THE changes suggested in the existing SBP Act should place the central bank in a better position to control price inflation and manage currency through an independent determination of its monetary and exchange rate policies as per international best practices. The changes approved by the cabinet the other day will reset the State Bank’s core function and prevent frequent political intervention in its working. If parliament clears the changes, the bank will acquire vast powers to solely focus on its new function of domestic price stability without having to support the government’s economic growth target. It will, nevertheless, continue to indirectly foster growth and help a fuller utilisation of the nation’s productive resources by fighting price inflation and ensuring financial stability by using its policy tools.
Though the target inflation rate for the bank to achieve will continue to be set by the National Economic Council, the government will no longer be in a position to dictate monetary and exchange rate policies. Previously, we have watched the State Bank functioning as an adjunct to the finance ministry with its governors obtaining ‘advice’ from the government or easily succumbing to pressure, without thinking of the consequences for prices and financial stability. We have, for example, seen the bank go out of its way to interfere in the market and spend billions to maintain the exchange rate at the level suggested by the previous PML-N administration at the cost of exports and foreign exchange reserves. Not only that, it would not hesitate to print huge amounts of money to lend to the government and fuel inflation. Likewise, an independent view by the bank of the economic and financial trends and a critical analysis of government policies in its reports have been rare. There are many instances where central bankers were sent home if they took a stand. If the changes are approved, the situation is expected to become better.
The draft law also proposes sweeping administrative and other powers for the State Bank governor besides guaranteeing his tenure that has been extended from three to five years with the possibility of extension for another term. This is understandable because no one can steer the bank without complete administrative freedom and guaranteed tenure. Nonetheless, these kinds of powers also anticipate a strict evaluation of the candidates for the top office and their accountability by parliament. Parliamentary evaluation is crucial to ensure that the right person is chosen for the job after a thorough debate by the people’s representatives who should also have the power to fire them if they find their performance below par. Clearance of their appointments by parliament will empower them further in executing their mandate. Hence, it is advisable that the government revisit the draft law and change the method of selection of the State Bank governor in line with international democratic practices.
Out-of-school children
HOW can a country hope to become economically self-sufficient when at least a quarter of its child population has never seen the inside of a classroom? According to the government’s own figures, one in every four children in Pakistan has never stepped inside a school and learning poverty — the percentage of children unable to read an age-appropriate paragraph by the age of 10 — is 75pc in the country. The incumbent government seems to have a fair idea of the challenge and the federal education department has come up with a framework to re-enrol out-of-school children. There are at least 18.7m children who do not go to school — a figure that is equal to the total population of a small European country. According to the framework, a summary of which was presented to parliament, the government plans a phase-wise reopening of classrooms from the most to least disadvantaged areas of the country. The plan calls for providing dedicated — and cheap — transport services to female students and teachers of secondary schools, training support for teachers and bridge programmes for students resuming school.
All this may look good on paper but how effectively will the plan be implemented, especially since education is a provincial subject? Though the federal education ministry has vowed to work in collaboration with the provincial and district tiers of government, it is easier said than done because ground realities differ from one area to another while district administrations are non-existent. Secondly, data has also shown that those children who are in school are not learning well. The plan makes hardly any mention of the existing education infrastructure and how it can be improved. The government needs to further develop this plan to identify problem areas and chalk out clear short- and long-term targets and then devise a mechanism of collaboration for their implementation. Getting 18m children to school is a mammoth task that will require consistent and backbreaking efforts for many years by all levels of government.
GB’s demand
THE demand of the people of Gilgit-Baltistan for provisional provincial status is not a new one, and has been reiterated again by the region’s assembly. On Tuesday, the GB Assembly passed a unanimous resolution, supported by all parties in the house, demanding an amendment to the Constitution to enable GB to become a provisional province of Pakistan, without prejudice to the Kashmir dispute.
It also called for representation of the region in the Senate and National Assembly. According to GB Chief Minister Khalid Khurshid Khan, the demand is of the people of the region, not of any party or individual. Moreover, before last year’s elections to the region’s assembly, Prime Minister Imran Khan had announced that the northern region would be granted the status of a province.
The long-standing demand of the people of GB is indeed a just one. The region’s people are present in almost every part of the country and very much form part of the national fabric. The area’s people have contributed to this country’s progress in the health, education, arts, sports and military fields, amongst others, and in fact opted for Pakistan right after independence, putting up a brave resistance to the Dogra rulers of Kashmir. Yet their constitutional status is ambiguous, while they have no representation in the upper and lower houses of parliament.
This is a situation that can and should be remedied. The concerns of some within the ruling circles about the matter affecting Pakistan’s case vis-à -vis India-held Kashmir if GB is merged as a province are genuine, as historically the region has been linked to Kashmir. But that is why the proviso of granting provisional provincial status has been included in the resolution, to protect Pakistan’s case under the relevant UN resolutions. Over the past few decades successive governments have taken steps to grant GB greater autonomy. This was witnessed during the Musharraf era, while under the PPP’s watch in 2009 the region gained its present nomenclature, changed from the colonial-era Northern Areas.
While all these moves have contributed to ensuring greater rights in the region, the time is ripe to grant full provincial status — albeit on a provisional basis — to the mountainous area as per the democratic aspirations of the local population. Of course, homework on this front should be done thoroughly, and legal changes must be cleared by experts to ensure full rights to the region, as well as protect Pakistan’s position in the Kashmir dispute.
