State Bank and financial sovereignty

International Monetary Fund (IMF) media representative for Pakistan, Miss Randa Mohamed Elnagar responded to a query of The Frontier Post when asked whether IMF is requiring Pakistan that Reza Baqir, the Governor of State Bank of Pakistan be outside the domain and influence of the Prime Minister and the Parliament of Pakistan. Miss Randa replied through email and said that this appointment was entirely the decision of the Pakistani authorities. However, Miss Randa avoided further discussion on the topic. A Senior Foreign Diplomat in Washington DC commented that Miss Randa is probably telling the truth that IMF is not inserting any pressure on Pakistan and it is probably Pakistan who is providing the IMF full confidence that its loans will be paid off in time by Pakistan.

The government of Pakistan has introduced State Bank of Pakistan amendment act 2021 during recent days. The proposed act inflamed clashing discussions among Government’s spokesmen, opposition leaders, TV anchors, and technical experts across the country. The government team advocated the bill for curbing inflation, enhancing growth, and ensuring transparency in the system. However, the opposition termed it going to make the Central bank a nightmare for the Country. According to opposition, after enforcement of State Bank amendment act 2021, the bank would turn into infamous East Indian Company and Governor would act as Viceroy, that means unaccountable having sole power.

In fact, if a layman goes through the transcript of the proposed amendment act of State Bank of Pakistan, there are useful several clauses for limiting governmental interference and enhancing independence of the Central Bank. However, few clauses are very alarming and having no relevance with the functioning of the bank.

These clauses include that all staff of State Bank of Pakistan will not liable in their personal capacity for any act of commission or omission done in their official capacity in good faith. The act further said that no action, inquiry, investigation, or proceedings will be undertaken 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”. It further stated that the governor and Finance Minister would coordinate the matters while bypassing the Monetary and Fiscal Policies Coordination Board.

The question arises that why government is granting such unlimited and controversial powers to governor State Bank of Pakistan, which have no example in the history of Pakistan. The government must accept that the authority and accountability run side by side. Without accountability authority proved to be the fatal for any nation. The IMF representative has rightly said that it is internal matter of Pakistan. IMF has no interest in this issue except accomplishment of its program and payment of its money by the country. However, Reza Baqir can lobby for such authoritarian powers and exemption from accountability for himself. Currently, except the government’s benches all elements of our society are opposing such legislation. No one is above the law and all must be accountable for their actions particularly public office holders to the people of the country. Presently, economy is the Pakistan’s biggest weakness. Our enemy could not defeat Pakistan in the battlefield; however, they are in efforts to kneel Pakistan through economic collapse. Therefore, PTI government must act wisely and review the proposed act by protecting Pakistan’s economic freedom and sovereignty.

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The Frontier Post

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