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LOS ANGELES -- The arrogant International Monetary Fund (IMF), a
lead Western crisis-intervention agency, will never win a popularity
contest in Asia. But it did seem that virulent anti-IMF feeling
in the region was waning when -- there it went again!
In an unfortunate return to the bad old days of nanny-lecture, a
top IMF official has blamed Asia for depressing the world economic
recovery. This kind of blanket accusation has been made before,
by the IMF and others in the West. But with the economies of China
and India still strong, Vietnam coming up fast and Japan looking
less grim, the timing of the latest lecture seemed odd.
The Western lecturer this time is a professor, chief IMF economist
Kenneth Rogoff, stepping down after a two-year stint to return to
Harvard. ‘‘It’s bad enough that the global economy
is flying on one engine,’’ said Rogoff in Washington,
where the IMF is based, ‘‘but it’s going to be
a lot worse if it has to land on one wheel.’’
That wheel is the United States, whose recovery is allegedly being
suffocated by the “inscrutable” currency manipulations
of China, Japan and others in Asia. By deliberately weakening their
currencies, Asians are ballooning the U.S. trade deficit, undermining
the U.S. currency and thus eviscerating the world economy.
Asians have heard this kind of trash talk before, of course. In
the ’90s, Washington alleged that Japan’s unfair trade
practices were behind the American recession. Now, a decade later,
America’s problems are being blamed on China for keeping its
currency low in value so as to enable its exporters to hold down
the prices of their merchandise abroad.
Asians, a resilient lot, seemingly never tire of being blamed for
the world’s ills. Many thought the Bush administration would
be less simplistic than its predecessor, but it looks like they
thought wrong. Earlier this month, U.S. Treasury Secretary John
Snow, in Beijing, echoing the IMF, broached the currency-valuation
controversy. The Chinese are wary. Wonder why? Ten years ago, the
Clinton crowd wanted China’s currency to be traded across
international borders, like many other Asian currencies. But Beijing
balked -- and that restraint turned out to be a lifesaver. The roiling
Asian crisis that ensued (in which speculators brought and sold
currencies from Thailand to South Korea like used sex slaves) turned
the region into one big currency bazaar. But, by insulating its
dollar from the storms of Western speculation, China had kept its
currency’s head safely down.
Western financial institutions such as the IMF and the World Bank
can be very helpful, especially in a crisis, but playing the blame
game is distinctly unhelpful. During the Asian financial crisis,
the IMF loaned tens of billions of dollars -- and yet wound up resented
for it. Repetitive common-scold lecturing by the institution’s
economists -- do this to your economy, do that to your economy,
or else -- irritated the heck out of people.
Resentment certainly lives on in Indonesia, where the world’s
largest population of Muslims lives. Indonesia’s urbane foreign
minister, Hasan Wirajuda, in a talk to the Los Angeles World Affairs
Council last week, politely skirted a blunt question about the IMF,
commenting only that Indonesia would soon be making its last IMF
payment, and ‘‘that would close the account.’’
This was said in the manner of someone about to shed a repulsive
skin disease.
IMF-style diplomacy won’t do these days. Asia is no longer
a colony but a coming colossus. When even serious issues are raised
accusatorily, the accused tend to respond by raising issues about
the motives of the accuser. This is no good.
Consider the issue of national and corporate practice on which virtually
all agree: the need for transparency of operations and accuracy
of official statistics. Who wants to invest in a country or company
that cooks the books, like an Enron, an Arthur Andersen or a Japan
Inc.?
Tokyo -- during Prime Minister Junichiro Koizumi’s triumphant
reelection as head of Japan’s largest political party -- has
been forced to admit that its announcement of second-quarter growth
of nearly 4 percent was wrong. It was much less. Were the original
stats an unintentional error -- or outright deception? In Japan,
alas, such errors -- er, ‘‘statistical biases’’
-- are not as infrequent as they should be. As a result, confidence
in the integrity of the world’s second largest economy when
it reports economic figures is not as high as it needs to be.
Look, no one’s perfect, in Asia or anywhere else. But PM Koizumi,
on his way to three more years in power, could leave his country
a lasting legacy by ordering an official probe of Japan’s
statistical deficiencies. Recommendations properly implemented could
refurbish the professionalism of Japan’s official statistics.
Panel members could include some Westerners, to be sure, though
not, understandably, any from the IMF. Japan needs fair and solid
judgment, not finger-pointing. The world hardly needs a clash of
banking civilizations.
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The above weekly column has just appeared in the Honolulu Advertiser,
The South China Morning Post and The Straits Times of Singapore.
The author, Tom Plate, is a regular columnist at these three papers.
The column also appears in other world newspapers, including The
San Francisco Chronicle, The Seattle Times, The Japan Times and
The Korea Times. Email him at: tplate@ucla.edu.
For publication
and reprint rights, contact the author directly or John Simpson
(john.simpson@latsi.com) of the Los Angeles Times Syndicate International. |
