CORRECTED: Sakakibara urged to remain in IMF race as 'Asian…'

Asian Economic News, March 6, 2000

BANGKOK, March 2 Kyodo

Former Japanese Vice Finance Minister for International Affairs Eisuke Sakakibara should stay in the race to head the International Monetary Fund (IMF) even though skeptics say the chances of an Asian candidate winning may be next to nil, a leading Thai political analyst said Thursday.

"Sakakibara doesn't have to win. He simply has to prove that Asia isn't a walkover for the new IMF boss," Suthichai Yoon said in an opinion piece in the Nation, a leading English-language daily in Thailand.

"There is an Asian alternative," said the editor-in-chief of the Nation Multimedia Group, which publishes the daily.

Recalling Japan's failed proposal to set up an Asian Monetary Fund, Suthichai said Japan should strive to convince Asian nations that suffered from the IMF's handling of the region's financial crisis that it "really means business this time."

"What's wrong with an Asian being the new chief of the IMF? Is it simply because there is an implicit agreement among the big guys that it has to be a European at the top? Whoever said that's the way it is and that's the way it will be?" he said.

He stressed a need to "dilute the undue influence of the Western countries" in the IMF, noting that the 182-member body has been led by Europeans since its creation half a century ago, while its sister lending agency -- the World Bank -- has been headed by Americans.

The United States on Tuesday renewed its call for the European Union to reconsider its nomination of German Deputy Finance Minister Caio Koch-Weser for the IMF post and called for another European candidate who could command broad support from around the world.

The final winner will almost certainly need U.S. support, as the country has a 17.37% share of the voting power, reflecting its capital contribution to the IMF. Japan is a distant second with a 6.23% share, followed by Germany with 6.09%.

Also in the race for the top IMF post, which has been vacant since Frenchman Michel Camdessus stepped down Feb. 14 after 13 years at the helm, is Stanley Fischer, the IMF's acting managing director and a U.S. citizen, who has been nominated for the job by a group of African countries.

Noting that cynics may see Sakakibara's nomination as part of Japan's continuing effort to raise its profile on the international stage, Suthichai said, "Despite all the arguably suspicious motives and flaws, Japan's decision to promote Mr. Yen as Mr. IMF isn't such a far-fetched or self-serving idea after all."

Sakakibara, now a professor at Keio University in Tokyo, was known as "Mr. Yen" due to his influence over global currency markets when he served as vice finance minister for international affairs between 1997 and 1999.

"Japan's nomination of Sakakibara is probably not so much to win the top IMF seat as to win recognition of the international role Japan could play on behalf of the unfortunate countries in the region," Suthichai said.

"If Tokyo takes that new role seriously -- as the 'spokesman' of the developing world in the international arena -- it's headed in the right direction," he added.