[stop-imf] IMF on debt deal

[Robert Weissman]

1. IMF Press release on debt deal
2. Transcript of media call with Thomas Dawson, IMF Director of External
Relations, on debt deal

Press Release No. 05/286

FOR IMMEDIATE RELEASE
December 21, 2005


*IMF To Extend 100 Percent Debt Relief for 19 Countries Under the
Multilateral Debt Relief Initiative*


The Executive Board of the International Monetary Fund (IMF) completed
the assessment of the first group of countries eligible for relief under
the historic Multilateral Debt Relief Initiative (MDRI). Following the
discussion, Mr. Rodrigo de Rato, Managing Director of the IMF, made the
following statement:

"I am delighted to announce that the IMF will grant 100 percent debt
relief to 19 countries under the MDRI (including remaining HIPC
assistance) amounting to SDR 2.3 billion (about US$ 3.3 billion). This
is an historic moment, which will allow these countries to increase
spending in priority areas to reduce poverty, promote growth, and to
make progress towards achieving the Millennium Development Goals. These
countries should receive this debt relief in early 2006.

"Bringing the MDRI to this stage since it was proposed in June 2005 has
taken an intensive effort. I am proud of what the IMF has achieved in
delivering debt relief in just six months.

"This represents the first phase of countries that will receive 100
percent debt relief under the MDRI. There are other countries that are
also eligible, and at various stages on the road to qualification for
MDRI relief. As they continue to make progress=E2=80=94and it is my hope th=
at
their progress will be rapid=E2=80=94we look forward to assisting them in
joining those that we considered at this Board meeting.

"For this debt relief to take effect, the IMF still needs consents from
some contributors to the PRGF Trust Subsidy Account, which is one of the
sources of financing for MDRI resources for debt relief, and I urge the
donors who have not yet done so to provide their consents as quickly as
possible,=E2=80=9D Mr. de Rato said.

The 19 countries that qualify as a result of today=E2=80=99s assessment inc=
lude:
Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana,
Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda,
Senegal, Tajikistan, Tanzania, Uganda and Zambia.

---

*Transcript of a Conference Call by
Thomas C. Dawson, Director, External Relations, with Journalists on the
Multilateral Debt Relief Initiative*

December 21, 2005

Washington, D.C.



OPERATOR: Welcome to the MDRI conference call. At this time all lines
are in a listen-only mode. Later there will be a question-and-answer
session, and instructions will be given at that time. If you do need
assistance during today's call, please press the star, followed by the
zero, and an operator will help you off-line.

At this time I'd like to turn the conference over to Mr. Tom Dawson.
Please go ahead, sir.

MR. DAWSON: Thank you very much. This is Tom Dawson, the Director of
External Relations at the IMF. Thank you for joining me. This press call
will be embargoed until 15 minutes after conclusion, and we will set a
precise time at that point.

We've scheduled this conference call to update you on where the IMF
stands on debt relief under the Multilateral Debt Relief Initiative.
This is particularly important since the Board did, in fact, meet this
morning and since there have been a number of press reports and other
speculation as to what the meetings might or might not accomplish.

Let me start off by making it clear that we are on track to deliver 100
percent debt relief within the coming weeks to 19 of the 20 countries,
mostly in Sub-Saharan Africa and Latin America, and we are optimistic
that the one country that remains eligible will qualify for relief
within just the next few months.

Today's Executive Board discussion of the Multilateral Debt Relief
Initiative, which wrapped up a little after noon, took about two hours
and involved both Board and staff presentations. The meeting was chaired
by the Managing Director, Rodrigo de Rato, and we think it has led to a
historic agreement in terms of the delivery of debt relief to the
world's poorest countries.

Let me note at this point that the Managing Director will be releasing a
statement. You all will receive it as soon as this briefing is
concluded. And one of the reasons for our embargo is so you will have
the opportunity to weave the Managing Director's quotes into whatever
else you have gotten out of the briefing that I am doing.

I would say that the Executive Board has essentially completed its
assessment of the first group of countries eligible for this historic
debt relief initiative. For the 19 countries agreed today, debt relief,
including the remaining HIPC assistance, will amount to approximately
US$3.3 billion.

If I could, I think many of you may already have the names of the
countries, but I will quickly go over the list of the countries: Benin,
Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras,
Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal,
Tajikistan, Tanzania, Uganda, and Zambia.

I should note that Cambodia and Tajikistan are not HIPC countries but do
fall under the US$380 per capita income threshold for the Multilateral
Debt Relief Initiative. The remaining countries are HIPCs.

I should also note that this relief, this action by the Board today, is
contingent on the IMF receiving consent agreements from the 43 donor
countries that have contributed to the PRGF trust subsidy account, which
is where a significant portion of the debt relief is coming. So far, we
have 37 of the 43 countries that have provided their consent. I would
note, to give you a context, this is 37 countries that have provided
this consent during the course of this month. So we are actually quite
hopeful that we can get the remaining six consents if not in the next
few days, certainly in the next very few weeks.

I think the Fund Board, Management, and staff have done our part, and
now we are waiting for the remaining six countries to approve=E2=80=94to pr=
ovide
the so-called consent.

It is natural, of course, for you to ask who is the 20th country, and if
you have your list, you will have noted that Mauritania was not included
in the list. The Board indicated today that Mauritania will qualify for
relief and receive relief once it demonstrates satisfactory progress in
a few policy areas.

I should note that the agreement under the Multilateral Debt Relief
Initiative approved by the IMF Board and published as a public document
indicated that the Board would make an assessment for each of the
countries to ascertain whether the macroeconomic situation continued
more or less the same as it had been at the completion point under HIPC.

We are optimistic that once the required policy options are taken,
Mauritania will be positioned to receive 100 percent debt relief. In
that context, I would say the characterization of countries and the
speculation that countries were being `dropped' or being `off the list'
is simply not correct, and we are, as I said, quite optimistic that in
this context, the 19th=E2=80=94I'm sorry, the 20th country will be added be=
fore
too long.

Now I would be happy to take whatever questions you may have. Since I do
not have the advantage of knowing who has called in, could I ask that
you identify yourselves and your institutional affiliation? Now I
believe the operator will switch this to a questioning mode.

OPERATOR: Thank you, sir.

And, yes, ladies and gentlemen, if you do wish to ask a question, please
press the star followed by the 1 on your touchtone phone. You'll hear a
tone indicating you've been placed in queue, and you may remove yourself
from queue by pressing the pound key. So, again, if you do have a
question, please press the star and then 1 at this time.

Please go ahead.

QUESTIONER: Thank you. I remember that Gordon Brown, when he made this
announcement in September in the Annual Meetings, there was a question
on whether there would be any new requirement or any new, anything else
that the countries should do, and he said, no, this is final. This is
approved for the 20 countries. So I would like to know your answer on
what happened.

MR. DAWSON: Well, first of all, I would note the=E2=80=94it was the Executi=
ve
Board that unanimously agreed that in terms of the provision of the debt
relief, a look at each country's economic situation would be taken, that
this would be done in the context of whether there had been any
significant deterioration in the country's status. This was a position
taken, as far as I know, unanimously by the Executive Board.

And I should add, contrary to what you may have been reading in the
press, this is not some new condition. This has been known for some time
and has been published, that the Fund Board=E2=80=94this is a decision by t=
he
Executive Board, representative of our member countries=E2=80=94that countr=
ies
indeed would benefit from this relief. So I think it is not correct to
call it new conditionality or anything that was a surprise. This is
something that was supported, I believe=E2=80=94I know of no member country=
 that
opposed this approach. In fact, this was part of the original concept.

OPERATOR: Thank you. Please go ahead.

QUESTIONER: Hi, thank you. Yeah. Since you work so closely with the
World Bank, I wonder if you=E2=80=94if this decision taken by the Board tod=
ay
will have any consequences on the relief that the World Bank will
approve and [inaudible] in July?

MR. DAWSON: Well, I think the Multilateral Debt Relief Initiative is
something that indeed applies to three international financial
institutions, the IMF, the World Bank and the African Development Bank.
I think questions about the World Bank's, the status of the World Bank
and timing and so on are best directed toward the World Bank. Certainly,
from our point of view, this is absolutely good news for the people of
these poorest countries in terms of demonstrating the commitment of the
international community to provide the debt relief that the membership
of the institutions had indicated that they supported at our meetings in
the fall.

But questions about the particular timing and so on of the World Bank
should be directed to them.

I guess the simplest way to answer your question about implications, it
certainly should be a good implication, since we have been able to get
our work, as I say, substantially done. And also, as I indicated, we are
quite hopeful that the six remaining donor countries will be providing
their consent, so this relief can be provided very early in the New Year.

QUESTIONER: If I may ask a follow up.

MR. DAWSON: Sure.

QUESTIONER: I mean I didn't explain myself very well. I was referring
whether you expect that those 19 countries will receive, you know, the
debt relief from the World Bank, so that [inaudible] that they have
passed with the meeting today of the Board, that will clear the way for
them to get the World Bank relief as well.

MR. DAWSON: The decision is a decision of each respective institution,
and so this will be a decision of the World Bank Board, just as it was a
decision of the IMF Board. I certainly think the implication is of
progress and of good news.

I think we might turn to the next question.

OPERATOR: Thank you, yes. Please go ahead.

QUESTIONER: Thank you. With the speculation on the last couple of days
in the press about Nicaragua not being on the list, I would like to ask
how satisfied the Board of the IMF on Bolivia and Nicaragua
implementation of different IMF programs?

MR. DAWSON: Well, I think you will be=E2=80=94as time goes on, you will be
getting a formal, the summing up of the Board discussion today as well
as individual country-specific information, but I think it is fair to
describe the decision of the Board today of being a strong decision by
the Board without reservations, and that this is an endorsement of the
policies of the countries, the 19 countries that are identified,
including the two specifically that you ask about, Bolivia and Nicaragua.

QUESTIONER: Okay, thank you.

OPERATOR: Thanks. And again, if anyone does have a question, please
press the star and then 1 at this time. We do have a question. Please go
ahead.

QUESTIONER: Hi. Could you just give us a little bit of detail on
Mauritania, what happened and what the sticking points were?

MR. DAWSON: Well, I think I did indicate indeed that the Board's view
was that Mauritania will qualify for relief and receive it once it
demonstrates satisfactory progress on some policy areas that have been
identified. We think that this is a matter that is understood with the
authorities as well as within the institution, and we are hopeful that
this will take effect, as I say, relatively soon. I would think the best
description is in a few months. A few months is less than half a year,
but more than a few weeks.

QUESTIONER: And what are the policy areas?

MR. DAWSON: I think I would rather=E2=80=94you'll see it from the summing u=
p in
the Board, the detailed areas of concern, but they do involve public
expenditure management as well as some of the financial relations with
the Fund.

QUESTIONER: Right.

OPERATOR: Thank you. Please go ahead.

QUESTIONER: Yes. Tom=E2=80=94

MR. DAWSON: Hi, Marty.

QUESTIONER: Hi there. The press reports that talked about the six
countries that might be dropped, can you describe at all what happened
to change that status? Did the countries meet the qualifications that
the staff was concerned about? Did the staff lower its=E2=80=94the bar for =
what
they needed to do? Can you tell us what happened?

MR. DAWSON: I think I would sort of have two points. One is I don't
think we would, under any circumstances, have agreed to the
characterization of countries being dropped. I mean we are committed to
working with these countries to provide the relief that was indicated
under MDRI. And indeed, at the end of the session today, as I've
indicated, 19 out of 20 did so qualify. We've also made it clear that
this fundamentally is a decision of the Executive Board, and the
Executive Board provided with all of the information provided by the
staff, came to this judgment, and I say it was a strong judgment.

I would, however, also note that these are not sort of snapshots frozen
in time. Indeed, as the decision points got closer, more information was
available. I'm aware of in a number of countries there have been
missions in the country just very recently, so indeed, it's not terribly
surprising that additional information comes forward and that different
decisions are taken.

Again, our summing up will perhaps have=E2=80=94when it is released, and we=
're
hoping to get it out very, very quickly=E2=80=94I think we have a decent sh=
ot of
getting it out this week. As you know, sometimes they take a week or
more, but this was such a, frankly, a harmonious Board meeting, that I
think there's a good chance that we will get it out in the next day or
so. It will, I think, indicate in a little bit more detail the
considerations in each of the countries.

Oh, and I should also note, which I haven't explicitly, we expect within
the next, I would say, 24 hours, to have available country-specific
descriptions of the state of play in each of the 19 approved countries,
and as I indicated, the summing up itself will describe those as well as
the situation for Mauritania.

QUESTIONER: Thank you.

OPERATOR: Thanks. Please go ahead.

QUESTIONER: I was wondering if you could tell us which six countries
you're waiting on in terms of the=E2=80=94

MR. DAWSON: No, we are not waiting on six countries. We've approved 19
out of the 20=E2=80=94

QUESTIONER: No, sir, that wasn't the question I was going to ask. You
were talking about the trust fund consent.

MR. DAWSON: Oh, oh, which of the approvals=E2=80=94

QUESTIONER: Yes.

MR. DAWSON: I am not in the position right now to reveal that. We are in
contact with the authorities. If you would like to know the list of the
43, which is=E2=80=94that is certainly publicly available and we can provid=
e
that to you. I believe you can find it in the Annual Report of the Fund
as well, and it's on the website. But I think this is=E2=80=94we're not in =
the
"name and shame" game at this point. I think the reality is that this
has come up=E2=80=94the decision was made I believe early this month, and w=
e've
now gotten 37 out of 43, and we're quite hopeful that we will get the
remaining six. And I think the Board made it clear, the Managing
Director in the statement that you'll be receiving momentarily also
makes it clear, and we are quite hopeful. We view this as something we
need to get done, but we don't view it as, quote-unquote, a problem.

QUESTIONER: Okay. And just to confirm, you said it was=E2=80=94the total am=
ount
of debt relief approved is US$3.3 billion.

MR. DAWSON: 3.3. Now, you will see occasionally slightly different
numbers because it's all keyed off of the SDR rate and the SDR rate does
vary. But, yes, I did indeed say 3.3, and that is the number=E2=80=94billio=
n
dollars, and that is the number you will see in the Managing Director's
statement shortly.

QUESTIONER: Thank you very much.

OPERATOR: Thanks. Please go ahead.

QUESTIONER: Earlier in the day, a number of the news agencies were
running stories saying that the IMF was likely to boot six of the 20
countries off the list, and those six were listed, and there are also
reports in one of the English national=E2=80=94one of the British national
newspapers this morning. Would you have any idea where those reports
came from or, indeed, whether there was any debate about whether six
countries should not qualify for debt relief at this stage?

MR. DAWSON: I mean, I can't=E2=80=94you know, I've long since given up tryi=
ng to
chase where news stories come from. It's my job to sort of present what
actually happens. I think there was perhaps anticipation as well as
misunderstanding. And I would repeat again=E2=80=94you used the rather grap=
hic,
colorful phrase of "booting off the list." That wouldn't have been the
case even had countries not been put in motion for the relief that 19
were today, because as we've indicated, for Mauritania, the one other
country on the list, we are quite hopeful that it will be accomplished
shortly.

But life is too short for me to be trying to figure out where inaccurate
news stories come from.

QUESTIONER: Thank you.

OPERATOR: Thanks. Please go ahead.

QUESTIONER: On this issue again, I mean, but do you acknowledge that
there was some concern about these six countries at some point?

MR. DAWSON: Well, I mean, I think there=E2=80=94I mean, the Fund=E2=80=94th=
e Fund staff,
Management, and Board take their jobs very seriously, and I would say
that in the Board discussion today, many of the 20 countries were
discussed, ones that speculation had been would be on the approved list,
ones that speculation had been that they would not be on the approved
list. The Board discussed many of the 20 countries in their discussion
in the two-hour meeting this morning. But as I say, in the end it was a
very strong consensus reached by the Executive Board.

QUESTIONER: Thank you.

OPERATOR: Thanks. And, again, if anyone does have a question, please
press the star and then 1 at this time.

MR. DAWSON: If we do not have questions, which is sort of what I sense,
we will be forwarding, hopefully within just seconds, the Managing
Director's statement on this historic decision, and if you have
questions, certainly feel free to be in touch with Media Relations with
follow-up questions.

It is now approximately seven minutes before 2:00, so I would suggest we
lift the embargo at 10 minutes after 2:00.

Thank you very much.

OPERATOR: Thank you. And, ladies and gentlemen, that does conclude our
conference for today.