Concession on SBP board’s appointment result of IMF hard talks, Hammad says

ISLAMABAD: Federal Minister for Energy Hammad Azhar said on Tuesday that concession regarding the appointment of the State Bank of Pakistan (SBP) board by the federal government was the result of hard negotiations with the International Monetary Fund (IMF).

He said the government retaining the authority to appoint the board was a “concession” that was gained after “hard negotiations” with the IMF. Addressing a joint press conference with Federal Minister for Information and Broadcasting Fawad Chaudhry after the cabinet meeting, Azhar said that SBP’s board members would be appointed by the federal government, adding that the board could remove the governor as well.

About the “tenure security” of SBP’s governor, he said that the rule was present for the last 50 years. “It is still present and there is nothing uncommon about it,” he emphasised. “Tenure of security is also present in other regulatory authorities like Ogra, where chief can be appointed and removed. “We have applied the same formula in SBP,” he said.

Explaining why the central bank’s autonomy was important, he said available data globally shows that when central banks are independent, sustainable economic progress takes place. Criticising the previous governments for their efforts to undermine the SBP’s autonomy and work, he said anyone could influence the exchange rate in the past.

“To show economic growth during the last year in government, political parties in power focused on printing excessive money which eventually impacted inflation,” he explained. The minister emphasised that the law to ensure SBP’s autonomy was important.

About the Pakistan Muslim League Nawaz (PMLN) alleged interventions to give away the SBP’s control, he said that the party also passed a bill in this regard in 2015. The bill, he said, reads: “The role of State Bank of Pakistan has been strengthened further by substituting the federal government’s approval wherever required to the [SBP] board approval.”

Criticising the PMLN’s 2015 bill, the minister said that while all SBP board members would be appointed by the federal government, the PMLN virtually gave away everything to the board members. “Now you can decide which political party tried to undermine the independence of the SBP and which party tried to protect it and made a comprehensive policy in this regard,” he said.

“We brought a system that many serious economists in Pakistan were demanding,” he added. “I want to make it clear that the SBP and its assets will remain under the federal government’s ownership.

“Some political parties are engaged in politics over the issue and an explanation was needed,” he said. The opposition parties have maintained that the government's move to grant autonomy to the SBP is aimed at targeting inflation rather than economic growth, calling it an agenda of the IMF.

Information and Broadcasting Minister Fawad Chaudhry said that the federal government was obliged to abide by the court's directives regarding the sealing and demolition of the sprawling naval golf course located in Islamabad's Margalla Hills National Park area unless the court suspended its orders.

The statement comes a week after the Islamabad High Court (IHC) directed civic agencies to seal the golf course. During the January 11 hearing, it had also ordered the golf course’s demolition within four weeks unless an environmentally-friendly use could be found for it.

Fawad said the opposition was only focused on hatching conspiracies against the government despite the latter’s constant efforts to engage them on major system reforms. “We want to engage the opposition on electoral and judicial reforms, and the process for appointment of the National Accountability Bureau (NAB) chairman, but the reforms are not the priority of opposition leaders,” the minister said.

Fawad said the government, as well as the National Assembly speaker, had invited the opposition for holding talks on those three issues, but, unfortunately, their leaders only wanted to topple the government.

From the very first day, he said, they (opposition leaders) desired that they would succeed in removing the current government after six months, and they were still yearning for that. They had already passed four years with such illusions, and the next five to six years seemed to be not any different for them.

The minister revealed that during the cabinet meeting, the premier was briefed about the COVID-19 situation in the country. “The meeting was informed that daily cases had reached over 5,000 with rising in hospital admissions, including 20% increase in ICU cases,” he said.

The minister added that vaccination was vital for everyone as those, who had gotten two jabs, were safer against the Omicron variant than the unvaccinated.

“Unfortunately, Sindh is lagging behind in the vaccination process, as its capital Karachi, has become the most-affected city of the country in terms of the cases of the new variant,” he said. School-going children were the major victims, he said, adding that the government had spent $2 billion on the import of vaccines.