SBP gets new governor

[kamranofficial]

ISLAMABAD: The federal government on Saturday appointed new heads of the State Bank of Pakistan and Federal Board of Revenue (FBR) to effectively deal with the challenges of weakening growth rates and soaring inflation.

Dr Reza Baqir has been appointed as Governor State Bank of Pakistan (SBP) for three years a day after the removal of his predecessor Tariq Bajwa.

A notification issued by the Finance Division said the President of Pakistan in pursuance of Section 10 (3) of State Bank of Pakistan Act 1956 was pleased to appoint Dr Reza Baqir as Governor SBP for a period of three years from the date he assumes the office.

The terms and conditions of his appointment will be notified later with the approval of President of Pakistan, the notification concluded.

Dr Baqir, a Pakistani economist, has been working with the International Monetary Fund (IMF) since 2000.

Dr Baqir, a Harvard and Berkeley University alumnus, is currently the Fund's senior resident representative in Egypt.

He has previously served as the head of the IMF Mission for Romania, and as Head of the Fund's Debt Policy Division.

According to Geo News, the government has decided to appoint Ahmed Mujtaba Memon as the FRB chairman. The position fell vacant on Friday after the removal of Jehanzeb Khan, the chairman of the tax collection body.

Memon comes from the Pakistan Customs Service and is presently an additional secretary in the Finance Division.

The key appointments come only weeks after Finance Minister Asad Umar was asked to step down amid vital bailout negotiations with the IMF, suggesting the government wants to overhaul its financial team amid weakening growth rates and soaring inflation.

Last month, Prime Minister Imran Khan appointed Dr Abdul Hafeez Sheikh as Adviser on Finance in place of Umar, as inflation rose to its highest in six years.

The IMF is pushing Pakistan to embrace a more flexible rupee policy to end repeated boom-and-bust cycles, with many analysts arguing that the local currency is overvalued.

The government has also been frustrated by the low tax collection rates during its first year in office, with the disappointing figures threatening the prime minister's promises to build a welfare state for the poor.

The central bank in March cut its economic growth estimates, forecasting the economy would expand 3.5 to 4 percent in the 12 months to the end of June, well short of a government target of 6.2 percent.

The IMF paints a gloomier picture, predicting growth of 2.9 percent in 2019 and 2.8 percent next year.

Pakistan’s consumer price inflation in March rose to its highest since November 2013, hitting 9.41 percent year-on-year, before easing to 8.82 percent in April.

 

[xyx007]

Pakistan economy is unstructured, weak and in shambles whereas Dr Baqir all his career work a very structured and disciplined organization. This new appointment will test his capacity to fix very complex economic issues including working in a highly politicized environment. Looking at his expertise to resolve the problems of Greece and other countries, Dr. Baqir seems to be the best choice. I think such talented overseas Pakistanis can not change the attitude of the real force behind state policy making. Some short time measures will be taken to complete the duration of IMF program . At the end of the day he will be a real frustrated man.we had a local bureaucrat from the District Management Group sitting over our monetary policies and economy's evaluation. Now we have an international bureaucrat from the "World Management Group" (IMF). I feel Pity the nation that does not have a technocrat with a pro-poor indigenous profile to lead its central bank. This all root cause happen because establishment allowed Bhutto Policies and now we have no indigenous profile .Pakistan is at the stage where technical knowledge and a fool proof strategy are required to pull the country out of multiple crises. Pakistan will not be the first country to adapt this strategy, albeit temporarily; the United States introduced technocrats into their governing system during the Great Depression.
Since the early 1980s, post-Mao China has been governed by three generations of technocratic leadership. In present day China, more and more men and women in the government are specifically trained for the posts and or ministries that they are in charge of. The results are clear as China is stepping into the shoes of a World Power with an ever growing middle class and spending power to support it.
Pakistan is at a crossroad and democracy in Pakistan is not and has not worked for the following two primary reasons; It can keep spiraling downwards with ministers and technocrats who have fake degrees and are incompetent for the ministries and department that they hold. It is a country which is governed by feudal lords who come into power with autonomy, hence the essence of the voice of the people is lost even before votes are cast. Until land reforms are introduced, the masses will remain at the mercy of these leaders.

Injection of technocrats into the system will keep the appointed ministers and people focused on their tasks, which would not only stabilize the county but also the region.