be in discussion with Raghu Rajan of the University of Chicago, also a former chief economist here at the IMF. Gita and Raghu will be in discussion at 11:00 o'clock this morning. Promises to be quite an interesting discussion. You can watch it live on IMF.org.

Tomorrow, our deputy managing director, Antoinette Sayeh, will moderate a virtual panel on Africa, Sub-Saharan Africa, the issue of tax avoidance, particularly relating to the mining sector in Africa. That's 8:00 o'clock until 9:00 tomorrow. And there's a working paper from the IMF on that topic.

Monday, Kristalina Georgieva, the managing director, will be in a panel discussion on the European Union's budget, the evolving nature of the European's budget with Johannes Hahn, commissioner for budget administration in Brussels with the EC. That's Monday morning.

Wednesday, this is November 10th, our deputy managing director, Bo Lee, will be participating in a panel of experts on managing technology and finance, global approaches in the digital age. Again, you can join that live if you are interested.

And a week today, Kristalina Georgieva will be at the Paris Peace Forum, participating virtually, talking about SDRs, the Special Drawing Rights, and options on accelerating the response to the pandemic. That's Paris Peace Forum next Thursday.

And then the following day, the APEC Leaders Meeting. So that's Friday, November the 12th. Kristalina will be there at the APEC Leaders Meeting –– she'll be there virtually –– chaired by Prime Minister Jacinda Ardern of New Zealand.

And let me also just mention finally November 17 and 18 we will be holding our annual Statistical Forum on measuring climate change. And, again, you can find more details of that and everything else that I've mentioned on IMF.org, or if you prefer, just follow up with media relations after this briefing. We'll be happy to give you more information.

With that, let me turn to colleagues online. Welcome to you all, nice to see you all again.

Let me begin with Lalit Jha. I see Lalit there. Lalit, would you like to come in?

QUESTIONER : Yeah, hi. Good morning.

MR. RICE: Hi, Lalit.

QUESTIONER: I wanted to speak about India's announcement of becoming net zero by 2070. How does IMF (inaudible) what the IMF says of India's (inaudible)?

MR. RICE: Thank you, Lalit. Appropriate I think to begin with COP and climate change.

You were asking about Prime Minister Modi's pledge that India would reach net zero emissions by 2070 and our reaction. I can tell you we welcome India's announcement at the COP26 of new targets to increase reliance on renewables and reduce the carbon intensity of its economy, including to adopt net zero target by 2070.

As you know, India is currently one of the world's largest emitters, still heavily reliant on coal for electricity generation. And so, its actions may help catalyze action in other emerging market economies as well. India's significant investment in renewables and climate change adaptation policies suggest it's well positioned to take further steps to reach this new target. We are heartened by India's focus on achieving progress in the current decade given the urgent need for global mitigation action. And as with other countries, it will be important to follow through with specific actions to contain emissions over the current decade.

So, you know, bottom like, Lalit, we welcome India's announcement just made at the COP26 in Glasgow.

Thank you.

Let me turn to Matthew Lee in New York. Matthew, good to see you.

QUESTIONER: I wanted to ask you –– I guess it's related to the G20, but under the G20 program, where do things stand with Ethiopia? I know that they had made a request, but there is also the Tigray Conflict and other issues. Same thing on Chad and the status with Glencore. Sorry if there's an echo. I wasn't aware.

And, finally, you know, Zambia I saw that the Managing Director said that it's moving fast. How fast is it moving and what are the issues?

Thanks a lot.

MR. RICE: Okay. Thank you, Matthew. And there's no echo for us. You're coming through loud and clear there from New York.

Let me just take these questions –– important questions –– on Africa and the Common Framework in these countries, particularly the Common Framework

Maybe just go this way. On Zambia, Matthew, what I can tell you is discussions on a possible program under an ECF, Extended Credit Facility, with the Fund are set to begin today –– today. And we expect these discussions to build on the progress made previously. I don't have a duration on the timing of those discussions on Zambia on you, but timely question since the discussions begin today.

As you know, Matthew, but others who follow it may not, Zambia's debt is unsustainable, therefore the IMF would need sufficient financing assurances from creditors before a staff level agreement on an extended credit facility could move forward. Zambia has sought comprehensive debt treatment under the G20 Common Framework, which is what you were talking about, and is in discussions with private creditors to help facilitate that.

And you're quite right, as the Managing Director said yesterday, there is progress. She said we are not quite there, but they are very determined. So that's where we are on Zambia.

On Chad, again just backing up a little, Matthew. You know this, but others may not. Official creditors in the creditor committee for Chad, they issued a statement over the summer supporting an envisaged IMF support program for Chad and they committed to negotiate the debt restructuring terms accordingly. So, we need a credible debt restructuring process with private credits to unlock the official financing that Chad urgently needs. A strong commitment from private creditors on their willingness to negotiate such debt treatments consistent with the parameters of the envisaged IMF supported program without further delay would help boost Chad's economic recovery and poverty reduction efforts.

The managing director has also endorsed this call by the creditor committee for private creditors to commit to negotiate such debt treatments, again without delay. And the international community of course is monitoring these developments closely and I think we're all looking forward to concrete progress on the engagement between Chad and its private creditors in the coming days.

That's where are on Chad. So that's Zambia and Chad. You also asked about Ethiopia, Matthew. And I know Rodrigo, who is also in the call –– Rodrigo Campos of Reuters –– also had a question on Ethiopia, as well as Bloomberg had a question on Ethiopia from Samuel Gebre, all essentially asking about the status of talks with the IMF and what's happening.

Maybe a couple of things on Ethiopia. On the Common Framework and debt, since we were talking about that, again, we welcome the formation of the creditor committee for Ethiopia under the G20 Common Framework. And the Fund has been and will continue to work closely to provide needed technical support to the work of the creditor committee.

On the program with the IMF, given the heightened uncertainty on the ground and its impact on the macroeconomy, amid significant donor support, it's difficult to move to program discussions at this stage, but we stand ready to engage when the time is right. In fact, we will continue to engage with the authorities on an ongoing basis to provide policy advice and technical assistance. And clearly, like everyone else, we are watching developments, the situation in Ethiopia with concern and continue to monitor that.

So that's where we are, Matthew, on Zambia, Chad, and Ethiopia.

Let me turn to colleagues from Argentina and see if we have any questions there. I know Liliana has had trouble connecting, but she has put some questions online. I'll take those, but I'm wondering if Rafael or anyone else wants to come in on Argentina? Yes, please.

QUESTIONER: Hi, how are you? I'm Patricia Valli from El Cronista.

MR. RICE: Hi, Patricia. I can hear loud and clear.

QUESTIONER: I was wondering –– perfect. I was wondering after the recent meeting between Georgieva and Alberto Fernandez and also the technical meetings, what was the progress in the negotiation and when can we expect an agreement? And also, if there had been any talks about delaying it for some reason in thinking of a waiver or a standstill?

MR. RICE: Okay, Patricia. Thank you very much. I'm wondering if Rafael wants to come in? If not, I'm going to turn to Liliana's questions. As I said, I don't think Liliana can join us because of technical difficulties, but she's posted her questions online. Some of them along the same lines as you, Patricia.

But Liliana, who is with Ambito Financiero, is asking Madam Georgieva told Alberto Fernandez that in December the Board is going to discuss the surcharges policy. Is that correct? And, if so, do you have the date of that board meeting?

Liliana had another question. Is it possible the IMF is now negotiating with the Argentina a standby or a bridge loan instead of an Extended Fund Facility?

So, let me take those questions, along with yours, Patricia, and sort of give you an update and as much information as I have.

Indeed, Kristalina Georgieva met with President Fernandez on the sidelines of the G20 summit in Rome last weekend. I would characterize that meeting as good and productive and Kristalina said after the meeting, our teams –– I'm just quoting her –– she said our teams must work together and identify strong policies to address Argentina's significant economic challenges for the benefit of the Argentine people.

So, separate from that meeting between the Managing Director and the President, the IMF team, staff team, and the Argentine authorities also met and they continue to work closely together with the view of deepening the technical work toward an IMF supported program. To the best of my knowledge, Patricia, that is still an EFF that we're working towards, Extended Fund Facility. Liliana had also asked about that.

So, in the context of those discussions, Julie Kozack, who is our deputy director in the Western Hemisphere Department, and Louis Cubeddu, met with Finance Minister Martin Guzman over the course of a few days. Our esteemed executive director Sergio Chodos, from Argentina, was also part of those discussions. And, again, part of the ongoing dialogue. What did they discuss? You know, a wide range of issues relating to Argentina's macroeconomic outlook. And, again, from the Fund's side, we remain very committed to helping Argentina address the deep socioeconomic challenges it's facing by supporting policies that can strengthen economic stability, protect the poor, and set the basis for more sustainable and private sector led growth.

Just responding to Patricia's questions about a waiver. I believe Minister Guzman has addressed this issue, Patricia, and said it was an unfounded rumor. And I don't have much to add other than what, you know, we said before on this issue. And, again, we continue to work toward a program that can help Argentina and

face the challenges of the moment and set the basis for inclusive growth. There was the question from Lilliana about IMF surcharges and the dates of when the board might meet and so on. In her Annual Meetings press conference on this topic, the Managing Director mentioned that an informal IMF executive board meeting had already taken place in [September].

So informal meetings of the board are regularly held to seek the preliminary views of our executive directors and their guidance on policy and country matters that could subsequently be submitted for further consideration in formal board meetings. So what Kristalina said at the Annual Meetings was that an informal board discussion had already taken place.

And then the G20 actually in their communique last weekend mentioned that further discussion of surcharge policy, the IMF surcharge policy is expected to take place at the IMF board in the context of a broader discussion of a precautionary balances interim review. And what I can tell you, Lilliana is that that review is currently expected later this year. I don’t have a specific date, just to answer your question, but later this year and that's about all I have on Argentina. Patricia, does that help?

QUESTIONER: Yes, thank you.

MR. RICE: Okay thanks very much. Let me turn to Reuters. David, I see you there. I see I think Rodrigo has some questions. I don't know how you want to handle it.

QUESTIONER: Well, let me toss a couple out. I'm also getting a bit of an echo here on my end. So just on the African continent, can you talk about sort of where things stand with Sudan? As you know, the World Bank had paused their disbursements and their operations there given the coup. What's the current status with the IMF engagement with Sudan?

And also, can you talk a little bit about what the Fund is doing to meet the demands of Treasury Secretary Janet Yellen who has called for some concrete steps to ensure data integrity following the whole WilmerHale investigation of the World Bank and the board review of the Managing Director's status. What kind of steps are being taken at this stage or is it a case of you're still studying that, thanks.

MR. RICE: Hey thanks, David, let me take those questions. On Sudan, you know, clearly, we are watching developments unfold in Sudan. It's too early to tell how this might impact the situation there. Just stepping back, David, I know you know that this but others may not.

Back in the summer, the boards of the World Bank and the IMF approved Sudan's eligibility for debt relief under the HIPC initiative. That's the Heavily Indebted Poor Countries Initiative. It's a milestone-based process. Once all necessary conditions are met, Sudan will be eligible to reach the HIPC completion point for that very important debt relief. So, we're looking at those milestones.

At the same time, Sudan currently has an extended credit facility arrangement from the IMF which was approved again in the summer in June actually. And those disbursements under the IMF arrangement are conditional on the boards, our executive board's completion of a review which, in this case of Sudan, could take place at the earliest at the end of March 2022.

So that's kind of the status on Sudan. And again, it's too early to tell if the momentum toward HIPC completion point will be impacted by recent developments. And that's true obviously also for the review that's going to take place of the IMF program and we are watching that very closely.

David, you asked about follow up work on the issue of integrity of IMF data. And you're right, this question did come up in recent weeks. The first thing I'd like just again, you know this but others may not. The first thing to remember, I think, and is underlying is that the questions about the integrity of data were never about the IMF's data or the processes.

At the Fund, we have an extremely robust, thorough review process of our data and forecasts. We have multiple economists in multiple departments who review the data and provide detailed comments. We also have, as you know, the Independent Evaluation Office that reviews these reports on a regular basis.

And in its statement, David, on this issue, the executive board made explicitly clear that they had full confidence in the impartiality and the analytical excellence of IMF staff. Indeed, the quality of our data an analysis is I think well-recognized by our 190 member countries and third parties alike as being excellent and indeed one of the IMF's greatest strengths.

In that vein, of course, and coming to your question, David. In that vein, of course, one of the reasons that the integrity of the IMF's data is so strong, so robust is that we are committed to continuous improvement and strengthening in that area as in all areas of our work. And with that in mind, we will work with our board and staff to consider additional proactive steps to further ensure the robustness and integrity of the IMF data, research, analysis.

So, I don't have, you know, specific steps at this point, David, or a timeline. But again, we are -- we will be working with our board and staff looking at various ways in which we might be able to continuously improve.

I see that Eric is online. Eric Martin of Bloomberg. Eric, do you want to come in? Unless Eric, he was there a second ago. He may have disappeared.

QUESTIONER: I think Rodrigo had a couple questions.

MR. RICE: All right. Rodrigo, still with Reuters.

QUESTIONER: Hi Gerry.

MR. RICE: Hey Rodrigo, come on in.

QUESTIONER: Thanks. On El Salvador, (audio skip) whether there have been any recent discussions about a program, not just about an Article IV visit but a program itself. And if there is any hard or soft deadline approaching regarding any program.

And last week, Alejandro said that Argentina will not pay the Fund and that the importance of a program between the IMF and the Fund is overblown. Of course, you know, he just left the head of the Western Hemisphere Department so we're interested in a comment on what he said about that.

MR. RICE: Thank you, Rodrigo and I saw a couple of questions online as well. Just on your last point on Argentina and Alejandro Werner's comments just in case people didn't pick up what you said. Alejandro Werner is the former director of the Western Hemisphere Department at the Fund. Now Alejandro working in academia. So, I really don't have any comments on what Alejandro said.

But again, just to reiterate, Rodrigo, what I said in response to Argentine colleagues, we continue working toward an IMF supported program that can help Argentina, the people of Argentina face up to the challenges of the moment. And, you know as I've said here before, Argentina has indicated its commitment to meeting its obligations to the Fund. So, I'll probably just leave that there because I would just be repeating what I said earlier on Argentina.

On your question about Sudan, sorry it wasn't on Sudan it was on El Salvador, Rodrigo because I already took a question on Sudan. You were asking about potential for a program, and you were asking about specific dates. So, what I can tell you on El Salvador is that virtual discussions with the government began earlier this year around April. And I can tell you progress has been made since then toward measures needed for a potential program supported by the IMF.

Development since that time will require some recalibration of policies needed to ensure inclusive growth, fiscal sustainability and financial stability. The authorities and the staff have agreed to complete the 2021 Article IV consultation in the coming months. I know you mentioned that and that would allow time to prepare the full assessment of the underlying policy measures needed to achieve those goals.

So, I guess the sequence would be that, you know, we're working on the Article IV consultation. We will communicate that at the end of that mission. That's in the coming months and as part of those discussions there will be dialogue around policies that would underpin a potential IMF program. I hope that helps you.

I'm looking on the screen if there are any other questions. Simon, I don't know if you have a question. I see you there. Simon Ateba, Africa News Today. Hi, Simon.

QUESTIONER: Yes, thank you for taking my question. (inaudible). I don't know if you can go back to the takeaways from the COP26 climate change IMF and Africa, if you can. Maybe you can go back and talk a little bit about it.

And also, you know, I know that the IMF has been trying to fight climate change and we know that the other biggest threat is also the threat to misinformation and disinformation. And we know that the IMF Managing Director herself (inaudible). And by that time, she's been distracted for weeks and she spent so much money (inaudible) to correct (inaudible). Is the IMF making an investment to fight misinformation on this information? I know you (inaudible) but are you making investments to fight disinformation that ends up destabilizing countries (inaudible) and all of that.

MR. RICE: Yeah, thank you, Simon for those questions. Maybe just on your last one, you know, we don't invest specifically in, you know, mitigating or, you know, preventing misinformation. However, you know, I think the best thing we do, the most effective thing we do in that area is that we try to provide accurate economic analysis, accurate data, accurate statistics, accurate and objective economic information to all our member countries.

And I think that's a valuable service to those countries and to the world in terms of trying to ensure that information is as accurate as possible. So, I do think it's a service the IMF provides though not perhaps in the direct sense that you were talking about, Simon.

On your question about COP and Africa, clearly, Africa is a special focus in terms of facing the issue of climate change. Given the harsh impact of climate change on low-income countries, on fragile states. We've talked about this a lot. We talked about it during our Annual Meetings.

Kristalina Georgieva has given it special focus. She actually participated, as I mentioned at the top of the meeting, in the adaptation for Africa session in Glasgow. And some of the initiatives that we are pushing very hard including the resilience and sustainability trust, the integration of climate change into our surveillance efforts, our capacity development in the area of climate change.

I think all of these have a special resonance and impact on Africa. And, you know, I think it's encouraging at COP that we are seeing some support among countries in terms of commitments to net zero targets, commitments on deforestation. Private sector mobilization towards climate change and net zero and so on. And again, I think all of these will support Africa. Again, it's certainly an area of special focus for us.

I'm going to take one last question. I don't see anyone else popping up online. I did see Eric Martin of Bloomberg earlier, but I think he had to run off. So, I'm going to take one last question online which is about Lebanon. It's from Shabta of Devex (phonetic).

Asking, I want to ask about Lebanon and see if there are any updates about the talks between the IMF and the new government. Is there a timeline? How much longer can Lebanon hold on? Also, is there any IMF reaction to reports it buried information about a hole at the central bank?

I can give a quick reaction on that last one. That would be absolutely untrue and false so I can certainly say that about the last one. On the other questions, updates and timeline. What I can tell you is the IMF has received a letter from Prime Minister Mikati of Lebanon expressing the authority's interest in a Fund program.

And I can tell you that preparatory technical discussions have started. Clearly, strong policies and reforms are needed to address the really unprecedented economic and social crisis facing Lebanon and the Lebanese people. So we've received the letter, technical discussions have begun and we're engaging on some of those polices and reforms that I mentioned to address macroeconomic stability and lay the ground for hopefully a sustainable and inclusive recovery.

The Managing Director, Kristalina Georgieva, actually met with Prime Minister Mikati the last week and she tweeted about that. And again, just giving the sense that we are ready to, we, the IMF, we are ready to redouble our efforts to help Lebanon and the Lebanese people overcome the social and economic crisis that they are facing. And those technical, those preparatory technical discussions are underway.

With that, I'm going to leave it for today. I want to thank you, those of you online for coming. I want to thank those on the screen and those who came in virtually and online. And just to all wish you safe and well and I'll see you in a couple of weeks' time. Okay bye, bye everyone.