KARACHI: Yaseen Anwar may be the chosen one by Pakistan authorities, but analysts and former government officials fear he may not be the best central bank governor to fight challenges faced by the fragile south asian economy.
(Read more: Yaseen Anwar appointed SBP governor)
The articulate, soft-spoken former banker has served as deputy governor of the State Bank of Pakistan (SBP) since March 2007 and is seen by some as vulnerable to government pressures, especially after the recent aggressive and unexpected rate cuts.
Since July, the key policy rate has been slashed by 200 basis points to 12 percent, leaving analysts puzzled and concerned that the move, which the bank said was aimed at spurring growth, may end up widening the deficit and spurring inflation in the country.
The cuts have also led some analysts to question the bank's independence, as the main beneficiary of lower rates would be President Asif Zardari's cash-strapped government which would benefit immensely from fiscal relief to help serve its debt.
Anwar, a dual national who holds a US citizenship, studied economics and political science at the Wharton School of Business in Pennsylvania.
More a global citizen, he has about 33 years of banking experience across cities such as New York, London and Paris, and his resume includes American banks like JP Morgan, Bank of America and Merrill Lynch.
"What you need at the central bank is a strong macro-economist and not a banker," said Ashfaque Hasan Khan, a former government advisor and now the director general of the NUST Business School in Islamabad.
"Anwar's elevation as the central bank governor is unlikely to have a meaningful impact on the economy. In fact, it would further weaken the central bank and make it more vulnerable to political pressures."
A permanent tenure
Anwar is the fourth central bank chief in three years since Zardari took over as president, highlighting the politically unstable country's difficulties in attracting and retaining qualified individuals in government service.
This would be his first permanent tenure on the job, after two interim stints in one year.
Anwar was acting governor for three months after Salim Raza resigned, citing personal reasons, in June 2010, and then again after mid-July this year when Shahid Kardar resigned, citing "differences of opinion on policy actions".
In his capacity as acting chief and deputy governor, Anwar is no complete stranger to the central bank, unlike past few governors.
However, critics maintain his credentials are not enough to lead the central bank of a debt-laden country that's struggling to repay foreign loans and keep its economy afloat.
Settling into debt
In 2008, Pakistan and the International Monetary Fund agreed on a 3-year package loan of $11 billion. But the programme was halted in 2010 because of slow implementation of fiscal reforms, and only $8 billion had so far been disbursed.
The programme ended on Sept. 30 and Pakistan opted not to ask for a new loan.
While Anwar has many critics, there are some that see his appointment as a move towards stability.
"We don't have too much time at our hands, and at least Anwar would not take six months to settle in," said the top executive of a bank, requesting not to be named.
"At least he is a clean person and knows the institution. He will do whatever he has to straight away and is unlikely to have much of a conflict with the government, which I think is a good sign and is needed at this crucial time."
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Dear Shahzeb none are indespensible. Graveyards are full of "indespensible", Sir.
If Chief Inspector Jacques Clouseau of the Surete had been appointed Governor of SBP, he would have done a superb job compared to Yaseen Anwar. Check credentials of Clouseau attached:
He will print notes and more notes and we will have a more ruined economy.
Pakistan needed someone who has good macro economic background and was independent.
So Now a new Governor who doesn't seem to be independent. What should i expect ? Interest rate in single digit ??
There is no replacement for DR.ISHRAT HUSSAIN !!!
"New SBP governor has tough days ahead By Reuters"
Whats tough about ordering more printing machines?