Posted by: APO | 18 October 2007

Transcript of a Press Conference by International Monetary Fund Managing Director Rodrigo de Rato


Transcript of a Press Conference by International Monetary Fund Managing Director Rodrigo de Rato

With John Lipsky, First Deputy Managing Director, and Masood Ahmed, Director, External Relations
October 18, 2007
Washington, DC


QUESTION: [Translation from French.] One year ago in Bamako the First Managing Director told us that there would be an increase in aid for developing countries, but we are still waiting to see this increase in aid, and I would like to know how much longer the developing countries are going to have to wait for this dramatic increase in aid.

Then second question, Mr. Managing Director, you spoke about the legitimacy for greater efficiency and you have said that the IMF is undertaking initiatives in that direction. Are those initiatives going to mean that in the next few years we are going to have an MD who is not coming from Europe? Thank you.

MR. DE RATO: Thank you. If you do not mind, I will respond in English. First of all, we have been expressing our views that donor countries should keep their pledges on increasing aid, and we have taken every opportunity to do so. John, myself, and my colleagues, and I take this opportunity to do it again. I think the pledges made by donor countries should be kept because the aid is needed, and I think the doubling of aid is a needed element, and it was a commitment that was made, and we were witness of that commitment. So I have to say that I agree with that.

At the same time, we believe that aid should be harmonized. We see an increasing need for harmonization of donor conditions and conditionality that could become an impossible burden for some low-income countries. At the same time, we see new opportunities not only because of aid but because of investment and because of the price of commodities that are making sub-Saharan Africa move in a more dynamic way than in many years before. Economic growth, we expect it to be about 6 percent in 2007 and 7 percent in 2008, and inflation, if you take out Zimbabwe, should be about 7 percent in those two years. Those are very impressive numbers for sub-Saharan Africa, and we believe that they show that the countries are changing, they are implementing new and more effective economic policies. We are in very close partnership with many of them, with all of them, we know how difficult and how important these decisions are, but as we saw the examples of others, this is the way to reduce poverty in a sustainable way over years, but I totally agree with you that we need to hold donors responsible for their commitments.

On the governance issue, I have expressed my view that the double change that puts the view of the Board that emerging economies as a whole should increase their voice in the institution and at the same time low-income countries’ voice should be first more than doubled and then ring fenced I think is a very important step. Again, I have to say that we are pioneers in this, and we are moving in a territory that requires a lot of consensus and a lot of willingness by the part of government, but we see progress being made. As for who the members have elected, in the last two months the institutions have gone through not one but two elections, one that was held on the basis of votes, the other that was held on the basis of one chair, one vote. The results are known, and of course they were very transparent. I have to congratulate the Board for facing up to its responsibilities in a transparent and constructive manner.

QUESTION: Sir, you referred to the two terms, the legitimacy and quality of our advice. The Executive Board had a meeting in July this year to take stock of these situations, and you said that you had some lessons for the future. Is this legitimacy and quality of your advice, the IMF advice a result of that stock taking in that Executive Board meeting? That is one.

The second is that some of the countries, Pakistan has withdrawn from the IMF. Why? And do you feel that there is some more countries who would be inclined to withdraw from the IMF?


QUESTION: You talked about greater coordination of donors and then you said aid should be earnest. What do you think of China’s way of doing things in Africa?

MR. DE RATO: Well, I think China like many other countries is showing a growing interest in Africa, and I think that is very welcome, and I think it is also showing that interest because of very clear reasons. They have interests in commodities and also in trade and investment. I think that is not only a normal aspiration of any country but also a welcome one because African countries need new investment.

At the same time, China, like any other donor, should be aware that for instance debt sustainability is a key question, especially for countries that have gone through a period of debt cancellation by the international community but also by countries who could not absorb and at the same time could not handle higher levels of debt. In that respect, transparency is a very important element again. I think that China, like many other investors in Africa, is entitled, of course, to do whatever they think is suitable but at the same time to collaborate with the international community to help low-income countries to absorb in an efficient manner new resources and to keep levels of debt that can be sustainable over time and can be sustainable when circumstances change and interest rates raise, for instance. So I think there is no difference of what China is doing than others are doing, and there is the need for China and others, not only China, many others, to collaborate with international institutions like the World Bank, the African Development Bank, and us to have a setting of debt sustainability that is key for the long-term poverty reduction of African countries.

MR. AHMED: Okay, I will take one last question now. I think that gentleman there has been waiting the longest.





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