A tenure of distinction

While paying farewell visit to the "Business Recorder" on 26th November, Governor, State Bank, Ishrat Husain expressed his ideas on various issues in a very impassioned and frank manner and looked like a person who had played his innings remarkably well.
He seemed to be completely satisfied with the financial system restructuring and reforms undertaken during his tenure that had enabled the country to be in a position to mobilise and utilise its financial resources more efficiently. Accumulation of adequate foreign exchange reserves was another achievement, which had given confidence to the investors and other stakeholders by ensuring the solvency of the country.
However, reform process in a country like Pakistan becomes difficult because reforms are not generally received well and criticism becomes a norm. Asked about the over-exposure of a central bank governor, Ishrat argued that times had changed and the central bank must now inter-act more openly and frequently with various stakeholders including the public.
This openness, in his view, is in order so that a few players with their diverse interests do not dictate the market sentiment. He was leaving his office with a sense of fulfilment as he had done his job with commitment and the best of his abilities.
The Governor, however, seemed to be very concerned about the acute shortage of skills at the higher levels which was increasingly becoming a constraint on development and upgradation of technology. Incidentally, this topic was also the main theme of his address at the prize distribution ceremony of the Institute of Bankers the same day.
India and China, the Governor said, are developing at a very fast rate due mainly to the existence of top class universities and other high seats of learning and research. The movement towards higher growth trajectory requires leadership and highly skilled manpower, which unfortunately, is deficient in Pakistan. The problem becomes compounded when the few professionals we have in the country do not easily gel and often fail to work as a team.
According to the Governor, social sectors were not only inadequately funded but also suffered due to structural problems including lack of clarity and overlapping of functions. The role of local bodies, provincial governments and Higher Education Commission, for instance, was not properly streamlined for managing and funding the educational institutions. Ego and turf were the two major ailments afflicting our society.
Ishrat Husain divulged the fact that he was opposed by his own staff when he decided to create SBP Banking Services Corporation as a separate entity and transferred the regulation of NBFIs to the SECP because it would reduce the domain of the State Bank. He hated rhetoric and stated that armchair intellectuals inundate the country with their far-fetched ideas.
Sadly, no informed debate was taking place in the country. Discussing foreign investment, the Governor expressed the opinion that investors were satisfied with the present policies of the government but were worried about the continuity of policies and the kind of governance after President Musharraf is no more at the helm.
Talking about the recent earthquake, he stressed the point that it had traumatised the victims and rehabilitation should involve both economic and social help.
We would like to express our appreciation over the invaluable contribution he has made to the financial sector during his tenure at the State Bank. Although financial sector reforms were designed earlier, yet it was no easy task to implement them because of the various hurdles created by the vested interests from time to time.
Indeed, all of us need to acknowledge the fact that today the financial sector stands at a sounder footing than when he took over and the country's solvency is now, more or less, assured. However, the State Bank is generally criticised for the rise in inflation rate due to its accommodative monetary policy. Hopefully, recent tightening of monetary policy and further measures, if required, would be able to contain inflation within reasonable limits.
The most distinguished feature of Ishrat Husain's tenure was his very close and frequent interaction with the media and other sections of society. His detractors could say that it was to seek publicity but, in our view, he did not need it and it was necessary to properly educate the people and raise the level of debate over various policy issues.
There is no doubt that imparting of quality education at higher levels has become increasingly necessary due to the growing needs of an expanding economy. Rhetoric and cynicism have become our second nature and armchair and pseudo intellectuals have done a great disservice to the country by presenting each and every initiative and development negatively with the result that most of us have lost our pride and confidence.
Ishrat Husain indirectly hinted at joining the debate as an ordinary citizen either individually or through forming a think tank to put things in proper perspective.
Ishrat has had an extremely successful tenure as the head of the country's banking system. He has distinguished himself as a bold and forthright team player who articulated the government's economic policies with vision, clarity and conviction.
There is no doubt in our mind that Governor Ishrat Husain has raised the bar several notches and that his successor will have to strive hard to fit his tracks and be recognised. As we bid him farewell, we wish him success in all his future endeavours with the hope that he would continue to contribute to the best of his abilities for the welfare of the economy and the people of this country in some capacity or the other.