Let’s just try and remember that the SBP (State Bank of Pakistan) Amendment Bill was about the state bank, specifically about giving it complete sovereignty. Nothing wrong with that. Progressive democracies pride themselves for leaving their central banks free to toggle monetary policy, after all, so why shouldn’t we? Only it wasn’t about that at all. It was, as we all know, about meeting IMF (International Monetary Fund) prior conditions to restore the EFF (Extended Fund Facility). If the Fund hadn’t put its foot down, nobody would’ve bothered about it. In fact, the government didn’t like it much when it first got to know of it.
Buried deep in this argument, though not directly related to monetary policy, is also the fact that the finance minister had very different ideas about “making the IMF understand” about the need for an expansionary budget, and definitely no need for a mini-budget, when he took over. None of that happened, of course, and not only is this year’s fiscal policy turning out to be very different from the stimulus and subsidy bonanza implied in the budget, now there’s this monetary policy compromise as well.
But what’s so wrong with it? This doesn’t put cost-push pressures on prices like the finance bill, so even the opposition could do little more than attack it for selling out to IMF and financial colonialism — whatever that means.
Still, it got lumped with all the other very tough conditions so even the prime minister’s office was forced to show its displeasure. But then, after all sides employed their own spin on it on TV shows, it was shoved into Senate proceedings in complete, and completely expected, disregard of all formalities about proper debate, etc., and voted on in a session that could only strictly technically be called a gathering of the upper house of the country’s parliament to discuss an extremely important bill.
And while some people might genuinely have been surprised that the opposition’s boasts fizzled out, you can be sure that nobody was shocked that what is constitutionally a floor to discuss only and only matters of the utmost importance to the federation and the people descended into an embarrassing theatre of the absurd; a treasury members’ contest of whose insults drew the loudest cheers.
The opposition’s think tank also thought it was a smart idea to file a dissenting note with the senate secretary about economic slavery and all that.
Then the senate opposition leader, a former everything including prime minister, really thought that a seemingly politically correct resignation, to the party chairman not the senate chairman as the law requires, would make for the right kind of optics.
Now the hottest thing in the senate is Yousaf Raza’s alleged betrayal. But what are the people to make of all this? A government forced to sell a line that it vehemently opposes in principle and take it as far as a slugfest in the senate, an opposition forced to attack it simply because it’s in opposition even though it would have fought tooth and nail for it if it were once again in government, and a parliament that resembles an ugly fish market whenever it’s crunch time.
Nobody in all this had even an inkling that it would’ve made a lot more sense to discuss right now whether this bill would make the state bank lean more towards growth or inflation as it exercises its sovereignty. Inflation is high and will remain high for a while, so such decisions will have a very direct impact on people and also businesses.
But when even the upper house is all about who can sling more mud at the other, government for the people and of the people can’t really inspire much confidence. So we’ll get the Fund’s nod and the EFF and better loans at more favourable rates, and even bring down our bond yields, but does any of this have anything at all to do with improving the lives of common people? More loans will only mean more debt, which means yet more loans that must eventually be squeezed out of the common Pakistani.
But that’s not what parliament is obsessed with. Remember this was about the state bank?
Copyright Business Recorder, 2022
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