So why should the top job always go to a European?
For years it was a breach of manners to ask that question at the International Monetary Fund, where Europe has held informal rights to pick the managing director ever since the lending institution began operations in 1946. Now, with the job coming open, Japan is asking the question in public, declaring that its own Eisuke Sakakibara could run the IMF just fine.
European priority should not be "cast in concrete," Japanese government spokesman Sadaaki Numata said last month in Manila. "We feel that Dr. Sakakibara can be a very good candidate." The American-educated Sakakibara was until recently Japan's top international monetary official, known in world financial circles as "Mr. Yen" for the market-moving influence of his every word.
On the face of it, he seems a serious contender for the IMF's top job, now held by Frenchman Michel Camdessus. Yet outside Japan, few students of the Washington-based institution, which has about $90 billion on loan to the world, think the man has a prayer. To them--speaking off the record for the most part--he is a protest candidate, a new expression of frustration in countries that weren't on the inside when the victorious World War II allies put together an economic order that remains in place in key respects.
It's the same sentiment that helped deadlock the World Trade Organization meeting in Seattle earlier this month. Delegates from developing countries made sometimes angry allegations that rich countries were trying to run the Geneva-based body as a private club, as its predecessor agency was in the 1940s.
Not coincidentally, Japan says it's lobbying the developing world to line up behind its man for the IMF.
"The Japanese economy is one of the largest in the world," said Jacobo Rodriguez, a Cato Institute economist who believes Sakakibara has scant chance. But "when you look around, the Japanese have very little say in international organizations." By putting a name forward, even one unlikely to prevail, Japan may be saying: "Next time there's an opening, you will have to consider our Japanese candidate more seriously," Rodriguez said.
The IMF was established by the victorious Western powers to help countries facing balance-of-payment problems in the postwar era. Its sister institution, the World Bank, came into being at the same time to help with long-term development loans.
The bank would likely raise most of its money in U.S. capital markets, and so a gentlemen's agreement was made that its head should be American. That's held true for all nine presidents to date, the latest of whom, James D. Wolfensohn, is Australian-born but a naturalized U.S. citizen.
There is extensive consultation and consensus-building involved in selection of the IMF's leader, but always with the understanding that in the end one side has rights the other doesn't. When consensus is achieved, the fund's 24-member executive board typically appoints the favored candidate without a vote, by acclamation.
When Camdessus announced last month that he would leave early in the new year, the politicking got serious--in Europe, predictably.
France has just had its turn, so people are looking elsewhere. Germany, which has never filled the job, has pushed the name of its deputy finance minister, Caio Koch-Weser, a 26-year veteran of the World Bank, getting lukewarm response in some other European countries as well as in Washington.
Britain's corps of potential candidates includes Andrew Crockett, general manager of the Bank of International Settlements, though many people feel that Gordon Brown, Britain's chancellor of the exchequer (the equivalent of Treasury secretary), could trump any of his countrymen if he decides he's unlikely to become Britain's prime minister in the near future and tries for this job.
Following tradition, no Americans have emerged, or Singaporeans, Russians or Israelis. U.S. Treasury Secretary Lawrence H. Summers has signaled that the United States doesn't object to Europe making the pick again, as long as it's a qualified European. Treasury spokesmen decline comment on Sakakibara or any other contender.
Japan, however, isn't going along, not yet, at least. Visiting Manila, the Philippine capital, for consultations, Prime Minister Keizo Obuchi proposed the 58-year-old Sakakibara, who retired as vice minister at the Japanese Finance Ministry in July and isn't commenting on the IMF. His name received at least nominal support from some neighboring Asian countries.
"Japan is the number-two shareholder of the IMF," points out Yukio Yoshimura, Japan's representative to the fund. It holds about 6 1/2 percent, after the United States' 18 percent. "In that case, why shouldn't Japan--and other countries--nominate a managing director?"
Do the numbers, people in Japan say, and it's clear the man has to be taken seriously: Japan and its hoped-for allies the developing countries control roughly a third of the IMF's shares. Europe has about a third, with the rest in the hands of the United States and other countries.
Japan is not the first to target European influence at the fund. There are eight European nationals on the 24-member executive board (though some of those Europeans are expected to vote the interests of non-European countries). And though quotas are supposed to be proportional to economic stature, fast-growing countries sometimes feel that theirs lag behind their actual importance.
One problem facing Japan in naming a managing director, assuming it can ever get past the Europe bias, is a shortage of qualified candidates--people with long experience in world finance and strong command of the English language. Many people thought that a former Finance Ministry official, Toyoo Gyoten, fit that bill, but he is now too old to meet the 65-and-under requirement of the job.
But Japan decided it had to nominate someone, the skeptics say, and Sakakibara was the best name available at the time. Holding a doctorate from the University of Michigan, he is comfortable with English and well known in the world of international finance.
But he is also known as a shoot-from-the-hip personality, which would be out of sync with the staid management style of the IMF. And during the Asian financial crisis that began in 1997, Sakakibara built a name as an IMF critic, assailing its "blind application" of economic austerity policies to countries. Those statements won some praise for him from some developing countries. He publicly backed Malaysia in its controversial decision to put controls on capital movements.
One other possible strike against him: recession at home. "I doubt very much that the Americans and Europeans would go along . . . given the dire straits of this economy," said Robert Solomon, a guest scholar at the Brookings Institution.