Commentary: Why Tokyo Wants Mr. Yen To Be Mr. Imf

A man who loves to scuba dive in the shark-infested waters of the South China Sea might just seem ideal to run the International Monetary Fund. Add to that his uncanny ability to bend global money markets that earned him the moniker of "Mr. Yen," and Eisuke Sakakibara, 58, looks like a possible worthy successor to the fund's retiring managing director, Michel Camdessus.

Both Japanese Prime Minister Keizo Obuchi and Finance Minister Kiichi Miyazawa are toying with the idea of nominating the former Finance vice-minister for international affairs for the job. In quietly canvassing IMF members, they are in fact offering countries an outspoken intellectual who is extremely skeptical of free-market capitalism for a very sensitive job. Indeed, it's an uncharacteristically provocative move by Tokyo that's almost certain to fail.

But it might be just the ticket to broadcast growing frustration with the fund and the wish to have a greater say over an institution in desperate need of an overhaul. "We feel strongly that Japan needs a greater voice in the new global economic order," says one senior Ministry of Finance official. "And Sakakibara could be a very good choice."

COLD WATER. Japan has reason to feel underappreciated. Despite its economic heft, its nationals don't hold the very top jobs in such key bodies as the IMF and the World Bank, both viewed in Tokyo--and throughout the emerging world--as the servants of U.S. financial and economic diplomacy. Americans and Europeans have long divvied up leadership of both.

Perhaps that's why Japan pitched the formation of an Asian version of the IMF after the East Asian crisis broke in mid-1997. Japan wanted emergency financial aid to come with fewer demands for shock therapy. But despite its vast economic interests, it could do little to shape IMF policy in the region. In the end, the U.S. threw cold water on the idea.

Indeed, IMF economists ridiculed Japan in 1998 for its ineffectual efforts to pull its own economy out of recession--admittedly, a big drag on growth in the region. While China won plaudits for not devaluing the yuan, Japan got precious little thanks for the $30 billion loan package it set up for East Asia's crisis-hit countries.

Sakakibara, an IMF economist in the 1970s, certainly would change all that. He has the candlepower and credentials for the job--and is truly an outstanding player among the world's money masters. During a teaching stint at Harvard University during the early 1980s, he forged a good working relationship with Lawrence H. Summers, now U.S. Treasury Secretary. He's friendly with hedge-fund king George Soros.

All the same, he's a long-shot candidate. His once-triumphant views about the superiority of Japanese-style capitalism look suspect now. And he's a bit of a loose cannon with the media. Sakakibara's line that Japan's and Asia's problems have less to do with "crony capitalism" and more to do with a broader crisis in global capitalism strikes some as an artful dodge of the shoddy economic stewardship of the region's economies.

But that's probably beside the point. Even if Mr. Yen is turned down, Miyazawa is staking a claim to a louder voice in the debate over what role the IMF should play in resolving future global crises. Japan wants better tracking of international capital flows and the exposures of hedge funds, as well as measures to avoid wild gyrations in the yen, dollar, and euro.

Yet make no mistake: Given the beating that Japan has taken from Western critics, it is certain to be a lot more assertive in promoting its views on IMF policies. And if you consider the fund's checkered record in handling the global shocks of the 1990s, a stronger voice in the East about the economic orthodoxy in the West may be no bad thing.

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