Daily Times

Some news channels were running a ticker that the prime minister had sent packing Tariq Bajwa, the governor of the State Bank of Pakistan. Others were reporting that pressure was being ramped up on the governor to tender his resignation. Others still said he had dug his heels and was refusing to bow down to the pressure. Apparently, there was disagreement among news channels about the resignation. Nevertheless, all of them were one in reporting that Prime Minsiter Imran Khan had made up his mind to show the State Bank governor and the Federal Board of Revenue chairman the door the day he sacked Asad Umar.

The story of the resignation uncannily followed the pattern of Asad Umar’s resignation. Is this a deliberate strategy of the government to wash its hands of the undesirable persons? One can only guess.

The State Bank governor and the FBR chairman were holding serious meetings with International Monetary Fund officials. Their firing from the posts therefore raises serious questions. Was the IMF not happy with the men in charge of the economy? Were they not doing its bidding? Did the IMF want its own men in the saddle? Is the IMF calling the shots before it cuts a deal with Pakistan? Was this a condition for securing the bailout package? Could beggars be choosers? The answers are not hard to seek.

Dr Reza Baqir has been an employee of the IMF since 2000. He is not the only one to have jumped out of a plane with the IMF parachute and landed in Pakistan to sign a deal with the IMF.

Previously, Dr Muhammad Yaqub, who had spent 20 years in the IMF, was called upon to take up the State Bank reins. He served from 1993 to 1999. His stint at the State Bank saw the national debt rise four-fold. Curiously, another IMF man, Moeenudin Ahmad Qureshi was installed as caretaker prime minister in 1993. His oversaw saw devaluation of the rupee.

IMF employees are not alone in making significant contributions to the country’s finance. World Bank and Citibank have also played their role. Dr Abdul Hafiz Shaikh, the prime minister’s adviser on finance, had served in the World Bank before joining the Musharraf regime and the PPP government as finance minister.

Looking back, we see Shaukat Aziz, a Citibank financer joining the Pervez Musharraf regime as finance minister. In his attempts to steer the country out of turbulent economic waters, he introduced privatisation. He drew flak when he was stopped in his tracks by the Supreme Court while trying to privatise Pakistan Steel Mills.

It is pertinent to mention that Pakistan joined the membership of the IMF on July 11, 1950. It is now seeking its 13th assistance programme since 1980. This programme comes at a huge price to the citizen: devaluation of the rupee; slashing subsidies on electricity and gas; increase in interest rates; reduction in expenditure on public interest programmes etc.

Ever since we joined the IMF programme, we have been ceding space to the IMF, increasing the cost of living for the common man

And the State Bank? It was none other than the Father of the Nation, Quaid-i-Azam Muhammad Ali Jinnah, who inaugurated the State Bank on July 1, 1948, at the special request of Zahid Hussain, its first governor. Jinnah made a speech laying out the vision for the State Bank. A few excerpts there from are worth quoting:

“I need hardly dilate on the important role that the State Bank will have to play in regulating the economic life of our country. The monetary policy of the bank will have a direct bearing on our trade and commerce, both inside Pakistan as well as with the outside world and it is only to be desired that your policy should encourage maximum production and a free flow of trade. The monetary policy pursued during the war years contributed, in no small measure, to our present day economic problems. The abnormal rise in the cost of living has hit the poorer sections of society including those with fixed incomes very hard indeed and is responsible to a great extent for the prevailing unrest in the country. The policy of the Pakistan government is to stabilise prices at a level that would be fair to the producer as well as the consumer. I hope your efforts will be directed in the same direction in order to tackle this crucial problem with success.

“I shall watch with keenness the work of your research organisation in evolving banking practices compatible with Islamic ideas of social and economic life. The economic system of the West has created almost insoluble problems for humanity, and to many of us it appears that only a miracle can save it from disaster that is now facing the world. It has failed to do justice between man and man and to eradicate friction from the international field. On the contrary, it was largely responsible for the two World Wars in the last half century.

“The Western world, in spite of its advantages, of mechanisation and industrial efficiency is today in a worse mess than ever before in history. The adoption of Western economic theory and practice will not help us in achieving our goal of creating a happy and contented people. We must work our destiny in our own way and present to the world an economic system based on true Islamic concept of equality of manhood and social justice. We will thereby be fulfilling our mission as Muslims and giving to humanity the message of peace, which alone can save it and secure the welfare, happiness and prosperity of mankind.”

It bears mentioning that the State Bank was brought into being through the promulgation of the State Bank of Pakistan Order of May 12, 1948. This order was the forerunner to the State Bank of Pakistan Act, 1956, which lays the groundwork for its constitution. It goes without saying that it is the heart of economic growth of Pakistan; it regulates the monetary policy and credit system of the country. Section 24 of the Act lays down that it is only the State Bank that enjoys the right to issue banknotes.

The State Bank is an autonomous body with a board of directors empowered to deal with its affairs, business and general superintendence. The board comprises 10 members, including the governor. The governor is the chairman of the board and the chief executive officer, who is empowered to ‘direct and control the whole affairs of the Bank’.

The governor, he is appointed by the president for a period of three years.

To draw the strands of the whole discussion together, Pakistan is caught in a vicious economic cycle. Ever since we joined the IMF programme, we have been ceding space to the IMF, raising the cost of living for the common man. Governments have made lofty claims many a time to break the begging bowl. But, it was not to be. Imran Khan too tried to build castles in the air. Now that the IMF team is tasked with the economic affairs of the country, two all-important questions stare us in the face: Firstly, would it succeed in securing a bailout package with less harsh consequences? Secondly, would Pakistan dig itself out of the hole?

Regrettable as it is, after 72 years of our independence we are still groping in the dark, trying to find our feet. This may sound too pessimistic and one might be accused of being a peddler of doom and gloom. That being said, one must earnestly hope that one day, the light of hope will end the long and pitch-black night of hopelessness. One day, Pakistan will say goodbye to the IMF for good, thereby taking full control of its economy. One day, the Quaid’s vision of Pakistan will turn into reality.

The writer is a Lahore-based lawyer