CITY AND SUBURBAN
The very Motor Show of money with no new models
CHRISTOPHER FILDES
Washington hehe ballroom of the Washington Sher- aton would house an Olympic swimming pool, or a greyhound circuit, or almost anything except a ball. Just now it houses the finance minister of Colombia and the biggest audience of his life. He is delivering the sonorous platitudes appropriate from this year's chairman of the International Monetary Fund and World Bank meetings. His creditors listen abstractedly, hoping that the United States Customs do not do too much harm to his country's only thriving cash crop and source of export earnings. Somewhere in Colombia, a Senor Jardine must already have met a Senor Matheson.
The occasion is ceremonial. The week's efficient occasions tend to be in corridors, over coffee, in the corners of parties, or tucked away in the crevices of the huge hotel (nicknamed Alcatraz East) which quivers to the thudding feet of the finance ministers, governors of central banks, assorted officials, international bureaurats, bankers commercial, merchant, invest- ment, bag carriers, hangers on, promoters — each discernible by a different coloured badge, with a brooding orange chosen to signal the journalists. The total runs into five figures. Everyone is here because everyone else is here.
It is a kind of Motor Show of money, and, as with the Motor Show, has until lately learned to carry on undisturbed by the absence of any new models. Now, though, we have James Baker at the US Treasury — a man for plans and initiatives and grand international designs, and cer- tainly a great improvement on his crusty predecessor who is now the President's chief of staff. Mr Baker has stirred up expectations which this year's meeting was never going to fulfil.
He is thus partly to blame for the inflated commotions over Germany's in- terest rates, and whether they should be one half per cent lower or not. Those commotions, too, have a touch of the ceremonial. Germany is in the firing line as a proxy for Japan, because if Mr Baker went for the Japanese, his State Depart- ment would not like it.
Nigel Lawson here treads the world stage, aware that he is standing on a creaking floorboard of a currency. The Fund has been much exercised to establish `objective indicators, for co-ordinating the world's economies and currencies (Mr Baker sets great store by this), but the proven objective indicator is the Chancel- lor's choice of tie. The Garrick's bold stripes signal ebullience. The Royal Naval Volunteer Reserve stands for caution, re- spectability, and the periodic need to look like a characteristic member of the Con- servative Party. This time he is wearing a tie which may be of his own composition, designed to celebrate the end of exchange control. This is his gesture to the market economy.
He knows how to speak to these audi- ence, but by all accounts he is at his best in the smaller and less formal meetings, where he does not have to be tied to his text. A quick mind in full rehearsal lets him argue on his feet, without need of a brief— here, an unfair advantage as great as that of the Cardinal who, at the second Vatican Council, was able to think in Latin. It helps him in deal-broking. The ceremonial set pieces are less to his taste. His three predecessors formed the taste for financial diplomacy in its public expression: Sir Geoffrey Howe and Mr Denis Healey both chaired the 'Interim Committee', the Fund's (permanent) political steering group. Mr Lawson is content to leave such honours to ambitious Dutchmen.
`Megaphone diplomacy,' he was saying this week, 'is as unproductive in the fields of interest rates and exchange rates as in any other.' In other words, it does not take the heat off sterling when all has to be done in this hothouse, with its unique properties as a refractor of gossip. Orange-badged hordes scrabble for crumbs. They mob the very Governor of the Bank of England as he emerges from the Bunker (as the IMF's home is unkindly called). Pushing mic- rophones at him, they ask if he is going to force up the banks' base rates. The Gov- ernor, knowing that it is tea-time in Lon- don, replies courteously: 'Not today.' This sensible evasion goes straight into the tapes as GOVERNOR DENIES BASERATE HIKE TODAY. He and his opposite numbers in the Bundesbank have been doing their best to make it true for tomorrow as well, but they know that the pound is caught in an international crossfire, and it is not in their gift to make that firing die down.
Their task, and the Chancellor's, has not been eased by the apprehension of what may follow Britain's elections. Mr Weinberger has been publicly quarrelling with Mr Kinnock, and Mr Hattersley, too, has added his quota. A British merchant bank took him to Wall Street by way of showing that he would not bite. This was not the impression his hearers formed. Asked whether he thought there was any- thing to be learned from M. Mitterrand's experiences, he said: 'Yes — not to give up after two years.' It has been a theme of Mr Lawson's at this meeting that we are all market economists now. This time next year, will he be here to say it?
To the strain of the meetings is super- added the strain of the parties. IMF week in Washington is the Grand Prix of the whisky-and-peanut circuit. The course is taxing and winding — through parties in art galleries, in club gardens, in trim Georgetown houses, in the Air Space Museum, little dinners at the embassies, lunches for 400, drinks for 5,000. Re- freshing, in this welter, is the champagne well which is operated by Sir Patrick Sergeant, veteran of 29 IMF meetings, and his Euromoney delegation, rather bigger than Belgium's. Most nauseating is the Development Committee Dinner, where the official lobbyists for the world's poor and hungry show, at appropriate length and expense, where they think the relief of necessity should begin.
Their constituents can at least be glad that protection in its most hurtful and uneconomic form is here under scrutiny at last. Hero of the week is Paul Keating, Australia's Treasurer, who in the Interim Committee looked at his prepared speech, put it down with an Australian expletive, and laid about him, telling Germany's Gerhard Stoltenburg that he could do more good, not by fiddling about with his interest rates, but by letting food into Europe's markets, and by not dumping Europe's food abroad. Mr Baker, with his own farmers to protect, kept quiet on this. Mr Lawson has not. It will be a theme of Britain's presidency of the European Com- munity, and a good theme, too. But a simpler cure for the world's food surpluses is to supply them to an IMF meeting.
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