BB Governor change: Qualified people won't be interested in such positions in future

It is not unusual for a new government to reshuffle people in various important posts. But the way the recently outgoing governor of Bangladesh Bank, Ahsan H Mansur, was removed was not what he deserved. He could have been given a more dignified farewell.

Just the day before yesterday, the outgoing governor had met the new finance minister. It seemed then that continuity in the governorship would be maintained. Yesterday, the outgoing governor even held a press conference. Then, in the afternoon, he learned that he was no longer governor. If he had been told during the meeting with the finance minister the previous day that a change of governor was coming, that would have been better.

The entire series of events surrounding the governor’s removal has tarnished the image of the new government. A new government certainly has the right to decide to change the governor. But the way the decision was carried out was not graceful; it could have been handled more smoothly.

This is especially so because the outgoing governor had to take responsibility at a difficult time under very challenging circumstances.

He made some bold and risky decisions. That was his contribution, and it could have been acknowledged. The process of his departure is unfortunate. It sends a signal that, in the future, competent people may not want to come to such positions.

No one will deny the need for reforms in the financial sector. Expectations from the new governor, Mostaqur Rahman, are that he will maintain continuity in the reforms already begun. In addition, he should carry out the pending reforms. It will be a major challenge for the new governor to help the financial sector emerge from its distressed condition. The reforms underway under the programme of the International Monetary Fund must be continued.

The new governor may also face challenges in continuing reforms such as amending the Bangladesh Bank Order. There are also challenges in continuing the process of merging weak banks and financial institutions.

Controlling inflation will also be a major challenge for the new governor. Of course, in this country, controlling inflation is difficult for the central bank alone.

Overall, given the current economic situation, the position of governor of Bangladesh Bank is a hot seat. Alongside carrying out reforms, the governor has to withstand various pressures from influential quarters.

*Zahid Hussain is a former lead economist at World Bank’s Dhaka office.