Well, NO, not in current circumstances. Many of the senior economists have raised fears about the autonomy of the State bank of Pakistan’s impact on the economy and country’s sovereignty. It all started when the cabinet recently approved the draft law to make the State Bank of Pakistan (SBP) more independent from the federal government.
The greater autonomy for the State Bank of Pakistan (SBP) was one of the never-ending preconditions of the International Monetary Fund (IMF) for the next $6 billion loan. Many well-known senior economists raised their concerns regarding its long-term impact on the economy and Pakistan’s overall sovereignty.
As far as the proper financial reforms are concerned, the caretaker Prime Minister Moeen Qureshi gave the authority of making monetary policy to the State Bank of Pakistan. But alas! Our political government never missed a chance to interfere in the monetary policies just for their political agendas.
Mainly the interference was started, many believe when Ishaq Dar created an existing Monetary and Fiscal Policy Co-Ordination board. It allowed the ministry of finance to influence SBP-mandated functions.
When it comes to the current government, MashaAllah every member of the cabinet, whether they are minister or advisor, are the expert of all ministries except their own. I always use to say that Prime Minister Imran Khan heading towards the same trap in which former Prime Minister Nawaz Sharif went into, due to their advisors.
Brief Cases and A Deals with IMF
Abdul Hafeez Sheikh & The Matter of National Interest
Paratroopers have a significant place in the history of Pakistan. These paratroopers never had anything at stake. They just came, do their assigned task, and that is it BOOOMMM. Take former Finance Minister Hafeez Sheikh for an example. He was a finance minister from March 2010 to February 2013 in the era of PPP when Yousaf Raza Gillani was the Prime Minister. He also worked with former President Pervez Musharraf as the Privatization Minister. Recently he worked as Special Advisor to Prime Minister for Finance and then became full-fledged Finance Minister.
Prime Minister Imran Khan believes that the current economic crisis is due to former governments, where he used to start from the era of PPP. Now the questions arise that why you were betting on the same horse which also ran for Yousaf Raza Gillani?
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Abdul Hafeez Sheikh’s CV also has the experience of working in the World Bank. Some believe that Hafeez Sheikh was brought up after the recommendation of IMF and then he managed all the deals on the behalf of Government of Pakistan.
Whenever someone asked regarding the details of the deal with IMF, H.E Abdul Hafeez Sheikh uses to run away by saying that it’s a matter of “National Security”. Like Seriously? You made a deal with IMF for the loan, most importantly you agreed, and when someone asks you for details it becomes a matter of National Security.
Baqir Raza, Member of Board of Governors
Along with Hafeez Sheikh, two more brief case holders were enforced over Pakistan. One of them is the Former FBR chairman Shabbar Zaidi and our current Governor SBP Baqir Raza. Let’s not discuss Shabbar Zaidi because he is not in the system.
Before becoming the Governor of the State Bank, Baqir Raza help numerous positions in the International Monitory Fund (IMF). He was the Mission Chief for Romania and Bulgaria and Baqir was also the IMF’s Senior Resident Representative. In 2019, in the larger national interest, the Government appointed Baqir Raza as the governor of the State Bank of Pakistan.
Baqir Raza has the same status as Former Prime Minister Shaukat Aziz had in the past. Yes, the same Shaukat Aziz who was flirting with Condoleezza Rice.
Anyway, where is Shaukat Aziz right now? He is currently living in West London, England. Paratroopers like those have nothing to do with the betterment of Pakistan, they are more loyal to their lords to bring them into this position. Mark my words, Baqir Raza will do the same as Shaukat Aziz did, pack the briefcase, and get on the next possible flight for the US.
Monetary and Fiscal Policies Co-ordination Board
Currently, a board known as the Monetary and Fiscal Policies Co-ordination Board is responsible for making the decisions. This board contains the members of Governments and SBP which make decisions after the consensus.
According to the Amendment Act 2021, “Governor and Minister of Finance to establish liaison. The Governor and the Finance Minister shall establish a close liaison with each other and shall keep each other fully informed on all matters which jointly concern the Bank and the Finance Division.”
It means that Governor State Bank will do whatever he wants and by the end of making the decision, he will call the minister like “Minister, we updated the policies please view our website for further details…….”
SBP Governor or Viceroy?
The Amendment Act 2021 also gives complete immunity to the SBP officials from civil litigation for official acts. It states “No suit, prosecution or any other legal proceeding including for damages shall lie against the Bank, Board of Directors or member thereof, Governor, Deputy Governors…” further it states, “No action, inquiry, investigation or proceedings shall be taken by NAB, FIA or Provincial Investigation Agency, bureau, authority or institution by whatever name called without prior consent of the Board of Directors of State Bank”.
What is this? The Governor of the State Bank of Pakistan (SBP) will not be held accountable. Are we having another president within the state? Especially, when it comes to the current Governor of the State Bank, he will be nothing but a Viceroy.
We should have an independent Central Bank far away from the political influence, but it will be worst if we give all sort of immunity to its leads. Especially in the current circumstances where the appointments are made under foreign pressure.
Pakistan has thousands of economists who have expertise in banking, then why we are betting on the paratroopers. All we need seriousness and national consensus for our issues.