Is the Pope Italian?

Is the managing director of the International Monetary Fund French? One might just as well have asked in the not too distant past: Is the Pope Italian? Actually, the Italian lock on the Papacy ended with the elevation of the Polish cleric Pope John Paul II, but one can bet money that the next IMF managing director will be French.

A head of steam is building to choose France’s Finance Minister Christine Lagarde to replace another Frenchman, Dominique Strauss-Kahn, who resigned in the middle of his term after being arrested in New York on sex charges.

But there is more than mere sentiment behind the Lagarde push, and that is the tradition that the post must go to, if not a French citizen, then at least a European. Since the IMF was founded in 1947, the post of managing director has always been held by European in an unwritten tradition that the U.S. hold the World Bank Presidency and a European the IMF leadership.

This long-lasting “deal” between the Americans and the Europeans “is no longer tenable,” maintains Thailand Finance Minister Korn Chatikavanij who argues that an Asian, coming from the world’s engine of growth, should hold post of managing director.

Asian and other emerging nations have had better luck in breaking the U.S.-European lock that third organ of global economic management, the World Trading Organization. The WTO is also currently led by the Frenchman, Pascal Lamay, but once was headed by Supachai Panitdhpakdi of Thailand.

Supachai was the first Asian, indeed the first person from any developing nation, to head the WTO, but he had to share the post with New Zealand’s former prime minister Michael Moore due to an election impasse. Nominations to succeed Strauss-Kahn close on June 10, and so far no credible alternative candidate has emerged save for Mexico’s Central Bank Governor, Agustin Carstens.

So far no Asian candidate has yet put him or herself forward for the rest of Asia to rally behind. “We’re not used to organizing as a bloc,” said Thailand’s Korn, speaking in Tokyo recently the Nikkei Forum. But, he added , it is not for any dearth of plausible Asian candidates.

Among those who could easily fill the bill include Indonesia’s former finance minister Mulyani Indrawati, who was tapped to become one of the three managing directors of the World Bank, raking immediately below the American president Robert Zoellick.

During her tenure as Indonesia’s finance minister she earne considerable international praise for her work in reforming the country’s tax system, increasing Indonesia’s foreign reserves, and, the hot topic of the moment, reducing the nation’s debt ratio. And, of course, she is a woman and a Muslim.

Another serious Asian candidate might be Singapore’s finance minister Tharman Shanmugaratnam, although he recently took on the additional duty as the republic’s deputy minister after last month’s general election, which would indicate that he is not eager to move to Washington, headquarters of the IMF.

It is argued by some that a European at the head of the IMF is especially needed now so as to bring a necessary European perspective in helping to resolve the debt crises in Greece, Ireland, Spain and Portugal. Yet it was not considered necessary to have an Asian at the head of the IMF to bring any local perspective to the Asian Financial Crisis of 1997.

Japan and China do not have horses in this race, for the moment, but the two nations, Japan, in particular, will be worth courting by any candidate. Nor has Tokyo has taken sides in the contest so far, except to support a transparent and merit-based election process.

Japan has long held one of the three IMF deputy director posts (currently held by former vice finance minister Haoyuki Shinobara), and is eager to keep it. China might wish to supplant Japan at this level, but may settle for creation of a fourth deputy post for one of its citizens..

The Lagarde steam roller may have too much momentum to stop before nominations close in a week, especially has there may be strong sentiment to choose a French person to fill the unexpired term of Strauss-Kahn, but it could also develop into one of the more interesting East-West, developing-world –versus-developed-world contests.

No Confidence

Politics in Japan went into the deep freeze in the immediate aftermath of the March 11 “triple disaster” of earthquake, tsunami and nuclear meltdown. Slowly the old political standoff that had threatened to bring the government to a halt is reasserting itself.

In a way, the disaster saved Prime Minister Naoto Kan’s bacon, at least temporarily. Before the tragedy, Kan was a dead man walking. The only question seemed to be how many more weeks could he hold on to the job before he became another short-lived Japanese premier.

It is not as if Kan’s handling of the disaster and its aftermath really boosted his flagging popularity. Support for the Kan cabinet still languishes at around 20 percent approval, not much different from before the earthquake struck. Huge pluralities, reaching 70 percent or more, say they disapprove of the government’s handling of the crisis.

Perhaps that is not surprising when one considers that more than two months after the quake struck, thousands of people in the impacted region are still camping out in high school gymnasiums and the four damaged nuclear power plants that have yet to be brought under control.

Kan has kept a relatively low profile during the ensuing weeks to the point of being virtually invisible, to quote his rival Ichiro Ozawa. The day after the quake he flew to Fukushima to gauge the nuclear threat at first hand, but all he earned for this effort was criticism for getting in the way of people struggling to contain the meltdown..

He didn’t return to the disaster area until three weeks later, and thus was criticized for neglecting the population. This seems to be a no-win situation, except that a sense of proper timing for such things is a basic attribute of a well attuned politician.

Kan’s absence from the public light means that the public face of the government during the crisis has devolved on the Chief Cabinet Secretary, Yukio Edano, who acts as the government spokesman as Japan’s premier does not have his own press secretary. He had held daily briefings, though he has changed from wearing his disaster jump suit to an ordinary coat and tie.

By most accounts the political “truce” ended on April 10, when Japanese went to the polls in local elections. Kan’s Democratic Party of Japan (PJ) failed to secure any of the six prefectural governorships at stake, and their numbers in local assemblies also fell (elections were postponed in the impacted region.)

Since that election the reluctance to criticize the government that was apparent in the weeks immediately after earthquake, has receded. Sharp questioning from the main opposition the Liberal Democratic Party (LDP) is to be expected, but Kan has had to endure criticism from his arch rival in the DPJ, former party president Ichiro Ozawa.

Ozawa berated Kan publically for the “irresponsible way the cabinet is dealing with the crisis” and what he called his “invisible leadership.” Ozawa continues to command a strong following among the ordinary members of parliament, many of whom he personally recruited and advanced.

Ever since the earthquake there has been loose talk about forming a grand, cross-party coalition with the LDP and other parties, possibly with LDP president Sadakau Tanigaki as prime minister and Kan serving as a deputy. There is a precedent; indeed, Kan served in such a “grand coalition” in 1990s as health minister.

Shortly after the earthquake, Kan himself made just such a suggestion, albeit with himself serving as prime minister and the opposition leader as deputy; Tanigaki rejected the overture, and there seems little prospect that the DPJ rank and file, with more than 100 majority in parliament, would accept such a deal.

There is some talk of the opposition tabling a vote of no confidence sometime before July. To succeed this would require a substantial number of DPJ members, to join forces with the opposition to vote against their own party.

This is not impossible – a sizeable faction of the DPJ backbenchers are dissatisfied with Kan’s leadership, or lack thereof, or are beholden to Ozawa - although it seems unlikely that they can muster enough votes to support such a motion. Ironically, Ozawa masterminded of the last successful no confidence vote in 1993.

A third possibility might be a censure motion against Kan filed in the House of Councillors, the upper house of Japan’s bicameral parliament, where the combined opposition holds a majority. Such a vote has relatively little practical clout but would embarrass the government and hamper Kan in speaking to upper house committees.

The Japanese public seems to be of two minds about the situation; they are unhappy with the government’s response to the crisis, yet equally reluctant to switch leaders at this critical time. They are also unhappy with the return of political gamesmanship at such a critical time and not eager for holding a general election at this time.

For his part, Kan disavows any intention of stepping down.”It would be wrong to shirk my responsibilities,” he has said. He seems to have more personal stamina in bucking the recent trend of short-term premiers, including his own predecessor Yukio Hatoyama, who resigned last year under far less demanding circumstances.

Nevertheless, Kan may not be able to resist pressure. Even before the earthquake struck, the opposition had been threatening to use its upper house majority to deny passage of crucial money bills in hopes of forcing a general election.

Coming soon are action on several supplementary budgets and potential tax increases necessary to raise the revenue needed to begin the long and expensive recovery of the devastated northeast. Yet the parliament has not yet even got around to giving the government authority to sell the bonds that cover 40 percent of the budget, sort of equivalent to the US raising the debt ceiling.

So there remain many hurdles for Kan to overcome which may force his resignation even if it goes strongly against the grain. Waiting in the wings are several possible younger replacements such as Edano and former foreign minister Seiji Maehara, who resigned a couple weeks before the quake over a trivial political fund raising violation.

Maehara has not been heard from much since the crisis began. But he is energetic – and telegenic – and was the star of the administration in the heady days following its 2009 landslide electoral triumph. He may be the only one equipped to provide the leadership that Japan now requires.