Governor, Banco Central do Brasil
By building up the Central Bank's reserves and raising interest rates in Latin America's largest economy, 44-year-old economist Fraga kept the Argentine crisis from spreading to Brazil (and, therefore, to the rest of the world). A former Soros Fund manager, Fraga took office in March 1999, shortly after the devaluation of the real. He has kept inflation in the single digits since, thanks in part to a novel emphasis on transparency at the Central Bank. Brazil now boasts a stable B/B1 credit rating. He plans to step down after the presidential election in October — if the winner lets him.
Francisco Gil Diaz
Secretary of Finance
Governor, Banco de México
Often at odds over policy details, Ortiz and Gil Diaz probably wouldn't want to be portrayed as a team, but tension between them has helped Mexico dramatically improve its economy. Ortiz — who once held Gil Diaz's seat — tightened monetary policy in February out of fear that the administration's decision to lift electricity subsidies would spur inflation. He also criticized the patchwork that Gil Diaz's tax package was reduced to once the government pushed it through Congress. Yet thanks to Gil Diaz's tax package and Ortiz's anti-inflation stance, Standard & Poor's finally agreed to join other ratings agencies in awarding Mexico an investment-grade rating.
Chairman, Federal Reserve Board
Curator of the most important economy in the world, the 76-year-old Greenspan moves markets when he speaks. Sure, his godlike status was tarnished somewhat by the recession (the first in the United States in a decade), but his ability to contain the pain by deftly manipulating interest rates (down 4.75 percentage points since January 2001) has been remarkable.
In April, his tone was especially upbeat when he told the Joint Economic Committee of Congress, "There can be little doubt that prospects have brightened." Those prospects — reflected in a 5.8 percent increase in real GNP in the first quarter — haven't materialized in many corporate sectors. But his often-cryptic pronouncements will be sorely missed when he leaves office in 2004, if not before.
Governor, Bank of Japan
In his first news conference in 1998, Hayami said, "The central bank must be able to say no." And these days, "no" has become the 77-year-old's mantra. While Hayami cut interest rates to almost zero and flooded the market with liquidity over the past year in an effort to ignite Japan's ailing economy, he now says enough is enough.
The necessary reforms, which include urging corporate restructurings and bailing out the country's ailing banks, are, he says, the government's alone to solve. With the world's second-largest economy showing flickers of life, however, experts say that might not be in the offing. Hayami, whose term expires in March 2003, has not won many fans within or outside Japan, due to his obstinacy. Only time will tell if his decisions spur the necessary reforms or just add to the gridlock.
President, Deutsche Bundesbank
One might have thought 1999 was a bad time to take over the once-powerful Bundesbank, given it was the year that the European Central Bank eclipsed German monetary policy. But the hawkish Welteke, a 59-year-old maverick who flouts politicians' pleas for rate cuts as publicly as he does some of his ECB counterparts' views, has managed to boost his personal influence over the past three years by consolidating Germany's nine regional banks and other sectoral authorities into one über-executive council, which he oversees.
Next on his list is slimming down the organization while boosting its role as banking supervisor. Now, with a more coherent national agenda, he is likely to wield even more sway over the ECB — perhaps not so wunderbar for Germany's sluggish economy.