New York-based Alvarez & Marsal Inc. (A&M), a global professional services firm known for its work in turnaround management, is hiring Dr Reza Baqir to lead a new advisory business focused on counseling developing countries on how to best manage their debt loads, reported Bloomberg on Friday.
Dr Baqir, who was the governor of the State Bank of Pakistan (SBP) until May last year, will lead the A&M’s newly-formed service to help emerging-market governments deal with difficulties triggered by high interest rates and prices for energy and food, the firm said in a statement, the Bloomberg report added.
“A&M decided that what they do for companies very well there is an opportunity to do for countries,” Baqir was quoted as saying in an interview.
There is more scope for this kind of work as “emerging markets are experiencing a lot of financial stress right now,” he said.
A&M has taken on some of the biggest corporate blow-ups in recent history, including Lehman Brothers Holdings Inc., Arthur Andersen LLP and FTX.
The company will draw on its experience working with companies to advise governments via the new Sovereign Advisory Services arm, potentially competing with investment banks such as Rothschild & Co. and Lazard Ltd, according to Baqir, the report added.
Ghana, which has suspended debt payments, hired Lazard while bondholders turned to Rothschild for help with the process.
As many as 15 emerging and frontier markets are trading at distressed levels, according to a Bloomberg index tracking sovereign dollar debt.
“There are a number of countries that are not yet in a debt restructuring, but all the signs are beginning to blink,” Baqir, who will be based in Dubai, said. “We are in conversations with a number of them.”
Prior to his appointment as SBP governor, Dr Baqir had 18 years of experience with the International Monetary Fund (IMF) and two years of experience with the World Bank, according to information available on the SBP website.
He was head of the IMF’s Office in Egypt and Senior Resident Representative since August 2017. He also held positions as IMF’s Mission Chief for Romania and Bulgaria, Division Chief of the IMF’s Debt Policy Division, Strategy, Policy and Review Department, overseeing the lender’s work on debt relief and sovereign debt restructuring, and head of the IMF delegation to the Paris Club for four years.
Dr Baqir was also the Deputy Division Chief of the Emerging Markets Division overseeing IMF’s loans and policies in emerging markets, amongst other roles.
During Dr Baqir’s tenure, the SBP took a number of measures to strengthen Pakistan’s financial sector including an aggressive economic support package of over Rs1.5 trillion in response to COVID-19.
Roshan Digital Accounts, an initiative aimed at digitally including the diaspora into Pakistan’s banking system and providing incentives to use formal channels to remit, as well as implementation of the National Payments Strategy to promote the digitisation of financial services, were also launched during his tenure. Mera Pakistan Mera Ghar (MPMG), another initiative that set lending targets to banks for the provision of financing for the housing and construction sector, was also launched.
Additionally, the SBP (Amendment) Bill was also passed during Dr Baqir’s tenure, inarguably among the most hotly-debated piece of legislation during the previous Pakistan Tehreek-e-Insaf government.