EIN Presswire: International Trade Live Feed Press Releases

Jordan: Statement at the Conclusion of the 2011 Article IV Mission

Tue, 07 Feb 2012 22:12:45 +0000

An International Monetary Fund (IMF) staff mission, led by Mr. Paul Cashin, met with the Jordanian authorities in Amman during January 22-February 2, 2012 to conduct the discussions for the 2012 Article IV consultation.¹ Mr. Cashin issued the following statement at the conclusion of the meetings:

“A modest increase in economic activity has taken place in 2011. Following a sharp downturn in 2010, real GDP is expected to rise by 2½ percent in 2011. Inflation fell to 4½ percent in 2011, due in large part to the absence (since January 2011) of pass through of international oil prices to domestic markets. The unemployment rate increased to almost 13 percent in 2011, and is expected to continue to rise given the country’s muted growth prospects. The external current account deficit is expected to widen considerably to 9½ percent of GDP in 2011, as a robust export performance is offset by increased energy imports and declining remittances and tourism receipts. International reserves fell by 14 percent in 2011 to reach $10.7 billion (equivalent to 6⅔ months of imports), as shortfalls in Foreign Direct Investment (FDI) flows accompanied the deterioration in the current account.

“The outlook for 2012 has become increasingly challenging, in light of growing social pressures and heightened instability in the region. Economic growth of 2¾ percent is expected in 2012 as unrest in the region, high commodity import prices, and rising sovereign financing costs will adversely affect the Jordanian economy. Average inflation is projected to pick up to 5½ percent in 2012, given the planned resumption of pass through of international oil prices. Despite regional uncertainties, the current account deficit is projected to narrow (to 7½ percent of GDP) due to a moderation of energy imports and buoyant mining exports.

“The Jordanian economy continues to face substantial downside risks. An outturn of higher commodity-import prices (particularly oil imports) would generate lower economic growth and higher fiscal and external deficits than the baseline projections. Indeed, Jordan has already experienced a 13 percent decline in its terms of trade in 2011. Regional political events with possible spillovers to Jordan—including unrest in neighboring countries—could adversely affect economic activity through lower tourism receipts and FDI, and more costly access to capital markets. In addition, a deepening of the European crisis could indirectly affect Jordan, mostly through its adverse impact on regional oil exporters (a major source of Jordanian trade, external grants, remittances, tourism and investment flows), given Jordan’s limited trade and financial market links to Europe.

“Increased social spending has intensified pressures on the fiscal position, and tighter macroeconomic policies are needed to reduce fiscal and external imbalances. The overall fiscal deficit is expected to rise to about 6 percent of GDP in 2011, mainly due to increased commodity subsidies and other social spending (costing an additional 2⅓ percent of GDP) and a cyclical weakening in domestic revenues. Budgetary grants of $1.4 billion (5 percent of GDP) were provided by Saudi Arabia during 2011, which helped fund the cost of fuel subsidies. In addition to central government borrowing, increased borrowing on behalf of Jordan’s National Electric Power Company (to accommodate more costly imported fuel oil during the extensive periods of interrupted natural gas supply) and other own-budget agencies increased the public debt-to-GDP ratio to about 64 percent at end-2011.

“The draft 2012 budget envisages considerable fiscal consolidation. The authorities' intention to rein in the fiscal deficit is an appropriate and necessary step, to mitigate risks associated with Jordan’s already-high public debt and debt servicing, and given the importance of demonstrating the government’s determination to maintain fiscal sustainability. The budget focuses on raising domestic revenue (including by removing tax exemptions, revamping property transfer fees, and higher tax rates on luxury goods) and containing current spending (including by freezing public sector hiring, reductions in the operational costs of Ministries, and reform of the present system of universal subsidies for gasoline and diesel). Importantly, putting back in place the automatic fuel pricing mechanism removes the vulnerability of the budget to future oil price movements. To better protect the needy, universal subsidies should be replaced by well-targeted compensatory transfers—these could take the form of cash transfers to low-income households. Based on the latest developments and macroeconomic assumptions, the 2012 overall deficit is expected to narrow by about 1 percent of GDP relative to the 2011 outturn, reaching 5¼ percent of GDP. In particular, the primary deficit (excluding grants) narrows by over 3 percentage points of GDP to about 6⅔ percent of GDP. With this, and given likely borrowing for own-budget entities, the public debt-to-GDP ratio would rise slightly to 66 percent by end-2012. Failure to implement the fiscal consolidation envisaged in the 2012 budget would place upward pressure on inflation, increase external imbalances, and raise domestic borrowing costs.

“Further fiscal consolidation will be essential over the medium term to return fiscal and external balances to a sustainable level. The mission supports the authorities’ proposed three-year fiscal reform agenda to minimize vulnerabilities, reduce distortions, and help ensure that the economy achieves a higher and more inclusive growth path. In particular, the 2012 budget envisages a narrowing of the overall deficit to about 3½ percent of GDP by 2014. Nonetheless, additional policy measures will be necessary if the fiscal authorities are to successfully implement this agenda. At present the bulk of the deficit-reduction effort beyond 2012 is based on real GDP growth, which on current assumptions will not be sufficient to attain the medium-term budget goal until 2017. In order to leave some cushion for possible unforeseen demands on the budget, gearing fiscal policy toward a more ambitious medium-term target would be prudent.

“Maintaining an appropriate monetary stance is important. While the envisaged fiscal consolidation is critical to ensure debt sustainability and boost confidence in the Jordanian economy, the fiscal deficit remains sizeable in 2012, and there is scope for an offsetting tightening of the stance of monetary policy to ensure that inflationary pressures remain muted. In addition, given rising sovereign risk premia in Jordan and other Middle East countries, further tightening of monetary conditions is appropriate, to sustain the attractiveness of Jordanian dinar (JD)-denominated assets and strengthen the international reserve position.

“Safeguarding the exchange rate peg remains the lynchpin for the maintenance of financial stability. The peg of the Jordanian dinar to the U.S. dollar has served the country well by anchoring inflation expectations and providing stability in a challenging regional and global environment. While the real effective exchange rate has experienced a modest appreciation of 2½ percent between December 2009 and November 2011—driven by rising inflation differentials with trading partners—the mission’s analysis of the real exchange rate suggests that the dinar remains broadly aligned with medium-term fundamentals.

“The Jordanian banking system remains sound. The Central Bank of Jordan (CBJ) continues to exercise prudent regulation and supervision of the banking system, and banks have remained conservative in their funding practices (with the JD loan/deposit ratio near 73 percent at December 2011). The banking sector’s macro-prudential indicators remain strong—banks remain profitable and well capitalized, deposits (largely JD-denominated) continue to be the major funding base, liquidity ratios and provisioning remain high, while non-performing loans increased slightly to 8½ percent of outstanding loans at mid-2011. Bank private sector credit continues to rebound (growing by 10 percent y-o-y in December 2011). However, there is a risk that banks could be exposed to increased non-performing loans and provisioning requirements over the medium term, as Jordan’s growth path is likely to remain below trend in the period to 2015.

“The capacity of the Jordanian banking system to weather shocks has been strengthened by effective banking supervision. The mission welcomes measures taken by the CBJ in 2011 to further enhance its banking supervision under Basel II, including by: Supervisory Reviews on the submitted bank Internal Capital Adequacy Assessment Process (ICAAPs) to ensure appropriate risk management and corporate governance; and continued semi-annual monitoring of financial soundness indicators. Further steps have been taken toward the introduction of an automated data collection system (expected to be operational by end-2012), to be used to improve off-site monitoring of banks and allow for a statistical-based early warning system. Passage of the Credit Information Law and associated by-laws (in August 2011) will enable the establishment of a credit bureau and help promote private credit flows. The CBJ also issued a circular to licensed banks in October 2011, requiring banks to provide details (by mid-2012) on the impact of implementing Basel III.

“The mission would like to thank the Jordanian authorities for their hospitality and the candid and productive policy discussions during our stay in Amman, and wishes the government and people of Jordan every success.”

¹ Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with member countries, usually every year. The mission reviewed macroeconomic developments and changes to the economic outlook since the last consultation. This statement represents the views of the mission team, not necessarily those of the IMF. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

SBA-funded State Trade Export Program Helps Penn. Manufacturing Firm UMF Retain Jobs, Increase Sales

Tue, 07 Feb 2012 21:40:05 +0000

SBA-funded State Trade Export Program Helps Penn. Manufacturing Firm UMF Retain Jobs, Increase Sales

PR Newswire

JOHNSTOWN, Pa., Feb. 7, 2012 /PRNewswire-USNewswire/ -- Exporting has allowed United Medical Fabricators to retain its staff of 60 employees and increase sales while its supply partners have begun to grow, thanks to the Small Business Administration-funded State Trade Export Program in Pennsylvania. With STEP, a three-year pilot trade and export initiative authorized by the Small Business Jobs Act of 2010, UMF president and CEO Eileen Melvin embarked on Middle Eastern trade missions to export medical examination tables made by her company in Johnstown to hospitals in Saudi Arabia.

(Logo: http://photos.prnewswire.com/prnh/20110909/DC65875LOGO)

U.S. Small Business Administration officials, along with federal, state and local government officials toured UMF on Monday to mark the company's exporting success. "I have to commend the Pennsylvania state government in what they do," said U.S. Rep. Mark Critz.

"We have a very robust program here to help entrepreneurs in the state identify and then go after opportunities outside this country. What we do at the federal level is put funding in to help these organizations that do this international trade and international travel because without it, they could never do it on their own," Critz said.

Melvin used help from Pennsylvania's STEP program, to determine countries that would be likely to purchase UMF's medical equipment. State agencies were able to assist her in developing necessary overseas business relationships.

STEP grants are being awarded to state international trade agencies to support increased exporting by small businesses, which enables businesses like UMF to hire more workers, and make infrastructure investments that create more demand for small manufacturers, said acting SBA Regional Administrator Bridget Bean.

Bean is pleased with the trade expansion UMF medical has been experiencing. "Small businesses employ about half of the nation's work force and small businesses like UMF who export are helping propel our economy forward," Bean said. "STEP grants are a great example of how SBA is working with state and local governments to support regional economic development."

"The Southern Alleghenies Planning and Development Commission employs staff dedicated to international trade," Melvin said. "With their assistance our export sales increased more than 60% over last year. Now, across our country and the world, newborn babies are examined on UMF Medical pediatric tables. As they grow up, they are treated on our exam tables."

Contact: Janet Heyl (412) 395-6560, ext. 103 | Janet.Heyl@sba.gov

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SOURCE U.S. Small Business Administration

Kingdom of Swaziland: IMF Executive Board Completes 2011 Article IV Consultation

Tue, 07 Feb 2012 20:13:12 +0000

On January 23, 2012, the Executive Board of the International Monetary Fund concluded the 2011 Article IV consultation with the Kingdom of Swaziland.

Under Article IV of its Articles of Agreement, the IMF has a mandate to exercise surveillance over the economic, financial and exchange rate policies of its members in order to ensure the effective operation of the international monetary system. The IMF’s appraisal of such policies involves a comprehensive analysis of the general economic situation and policy strategy of each member country. IMF economists visit the member country, usually once a year, to collect and analyze data and hold discussions with government and central bank officials. Upon its return, the staff submits a report to the IMF’s Executive Board for discussion. The Board’s views are subsequently summarized and transmitted to the country’s authorities.

Camping World RV Sales Secures the Confidence and Support of America's Top Financial Institutions Through a New Multi Year Floor Plan Facility Quickly Approaching Half a Billion Dollars

Tue, 07 Feb 2012 17:59:00 +0000

Camping World RV Sales, the world's largest recreational vehicle retailer, announced today that it has secured a new multi-year syndicated credit facility quickly approaching half a billion dollars, consisting of an amended floor plan credit facility, letter of credit facility and a term loan. Bank of America, N.A., which serves as the Administrative Agent, led the transaction. JP Morgan, who has partnered with the company since 2003 acted as Co-Agent. The facility also includes seven of the nations premier lenders: US Bank, SunTrust, Key Bank, M & T Bank, Bank of the West, Ally Bank and Flagstar.

Marcus A. Lemonis, Chairman and CEO stated, "Our company's double digit return in same store sales along with an unprecedented level of profitability has earned us a multi-year facility. Our top line outlook for 2012 remains flat to slightly up; however, our tight inventory controls and right sized SGA has us well positioned for another solid financial performance."

Floor plan financing is a line of credit that allows dealers to borrow against their inventory, and then repay that debt as they sell their inventory or borrow against the line of credit again to add new inventory.

About Camping World RV Sales
Camping World RV Sales operates a dynamic network of well-established local and regional RV dealerships that unite to benefit customers, employees, suppliers and the RV industry. The Camping World RV Sales dealerships engage in the retail sale, finance, and service of recreational vehicles, with over $350 million of new and used recreational vehicle inventory representing over 13 RV manufacturers and 150 brand names. Today Camping World RV Sales serves over four million RV enthusiasts. Visit www.CampingWorld.com for more details.

Camping World
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USW Values USTR Settlement of 'Zeroing' in Trade Disputes

Tue, 07 Feb 2012 15:50:16 +0000

USW Values USTR Settlement of 'Zeroing' in Trade Disputes

PR Newswire

Obama Administration Needs to Clarify U.S. Rights within WTO

WASHINGTON, Feb. 7, 2012 /PRNewswire-USNewswire/ -- Leo W. Gerard, International President of the United Steelworkers (USW), today issued a positive but cautious reaction to the signing of understandings reached by the U.S. with the European Union, and separately with Japan, in long running trade disputes over antidumping methodology called 'zeroing.'

(Logo: http://photos.prnewswire.com/prnh/20080131/DC12982LOGO)

"USW members have been a petitioner or supporter of more than a third of the antidumping cases brought against imports during the last twenty years," Gerard said. "Strong trade remedy laws are important for stopping the destructive practices of many of our trading partners who dump products in our market that harm our union members and domestic producers."

Historically, U.S. law has captured 100 percent of dumping found with no reduction based on non-dumped sales. The World Trade Organization (WTO) Appellate Body, in a series of decisions in the last decade, viewed the WTO Antidumping Agreement as requiring WTO members to give 'credit' for non-dumped sales. The U.S. under two Administrations has viewed the WTO Appellate Body decisions as overreaching and contrary to what the U.S. had negotiated.

The agreements made by the USTR with the European Union and Japan were the result of U.S. efforts to settle long standing disputes with two major trading partners.

The USW has long urged a clarification of U.S. rights within the WTO in the ongoing Doha negotiations to specifically permit capture of 100 percent of dumping found, while also seeking to clarify the intended limits on the power of the WTO Appellate Body. The announcement from U.S. Ambassador Ron Kirk is a positive development on two counts – and raises cautions on a third.

"One count of our core objectives has been met with these announced agreements – a prospective application of any change – meaning no retroactivity – while avoiding retaliation is certainly a very positive outcome," Gerard said.

"Also positive is Ambassador Kirk's confirmation that the U.S. will continue to pursue clarification of our rights within the WTO to apply zeroing, which is important to all companies and their workers who rely on conditions of fair trade in the U.S. We will be working with the Administration to see that the clarification happens as quickly as possible," he added.

The USW President acknowledged there was no question that the modification will significantly undermine the historic ability of our antidumping duty law to address all injurious dumping.

"U.S. manufacturers and their workers will be disadvantaged, which now makes clarification of such rights extremely important."

Gerard said the USW will be monitoring how the changes are implemented and trusts that the Administration will rebalance the operation of U.S. law so jobs are not needlessly lost to international price discrimination. "This is a highly technical area of the law but, it has a huge impact on the jobs of our members," he explained.

"The Administration has the opportunity to review and alter existing U.S. practices by reviewing our rights under international law and determining how we can alter our approach to address the predatory pricing of our competitors to implement our rights and fight for our producers and workers."

Gerard emphasized: "Rebalancing must be a priority of the Obama Administration and of the Congress. No group has a greater interest in the vigorous enforcement of our antidumping law than the men and women who are employed in American manufacturing facilities."

The USTR Ron Kirk's announcement on the zeroing disputes can be viewed HERE.

Contact: Gary Hubbard, 202-256-8125, ghubbard@usw.org;
Wayne Ranick, 412-562-2444; wranick@usw.org

SOURCE United Steelworkers (USW)

Private Exporters Report Sales Activity for Morocco

Tue, 07 Feb 2012 14:13:48 +0000

WASHINGTON, Feb. 7, 2012-- Private exporters reported to the U.S. Department of Agriculture export sales of 20,000 metric tons of soybean oil to Morocco during the 2011/2012 marketing year.

The marketing year for soybean oil began Oct. 1.

USDA issues both daily and weekly export sales reports to the public. Exporters are required to report to USDA any export sales activity of 100,000 metric tons or more of one commodity, except 20,000 tons for soybean oil, made in one day to one destination, by 3 p.m. Eastern time on the next business day following the sale. Export sales of less than these quantities must be reported to USDA on a weekly basis.

For further information, contact the Export Sales Reporting Staff at (202) 720-9209.

Transcepta Procure-to-Pay Network Selected to Simplify Accounts Payable for Manheim

Tue, 07 Feb 2012 13:00:00 +0000

Transcepta, the leading global procure-to-pay (P2P) network, today announced that Manheim selected Transcepta to simplify Manheim's accounts payable process and eliminate the costs associated with paper transactions.

Manheim, the world's leading provider of vehicle remarketing services and a division of Cox Enterprises, wanted to improve its process by connecting electronically with its suppliers.

Manheim researched a solution that would maximize supplier adoption and enable secure, cloud-based business transaction and collaboration, eliminating the need for paper invoices and related documents.

"I'm proud to work for an organization that places such importance on respecting the environment," said Nancy Patin, Manheim's senior director of Enterprise Resource Planning. "Choosing to communicate electronically with suppliers to eliminate much of the paper processing for Manheim and its suppliers was an absolute no brainer, and working with Transcepta gave us the flexibility we needed to reach virtually all of our suppliers. We estimate we'll eliminate the need for 5 million pieces of paper a year."

Because supplier adoption is critical to successful P2P projects, Transcepta employs its own industry-leading technology and unique approach to supplier on-boarding. To maximize adoption, Transcepta manages the entire on-boarding process for its customers, notifying suppliers of the initiative and working with them to determine their optimal electronic connection option.

For each connection option, set-up is completed in minutes, enabling suppliers to transact directly from their existing systems for guaranteed, secure delivery. With Transcepta, suppliers do not pay any fees or require IT resources.

"We're delighted to have Manheim as a customer. Their confidence in us further proves that the Transcepta Network model of not charging suppliers and making it easy for them to connect is the preferred model for P2P project success," said Shan Haq, Transcepta vice president.

About Transcepta
Transcepta is the leading procure-to-pay (P2P) network. Transcepta enrolls suppliers, employing a best practice approach, and connects them to customers around the world. Customers collaborate and transact electronically to reduce costs, communicate more efficiently, and make business relationships more productive. Since 2005, Transcepta has connected tens of thousands of trading partners and processed millions of transactions to become the fastest growing network. For details visit www.transcepta.com.

Trademarks
Transcepta is a trademark of Transcepta LLC. Other names may be trademarks of their respective owners.

Jill Hennigan
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PENSRUS Pens Reduced Prices on PaperMate Personalized Products

Tue, 07 Feb 2012 12:45:00 +0000

PaperMate advertising pens are being offered at extremely reduced prices by PENSRUS, an online personalized pen and promotional product seller. PENSRUS has over 50 years of experience and industry relations, providing advertisers and business owners with high quality products while becoming a mainstay in the promotional products business. PENSRUS specializes in the distribution of imprinted and engraved pens, custom logo pens, sticky notes, and other specialty marketing items.

PENSRUS is drastically discounting prices on PaperMate business pens throughout the rest of the 2012. Both consumers and marketers alike can choose from the hundreds of different styles and options that PaperMate and PENSRUS have to offer, including retractable ballpoint ink and gel pens, stick pens, TriEdge pens, pencils, and much more.

"PaperMate logo pens are popular due to their high quality workmanship," comments PENSRUS CEO Henry Morgan. "No matter how many times a PaperMate pen has been used, PaperMate's tungsten carbide ball produces the most excellent writing experience, time after time."

Because PaperMate offers a guarantee on each and every one of their products, these inexpensive, yet quality pens are suitable for both companies on a large or small budget and are dependable for all writing needs and particular occasions.

One of PaperMate's most popular items, a consistent consumer favorite, is the PaperMate TriEdge ink pen. With imprint option on up to three different sides, advertisers can market their message, contact information, and logo by repeating the same message on all three sides for highest visibility, or can choose different messages for each location to provide more variety. Imprint-friendly white barrels with colorful triangular grips complement virtually any logo. These discount pens are virtually a walking billboard for any company large, or small.

For more PaperMate products, and to take advantage of PENSRUS' free shipping offer, please visit www.PENSRUS.com.

About PENSRUS

Founded online in 2001 with over 50 years of industry experience, PENSRUS has helped thousands of companies each year to increase brand awareness through their high quality products. PENSRUS is a leading distributor of specialty advertising and promotional products and offers a wide array of personalized products including customized pens, pencils, sticky notes, and more.

Contact information:
PENSRUS
PENSRUS.com
800-736-7787
info(at)PENSRUS(dot)com

Djibouti's: IMF Executive Board Completes Fifth Review Under Extended Credit Facility Arrangement and Approves Request for Augmentation of Access and US$ 9.7 Million Disbursement

Mon, 06 Feb 2012 23:13:02 +0000

The Executive Board of the International Monetary Fund (IMF) completed today the fifth review of Djibouti’s economic performance under the Extended Credit Facility¹ arrangement (ECF) and approved the authorities’ request for an augmentation of access of SDR 9.54 million (US$14.7 million, 60 percent of quota) to meet the additional external financing needs created by the increase in global commodity prices and the drought in the Horn of Africa. The augmentation will be disbursed in equal parts upon completion of the fifth and sixth reviews.

The Board’s decision enables the immediate disbursement of SDR 6.246 million (about US$9.7 million), bringing total disbursements under the program to SDR 16.014 million (US$24.75 million).

The Board also approved the authorities' request for two waivers of nonobservance of the end-June 2011 performance criteria on the fiscal balance and on net banking system credit to the government. Furthermore, the Board granted waivers of nonobservance on the continuous performance criteria on the non-accumulation of external arrears and the accumulation of new domestic arrears (related to delays in the payment of salaries and pensions), which were not observed in the second semester as a result of the tight cash flow situation. These waivers were granted on the grounds of temporary or minor deviations from the program objectives or the corrective measures undertaken by the authorities. The Board also granted a waiver for the non-observance of the external payments arrears performance criterion following minor data revision after the completion of the fourth review under the ECF arrangement.

The ECF arrangement for Djibouti was approved in September 17, 2008 (see Press Release No. 08/211) for an amount to SDR 12.72 million (about US$19.66 million, or 80 percent of the country’s quota in the Fund). On January 7, 2011, the ECF arrangement was extended by 9 months, through June 16, 2012 (see Press Release No. 11/3).

After the Executive Board's discussion, Ms. Nemat Shafik, Deputy Managing Director and Acting Chair, said:

“Djibouti has been hit hard by the spike in commodity prices and the Horn of Africa drought, which have affected particularly the poorest households. These shocks have hiked imports, especially on food and fuel, thus increasing the current account and external financing needs, and have put pressure on fiscal space through lower tax revenues and higher fuel subsidies. The augmentation of access of 60 percent of quota under the ECF will help Djibouti meet the additional financing needs stemming from the two exogenous shocks.

“Looking ahead, strong commitment to the ECF-supported program is necessary to maintain macroeconomic stability and reduce poverty. Fiscal policy should focus on increasing revenues and controlling expenditure, while protecting priority social expenditure and capital investment. Further progress on public financial management will strengthen the budget process. Pursuing prudent debt policies, including avoiding non-concessional borrowing remain critical for maintaining debt sustainability.

“Strengthening bank supervision and regulation will help address the challenges posed by the rapid development of the financial sector. Structural reforms should aim at improving competitiveness and fostering private sector development. Reforming the state-owned energy company will lower energy costs and reduce government transfers.”

¹ The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years (http://www.imf.org/external/np/exr/facts/ecf.htm). The Fund reviews the level of interest rates for all concessional facilities every two years.

Transcript of a Conference Call on Pakistan

Mon, 06 Feb 2012 22:13:12 +0000

MR. ANSPACH: Good morning, everybody and thanks you for joining this teleconference. This is Raphael Anspach, with the External Relations Department of the International Monetary Fund, in D.C.

Joining us today for this conference call on Pakistan is Mr. Adnan Mazarei, who is the IMF Mission Chief for Pakistan. And two of his colleagues who are senior desks for Pakistan, as well.

Now, before we start, let me remind you that this call and the PIN to which you have access today are embargoed until 9:45 am D.C. time.

With that, I'd like to now turn it over to Mr. Mazarei, who will have short introductory remarks, and then will be happy to take your questions. Thank you. Mr. Mazarei.

MR. MAZAREI: Thank you very much. Good morning, ladies and gentlemen. Thank you very much for taking the time to listen to our views on Pakistan.

As you may be aware, we had a Board meeting on Friday, on Article IV discussions with Pakistan. Directors were very much in sympathy with the experience of the Pakistani people in recent years, –expressed their dismay about the population’s experience of the floods, security problems, and the general economic difficulties.

The IMF’s Executive Board indicated that Pakistani policy-makers have taken important actions, and implemented several reforms in the wake of the crisis in 2008. These actions have included establishment of an interest rate corridor, a more market-oriented exchange rate system, and an improvement in enforcement powers of the central bank.

In addition, the authorities have substantially raised electricity tariffs and domestic prices of the main petroleum products, but at the same time have taken some steps to support the most vulnerable segments of the population through the Benazir income support program.

More recently, however, with unresolved structural problems, especially in the energy sector, vulnerabilities have increased. And, of course, these vulnerabilities should be understood in the context of a much more difficult global environment. Real GDP this year is expected to grow at 3-1/2 percent -- well below the 7 percent that is needed to absorb the two million new labor market entrants that join the labor force annually. Additionally, inflation is persistently in double digits.

Last year, the fiscal deficit widened to 6.6 percent of GDP. And monetary policy was accommodative.

This year, while the economy is recovering from the floods, the external position which, until recently, was a source of strength on the back of booming exports and workers' remittances, is deteriorating somewhat, and there have been some pressures on the Pakistan rupee.

In 2011/12, we expect GDP, as I mentioned, to be about 3.4 percent, and CPI inflation at about 12 percent. In the absence of corrective measures, the fiscal deficit is likely to reach 7 percent of GDP. Now, if the authorities succeed in selling 3G licenses, of course, this deficit will be lower.

Our Executive Board noted that in light of this background, there were measures that would need to be taken in the short run to reduce vulnerabilities. And at the same time, measures that needed to be taken to raise growth and make sure it is inclusive growth over the medium term.

To address these vulnerabilities, a short-term action plan is needed that includes strengthening of public finances, and a tightening of monetary policy if inflation increases. It is particularly important to address the problems in the energy sector, and also the public enterprises which are consuming a large amount of subsidies and resources every year.

With regard to creating employment opportunities and raising living standards, what is needed, is first and foremost, fixing the energy supply, reducing the state's footprint in the economy by restructuring loss-making public enterprises, improving the investment climate, civil service reform, and also taking steps to improve the situation in the financial sector to allow better channeling of savings to borrowers and to investors.

I will be very happy to answer any questions you may have at this moment.

SPEAKER: Yes, Mr. Mazarei, thanks for this important information. I would like to ask you -- you mentioned energy sector and the problems created by it, and the issue of subsidies, as well as the external situation. And you particularly mentioned the remittances decreasing.

So, what is the reason for this external situation to go down, because Pakistani policy managers are very hopeful about it? And what are your recommendations for the energy sector, and for the subsidies as they are now?

MR. MAZAREI: Thank you very much for your question.

On the external sector, the deterioration is coming, in large part, because of the developments in the international economy. Commodity prices, prices of cotton and textiles for Pakistan in particular, have come down drastically, while at the same there are important risks to oil prices.

And because global economic activity is not robust, the demand for Pakistani products is coming down. And this may also affect remittances.

On energy sector issues, as you know, the Fund is not an expert. And we often defer to our colleagues in the World Bank and the Asian Development Bank for the technical plans as to how to address these sector problems. And the case remains so.

What we indicate to the authorities -- and the authorities are quite aware of this -- is that without structural change in the energy sector -- and this doesn't just mean price increases, it means fundamental changes in the structure and the management of the sector -- untargeted electricity subsidies will remain large, at about 2 percent of Pakistan’s annual output which, by all measures, given the resource base in Pakistan, is quite high.

SPEAKER: Yes. Good morning. Two questions.

One is about the monetary policy. So I just want to make -- you say it's "too accommodative," but then you say it should be tightened only if -- well, not "only," but if inflation accelerates.

So did you consider that rates are too low at this point, and should be increased as soon as this month? Or it's not that urgent.

And, second, regarding the IMF relationship with Pakistan, when are they starting to repay the first loan? And is there any talk of a [renewed] loan?

MR. MAZAREI: I’ll start with your second question.

Repayments to the Fund start in February, and the authorities have not requested a new program.

On monetary policy, I'm not going to comment on whether their rate should be increased or not at this stage. But what I would like to say is that, in the past year, the government has been borrowing both from the Central Bank, and large amounts from the commercial banks. The Central Bank has been injecting large amounts of liquidity into the money markets -- which will push up prices, and eventually raise considerable pressures on interest rates.

SPEAKER: Good morning.

I was wondering if you could give us a sense of -- I mean, the IMF uses all these words about re-orientating the economy, you know "vulnerabilities," and so on.

But, you know, in short, it looks like Pakistan is pretty much in dire straits right now. And what are the -- you know, beyond the steps that it needs to take, and obviously will take some time, including, you know, management of its finances and stuff.What immediate steps need to be taken to help its situation?

And then, I suppose, would you give any kind of advice to the Central Bank, and what they should do in the upcoming monetary policy meeting on February 11^th?

MR. MAZAREI: Well, as you correctly said, Pakistan is facing vulnerabilities. By "vulnerabilities" we, of course, mean pressures and risks.

The way we recommended to the authorities to address these vulnerabilities is to recognize that we are all, including Pakistan, living in a more dangerous environment because of the deteriorating global environment -- and to build buffers.

One, to make sure there is immediate reconsideration of some of the non-essential spending in the budget.

Two, making sure monetary policy doesn't end up pumping in too much rupees in search of dollars.

Third, to protect foreign exchange reserves by making the exchange rate more flexible. And, to the extent possible, seeking financial assistance from donors.

SPEAKER: Yes, thank you very much. And good morning, everybody.

My first question is regarding the fiscal deficit, as you mentioned, that it will be around 7 percent of GDP, but if the government succeeds in auctioning the 3G licenses, it will be a little less. Of course, that will depend on the price that the government sees for the 3G license.

But could you just tell us how much would be -- what would (inaudible) if the government succeeds in the 3G auction license?

And also, my second question is that this year, as you mentioned, that Pakistan has to pay $1.2 billion to the IMF [FY 2011/12].

In the next couple of fiscal years, the bigger loans have to be paid back. Do you see any other dollars coming in, into Pakistan, that would help Pakistan to pay off its IMF loans and not dent its exchange rate to a big extent?

MR. MAZAREI: First and foremost, on the budget.

The authorities estimate a maximum of about $700 to $800 million from the sale of 3G -- which, if it happened, will bring down the budget deficit to around 6.6% of GDP. But that's the maximum, and I have no idea about how much may actually earned on these 3G licenses.

With regard to foreign inflows, there are various donors, official and bilateral, like the World Bank and ADB, and the Islamic Development Bank, and others, who have regular disbursements to Pakistan, which should be coming in. Now, depending on -- the adequacy of these will, in large part, depend on, especially, the commodity price outlook, and how this outlook materializes, especially for cotton and petroleum products.

SPEAKER: Thank you. Good morning.

I would like to ask a question about unemployment. You're saying that unemployment is high, when you take into account underemployment, or unpaid employment. And you say that unemployment should rise, since growth is too low to employ people who are entering the labor market.

But you don't give any figures. Could you give us a sense of how high the unemployment rate is in Pakistan right now?

MR. MAZAREI: The official unemployment rate is 6 percent now. But this figure does not capture the partially employed and, for instance, household workers who are not paid.

The problem, in addition to the level of unemployment, is that there are about a couple of million people who enter the labor force every year. And, as I noted, the authorities, in their growth strategy, have indicated that they need about a growth rate of 7 percent per annum to absorb this increase in the labor force. And with growth rates of 3 to 4 percent per annum that we have right now, the task of creating jobs is becoming more difficult.

SPEAKER: A follow up question if I may. Six percent is the official rate, but it seems very underestimated. Can we say it's -- the unofficial rate could be twice or three times this one?

MR. MAZAREI: I am not in a position to give you an indication. It certainly is higher than this.

SPEAKER: Mr. Mazarei, I was wondering if you could give us a sense of whether Pakistan is headed for a balance-of-payments crisis? And there have been some -- I mean, I just want to clarify, are you still disbursing -- you're not disbursing any more to Pakistan, are you?

MR. MAZAREI: The [Stand-By Arrangement] program ended last September.

And we are not disbursing.

Now, like a lot of countries in the world right now, the external outlook for Pakistan is [uncertain]. Until recently, exports, especially of textiles, have been high, and remittances have been high.

Looking ahead, prices of cotton and textiles have come down and they [may] have bottomed out. And remittances are still strong, but they're subject to risks.

A couple of good things have happened in the recent weeks, too. One is the improving trade relations with India. And, secondly, there's a new arrangement with the World Trade Organization to give tariff exemptions to 75 items, which should help Pakistan's external position.

There are upside risks and negative risks, but unless there are measures taken -- especially to rein in the fiscal deficit, and the monetary policy tightening that is probably needed right now -- pressures on the rupee could continue.

At the same time, of course, much of what is happening in Pakistan's balance of payments and exchange market is affected by the political situation, which has a life of its own. And it's difficult to predict for us.

SPEAKER: One quick question regarding the fiscal deficit, again, and as you mentioned, the 3G license.

The Finance Minister (inaudible) after the 3G license he expects the Coalition Support Fund reimbursement to materialize during this fiscal year. And also, proceeds from Etisalat, $800 million.

So, have you not factored that in? And if that money comes in, then the fiscal deficit would improve a little bit?

MR. MAZAREI: We've done so to some extent, but a lot depends on how much and when. Of course, as you said rightly, the more through 3G, and the more the Coalition Support Fund come in, there will be more budgetary space, and the deficit will be lower.

Thank you.

MR. ANSPACH: Well, with that, I would like to thank Mr. Mazarei for his availability.And I would like to remind everybody that the call and the PIN to which you've had access are embargoed until 9:45 D.C. time.

Also I would also like to inform you that the Staff Report on Pakistan will be made available in the coming days.

Thank you very much again.

* * * * *

Ronald Reagan Building and International Trade Center and the Meridian International Center Join Together in Partnership

Mon, 06 Feb 2012 18:29:09 +0000

Ronald Reagan Building and International Trade Center and the Meridian International Center Join Together in Partnership

PR Newswire

WASHINGTON, Feb. 6, 2012 /PRNewswire-USNewswire/ -- Trade Center Management Associates, the trade center manager for the Ronald Reagan Building and International Trade Center, and the Meridian International Center signed an agreement to foster greater cooperation between the two organizations. Signed by John P. Drew and Ambassador Stuart Holliday, the Reagan Building and Meridian will become partners on a series of collaborative and complementary activities.

(Logo: http://photos.prnewswire.com/prnh/20100714/ITCLOGO )

The memorandum provides a framework for the two organizations to work cooperatively using their strengths, experience and resources to pursue international projects that advance the missions of both organizations. Shared efforts will include jointly hosted, co-branded events and programs, trade delegations and international visitor's meetings as well as internationally themed art and cultural exhibitions. Joint projects have commenced.

"We are delighted by the expansive possibilities our alliance with Meridian will create and we are looking forward to a successful partnership," said John P. Drew, CEO, Trade Center Management Associates. The Reagan Building is a special project of the U.S. General Services Administration.

"With its signature location between the White House and the Capitol, we envision a unique opportunity to work with our partners at the Ronald Reagan Building and International Trade Center to develop greater international collaboration and understanding," responded Ambassador Holliday, President and CEO of Meridian International Center.

Founded in 1998, the Reagan Building brings together government, business, associations and thought leaders to fulfill its congressional mandate to promote United States exports through expanded trade opportunities for small and medium sized companies. The Reagan Building is also the official World Trade Center Washington, D.C. through its membership in the World Trade Center Association. The building is one of 300 Trade Centers in 100 countries.

Founded in 1960, Meridian's mission is to strengthen international understanding through the exchange of people, ideas, and culture. Meridian achieves its mission through leadership exchanges; cultural exhibitions; conferences, seminars, global readiness training; and public programs and events.

For more information, please contact Allyson Browne McKithen at 202-312-1563.

About the Office for Trade Promotion at the Ronald Reagan Building and International Trade Center
The Ronald Reagan Building and International Trade Center (ITC) is a preeminent forum in the heart of the nation's capital advancing international commerce and cross-cultural dialogue. As a seamless, unifying framework, the ITC provides a platform for building connections, fostering diplomacy, growing businesses and creating a more prosperous U.S. and global economy. The ITC also serves as the World Trade Center Washington, D.C.

The Office for Trade Promotion (OTP), the programming arm of the International Trade Center, partners with an extended network of public and private-sector organizations to convene signature events that foster international dialogue, generate business opportunities, educate the public, and provide small and medium-sized enterprises (SMEs) the resources they need to thrive in today's complex trade environment. For more information, please visit www.itcdc.com.

About Meridian
Meridian International Center's mission is to strengthen international understanding and serve as a center of innovation for engaging the public sector, private sector, and diplomatic community in an exchange of ideas, people, and culture.

Through more than 200 annual programs and projects, Meridian brings together leaders from business, government, and civil society through conferences, exchanges, and online networking, and provides a unique Washington venue for members of the Diplomatic corps to gather, learn, and inform. For more information, visit www.meridian.org.

Contact: Allyson Browne McKithen, Senior Operations Manager,
Office for Trade Promotion
Ronald Reagan Building and International Trade Center
202-312-1563 / AMcKithen@itcdc.com

SOURCE Ronald Reagan Building and International Trade Center

U.S. Containerized Imports Grew 3 Percent in 2011

Mon, 06 Feb 2012 17:22:59 +0000

U.S. Containerized Imports Grew 3 Percent in 2011

Year Ends on Upturn, Expansion in Home Sales Market Vital for Sustained Growth, Cautions Economist for The Journal of Commerce/PIERS

PR Newswire

NEWARK, N.J., Feb. 6, 2012 /PRNewswire/ -- U.S. containerized imports closed 2011 with a surge, with goods related to the recovering housing and auto markets pushing inbound volume up 3 percent year-over-year in December, according to figures from The Journal of Commerce/PIERS.

(Photo: http://photos.prnewswire.com/prnh/20120206/NY48130 )

The growth marked a rebound from weakness earlier in the fall and lifted containerized imports for the year up 3 percent over 2010 and 1.9 percent in the fourth quarter over the same period last year. The Journal of Commerce/PIERS Economist Mario O. Moreno remains cautious in his outlook for 2012, despite the late-year growth.

A pick-up in sales of existing homes supported a 5 percent upswing (to 144,679 20-foot equivalent units) in U.S. furniture imports. Growth in the manufacturing sector also pushed auto parts imports up 19 percent, driving December increases in imports from Germany and Mexico. Requests for the import or return from Mexico of empty containers, for U.S. export and domestic use, rose by 264 percent.

"The overall economy continues to recover in a stubbornly slow fashion, which makes it highly vulnerable to shocks," Moreno said. "The auto industry cannot by itself sustain the import trade, but a steady, self-sustained recovery in home sales is decidedly required to support growth going forward." Moreno's 2012 container imports forecast remains cautiously at 2.5 to 3.5 percent, despite fourth quarter data above his earlier predictions.

On a month-over-month basis, overall U.S. containerized imports fell 11.7 percent in December.

A full analysis of the JOC/PIERS findings is available online at www.joc.com.

To become a member of The Journal of Commerce click here. JOC members have access to our weekly print and digital magazine and Web site, as well as a 10 percent discount on all JOC events and trade shows, UBM Global Trade Directories and select PIERS products. Authoritative editorial content in the form of daily news, weekly analysis and regular features ensure our members have the information and data necessary to understand the issues facing trucking, rail and maritime transportation. Members enjoy access to "By the Numbers," an exclusive weekly compilation of key industry statistics that provides detailed views of current market trends across all modes. Regular market intelligence reports -- utilizing PIERS trade data -- include Top 100 Imports and Exporters, quarterly Top 40 Container lines, Trans-Pacific and Trans-Atlantic Maritime Forecasts and Top Container Ports and Terminals. Market-sector supplements, including Breakbulk, Cool Cargoes, 3PL, JOC Guide to Trucking and others, ensure all modes are comprehensively covered.

About PIERS -- PIERS is the most comprehensive database of U.S. waterborne trade activity in the world providing information services to thousands of subscribers globally. Launched more than 35 years ago, PIERS was the first venture in digital global trade intelligence and quickly became the industry standard for accuracy, reliability and insight. Our unique infrastructure and proprietary technology allow us to not only publish import data but also complete coverage of U.S. export transactional data. PIERS is a division of UBM Global Trade, and a sister company of The Journal of Commerce. For more information, visit www.piers.com, or call 800-952-3839 (+1-973-776-8660).

About UBM Global Trade -- UBM Global Trade is the leading provider of proprietary data, news, business intelligence and analytical content supporting commercial maritime, rail, trucking, warehousing and logistics industries worldwide. The company's portfolio of more than 100 online, print and interactive workflow business solutions includes The Journal of Commerce, Breakbulk, RailResource, PIERS and an array of international trade and transportation databases and directories. UBM Global Trade, a subsidiary of UBM plc, is headquartered in Newark, NJ, with offices throughout the United States. For more information, explore www.ubmglobaltrade.com or call 800-223-0243 (+1-973-848-7250 outside the U.S. or Canada).

SOURCE UBM Global Trade

Council on Competitiveness Speaks in Support of Recent WTO Ruling on U.S. Challenge of China's Raw Materials Export Restraints

Mon, 06 Feb 2012 16:22:26 +0000

Council on Competitiveness Speaks in Support of Recent WTO Ruling on U.S. Challenge of China's Raw Materials Export Restraints

PR Newswire

WASHINGTON, Feb. 6, 2012 /PRNewswire-USNewswire/ -- The Council on Competitiveness applauds the recent World Trade Organization (WTO) ruling that finds export restraints imposed by China on several important industrial raw materials to be inconsistent with China's WTO obligations.

In remarks earlier today, Council President and CEO, Deborah L. Wince-Smith stated: "This ruling will improve U.S. manufacturing competitiveness by removing market-distorting policies that unfairly advantage Chinese producers. We are encouraged by President Obama's support for American manufacturers and remain hopeful that U.S. Trade Representative Ron Kirk will pursue similar cases against China to liberate trade in rare earths."

Monday's WTO findings are congruent with key recommendations put forth in the Council's recent MAKE: An American Manufacturing Movement report, which call for renewed efforts to "negotiate and enforce enhanced rules on foreign government export restrictions that are currently being used by other countries to manipulate and distort markets."

About the Council on Competitiveness

For 25 years the Council on Competitiveness has developed solutions to drive U.S. competitiveness, productivity and standard of living. We are CEOs of major American corporations; presidents of the nation's top universities, colleges and community colleges; and leaders of labor unions whose membership extends nationwide.

PRESS CONTACT:
Douglas Rohde
Communications Director
T (202) 383-9507
F (202) 969-3406
drohde@compete.org

SOURCE Council on Competitiveness

EU and U.S. Agree to Bring Excessive American Anti-dumping Duties Down to WTO Level

Mon, 06 Feb 2012 16:19:20 +0000

EU and U.S. Agree to Bring Excessive American Anti-dumping Duties Down to WTO Level

PR Newswire

WASHINGTON, Feb. 6, 2012 /PRNewswire-USNewswire/ -- The European Commission and the United States today solved one of their most longstanding WTO disputes concerning the U.S. calculation practice of so-called "zeroing" in anti-dumping investigations. They signed a roadmap which sets out the steps the U.S. will take to comply with WTO rulings in the future calculation of duties when the U.S. authorities find that some imported products from a particular exporter enter the U.S. market below the normal market price. As a result, no European Union exporter should be subject to an anti-dumping duty affected by zeroing in the future. The EU will closely monitor the U.S. application of this new practice.

"This understanding solves this longstanding dispute," said EU Trade Commissioner Karel De Gucht. "It will bring immediate relief to EU exporters who will no longer have to pay excessive anti-dumping duties; some of them will not pay any anti-dumping duties at all." Referring to intensive negotiations over the past months, he welcomed that the EU and U.S. were able to find a way forward. "We have now re-established a level playing field for our companies," he added.

"Zeroing" is a calculation method the U.S. authorities used when calculating duty rates for products that entered its market at dumped prices in review investigations. Anti-dumping duties are additional duties which are imposed on top of the normal customs duty to offset dumping. Until now, the current U.S. calculation practice led to higher duties for EU exporters, despite the fact that this methodology was found to be WTO-inconsistent in a series of dispute settlement cases.

With the roadmap signed today, the U.S. committed itself to apply a new methodology to calculate anti-dumping duty rates in all new review anti-dumping investigations launched as of mid-February 2012. In addition, the anti-dumping duty rates on goods imported into the U.S. after May 2010 will also be determined under the new methodology without zeroing. This will benefit about 30 EU exporters who are currently affected by ongoing U.S. anti-dumping administrative reviews for 10 different products.

Furthermore, 35 EU exporters in anti-dumping cases for 8 different products, some of which are currently not taking part in U.S. anti-dumping administrative reviews but are affected by zeroing, will have their anti-dumping duty rates determined without zeroing. Therefore, as of June 2012, no EU exporter should be subject to an anti-dumping duty affected by zeroing. At a very rough estimate, this could save EU exporters about USD 15 million a year.

For further information, please see:
Press Release and Background:
http://trade.ec.europa.eu/doclib/press/index.cfm?id=775
MEMO What is Zeroing?
http://trade.ec.europa.eu/doclib/docs/2012/february/tradoc_149065.pdf
Roadmap Addressing "Zeroing:"
http://trade.ec.europa.eu/doclib/docs/2012/february/tradoc_149066.pdf

SOURCE Delegation of the European Union to the United States

Statement by the WB, EC and IMF on the Review of Romania's Economic Program

Mon, 06 Feb 2012 16:10:00 +0000

Staff teams from the World Bank (WB), European Commission (EC) and the International Monetary Fund (IMF) visited Bucharest from January 24 until February 6 for the regular review of Romania’s economic program.¹ The objectives of the program are to solidify economic growth, while maintaining macroeconomic and financial stability.

The teams’ assessment is that the program remains on track. All IMF quantitative performance criteria for end-December were met. The authorities have made good progress in implementing program policies in a very difficult external environment. Going forward, continued prudent macroeconomic policies and accelerated structural reforms are important to ensure strong economic performance and instill market confidence.

For 2011, we have revised upwards our growth estimate to around 2½ percent, thanks in part to a bumper harvest. Inflation has also fallen sharply and came within the National Bank of Romania’s inflation target band. For 2012, we have slightly revised down our forecast in light of the more difficult economic environment in the Euro Area. We now project growth of 1½ to about 2 percent, depending on improved domestic demand and better absorption of EU structural funds. Inflation is expected to remain within the target band. The current account deficit is projected to be around 4-4½ percent of GDP.

In spite of global financial market tensions and deterioration in domestic asset quality, the banking sector has remained resilient. The average capital adequacy ratio of the banking sector stayed high at 14.5 percent at end-December 2011. Although bank lending to the corporate sector has picked up, credit growth has been weak in real terms, reflecting weak credit demand.

Continued fiscal consolidation has improved Romania’s credibility. The successful placement last week of a 10-year dollar bond bears witness to this. In 2011, Romania reached its general government budget deficit target of 4.4 percent of GDP (in cash terms). Encouragingly, the government also succeeded in paying off a substantial amount of arrears and unpaid bills at the end of the year. Initial estimates suggest that it has also achieved a deficit in accrual (ESA) terms well below the 5 percent of GDP program target. There was a slight underperformance on the revenue side, due mainly to lower than planned grants from the EU, which was more than compensated by savings on the expenditure side.

For 2012, the government continues to be firmly committed to reducing the general government budget deficit to below 3 percent of GDP in accrual (ESA) terms. Reflecting the need for prudence, the authorities continue to target a 1.9 percent of GDP cash deficit, or 2.1 percent of GDP including expenditures of the National Development and Infrastructure Program. Meeting these ambitious fiscal targets will require continued expenditure restraint.

We have agreed with the authorities the key parameters of the path towards price deregulation in the electricity sector, which is essential to ensure proper market functioning in line with EU legislation and to trigger the urgently needed investments in this important sector. Accordingly, regulated prices for non-residential consumers will be phased out gradually by the end of 2013. For households, prices will be adjusted gradually to reach market levels by 2017 rather than by 2015 as originally agreed. Additional government revenues from energy price liberalisation could be used to mitigate the impact of the price adjustment for those in real need. On gas, we have agreed to discuss the roadmap during the next review mission. In the meantime the government will explore with the industry fiscal and regulatory measures governing energy exploration, production and distribution.

The government remains committed to implementing a comprehensive reform of the health sector to put it on a sustainable financial footing and improve its effectiveness and efficiency. Pending this review, a number of concrete measures will be taken in the short term with a view to immediately address some deficiencies.

State-owned enterprises continue to be in urgent need of accelerated reforms to make them more efficient. These reforms include the sale of minority or majority stakes in some companies and the introduction of professional private management. The newly adopted law on corporate governance in state-owned enterprises is an important step to address inefficiencies. Strategies are being implemented to reduce arrears and put the state-owned enterprises on a sound financial footing. A strong regulatory framework will be important for ensuring reasonable prices in case of partial or full privatization of some state-owned enterprises.

The next review of the program is scheduled for late April – early May 2012.

For more information on the Stand-By Arrangement with the IMF, please see the following links:

Romania and the IMF: http://www.imf.org/external/country/ROU/index.htm
Key documents are also available in Romanian: http://www.fmi.ro/

For more details on Romania and on the EC’s Balance of Payments assistance, please see the following links: http://ec.europa.eu/economy_finance/eu/countries/romania_en.htm

For more information about the World Bank Group, please visit: www.worldbank.org

For information about the World Bank and Romania, please visit www.worldbank.org/ro

¹ It was the fourth review of Romania’s Stand-By Arrangement with the IMF (providing up to around EUR 3.5 billion of financial assistance) and the second interim review of the Program by the EC (providing up to EUR 1.4 billion of financial assistance). Subject to completion of this review by the IMF’s Executive Board, the fifth tranche of SDR 430 million (around EUR 505 million) will become available. The Executive Board meeting is tentatively scheduled for end-March. The authorities will continue to treat both arrangements as precautionary, i.e., not drawing on the available resources. The World Bank is currently working with the authorities on a Deferred Draw Down Option (DPL DDO) for EUR 1 billion to be approved by June 2012 to help support the fiscal buffer.