| September 27, 2002 | Friday | Rajab 19, 1423 |
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The Blair dossier
AUTONOMY for the State Bank has long been a pressing question. The federal cabinet has now approved an ordinance which, it is claimed, will secure and strengthen the autonomy of the central bank and reinforce the independence of its governor. The country’s economy has suffered immensely as a result of the long practice of keeping the SBP and its governor on a tight leash. It was only in the late 1980s that, with the resumption of the democratic process, it was felt that in order to introduce much needed checks and balances in the economic sector, it was essential to liberate the SBP from the clutches of the finance ministry. In 1997, the National Assembly passed the State Bank of Pakistan (Amendment) Act, 1997, under which the bank was authorized to formulate and monitor monetary and credit policy and, in determining the expansion of liquidity, take into account the government’s targets for growth and inflation.
The bank was also meant to conduct monetary and credit policy in a manner consistent with these targets and the recommendations of the Monetary and Fiscal Policies Co-ordination Board (MFPCB) with respect to macro-economic policy objectives. The State Bank governor was given powers to determine and enforce the limit of credit to be extended to the federal government, provincial governments and other agencies of the federal and provincial governments for all purposes, it being understood that the governments would meet their additional credit requirements directly from commercial banks through a market-based auctioning system to be introduced by the bank. The bank was further expected to approve credit requirements of the private sector, tender advice to the federal government on the interaction of monetary policy with the fiscal and exchange rate policy, analyze and advise on the impact of various economic policies, and submit a quarterly report to parliament on the state of the economy.
The 1997 Act seemingly took care of a number of weaknesses and loopholes in the original act passed in 1956. But the State Bank could not be protected from political influence and interference by the finance ministry. The reason perhaps was that the Act had not ensured full autonomy of action and enforcement for the governor. That is why one feels that the ordinance approved on Wednesday should be more specific. After having given the governor full autonomy and a single five-year tenure during which he cannot be removed except through a parliamentary inquiry declaring him to be medically or mentally unfit, the selection of the person for the job should now be made strictly on merit.
Under the Legal Framework Order, the president has the power to appoint the governor of the State Bank in his own discretion without consulting anyone. It would be far better if the appointee could be selected in consultation with the prime minister and the leader of the opposition. This way greater objectivity in the matter of selection would be ensured and the person so chosen would not have to be beholden to any single wielder of authority. But more than this, the governor will have to prove that autonomy means giving real direction and substance to the country’s economy and ensure that economic and fiscal policies work to meet the needs of our people rather than conform to the priorities and preferences of our donors as the foremost consideration.
BRITISH Prime Minister Tony Blair would hardly be pleased at the reaction to his voluminous “dossier” on Iraq presented to parliament on Tuesday. The document, put together to justify America’s case for a war against Saddam Hussein, has met with scepticism from even within his own Labour Party. British media comments too have been unenthusiastic. Russia has said it does not seem worth creating “a great propaganda furore” over the Blair report and only specialists and experts can judge whether or not Iraq has weapons of mass destruction. France is also not convinced, and says it will compare its own evaluations with those of Britain. China had not directly commented on the report till this writing, but earlier warned the Iraqi president that this was his last chance to comply with UN Security Council resolutions.
The dossier has been released just before the Security Council is due to consider a new resolution authorizing UN inspectors to return to Iraq. It is meant to add weight to American threats to the UN to come up with a tough resolution, failing which the US would feel free to act on its own. It has been released in Britain because public opinion there is not convinced of the need or justification of military action against Iraq, although the Blair government has already pledged its support to the Bush administration. It is clearly an attempt at a bit of blackmail.
President Saddam Hussein’s twists and turns on the issue of inspections are well known, and as China has tried to suggest, it should be hoped that this time there would be free and unfettered compliance by Baghdad with the prescribed pattern of inspection. But the issue has now gone beyond this. It now concerns America’s bid to assert its right to change regimes and strike militarily or otherwise at nations at will. The draft sent by President Bush to Congress seeking powers to act unilaterally is so open-ended that Tom Daschle, the Democratic leader of the Senate, believes that the Iraq question is being politicized by the Bush people with an eye on the November mid-term Congressional elections. Former Vice-President Al Gore has said the US acting alone will severely damage the war on terror and weaken America’s “ability to lead the world”.
If the UK document is to be believed, then the Iraqis must be among the most technologically advanced and resourceful people in the world: despite crippling sanctions and almost total isolation since the Gulf war, they appear to have managed to build up a weapons capability that Messrs Bush and Blair believe threatens international peace. The supposed newly acquired capability also raises the question of the effectiveness of the earlier phase of inspections, spread over many years, when scores of suspected installations and stockpiles of weapons in various stages of development and offensive material were claimed to have been destroyed. Robert Fisk, writing in The Independent of London, argues from another point of view. He says if the dossier, despite the words of doubt running through its pages, is true, than it means that the UN policy of brutal sanctions totally failed. It did not prevent Saddam Hussein from continuing with his weapons programme and the half a million Iraqi children who died because of the sanctions were therefore killed by the West for nothing.