Gerry Rice, Communications Director, IMF Briefing, 18.01.2018
For your convenience, we publish here just some questions and answers of the IMF spokesman concerning Russia, Ukraine and bitcoin issues. The full transcript of his briefing please read here.
[...] QUESTIONER: The IMF representative in Russia, Gabriel Di Bella, on Wednesday visited (inaudible) it's international economy analytical conference. He talked about historically the object for Russia is not to lose importance in the global economy and it needs grow at least three percent but at least in the next few years, potential growth may be limited at something between around 1.5 percent. So, what steps the Russian government should take to boost growth?
MR. RICE: Well, again I'm going to point a bit to the WEO update on Monday, because it will have some updated forecast numbers on Russian growth so I won't say more about the specific numbers. What I can say is that we believe Russia has left behind a two-year long recession now, thanks to good macroeconomic policies and improved sentiment in part due to higher oil prices, so GDP growth has been positive and again we will update that number on Monday.
Maybe just a bit more if it's helpful. To accelerate this pace of growth, we believe Russia needs in addition to the steady implementation of the fiscal rule, and inflation targeting regime already in place, Russia should tackle the structural shortcomings that we've identified in the Article IV process and so on, its detailed a bit more there: improving the investment climate for example; increasing investment in infrastructure, social and economic; improving the efficiency of the goods markets; integrating Russian trade more strongly, even more strongly in the global economy; expanding trade agreements; supporting innovation, et cetera, et cetera. So, I'm going to leave it there but you will get a bit more on Monday.
QUESTIONER: This week Ukrainian media published a letter from the IMF Europe and Department to the Presidential Administration of Ukraine regarding an establishment of credible and independent on the corruption institution. Of course, this is a very important step which is also as we know a precondition of the next IMF review. But is this the only necessary requirement that Ukraine has to fulfill in order to get the next disbursement?
MR. RICE: Okay. Thank you for that. I'm just going to dovetail that with what I'm looking at online which is two other questions on Ukraine. One is close to yours, it's on the anti-corruption and one is on the pension reform so I will just bundle them if that’s okay with you.
So first on the corruption issue, you’ve heard me here before, you’ve seen recent news from the IMF on the importance that we attach to corruption generally and in line with this, the IMF supported reform program in Ukraine has focused on corruption and governance right from the start. From the very beginning, given its macroeconomic implications, the establishment of the anti-corruption court, consistent with the Venice Commission’s recommendations, has been an essential part of the program as I think you know.
The letter to which you refer, the letter that was sent to the authorities, expressed staff’s concerns about the consistency of several provisions in the draft law with Ukraine's commitment under the program and the recommendations of that Venice Commission that I mentioned. Now we hope that the authorities take these concerns from IMF staff into account, and that the draft bill is amended between readings in parliament.
In terms of the next review, I think the issue of anti-corruption and what I've just described needs to be set in a broader context. As always with any review there are usually a number of issues, a range of issues that are discussed and I'm sure that’s going to be the case with Ukraine as well.
I want to take the question on pension reform that I mentioned. Ukraine recently adopted the pension law and what I will say on that, as you know the pension law introduces some important provisions to modernize the pension system in Ukraine but also has some shortcomings that undermine incentives for people to work longer and contribute to the system and it does not fully ensure a fair and sustainable pension system so we think a bit more work needing to be done there. Okay on Ukraine?
QUESTIONER: One more question about Ukraine. As you’ve said, Christine Lagarde will co-chair the next annual meeting in Davos. Does she plan to meet with the Ukrainian leadership at this forum and in this regard what kind of message the IMF would like to send to the Ukrainian authorities?
MR. RICE: Well, I'm going to leave the sending of messages to Madame Lagarde. What I can tell you is that yes, they plan to meet. Madame Lagarde and President Poroshenko plan to meet in Davos which they have done actually in previous meetings at Davos too. What will they discuss? Again, I'm going to leave it to them. We will have some communication oncoming out of that but, I think they will discuss the recent developments and the prospects for reform in Ukraine and particularly those that would help pave the way for the completion of the program review which you just mentioned. I would imagine that would be the gist of it but yes, they are scheduled to meet in Davos.
[...]QUESTIONER: Yes, I had a question on Bitcoin which continues to capture a lot of attention in the financial markets. Treasury Secretary Mnuchin said he wants the G20 to look into the risks of cryptocurrencies. To what extent would the Fund support that and what does the Fund think are the risk of cryptocurrencies to financial stability?
MR. RICE: We've talked about this in the past. I've talked a bit about it here in a press conference or so ago. We don't comment on specific currencies. I don't really have a comment on Bitcoin as such. All I would say is when asset prices go up quickly, risks can accumulate, particularly if market participants are borrowing money to buy those assets. So, it is important for people to be aware of the risks and take the necessary risk management measures.
On the broader issue of cryptocurrencies, as opposed to Bitcoin specifically, we've said we think they can have potential benefits, including the promotion of financial inclusion and more efficient payment and settlement processes. But we have also alerted that cryptocurrencies can post considerable risks as potential vehicles for money laundering, terrorist financing, tax evasion and fraud. So, the bottom line, I think, we think greater international discussion and cooperation among regulators would be helpful.