Kardar’s deputy appointed acting SBP governor

Govt accepts his resignation after week-long efforts to dissuade him failed.

ISLAMABAD:

After week-long dilly-dallying, the government finally accepted Shahid Hafiz Kardar’s resignation from the post of governor State Bank on Monday after efforts to persuade him to retract the same proved futile.

An official handout issued by the prime minister’s office said: “Prime Minister Yousaf Raza Gilani accepted the resignation of governor State Bank of Pakistan (SBP) Shahid Hafiz Kardar and appointed senior-most deputy governor Yasin Anwar as acting governor of the State Bank with immediate effect.” Anwar was appointed for a three-month tenure.

Shahid Kardar, 59, served for only nine months. He tendered his resignation last Monday after developing serious “policy differences” with the government which according to him “were impeding the State Bank from discharging the mandate to safeguard its own integrity and autonomy”. He said he took the decision to avoid a deadlock with the government in economic decision-making, indicating the level of influence exerted by the federal government to pursue its own, instead of a national agenda.

According to sources, Kardar was compelled to resign because of institutional politics within the SBP, a top bureaucrat’s attempt to undermine Kardar and differences with President Asif Ali Zardari. This provided the government with an opportunity to appoint a “loyal and dutiful” person, according to one of top three economic policymakers.

“I have received (resignation acceptance) confirmation”, said Kardar.

Legally, the government has to appoint a permanent governor prior to the expiry of his tenure.

Yasin Anwar previously served as the acting State Bank governor between May 2 and September 8 last year, when Syed Salim Raza resigned on “personal grounds”.

Kardar is the third governor in the current political dispensation and the second who left the prestigious position prematurely. His resignation once again leaves the economic team built last year in tatters.

“For macroeconomic stability continuity of key economic policy makers is very critical”, said a former SBP governor, Dr Ishrat Hussain. He said Kardar was doing a good job despite being busy dousing fire.

The international financial institutions had also recognised Shahid Hafiz Kardar’s professionalism.

Kardar’s statement

According to a statement sent to The Express Tribune, Shahid Kardar said: “Differences of opinion on policy actions and on the implementation of certain directions that I, in my best judgment, did not consider to be judicious have compelled me to resign from office.”

He said: “Such differences are impeding the State Bank from discharging its mandate to safeguard its own integrity and autonomy, to ensure prudent conduct of monetary policy and to maintain the safety and stability of the banking system.

“For these reasons and, more importantly, to avoid possible deadlock in economic decision making in these difficult times for our nation, I find that the only honourable course is to leave my position as Governor, State Bank of Pakistan. It was a privilege and a great honour to have served my country,” the statement said.

Published in The Express Tribune, July 19^th, 2011.