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THE DOLLAR ACCORD. Japan's chief of finance is all smiles after Paris pact. Tokyo emerges as main beneficiary - but there still is work to be done

``I'm very happy.'' Japanese Finance Minister Kiichi Miyazawa's relaxed, relieved expression said it all.

His country is the chief beneficiary of the agreement announced in Paris Sunday for concerted action to halt the dollar's slide and restore stability to international monetary markets.

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Mr. Miyazawa, Japanese sources reported, worked hard behind the scenes to forge a consensus among United States Treasury Secretary James Baker, West German Finance Minister Gerhard Stoltenberg, and himself.

He returned to Tokyo today with enhanced standing at home and abroad and with a good chance to take over the prime ministership when Yasuhiro Nakasone steps down at the end of October. If, that is....

The list of ifs is long:

If the US really brings its budget deficit down.

If Japan and West Germany really stimulate their own economies.

If, as a consequence, the US trade deficit shrinks and the huge trade surpluses of Japan and West Germany go down.

Most important, if the individuals, companies, and governments controlling the $150 billion that daily slosh around the world are really convinced that - this time - the major Western governments are acting in earnest.

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Italy refused to follow the scenario and canceled its participation in the weekend Paris meeting at the last moment, turning what should have been a get-together of seven finance ministers (the Group of Seven, or G-7) into one of six - Canada, plus the Group of Five, or G-5 (Britain, France, West Germany, the United States, and Japan).

But in fact, as the Japan Economic Journal pointed out, the Paris meeting was a G-3, a three-way accord between Miyazawa, Mr. Stoltenberg, and Mr. Baker.

It's how firm the dollar stays against the yen and the mark that will determine the stability of international exchange markets as a whole.

And so, back in Tokyo, Miyazawa will be an extraordinarily busy man.

The finance minister has Mr. Nakasone's support, but he must persuade the opposition parties to get the budget passed as quickly as possible.

Japan's new fiscal year starts April 1, and most observers believe that the government may have to operate on a temporary budget for at least a few weeks because of opposition obstinacy.

The opposition is obstreperous because it knows that the ruling Liberal Democrats will feature a 5 percent value-added tax as the core of their tax reform plans.

The value-added tax is unpopular with merchants, who are usually among the ruling party's most dedicated supporters, and the opposition parties see the tax bill as a good chance to try to split the Liberal Democrats.

Miyazawa's pledge to stimulate the domestic economy can take effect only after the budget is passed.

The government's strategy is not to revise the budget now before the Diet (Japan's parliament), but to announce a comprehensive economic package after the budget is approved.

With unemployment rising toward the 3 percent level and with company after company reporting losses due to the high yen, stimulating domestic demand is being viewed here increasingly as required, not just by the US and other trade partners, but by Japan's own domestic problems.

But there is still an intense argument between Ministry of Finance officials who see their principal role as reducing Japan's huge $650 billion total of accumulated government debt and Liberal Democratic politicians who want to be responsive to their constituents' pleas for drastic pump-priming measures to restore buoyancy to the Japanese economy.

In addition, there is the vexing question of what to do about Brazil's debt problem.

Japanese banks hold about $10 billion of the $70 billion that Brazil owes to foreign private banks.

Brazilian President Jos'e Sarney's announcement that his country would suspend debt interest payments to creditor banks was not unexpected, but the ``technical moratorium'' he declared gave renewed publicity to the debt problems of third-world countries.

Altogether, Brazil owes $108 billion. The list of countries with debt to foreign banks - Argentina, Peru, Mexico, the Philippines, and so on - is long.

The banks are putting the best possible face on things, noting, for example, that Brazil does not intend a permanent suspension of payments. But the vastness of the sums owed means that default affects both lenders and debtors. Third-world debt requires the best thinking of all parties.

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