ISLAMABAD: Pakistan Muslim League-Nawaz (PML-N) senior leader and former premier Shahid Khaqan Abbasi, Monday, criticised the government for giving an “absolute” autonomy to the State Bank of Pakistan (SBP) through a recently passed bill, saying that the “governor SBP will now be the second most powerful and the highest paid person in Pakistan.”
Speaking at a news conference along with other PML-N leaders, Abbasi deplored that the Pakistan Tehreek-e-Insaf (PTI) government along with putting an additional burden of Rs700 billion annually on the people through the mini-budget, has also passed the State Bank (Amendment) Bill without holding any discussion by the house last week.
“This move [the SBP bill], which was passed in the darkness of the night on Thursday without any discussion, will have serious conservancies for the people and the country’s economy,” he warned.
He further maintained that a very “dangerous” clause has also been included under which the SBP can now enter into agreements with international financial institutions and foreign governments to provide information to them about the state of the country’s economy.
“If the FATF [Financial Action Task Force] will require any information about Pakistan’s economic affairs, the SBP, without consulting the government, would now be able to provide the required information. There is no such absolute autonomy to any central bank across the world other than the SBP, which has been given under this legislation,” he maintained.
He stated: “It [the SBP] would now only act as the IMF agent and the Fund would keep it as its viceroy in the country. If you are handing over the economy to foreign institutions, then you can also compromise on the country’s security, which is not acceptable at all.”
He vowed that any legislation which is against the interest of Pakistani people would have to be reversed. “I would also like to tell the IMF and other international financial institutions that no compromise would be made on Pakistan’s security. Any future government would reverse this bill through an ordinance as its first thing to do after coming into power,” he added.
He stated that his party wanted the bill to be debated thoroughly and it should have been passed with consensus.
Abbasi maintained that it was in contradiction with the government’s national security policy, which was unveiled a day after the passage of the SBP bill, and as per the government’s view it is aimed at ensuring Pakistan’s economic security.
“It’s a strange contradiction that at 11:00 pm in the night the SBP bill was passed and the next day the government made the national security policy document public,” he said. “Only 12 hours ago, the control of the country’s economy by the government and the parliament was shifted from them to the SBP, when the national security policy was made public,” he added.
He said that the government’s economic policy would now be subject to the SBP policy and would not be in conflict with the central bank’s policy. “It means that running of the government has been made very difficult and the restrictions which were earlier being imposed by the international financial institutions, would now be imposed by the SBP itself,” he maintained.
The SBP, he added, which had the fundamental objective to control the banking and fiscal system, has now also been tasked to maintain domestic price stability. “If the government wants to provide a relief to the people, the SBP can stop it now from giving any such relief,” he said, adding that the central bank would not be answerable to any institution including the parliament.
He added that the government’s authority to run the country’s economy has been abolished through this legislation.
“After this bill, the governor SBP would now be the highest paid and the second most powerful man in Pakistan. There will neither be any body nor the government and the parliament to make the SBP answerable,” he further maintained.
He added that the SBP was earlier bound to report to the parliament quarterly in a year and now it has been made for one year.
Furthermore, Abbasi stated after this legislation the government cannot borrow from the SBP even during the emergencies.
He said that the tenure of the SBP governor has also been increased from three to five years, adding that the authority of the government to appoint deputy governors has also been shifted to the SBP.
He stated that the eight-member board of governors would now control the SBP policy and nobody would be able to remove them. “These ATM machines and those defending the government statistics of the economy will be the [political] ones to be appointed as board of governors,” he maintained, adding that a two-member executive committee has been set up over the board.
Copyright Business Recorder, 2022
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