Amendments in State Bank Order 1948
are being brought in the form of an Act which can be named as the International
Monetary Funds (IMF) Demands Act. If it is passed by the parliament, then
Pakistan will partially lose the power to decide its fiscal matters. This Act
will cripple Pakistan by snatching its powers to act as a sovereign state.
We are going to hand over our
independence and the future of our generations to the IMF by accepting these
demands, only to get $1 billion, which Pakistan could have generated from its
resources.
Do you think it is the right
decision, wherein we are being sucked in by this new version of the East India
Company in the shape of the IMF? This law would prohibit criticising or
questioning the Governor SBP for his actions, which means an utter violation of
the freedom of speech. The mini-budget has been presented in the National
Assembly on the demand of the IMF and more taxes have been imposed on the
already crushed common man.
The never-ending demands of the IMF
will not stop here as the agenda of the IMF is to cripple our economy and to
drive Pakistan towards international demand. Every Pakistani is bound to suffer
because of this mini IMF budget. The parliament, opposition parties and the
government should come up with a solution to get rid of the IMF with their
collective doable debt retirement programme. The nation sees a “dangal” in the
parliament instead of a decent approach to handle national issues requiring the
indulgence of Parliament.
Here are the salient features of the
State Bank Act which has been presented in the parliament and now referred to
the concerned standing committee.
As per the proposed amendment,
immunity has been granted to the sitting SBP management including the present
Board of Directors, the Governor, Deputy Governors, a member of any Board
committee and monetary policy committee or the staff of the Bank for any act or
performance of any functions or any legislation administered by the Bank.
Not only this, but the tenure of the
governor, deputy governors, external members of the Monetary Policy Committee
and non-executive board members has also been increased from 3 to 5 years with
two terms allowed and also one year’s extension.
As per the latest proposed
amendments, the objectives of SBP have been specified for price maintenance and
financial stability. While the government has justified this autonomy as a way
to maintain price, there has yet been no mention of the inflation targets or
price stability despite revising the act.
In what capacity can the State Bank
control inflation? Moreover, now the government can pay salaries (though it is
bad) by printing currency, whereas, restricting printing currency or loans to
our foreign debt-ridden country will come under heavy pressure and we will be
forced to beg for more loans. The government will not be able to borrow from
SBP under any circumstances, which will badly affect the financial needs of the
government and the national exchequer and this will create hardships for the
government, pushing us to bankruptcy. There will be no check or deterrence on
wrongdoings or criminal mismanagement or any criminal negligence by the
employees of SBP.
The entire business community is
showing serious objections and reservations on these amendments as the SBP will
now not finance any rural credit, industrial credit, export credit, loans
guarantee, and housing credit which means that these sectors will get into
trouble and mafias with cash will flourish at the cost of the common man and
the small business community.
The proposed amendments are posing a
serious threat to the sovereignty of our country as the independent State Bank
will be omitted from the State domain and it will be the State under obligation
to become the subordinate of the State Bank. An independent SBP will be
dictating all our institutional decisions and state secrets and operations in
the national interest will be directly subject to a security risk and the IMF.
The State Bank will be under the
legal ambit to supply information as already committed to the international
community via FATF whereas FATF is biased and anti Pakistan.
The bill excludes any government
representation on the State Bank Board of Directors as no member of parliament
or any state institution will be allowed to become a part of SBP or even
allowed to question its irregularities in the Parliament or any court. What a
destruction of our economic system by some geniuses working for the IMF it would
be. Its basic agenda is to compel the government to prioritise meeting the
country’s foreign debt obligations over all other expenses and then continue to
take new loans from the IMF to increase its authority. The annual report to the
parliament is nothing, as the parliament is not a regulatory authority to
oversee the day-to-day functioning of the SBP.
According to the new bill, the
monetary policy is the exclusive domain of the State Bank while fiscal policies
will be under the Federal government which will severely compromise and damage
the macro-economic management of the country as there will be no coordination
or coherence between both the domains as these amendments are contradictory and
are being brought in with ulterior motives to push the country to bankruptcy.
It has been unwisely decided that now the SBP is being given the status of the
supreme prestigious institution of the state.
Moreover, the parliament, which can
even remove a Prime Minister, cannot invoke any law against the SBP or remove
the SBP Governor or Deputy Governor under any circumstances. The SBP Governor
can only be removed by the federal government if found and proven guilty of
misconduct. It will only be a formality that the Governor would submit an
annual report or a half-yearly report, not less than that before the Parliament
regarding the achievements without any sort of accountability.
What is the use of such a report
which cannot be dissected for legal action? It is just eyewash as this report
cannot hold the SBP, the Governor or any other employee of the SBP responsible
for any wrongdoings or losses.
A glance at the draft act shows that
it is not drafted by us but rather dictated by the agents of the IMF. The draft
bill was also shared with the IMF before placing it before the Parliament for
discussion and adoption. Our country cannot afford this level of immunity to
such a critical institution as it will be detrimental to our economy as well as
the sovereignty of our country.
We have witnessed how the budget has been presented in the parliament and how the masses have rejected it as it is going to hurt the common man.
The article was published in The Nation on January 1, 2022. Link to the original article... https://nation.com.pk/01-Jan-2022/imf-demands-sovereignty-and-the-mini-budget
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