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'Mr. Yen' is back on the front page


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By Edward Neilan
SPECIAL TO WORLD TRIBUNE.COM

December 1, 1999

TOKYO -- The Japanese trial balloon to place one of its financial stars--Eisuke "Mr. Yen" Sakakibara--in the running for International Monetary Fund managing director is still aloft.

American and European sharpshooters have been trying to puncture the balloon ever since it was launched officially about two weeks ago by Japanese Finance Minister Kiichi Miyazawa. Before that, the idea had been heard in whispers in Tokyo, New York and London.

It was an added controversial topic on the sidelines of the World Trade Organization (WTO) "circus in Seattle."

Determining whether the trial balloon is serious or filled with so much hot air will not be known for sure until just before the retirement of current IMF chief Michel Camdessus in February.

There has been an unspoken understanding among top money men--from the gnomes of Zurich to the barons of Wall Street to the samurai elders in the Kasumigaseki financial bureaucracies--that the world's top financial jobs should be split up among the richest blocs.

The World Bank leadership traditionally has gone to an American, the IMF chair has been reserved for a European and the Asian Development Bank seat for a Japanese.

Because the IMF was roundly criticized for its handling of Asia's 1997 currency crisis, Southeast Asian nations particularly are happy to join the campaign to support Sakakibara, the former vice-minister of finance for international affairs. During the financal crisis, several Asian officials bristled at "being told what to do by foreigners."

Racist? You bet. But in times of severe stress, such things happen.

The front-runner for the IMF job has been Caio Koch-Weser, Germany's deputy finance minister.

Developing or emerging market countries have lobbied against his candidacy which may open the door a crack for Sakakibara.

Meanwhile, Japanese paranoia is fed by suspicions that Europeans are miffed that Japan snared the top post in UNESCO, which went to Koichiro Matsuura, former ambassador to France.

Realists at the Japanese foreign and finance ministries realize that the Sakakibara balloon inevitably will show leakage and eventually collapse.

But Japan and Asia will have served notice through advocacy of the candidacy that they are to be reckoned with. At 58, Sakakibara is young enough to stand for an international financial post some time the future.

Sakakibara told me last January that he felt it would take "about 10 years" to develop a yen bloc, which is one of his pet projects. The idea germinated in Sakakibara's mind when he was serving a four year stint at the IMF after getting his doctorate at the University of Michigan.

Meanwhile, U.S. Secretary of Treasury Lawrence Summers has opposed making the so-called "Miyazawa fund" of emergency assistance into something permanent that might resemble an Asian Monetary Fund. China, South Korea and The Philippines had recently said such a fund would be welcome.

These thoughts all have an element in them of the East Asian Economic Caucus concept put forward a few years ago by Malaysian Prime Minister Mahatir bin Mohamad. The guiding theme of the EAEC was the establishment of an Asian fund by and for Asians that would not have American or European management.

In a perfect world, the nationality of fund managers should not matter as much as qualities like transparency, avoidance of cronyism and adherence to accepted rules of the financial game. But sadly, some Asian leaders continue to suffer from a "colonial hangover" mentality that embraces a vague set of "Asian values" to use against the supposedly villainous "globalization."

Edward Neilan (eneilan@crisscross.com) is a veteran journalist, based in Tokyo, who covers East Asia and writes weekly for World Tribune.com.

December 1, 1999


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