CHI - M.B. Abbasi, and S. Ali Raza, two well-known bankers, one is ex-President of National Bank of Pakistan and the latter is current President NBP, are in the race to become new Governor of the State Bank of Pakistan as the outgoing tenure of the present Governor Dr. Shamshad Akhter is unlikely to extend on account of her failure in macroeconomic management and regulatory functions, sources told The Nation on Friday.
It is important to mention here that past governors' job terms were usually extended but in the case of current governor, the government has finally decided not to extend her position as a governor State Bank.
"This expected move is subject to change the remaining top officials of the former President Perveaz Musharraf political and economic management team and administration, sources said adding that the government seems reluctant to renew present SBP Governor tenure which is going to be ended in December, 2008 and with consultation of Ministry of Finance and other related stakeholders, the President of Pakistan has finally sought out these two names for the slot of SBP new governor.. M.B. Abbasi and S. Ali Raza are under consideration for designation as a SBP governor as both are strong candidates for the probable governorship. The designation will be entirely based on technical basis rather political.
This change is taking place when the country's economy is going through a deep financial crisis. By designating new SBP Governor, the government wants to intervene through its new macroeconomic policy in a bid to get national economy out of financial crisis.
The government is desperately seeking for immediate financial assistance from the multilateral donor agencies in order to finance record widening current account and trade deficits by stabilising worsening balance of payment position.
M.B. Abbasi, is currently working as a Pakistan Ambassador to Iran. He had taken this charge on October 26, 2008. Sources claimed that ahead of two weeks he might be quitting this slot and likely to take office of SBP Governor. He has served as a President in the National Bank of Pakistan. He thus has strong background in banking and financial management.
While S. Ali Raza is working as a President of state-owned National Bank of Pakistan, the largest commercial bank in public sector.
From monetary to fiscal policy management and exchange rate regime to supply-side instrument, the economic policies of present governor have adversely hurt the different sector of economy as far as her regulatory performance is concerned.