Finance Minister and Central Banker of the Year: The regional winners
Jacob Frenkel, governor of the Bank of Israel, is an extremely stubborn man. That's a necessary quality in stabilizing an economy which overheated three years ago.
Frenkel believes in progressive reform and has taken a gradualist approach to cutting interest rates. He has faced pressure from the business sector for devaluation of the shekel because it is appreciating in real terms but he has not swayed from his monetarist views on fiscal rectitude. The inflation rate, which was 18% in 1991, now stands at 10% and was reduced without causing a big rise in unemployment.
Frenkel's decision-making focuses on future stability and this often frustrates Israeli industrialists and politicians who want lower interest rates quickly. His role as economic adviser to the government has not compromised his strict approach. Frenkel has also set an inflation target - an innovation for Israel. He aims to meet the OECD rate of 4.5% by 2001. Participation in the foreign exchange market has been broadened to encourage investment and central bank intervention reduced to a minimum.
There is no doubt about Frenkel's qualifications for the job.