Transcript

Transcript of a Press Briefing by Thomas Dawson, Director, IMF External Relations Department

August 29, 2000

MR. DAWSON: This is the latest in our series of regular briefings, and as usual, we will embargo this until about ten minutes after we conclude and we’ll set the time at that point.

For the record, I’m Tom Dawson, Director of External Relations at the Fund, and I would appreciate it if people identify yourselves and your affiliations when you have questions.

I have a couple of announcements to make. I think a number of you know that we regularly publish certain reports before the Annual Meetings, and I’d like just to run through the schedule on two of them. The Fund’s 1999-2000 Annual Report will be released on September 15th, and we’re organizing a press briefing at 9:00 a.m. on Thursday the 14th, and First Deputy Managing Director Stan Fischer will be speaking at the briefing.

A few days prior to this, on September 11th, there will be a briefing on the release of the Annual International Capital Markets Report, which, as you know, is produced by our Research Department. The report will be available under embargo several days before the release, and you can contact Media Relations if you would like more information on either of these reports.

That’s all I have at this point, and I’ll be happy to take questions.

QUESTIONER: I’ve got two questions for you, Tom, one on Indonesia. Can you tell us who should we believe, what’s going on? Are there any renegotiations going on?

MR. DAWSON: I believe actually a statement has been put out in Indonesia a short time ago clarifying that there is not a renegotiation underway. Indeed, however, a small team is going to be visiting Jakarta this week to meet with Mr. Rizal Ramli, the new Coordinating Minister for Economy, as well as his team, and I believe the Minister has made some comments about that visit. And obviously the discussions are going to cover the economic program, and we are looking forward to this meeting. But there has been a statement out of Jakarta that basically clarifies the state of play.

QUESTIONER: Who from the IMF will be visiting Indonesia this week?-

MR. DAWSON: It’s a Fund mission. We don’t normally indicate the mission leader, but he’ll be recognizable when he arrives. It’s a member of staff, not management, if that was what your question was.

QUESTIONER: The Board has been expected to discuss Indonesia and the latest release of money later this week, Thursday or Friday. Is that still on schedule?

MR. DAWSON: I don’t have a change in that at this point, but obviously, with a mission going, it’s possible that could change. I just don’t have an announcement on it. The visit was just set up yesterday afternoon.

QUESTIONER: And the second question was, just as a broader sort of thing, the IMF seems to be issuing more waivers for nonperformance these days than it is loans. Is this just a reflection of the greater transparency at the Fund in that you’re now disclosing what perhaps wasn’t disclosed previously and that, you know, a lot of countries wouldn’t meet performance criteria, they were sort of examined and told to shape up and then the public statements didn’t reflect that? Or is this a trend among IMF client countries that nonperformance is on the rise?

MR. DAWSON: No, actually, you see, the way you formulated your question, you gave me a wonderful out. The truth is we, in fact, just aren’t making as many loans as we used to. And, indeed, if you take a look now in our spirit of transparency at our liquidity ratio, you will see it is soaring. But I don’t think you intended me to answer your question in quite that mechanical a fashion or logical a fashion.

No, I don’t think there is any increase. That is actually something that staff look at regularly in terms of number of programs and waivers and whether they’re technical or otherwise and whether they would have been binding and so on. So I don’t think that is accurate. On the other hand, I think the other part of your question is quite true. We are, as part of our overall spirit of transparency, revealing a lot more, so that may be apparent, but I don’t believe it is real in that regard.

QUESTIONER: About Argentina and the recent meeting of Minister Machinea with Stanley Fischer, two things. One is you have already acknowledged the fact that the possible deviation of the target has been discussed, and I wanted to ask you whether you are also discussing the possibility about Argentina having the contingency credit line (CCL).

MR. DAWSON: I’m not aware of anything new on the CCL side in terms of any developments on that. That is obviously a subject that has been under consideration for a number of countries. But I’m not aware—and I think—I’m sure I’m up to date—of anything new in that regard.

On the program side, we have indicated that if there were deviations, we would expect they’d be small and they’ll be dealt with at the time of the review. But we don’t have any findings at this point.

QUESTIONER: Speaking about the transparency issue, countries, as far as I know, give their consent on the publishing of their Article IV documents before the review, and I understand that Russia has given such consent with the forthcoming Article IV review. Now, the question is: Can a country pull out of that agreement later if it does not really like what it sees in the report?

MR. DAWSON: Under the present guidelines the answer is yes. Although there have been discussions in the Fund Board on the Article IV pilot project, and while the discussions are not concluded, I would expect that in the next few days we will have something of a formalization of this process so that it will be transparent and you can understand what the nature of that participation is. But the rules, as presently drafted under the pilot project, that is correct.

QUESTIONER: It’s a follow-up question on CCL. You said CCL has been under consideration for a number of countries.

MR. DAWSON: Right.

QUESTIONER: Is Argentina one of those countries?

MR. DAWSON: I’ll have to get back to you on that. I know that some have considered it. I am not, frankly, aware of or can’t remember the state of discussions between the authorities and the Fund. I’ve seen speculation in that regard. Whether I’ve seen it on the inside or not, I’m not certain. But I will get back to you on that.

QUESTIONER: Can you tell us which countries are considering it?

MR. DAWSON: No. I did say “a number.” In the context of the review of Fund facilities, streamlining of facilities that has been going on the last several months, I think if you go back and look at that discussion and the reporting of the discussion, you will see that, in fact, a number of countries have expressed an interest in the CCL if terms and conditions were altered. And, indeed, one of the clear reasons why the CCL has not been utilized to date—one of the reasons, maybe not sufficient, but certainly a consideration—has been that both financial and other terms for it have been insufficiently attractive, both the front-end fee and the question of what the charges were for drawing and so on.

So the process of looking at how to make the CCL more attractive has, not surprisingly, increased the level of interest on the part of countries, and that’s why I was not able to quite recall where Argentina fits in that category.

QUESTIONER: The question would be more on whether the IMF is considering this, because Argentina has already expressed its interest. I was wondering on your side.

MR. DAWSON: We’re in the process of reviewing the facility this month. I’ll see if I can get back to you on that. As you’ve recategorized that question, I suspect we won’t have an answer to that because obviously countries come to us. But it’s a good question, anyway, that I’d like to know the answer to.

QUESTIONER: Will the Board be taking up the issue of the review of the facilities anytime soon? I understand it will be discussed at one of the Board meetings in the near future. And the question is whether it will be discussed in the same form that it was previously or has the idea been changed in any way to consider the position of those who were against it originally?

MR. DAWSON: Against which?

QUESTIONER: Against the review and against, in particular making credit more expensive.

MR. DAWSON: Oh, you’re talking about the charges issue. Yeah, that is obviously one of the issues that’s still under consideration.

QUESTIONER: About Prague, it’s not too far away. How are the security arrangements proceeding?

MR. DAWSON: We are not only in regular contact with the authorities, we’ve had a number of visits to Prague, and we are very impressed with the authorities’ organizational work effort and their understanding of what is needed to make the meeting a success from both a logistical and organizational point of view, but also in terms of the objective of the meetings. And I think the authorities have been quite forthright in expressing their support of, interest in not only in hosting the meetings but assuring the meetings are a success.

I would draw your attention to the joint appearance of President Havel and Mr. Köhler back at the beginning of August, and there have been a number of pronouncements since then coming out of Prague. As I say, a number of Fund and Bank officials have been visiting there, and we are quite confident. On a related issue, we have been continuing our expanded outreach efforts with NGOs and others who are interested in the Fund, the Bank, as well as the meetings, and expect we’ll be working with them in a number of the events that the NGOs and others are planning during the Prague meetings. So I think it is obviously going to be a busy time, and people are looking forward in terms of, you know, demonstrations. But as Stan Fischer said recently, I think in his interview with Asia Week, the fact of demonstrations is not an issue. I think it’s quite appropriate that people present their views, and we look forward to that sort of exchange of views, whether in the context of demonstrations, seminars, teachings, or whatever.

QUESTIONER: Can we say anyway that Mr. Kohler will put his stamp on this meeting? This will be his inaugaral meeting.

MR. DAWSON: It certainly is his inaugural meeting as Managing Director of the Fund, and it certainly will be an occasion on which he will be presenting, not only publicly but in meetings with—in official gatherings, his views, his vision of the Fund, his reflections on his first, at that point, five months in the Fund. And I think you can expect that his ideas on reform of the Fund will be brought forward or developed further from, for example, the speech that he gave in early August at the Press Club. But, yes, certainly it is the occasion for him to put forward his vision of the Fund, and he’s been pretty clear that’s what he intends to do.

QUESTIONER: A follow-up. Tom, when you mentioned President Havel and also Mr. Fischer’s remarks on globalization and—Mr. Havel has spoken about the need for dialogue and his plans to have a dialogue with the protesters.

MR. DAWSON: And with the institutions, I might add. I mean, the event that he’s planning at Prague Castle on—I may have my dates wrong, but it’s Saturday the 23rd, I believe—is indeed intended to be a dialogue including the institutions, member governments, NGOs, civil society and so on.

QUESTIONER: Well, my question is: What does the Fund intend to do in terms of dialogue and with whom?

MR. DAWSON: As I mentioned earlier, we have been in an active dialogue with NGOs and civil society more broadly as well as, obviously, with our members, and I fully expect during—if the question is Prague-specific, there are a number of events. We have our own seminar program, some of which involves civil society, private sector, and so on. We have a number of invitations that we have received from NGOs that will be meeting in Prague that have asked us to participate in their seminars, their programs, which we will be doing. I think you will see us very, very visible in reaching out and talking to people both on a proactive basis but also in response to request from groups. And as I say, we have a number of groups that are planning events during the meetings, NGOs during the meetings that have asked for our and the Bank’s participation. And I know we both are planning, you know, a very active program, probably a more active program than at previous Annual Meetings.

QUESTIONER: Can you explain who will be going to the Prague Castle event and, you know, sort of outline how new this is for the IMF to participate in this kind of event in the middle of the meeting on the day of the G-7?

MR. DAWSON: The event is organized by President Havel, so that in one sense of the word, the question is best directed to them because invitations are coming from them. On the other hand, we have in response to their request suggested, you know, from sort of the institutional and governmental point of view, names that they might consider, and they would be obviously senior officials of the institutions as well as Ministers and Governors of the Fund. But in terms of who is actually invited, that is up to President Havel. But for the governmental/institutional component, we have provided them with lists.

QUESTIONER: I was told that Mr. Köhler would be going to this event.

MR. DAWSON: Yes, he’s announced that he intends to go. I haven’t literally seen the invitation, but certainly if one goes back to the context of his appearance with President Havel at Prague Castle, he indicated he would be there, so yes.

QUESTIONER: Assuming he goes there, how significant is that for the IMF to be doing that in the middle of a meeting? Iis it a big departure?

MR. DAWSON: It is not during a time of meetings that are scheduled for the institution itself. In other words, the press conferences will have been a couple of days earlier, and the Interim Committee is the next day. So in that sense of the word, there is not a conflict, and I certainly suspect that in response to President Havel’s invitation, other events that might potentially have been in conflict may well get rescheduled. My understanding is that the event is planned to last, you know, a couple of hours, maybe a little bit more, so it’s not as if it blocks out an entire day.

QUESTIONER: Concerning the question of demonstrations, do you see a difference between demonstrations and disruptions of the meeting? And do you expect disruptions?

MR. DAWSON: I can’t say that we do expect disruptions. The groups that we are familiar with have indicated—I mean, there’s obviously a broad spectrum of groups who are intending to make their views known at the time of the meetings. And, you know, most of the groups, that we are aware of have made it very, very clear that they are using the occasion of these meetings for demonstrations, to use your word, for dialogue to make their point, and we think this is entirely appropriate.

I have seen some reports of groups, you know, that may perhaps not quite share that feeling or that—or would not make that guarantee. On the other hand, at this point it seems to be quite different, for example, from the April demonstrations where you had a large group who had as their expressed goal stopping the meetings from happening. I do not have that as a sense of what the groups, the bulk of the groups are planning in Prague. Indeed, the bulk of the groups that we’re familiar with are making it quite clear that they do not intend to shut down the meetings, which was the goal of the group here in April and I think in the WTO in Seattle as well. So in that sense of the word, I think you do draw a correct distinction there, but I think all indications we have is that people are talking about demonstrations.

QUESTIONER: Mr. Gordon Brown is visiting the IMF this week to talk to Mr. Köhler. I think he’s also talking to Mr. Wolfensohn. Do you expect new developments on debt relief and are you going to be telling us what discussions are going on?

MR. DAWSON: You are correct, they will be visiting, I think it is tomorrow, if I’m not mistaken. At this point I don’t know that we will have a statement after the visit, but I’ll let you know and the press office will be in touch with you. Obviously, the discussions are on HIPC debt relief. It is a continuing process. We are all attempting to see how many countries we can get to a point of qualifying for the initiative, Enhanced HIPC, by the end of this year, and so every day there are developments, but whether we will have something, you know, formal for you or not, I don’t know. But we’ll let you know in a couple of days.

QUESTIONER: Just a couple of questions about a couple of countries, Ukraine and the status, I think it’s the third report. When we might be expecting the third auditors’ report on the situation there.

And also a question on Pakistan and the nature of any discussions and whether there’s been any decision on how any loan might go forward?

MR. DAWSON: I think it’s a little early to be talking about a loan on Pakistan, but there are—you know, we have been in continuous contact with the authorities, and the last time this issue came up—and this is still the state of play—is that, as and when sufficient progress is made, then there could be talk about a mission taking place. I don’t have anything for you on that, but I would stay tuned on it. I think it’s entirely possible that this can change, in particular since we are, as you know, back from recess.

On Ukraine, you, I’m sure, are aware of the repayment as a result of the misreporting, and there will be a Board meeting in the near future on that issue, which relates to the misreporting. We are talking with the authorities about a program, but we don’t have any date for a Board meeting on that. But just to make that clear, we would expect in the near future discussion of the misreporting issue. We don’t at this point have a date in terms of the program because we have not gotten that far yet.

QUESTION: I’m right in thinking there’s still the third leg of the auditors’ report to come out on the question of misreporting?

MR. DAWSON: I’ll have to get back to you on that. I’m not sure we have more—we have done our own internal review.

QUESTIONER: On Ukraine, if I may, a more general question. The Prague meeting will, in part, and probably in large part, be devoted to the results, interim results of transition. It’s ten years of transition. So are you disappointed or dissatisfied, or whatever you wish to qualify that, that some of the major economies such as Russia and Ukraine are still basically in the middle of the transition rather than at the end of it?

MR. DAWSON: Well,I’m not sure that transition necessarily ever ends. I mean, obviously different countries have gone further along the process, and as we’ve noted, you know, in Russia, the growth figures in particular have been really quite strong.

I think we recognize each country has its own unique circumstances and, you know, situation and ability and in some cases even will to confront the circumstances. And I think that in general we see progress, and, you know, some have proceeded much faster than others, but I don’t think there’s any doubt about the direction in which everyone is going. So I don’t see it’s a sense of disappointment. It is certainly an occasion, on the tenth year of the transition process, for a lot of stock taking in that regard, what works, what doesn’t work. And I think you’ll see in particular at the seminars that the Bank and Fund are putting on together that will, in fact, be very much of a theme of the seminars and of a number of studies and reports that we and the Bank have been producing for that occasion.

QUESTIONER: You mentioned that there needs to be sufficient progress before a loan can be considered for Pakistan?

MR. DAWSON: No, no. Before a negotiating mission.

QUESTIONER: Right, before you can get there, and there was recently a report out of Pakistan that the country still needs to produce its own report on poverty, a strategy to diminish poverty in the country. Can you clarify if that’s true, or where does that stand with the military government?

MR. DAWSON: A poverty study is not the particular benchmark that I was referring to. Obviously, for both the Fund and the Bank, that’s of great interest. But I think the sort of policies we are talking about, while they could include that, they were broader issues that we needed to be satisfied with. But as I say, this is something where there may be developments in the near future.

QUESTIONER: What are the broader issues?

MR. DAWSON: You know, the traditional monetary and fiscal issues. As you may recall, there have been some concerns on the quality of the accounts there. I mean, it is still a relatively new government there, particularly on the finance side, and it takes a while to get things started again. But as I say, I expect there will be developments in the near future. I was going to say certainly before my next press briefing, because I should have noted at the outset, it’s not clear to me when we will have our next press briefing since we have over the next few weeks a number of briefings planned. But as I indicated at our last session, and a couple of you followed up on it, if you do have a sense of a need for a briefing, as it were, at this time, we can try to set something up.

QUESTIONER: What is the state of play of the governance issues within the IMF? And how does Mr. Köhler stand on them, transforming the Board into a different type of organization that has different responsibilities and not just a consensus?

MR. DAWSON: Well, I’m not quite sure the governance issue is a big issue, including specifically the role of the Board. I’m not sure it’s an issue of changing the Board from a consensus organization. Indeed, I think one of the great strengths of this organization has been the fact that the Board has been able over 55 years to work on the basis of consensus. But certainly issues such as representation in the Board, you know, which goes everywhere from a seat issue to who owns the seat, who holds the seats, the number of seats, the nature of representation within constituencies, those are all issues that have been identified, that the Managing Director and others have spoken about, that have been talked about in a number of the IMF reform proposals, and they are all, you know, to greater and lesser degree, under consideration. We have the consideration of the quota formula which relates to that as well.

However, as in a way your question implied, these are all sort of fundamental issues which also indicates you don’t expect you’re going to have a Board meeting on Thursday afternoon and it’s going to announce a resolution that we’re going to change the number of Board seats and reallocate them and quotas and so on.

QUESTIONER: Does Prague advance this process?

MR. DAWSON: At the political level, certainly Prague is an occasion for governments to discuss the issue. But in a technical sense, quotas are discussed and changed largely in the context of quota reviews, and that’s an issue that’s basically a couple of years in the future. There are other options in terms of whether countries could get ad hoc quota increases, which has been an issue that has been raised by some chairs. Representation issues on the Board, the balance within the Board are also regularly being, you know, brought up.

But as I say, I would caution you not to think that there’s going to be any dramatic developments in that regard. These are very, very tough issues in which it’s it’s hard to get a consensus, and we do operate, as you said, on that basis and hope to continue that way.

QUESTIONER: A separate question on—just to follow up on some of the transparency issues mentioned earlier. What’s the IMF’s assessment of the progress of the dissemination standards? Is that going according to schedule, or are there some concerns that certain countries are not moving fast enough with dissemination?

MR. DAWSON: I don’t want to give too much of an off-the-top-of-the-head answer. I mean, I have not heard concerns in that regard. It’s a process that goes forward very much at a technical level, so I think I would prefer to get back to you on that one rather than give, you know, too glib an answer.

Clearly, in every aspect of what we’re doing, you know, every month we have more and more transparency, and in a sense, the SDDS was the beginning of that process. We are focusing on issues of the sort and we are making progress across the board. On your specific question on SDDS, I’m not aware of concerns that have come up on speed and signing on to it and so on.

We are regularly in touch, for example, with the markets to get a sense of whether they think the quality and frequency is adequate for them and so on. But as I say, I have not heard negative feedback, but I’ll have to get back to you.

QUESTIONER: Mexican President-elect Fox just toured Canada and U.S. to present his program for the government for the next six years. There has been a lot of talk saying that the transition, at least in political terms, will be a smooth one. I was wondering, what is the view of the IMF in terms of the transition, especially when, it’s very well known that this recurring crises takes place every six years, and also I was wondering if at this point the IMF has been, you know, talking with the people from Mr. Fox’s future government.

MR. DAWSON: The six-year problem did not recur, so it may be well known, but it appears to be at this point somewhat of a historical issue. I’ll have to get back to you on whether we’ve been in contact with the new authorities or the transition. I think that is correct, but I’m not up to date on that.

QUESTIONER: You mentioned that taking stock of the transition will be a big theme of the seminars. Can you expand on that and sort of explain whether that means just in the transition countries?

MR. DAWSON: This will also focus on lessons to be learned for other economies from the transition process. We have the agenda and the schedule for the seminars, and you’ll see that it is quite prominent in that. But, no, it is not simply, you know, looking at what went wrong and what went right. It is clearly, more than an academic exercise. It is lessons to be drawn not only for the transition economies for others, lots of lessons on sequencing are broadly applicable, for example.

QUESTIONER: Sorry, can I just clarify Indonesia yet again. You are going out there and you do expect—but you do, nonetheless, expect the Board to meet this week?

MR. DAWSON: No, I do not know. That’s a very good question you raise, and the fact that the mission is going out is, in my mind, you know, how we proceed on that.

As of yesterday morning, the mission had not left. Whether it’s already gone out and whether it will be able to report back in time, I don’t know. So stay tuned from us or from the Indonesians—

QUESTIONER: But will this Thursday’s board meeting for Indonesia be postponed?

MR. DAWSON: I don’t know. You are correct that we are planning a meeting. I can’t say that it was this week, because our schedules, particularly this time of year, do change. But in terms of the mission, what its implications are for the Board meeting at this point I don’t know, and as soon as we know, I’ll let you know.

QUESTIONER: On Nigeria, is there anything you can say about the progress that they have made in the first few weeks of this program? And is there anything about Ghana and the apparently deteriorating financial situation there?

MR. DAWSON: I do not have anything for you on Ghana. In terms of the Fund program with Nigeria, you are correct, we have a precautionary program there. I think it’s too early to have any results from that, but clearly it is—you know, we have re-engaged with the Nigerian Government and people, and I think are hopeful on how that process goes forward. I think it’s too early. The program was only approved a few weeks ago.

QUESTIONER: I just wanted to go back for a second to that event at the castle, since I must have missed the original reference to it. I assume it’s not just the MD and Mr.Wolfensohn who will attend?

MR. DAWSON: Yes.

QUESTIONER: I mean, is it some sort of joint initiative?

MR. DAWSON: No, this is an initiative of President Havel of the Czech Republic. As he has said a number of times in the past, Prague historically has been a cultural crossroads, and he thinks that this is the appropriate time, again, to try to have a meeting of the minds, as it were. And he has conceived of this event as broadly being the opportunity to bring, you know, the critics, as it were, representatives of the Czech society, representatives of the institutions and of governments for a dialogue in which a number of the concerns that have been raised on, for example, the globalization process can be addressed. And so he views this as a chance for the people from different backgrounds to come together. But, yes, Mr. Mr. KöHLER and Mr. Wolfensohn have publicly stated they’re going even though I haven’t seen the invitations.

QUESTIONER: Will the IMF be represented in any way at the Millennium Summit of UN in New York?

MR. DAWSON: My understanding is that—yes, we will have an observer there, but my understanding is it is an event in which governments are the ones that are formally the attendees and the speakers. So we will not be represented there in terms of speaking, but we will be represented at the summit as we have been represented at a number of the preliminary events.

QUESTIONER: Another fundamental issue which I’m just wondering is a current issue, if it ever comes up, and that is the question of the IMF becoming an issuer of debt, which apparently is steadfastly opposed by some important members. But does that ever come up? Is there anything new on that?

MR. DAWSON: Well, if you take a look at our now transparent financial statement, I think that would require some unique financial engineering to discover why we would need to borrow at this point. So, no, there’s nothing going on there.

QUESTIONER: Do you have any reaction to the recent interview of Mr. Camdessus in Foreign Policy where, for instance, he suggested that had he been reinventing the IMF at this point, he would have done some things differently, for instance, the distribution of votes where he said neither the United States nor the European Union should have a monopoly of vote or whatever—I may be slightly off in the phrasing, but he said that it should not be able to block the policies of the IMF. No one should be able to do that.

MR. DAWSON: Well, I mean, the whole process of consensus is that you try to get maximum support. I read the interview in Foreign Policy, and I don’t think it’s appropriate for us to have a response. People can go back to various points in history as to where they would like to start over. As a matter of historical fact, I can recall that in the initial Bretton Woods agreement the then Soviet Union would have had something like a 13 percent share of quotas.

Thank you very much. The embargo will be lifted twenty minutes after 10:00.