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Eyes on Governor Hilaire

Sunday, January 10, 2016

The appointment of Dr Alvin Hilaire as governor of the Central Bank from his position as deputy governor is potentially the most positive outcome of the imbroglio between the Government of the day and former governor Jwala Rambarran. Why? Because it could restart the process of succession initiated at the establishment of the bank, and continued when deputy governor, Dr Euric Bobb, succeeded Victor Bruce, the first local governor who had been understudy to the two foreign governors.

In addition to providing the bank with experienced and cultivated leadership, adopting such a process minimises the possibility of political intervention by a government wanting to install its political choice in what is seen as yet another political plum for a prime minister to hand out to supporters.

Allowing for succession, however, does not mean that a government will be denied the authority to inject qualified and experienced talent from outside when needed. 

As a rule though, growing the talent within and allowing for succession will contribute to further professionalisation of the Central Bank.

In a column one month ago at the early stages of the conflict between Minister of Finance Colm Imbert and former governor Rambarran, my focus was on how the Government, the private sector, relevant institutions and the population are going to dig the economy out of the hole it has sunk into; and that remains so.

However, in the commentary so far, a few viewpoints have been inserted which need countering. One of them is that the conflict between Minister of Finance Imbert and Governor Rambarran and the eventual outcome of that conflict are unprecedented. 

In the first break in the 30-year political monopoly of government by the People’s National Movement, Prime Minister ANR Robinson, with a new political force, inclusive of the Indo-Trinidad political party behind him, made life very uncomfortable for Governor Euric Bobb who had been appointed in PNM time. Perhaps the assumption on the part of the political directorate was that the governor was PNM, and therefore his advice on monetary and fiscal matters (such as the suggested devaluation of the TT dollar) would have been counter to the best political interest of the Government.

The only difference to that “hounding” of a governor out of office was that Euric Bobb chose not to stand in the way of the obvious need for productive relations between the fiscal and monetary authorities; he walked away.

Incidentally, there are similarities in the present state of the economy and those of the period, even though the circumstances then were more desperate: the Government then found itself going to the IMF for balance of payments support as there was no US$20 billion cushion as Prime Minister Rowley has reported is the situation in the present. 

It is also misleading for anyone to suggest that Rambarran was unique in his position of not being a member of corporate business (and social) community and so a natural target for eviction by the Government at the behest of the corporate elite. 

Were Bruce, Bobb, Demas, Harewood, Dookeran and Williams part of that “parasitic oligarchy,” so called? As a reporter covering contentions among the bank, the commercial banking sector and the business community, as in the old days of the ECO system, many were the aggravated contentions about access to the foreign reserves amongst the groups. Can it be claimed that Governor Hilaire is part of the business class placed there to serve the interests of the business elite?

Nonetheless, suggestions and allegations have already been made that given the circumstances of his appointment, Governor Hilaire is likely to feel indebted (like a Speaker of the House of Representatives and or a President of the Senate, acting as President of the Republic) to the Government which selected and appointed him/her. 

In his first news conference, Governor Hilaire set out a template for bank independence and responsibility: “We will not break the law and we will not be pushed to issue an unethical stance in different areas.” But he also noted the responsibility of the bank to co-operate with the fiscal authorities at the same time that it adopts policies which may be different from those of the Government. 

The national community will be monitoring the actions of Governor Hilaire.

One of the other points constantly overlooked by certain commentators is the alleged illegality of Rambarran’s calling of the names of bank customers. Anthony Wilson and Dr Terrence Farrell have gone into the detail of the alleged violation of the Central Bank and Financial Services laws by Governor Rambarran. Minister of Finance Colm Imbert, in a detailed cabinet note, set out the rationale for the firing decision of the Cabinet; Rambarran has had his contentions published.

Inevitably the lawyers will argue and the courts will decide. The strange thing about the overlooking of the alleged legal violations of Rambarran is that many of such commentators are those who stick closely to the “law”; now they do not argue against the law being allegedly broken; they ignore it or find some way around it claiming Rambarran was entrapped.

As to the Government’s handling of the announcement of the dismissal of the governor, it was non-professional and contemptuous of the population. A government does not fire a governor of the Central Bank and not make a formal and expeditious statement to the national community on the matter and give its reasons for doing so. 


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