Things are mostly smooth and non-abrasive at this year's annual meeting of the World Bank and the International Monetary Fund. But almost without exception, accusatory fingers are pointed at Japan for running a current account surplus of $9 billion with the rest of the world.
Being the "heavies" in this situation has not fazed the Japanese, however. Inscrutable as always, they acknowledge the problem, promise to look into it - but make no hard and fast commitments.
This has frustrated their major trading partners, but there doesn't appear that much will be done about it. At a dinner meeting last Saturday night attended by U.S. Treasury Secretary W. Michael Blumenthal, Japanese Finance Minister Hideo Boh, and the finance ministers of Great Britain, West Germany, and France, Boh was told bluntly that the Japanese surplus threatened the stability of the international monetary system.
In his address to the joint meeting on Monday, Boh calmly ignored the pressures, he quoted a Buddhist saying that "helping others helps oneself," but he promised only that "we will explore various possibilities to further promote imports."
Turning the heat up a notch, British Chancellor of the Exchequer Denis Healey, who participated in the Big Five dinner, later threatened retaliatory measures against Japan in a sharp passage in his formal address to the joint meeting.
The normally unflappable Japanese did not lose their cool, but they are bitter. Boh told the Washington Post that he had not heard Healey's address. "But my impression is that Mr. Healey doesn't understand Japanese problems."
In an interview yesterday during the IMF-Bank sessions, the Japanese vice minister of finance, Michiya Matsukawa, said that the floor of the annual meeting was not the right forum for such a blunt comment by one friendly nation to another. He said that he was not angry, but "most unhappy."
The soft-spoken Matsukawa, accustomed to western ways and fluent in English, cited Japan's commitment to expand sufficiently to hit a 6.7 per cent growth target. He said "we quite agree" that every country has its global responsibilities, but added that critics such as Healey had to "pay respect" to what Japan was undertaking, and what the limits are in view of conditions peculiar to Japan.
"I regret "that any government criticizes Japan before they finish a thorough study and understanding of what we are doing, not only of superificial policy actions, but of the background of social and economic conditions," Matsukawa said.
Healey's complaint is that by failing to boost imports substantially, Japan is not meeting its international responsibilities. For 1977, the Japanese trade surplus is estimated at a massive $15 billion. Thus, even after subtracting Japanese shipping costs, insurance payments and other "invisibles" of $6 billion, the current account surplus will be the $9 billion so widely publicized at this meeting.
Japan, which now has a staggering $26 billion annual oil bill, has been paying for it not by exports to members of the Organization of Petroleum Exporting Countries, but by exports to other countries, which is why they complain. They way they view it, Japan is transferring its oil deficit to them.
When the Japanese surplus "and a much lesser German current account surplus) are added to OPEC's $40 billion surplus. The problem of financing the resultant deficit "could prove insurlountable," Healey said.
The ideal solution that Healey, blumenthal, and others press on Boh is to pump up the Japanese domestic economy so that it will be importing more goods from England, the United States and others, instead of increasing exports which Healey said "simply compound the problems of the rest of us."
He warned that unless surplus countries take more exports, or provide more cash to finance the resultant deficits, "Their customers will be compelled either to deflate or to restrict their imports. None of us want to travel down that road."
At a press conference, Healey carried on his campaign this way.
"I think many of us, in other parts of the world, find it intellectually difficult to penetrate the seamless web of the Japanese politico-economic system. But Ilus is a Japanese problem just as much as it is a problem for other countries, and the Japanese must find some ways to solve it. I don't think we can tell them how to do it."
Japanese sources deny that they ever made a commitment at the London Summit to move from a $3.7 billion current account surplus in 1976 to a deficit of $700 million in 1977. That was only a forecast, Matsukawa says. They challenge the $9 billion figure now forecast in the West, but don't deny, however, that the balance is highly favorable, and talk of achieving "neutrality" by the end of the year.
As seen from here, however, Japan still will be running a sizable current account surplus in 1978. American officials say that Japan will show no significant increase in the amount of goods it imports unless its real gross national product swells by 10 to 12 per cent annually - a prospect that clearly is not in view.
Matsukawa claims that the admittedly low level of imports can be blamed on the failure of many nations - notably the British - to make their products attractive to Japanese consumers. He praises the efforts made by the U.S., through Commerce Secretary Juanita Kreps' current mission to seek ways of increasing trade possibilities.
Experts who try to remain impartial think that there probably is something in Matsukawa's complaint about unimaginative foreign exporters. The rest of the world clearly has not been as aggressive in seeking export markets as have Japanese producers.
But they also point to a unique distribution system in Japan that works as a barrier to imports, and they suspect that Japan has thrown up other protectionist devices to help its less efficient industries fend off foreign competition.
There is one defender of Japan among the major nations here and, not surprisingly, it is another wealthy power, West Germany, which also has come under criticism for being too self-centered.
At a press conference yesterday, Germany's minister of economics, Hans Apel, said it was unjust for criticism to be focused on one or two nations. Part of the Japanese problem is the failure of other countries to control their own inflation, he said. "Economic success can not be criticized," said Apel, no doubt thinking of his own country as well as Japan. "But it gives you a lot of responsibility."