Why it is important to make the State Bank of Pakistan independent from the perspective of investors? Investors want long term policies that they can easily follow and understand. They want easy exit options and security of their investment.
In Pakistan the politicians in power at any time will impose their own individual skills and understanding on financial policies and budgets that every business and investor have to follow. And with politicians in these positions changing every 3-4 years mean that these policies also change quickly and are short term.
While in USA the Reserve Bank of America, an independent organization dictates financial policies based on its organisation’s skills and experience. While the politicians have to follow these policies while conducting their own business of running the government.
This way the USA has a long term financial policy that is easy to understand, which investors love. But in Pakistan we see regular flight of investment after every 3-4 years.
Therefore to ensure financial stability in Pakistan it is important to make the State Bank of Pakistan an independent organisation with systems and procedures to form long term policies through experts for Pakistan. This will ensure investors and investment increase over the years in Pakistan.
SHAHRYAR KHAN BASEER P ENGR
PESHAWAR
