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15 October 2012

After a week of meetings, seminars, press conferences and photo opportunities, the annual meetings of the International Monetary Fund (IMF) and the World Bank – the first to be held in Tokyo in 48 years – came to a close yesterday. The equivalent of a small town of 20,000 officials, delegates and translators has packed up and moved on. The meeting was deemed to have been a great success; certainly the local businesses were happy. The city’s top hotels were reporting near 100 per cent occupancy rates and reservations at Tokyo’s best restaurants were hard to come by.

Japan has a good relationship with the IMF. It’s the second-largest shareholder after the US yet back in the 1950s it was a borrower, receiving money to build power stations and Shinkansen. It became a lender in 1967 – a key moment for Japan.

In a carefully managed get-together, the main headline news came early in the week with the IMF cutting the prediction for global growth from 3.5 to 3.3 per cent. Country after country found that its growth forecast had been reduced since the last report published in July, proving the difficulty of the prediction business. Countries such as the UK – which has trumpeted its economic credibility with brutal spending cuts – must have been dismayed to discover that austerity has gone out of fashion in IMF circles. The talk last week was all about how these once-lauded cuts are strangling growth.

The other big story of the week was the absence of China, whose four biggest banks pulled out of the meetings, reportedly due to the country’s ongoing territorial spat with Japan. China’s central bank governor was another no-show, cancelling his hotly anticipated speech yesterday.

At the opening press conference IMF managing director Christine Lagarde, resplendent in an iridescent jacket, could barely disguise her irritation. When asked what China should do to improve its economic prospects she answered drily, “Be a partner.” It was China’s loss she said, as she spoke warmly of the Japanese hosts.

Still, China’s loss was Japan’s gain. In the ongoing battle for influence in Asia between China and Japan, China lost ground as Japan announced massive new yen loans to Burma and huge infrastructure funding for Jakarta. You couldn’t help wondering if officials back in Beijing were ruing their decision. Even Japan and Korea – engaged in their own fierce territorial argument – announced a joint decision to give an extra €46m to a fund to improve food security in the world’s poorest countries.

It became obvious over the course of the week that IMF officials, exuding the power of trillion-dollar lenders, are proxy diplomats, smoothing relations between different blocs of the world with all their different needs. Said officials were all carefully on message – as was Jim Yong Kim, the president of the World Bank, at his first meeting since he was appointed in July. He injected the merest hint of potential controversy with the news that he plans to talk a lot about man-made climate change during his tenure.

My vote for the most personable official goes to Anoop Singh, the elegant IMF director for Asia Pacific who prefaced answers to press-conference questions with a ‘How nice to see you again.’ For a global meeting, the limits of most people’s interests were remarkable. Broad-brush reports were greeted with questions from journalists asking exactly how this would affect the picture in Lebanon, Cambodia, Egypt or Paraguay.

The hardest-working journalist – apparently making up for China’s absence – was a woman from the Hong Kong Economic Times who asked about China at every press conference. There was an amusing moment at one press conference when Christine Lagarde said she thought it would be appropriate to end with a question from a Japanese woman and pointed to… you’ve guessed it: the busy journalist from Hong Kong.


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