A Pakistani economist working for the International Monetary Fund (IMF) has been appointed as the governor of the State Bank of Pakistan (SBP), as the cash-strapped country seeks to finalise a multi-billion dollar bailout package from the global lender.
Prime Minister Imran Khan’s government Saturday removed chiefs of the SBP and the Federal Board of Revenue (FBR), in a surprise move days after an IMF team visited Islamabad to hold talks for the bailout package. Both the SBP governor and the FBR chairman are key players in any IMF programme.
“The President of Pakistan is pleased to appoint Dr Reza Baqir as Governor State Bank of Pakistan (SBP) for a period of three years from the date he assumes office,” read a notification from the government issued late Saturday night.
A Harvard and Berkeley University of California alumnus, Dr. Baqir has been with the IMF since 2000. He is currently serving in the IMF as senior resident representative to Egypt.
Dr. Baqir has been the chief of the IMF’s Debt Policy Division and worked on IMF policies on external debt sustainability and restructuring of member countries. Before the IMF, Dr. Baqir worked at the World Bank, the Massachusetts Institute of Technology and the Union Bank of Switzerland.
The government also appointed Ahmed Mujtaba Memon as the chairman of the FBR – the tax collection body.
Mr. Memon comes from the Pakistan Customs Service and is presently an additional secretary in the Finance Division. A notification for Memon’s appointment is likely to be issued shortly, Geo TV reported.
The key appointments come weeks after Finance Minister Asad Umar abruptly quit the Cabinet last month in the middle of the negotiations to secure the crucial multi-billion dollar IMF bailout package, amid mounting criticism over the handling of the economic crisis.
Prime Minister Khan appointed Dr Abdul Hafeez Sheikh as Adviser on Finance in place of Mr. Umar, as inflation rose to its highest in six years.
Both the finance minister and the SBP governor co-sign the Letter of Intent that a country sends to the IMF managing director for requesting a bailout package.
A delegation of the IMF arrived in Pakistan on Monday to hold technical discussions for the bailout package, days after Prime Minister Khan met IMF chief Christine Lagarde in China.
Pakistan is seeking $8 billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country’s economy.
Islamabad has so far received a total of $ 9.1 billion in financial aid packages from friendly countries like China, Saudi Arabia and the UAE during the current fiscal year.
The talks with the IMF are supposedly ‘progressing’ according to Dr. Shaikh.
According to some analysts, the fresh appointments have taken away the control of Pakistan’s economy from the civilian government.
While in opposition, Mr. Khan was against taking loans from the IMF but in the last few months he not only twice requested the IMF chief to approve the loan package but has now also hired their man to oversee the programme on behalf of the government of the Pakistan Tahreek-e-Insaf (PTI).
Citing sources, the Express Tribune reported that Dr. Baqir was residing in the Guest House of the PM’s House, which is also temporary residence of the de facto finance minister Dr. Shaikh.
Dr. Baqir’s immediate responsibilities will be to roll out policies set out by the IMF including implementing a flexible exchange rate regime, reducing the government’s reliance on central bank borrowings and ensuring transparency in many loans transactions.