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SBP governor, FBR chairman shown the door

Updated May 04, 2019

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No official reason given for sudden sackings, name of new central bank chief to be announced today. — DawnNewsTV/File
No official reason given for sudden sackings, name of new central bank chief to be announced today. — DawnNewsTV/File

KARACHI/ISLAMABAD: The government moved to remove the State Bank governor and the Federal Board of Revenue (FBR) chairman in a rapid series of developments in Islamabad on Friday.

SBP Governor Tariq Bajwa confirmed to Dawn that he was asked to resign while he was in Islamabad for talks with the Interna­tional Monetary Fund (IMF) that are supposedly ‘progressing’ according to prime minister’s adviser on finance Hafeez Shaikh who has recently replaced finance minister Asad Umar.

The developments came on a day when Prime Minister Imran Khan hinted at further changes to his cabinet in the days ahead.

Mr Shaikh did not discuss the developments on record with Dawn. But when asked if this change during the IMF talks might send a negative signal to the markets, he said: “I hope the markets are going to look at our actions and decide. They have to see the totality of the actions and our policies.”

It was unclear how the change of such senior and important officers will affect the talks with the IMF.

No official reason given for sudden sackings, name of new central bank chief to be announced today

A replacement for the SBP position is expected to be announced on Saturday (today) but there was no official word on when the name of a new FBR chairman will be announced.

Both men seem to have been taken by surprise, as FBR chairman Jahanzeb Khan was scheduling meetings for Saturday till late Friday night when the news of his departure flashed across news TV screens.

Similarly, Mr Bajwa was participating in what many consider the last leg of negotiations with IMF before the finalisation of a programme.

Their removal has not yet been formalised since a notification has to come in the case of the FBR chairman and a letter of resignation from the SBP governor will be required before his departure takes effect. However, this is likely to be a minor formality in the days ahead.

Both Mr Bajwa and Mr Khan are Grade 22 officers of the Pakistan Adminis­trative Service, though the former was appointed after his retirement. There was little indication in the days leading up to the removal about unhappiness with the performance of Mr Bajwa. However, about the FBR, both former finance minister Asad Umar and Prime Minister Imran Khan had given public statements expressing their disappointment over his performance.

Sources in the finance ministry, who were privy to the developments, told Dawn that the FBR chairman was viewed by PM Khan as ‘a mediocre person’, lacking dynamism, and was held largely responsible for the lacklustre revenue performance since his appointment. The FBR is on course to register one of the highest shortfalls of its history by the close of this fiscal year, anticipated to come in above Rs350 billion.

The sources said the recently appointed finance adviser agreed with the prime minister’s views, and seemed to be moving to bring in his own team to manage the country’s finances.

Minister of State for Revenue Hammad Azhar switched his phone off after the news of the removals broke and did not revert to the messages sent seeking comment.

Other members of the government team with direct bearing on economic management also had their phones switched off.

Both the SBP governor and the FBR chairman are key players in any IMF programme. The governor is actually one of the signatories to any programme, and the FBR chairman is tasked with meeting the revenue target that usually lies at the heart of any programme.

Published in Dawn, May 4th, 2019