Japanese IMF Official in Dilemma over Concept of `Asia Monetary Fund'

Article excerpt

The controversy over the creation of an ``Asian Monetary Fund (AMF)'' once more reared its head during a seminar last week led by Kunio Saito of Japan, a director of the International Monetary Fund (IMF).

Saito, a senior official in charge of the entire Asia-Pacific region and head of IMF Japan, had a tough time grappling with a question on the rationale for the creation the AMF during an IMF media seminar in Singapore.

``What are your views, both official and personal, toward a call from the Japanese government for a new Asian model similar to the IMF?,'' one of the participants from Korea asked.

``Well... first of all... I am not sure if IMF officials can have any personal view other than the official position. Well, I think the concept is good,'' said Saito, who joined the IMF in the 1960s and made his way all the way up to the director level.

Saito said the IMF will agree to it as long as the new institution operates in line with the Fund, meaning that it should be a part of the IMF at the regional level.

Saito's initial reaction to the question in front of over 30 reporters from all across Asia, including Korea, Indonesia, Thailand, Malaysia, Hong Kong and Singapore, was somewhat negative. He stressed that it was the official position of the IMF.

The idea of creating an Asian funding agency was proposed by Japan in the annual meeting of the World Bank and the International Monetary Fund in Hong Kong in 1997.

Korea, along with other Asian countries, supported Japan's proposal in principle while China remained non-commital out of fear of Japan's increased influence in the Asian region.

Japan's idea has not translated into reality owing to opposition from the U.S. and Europe, which say the creation of an AMF is likely to undermine the influence of Western nations in the region.

The session moved on to other issues like the effectiveness of monetary policies and the viability of fiscal measures in fighting the effects of the financial crisis in the region.

Saito interrupted the session unexpectedly and said, ``I have something more to add to the idea of the AMF...''

The Japanese IMF official said it is possible to have some form of new organization with distinctive regional characteristics to help fend off future Asian financial crises.

The senior Japanese official said he felt uncomfortable ignoring the call from his own government even though he works for the IMF.

``Yes, IMF officials also have their own personal views. …