Transcript

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

July 7, 2005

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MR. DAWSON: Good morning, ladies and gentlemen. I'm Tom Dawson, Director of External Relations at the IMF, and this is another of our regular press briefings. As usual, we will be embargoed until approximately 15 minutes after conclusion, and I will try to remember to set the time when we conclude.

I'd first like to express our concern, thoughts, sympathy, with the victims and families of today's terrible events in London. Obviously an awful experience.

There are, as always, a number of Fund staff in London at any given time, and at this time we have no information suggesting any Fund staff or their families was hurt in today's explosions.

I would also note that the Managing Director and a small group of staff traveling with him are at Gleneagles in Scotland and were not in London at the time of the explosion.

Concerning management travel and public engagements besides the MD's presence at Gleneagles that I just took note of, Deputy Managing Director Carstens is currently in El Salvador for meetings with the authorities and tomorrow he will travel to Guatemala for meetings with the authorities there as well. He plans to hold a press conference today in San Salvador and tomorrow in Guatemala City.

A book forum on Central America: Global Integration and Regional Cooperation has been set. It is a book edited by Fund staff members Markus Rodlauer and Alfred Schipke. It's scheduled for July 21st here at Fund Headquarters, and the forum will be open for the press, and you're welcome to attend.

A little bit of advance notice: I'd like to note that the Executive Board will be in its annual informal recess from August 6th through the 20th, and this is, obviously, usually a less active period at the Fund. However, Media Relations will be fully staffed, or at least adequately staffed, for any questions you may have in that time period. I also plan to have at least one additional briefing before the Board recess as well.

I would now be happy to take your questions, if you again make your mothers and fathers proud of you by identifying yourself and your organization.

QUESTIONER: Tom, what impact would this type of explosion have on growth?

MR. DAWSON: I think at this point everyone's concern should be on the humanitarian, rescue side of it as well as a security situation, and I think it's obviously not something we can or should comment on at this point. We are in the process of updating the World Economic Outlook, and I think you'll be hearing from us on that in the weeks and months ahead.

QUESTIONER: Is there a date for the Executive Board Meeting on Argentina?

MR. DAWSON: We had indicated we expected it during July. I don't have a precise date. I think middle of July, broadly speaking, is correct. But when we have an exact date we'll let you know. In that regard, what was indicated in the Managing Director's press statement I think is pretty clear, and I would direct you toward that. I would also direct you toward the public information notice from the June 20 Article IV Board discussion, which has been posted on the Web as well, which gives an indication or a sense of the views of the Executive Board.

QUESTIONER: The middle of the month is next week.

MR. DAWSON: Well, I would say start looking. I mean, you'll have a week's notice, you know, informally we can give you as to when the meeting is going to take place, so we'll just let you know when we have a schedule. I don't have a precise date, but it will not be a secret and you'll have notice.

We will give you notice. It may well be next week. I just was remembering. It may well be next week. I'll just have to let you know once we have it formally scheduled.

QUESTIONER: I was wondering if—I'm not sure if you've been briefed on Nigeria. As you know, the Paris Club has had an agreement in principle with Nigeria, and I was wondering what sort of impact, you know, you would see that going forward for Nigeria?

MR. DAWSON: Maybe I might be best to kind of briefly review the state of our relationship with Nigeria and then with regard in particular to the recent Paris Club—the agreement by Paris Club creditors.

The authorities have requested—and this has been going on for a while—the Fund to monitor their home-grown needs program, the National Economic Empowerment and Development Strategy, under a system or a program—I guess I should use the word a system or an approach of intensified surveillance. There was a mission in Abuja in March 2005 due to the Article IV consultation, and it described the policy performance in 2004 as commendable, and we can direct you to the PIN in that regard.

The Article IV discussion is expected—consultation is expected to be discussed by the Executive Board shortly, and we'll give you a date when we can. And there is a mission currently in Abuja to continue this intensified surveillance of the reform program implementation.

With regard to the agreement by Paris Club creditors, we welcome the agreement by creditors to extend debt relief to Nigeria, and we are ready to discuss Nigeria's request for what is being described now as a policy support instrument as soon as the instrument is available. This is the mechanism by which the surveillance would be conducted, and that is an item that is on its own agenda for being discussed by the Executive Board, I believe, before the Board recess.

QUESTIONER: You just got me there. That's a new one I've heard, policy support.

MR. DAWSON: Well, in that there is not an expectation there will be a formal Fund program.

QUESTIONER: [Inaudible]?

MR. DAWSON: There's not an expectation that there will be, so this would be the instrument or the mechanism by which the Fund would provide input to the—or an assessment—-that could be used by the Paris Club for their own judgment. I direct you to the Paris Club statement because they had indicated that as well.

QUESTIONER: On Argentina, I wonder if you have a sense of, you know, how long these negotiations for the new agreement will take, and how—you know, as you said, they just have recess in August, so I imagine that will delay a little bit the negotiations.

MR. DAWSON: Well, I think "delay" is not the right kind of a word to use. At this point where we are is that we expect we will have the discussion of the enhanced surveillance, and that will take place shortly, in this month is certainly our expectation. And as I say, as soon as we can have a date for you, we will give it to you.

Unfortunately, I'm in a situation where I think I know what the date is, but I'm not sure that it has been formally notified. And it would be after that that we do expect to engage the authorities in discussions for a new Fund-supported program, but I think it's too early to talk about either what that schedule would be or what the content would be.

The issues that are likely to be discussed, as I indicated in my previous comments, would be—I think it would be worth your time to take a look at the PIN for the Article IV discussion.

QUESTIONER: When you say enhanced surveillance—

MR. DAWSON: I didn't say enhanced surveillance. I'm sorry—enlarged access. I'm sorry. Enlarged access. Thank you. I apologize. I had a tape delay in my comments.

[Laughter.]

QUESTIONER: There was a statement out on Turkey. I'm sorry, I couldn't access it on my Blackberry. But you had a date set—I mean, I guess the Fund is waiting until the Parliament passes that law, and then they will set a date for the review. And what about the Board meeting or the [inaudible]?

MR. DAWSON: Well, I mean, indeed we do have a statement out from Anne Krueger, the First Deputy Managing Director, that I think we just a few minutes ago posted on the Web here so we can provide it to you. I may have it here as well.

I do direct you to read the statement because it is somewhat—it's more expansive than what I'm just about to say, I shouldn't simply repeat what she says. Performance under the program has been strong, and the performance criteria for the first program review were met apart from the passage of the pension reform law. With Parliament now in recess, completion of the first review has had to be postponed. We continue to support the authorities' efforts to implement the reforms agreed under the programs.

And the bottom line to your particular question is, therefore we can't have a date for that until Parliament comes back into session and can deal with this issue, and I don't have in my mind precisely when that is. But I believe it's a month or so, and perhaps longer.

QUESTIONER: And you're still withholding the—

MR. DAWSON: That's correct. Postponement of the review, that's what that means, yes.

QUESTIONER: I'd like to know if you have any evaluation of the impact of the political crisis in the country [Brazil]?

MR. DAWSON: I think as you understand, we don't talk about political developments in countries. That's sort of not what our mandate and orientation is. I would have some observations about the performance of the program, however, the Brazilian program. It's not a Fund-supported program any more.

The strong economic policy of the framework remains firmly in place, and has not been affected by recent political events. Fiscal policy continues to over perform, and monetary policy has been prudent, with clear signs now that the tightening is beginning to reduce inflationary pressures. Financial markets remain confident that strong policies will be maintained. And while the real has moved off in the last day or so, it remains fairly close to a three-year high.

The stable economy also continues to provide a good opportunity to press ahead with structural reforms to convert the recovery into lasting sustainable growth, and recent signs that activity has slowed underlines the importance of measures to boost potential growth, and we do encourage the authorities to press ahead with their reform agenda as soon as possible, including Central Bank independence, tax reform, and measures to improve the business environment, all of which are on their agenda and they've been working toward.

MR. DAWSON: Okay. Then we will lift the embargo at 10:30 Eastern Time, Eastern Daylight Time, and I look forward to seeing you in a couple of weeks prior to the Board recess. Thank you.