ISLAMABAD: Former governor of the State Bank of Pakistan Dr Ishrat Husain said on Saturday the fear of suo motu intervention by the Supreme Court or high courts in financial transactions and grant of stay by them during lengthy proceedings had contributed towards elevating the country’s risk profile.

“Even if the investors and businesses cross all hurdles imposed by the federal or provincial and local governments, they are now faced with an additional constraint that adds to uncertainty and unpredictability of investing and doing business in Pakistan,” he said while reading a paper on ‘Judicial review of administrative actions’ at a session of the judicial conference presided over by Justice Nasirul Mulk.

Dr Husain, who headed the central bank from 1999 to 2005, deplored the practice of filing of frivolous petitions by parties not pleased with the outcome of executive decisions. A large number of frivolous petitions were filed every year which had dire consequences for the economy, he said.

Without naming the Reko Diq gold and copper exploration case, he said very few countries would scare away a potential $3 billion investment by world’s leading mining companies for exploring resources in a difficult area.

“And when the investor seeks international arbitration, we spend millions of dollars in the tribunals to defend our actions. Meanwhile, the mining operations are at a standstill and whatever little foreign exchange we earn through exports is not accruing at a time when we need it badly,” he remarked.

“We do not acknowledge that we don’t have the technical knowhow, financial resources and organisational ability in the public sector to run such a sophisticated operation but we take pride in making false and misplaced assertions,” he said.

Dr Husain also shed light on the liquefied natural gas (LNG) project, also the subject of a suo motu case, and said any country facing an acute shortage of energy, particularly gas, would take exceptional measures to find resources for overcoming the shortfall.

“But for the past four years we have had several tenders, biddings and awards which could not proceed further due to court interventions,” he said.

Dr Husain also referred to the famous case against the privatisation of the Pakistan Steel Mills and said not a single transaction of privatisation had been carried out after that decision. “We have incurred losses of Rs100bn or more in the Steel Mills but its production is hardly one-tenth of its installed capacity, although we have to import the products which the mills used to fabricate and spend valuable foreign exchange. We are also obligated to pay salaries and wages to the employees who are presently not rendering any productive service.

“The more pernicious fallout of this decision is the sense of fear among the civil servants and political leaders for putting out any public assets for sale or transfer to the private sector to avoid the wrath of the judiciary.”