Governor’s role to advise minister
One of the enduring features of our country is the acceptance of political responsibility by our elected officials for the policies which they implement in managing our country. We elect these officials after listening to their proposals and comparing them with those of the other parties competing for our votes.
We cherish adherence to this democratic practice because it allows us to remain in charge of our political system. In due course we can vote out of office a government in which we no longer have any confidence, but we are not similarly able to remove or superintend permanent officials, even though they may advise those whom we elect to govern.
The division of labour is clear. We hold elected officials responsible for failure or success of policy which they have articulated, and they answer to the voters who hold the ultimate power.
Statements coming from the Central Bank Governor Dr DeLisle Worrell during the past week have forced their way into our attention. He said that he regards the value added tax as a “mess”, “inappropriate” and “controversial”. He let us know, too, that he would make his feelings known to the minister when the IMF’s review of the island’s tax system gets underway. To his credit we now know that the Governor’s views are not of recent origin. Even so, his personal views are not our business.
He also said that when this country went to the market and borrowed $300m from Credit Suisse last year that it did not need to borrow; but that “we have been forced to borrow simply because people are nervous; because we are not using that money . . . ”.
Such a statement is bound to raise questions about the wisdom of taking the loan especially in tough, market conditions. We are stunned at the Governor’s comments about the reason for raising the loan.
What is more, this approach is so drastically different from the traditional and principled reasons for borrowing on the international market, that serious stakeholders in our economy may justifiably be concerned at this utterance. Questions may also be raised afresh about the earlier failed $500m loan which was withdrawn. Uncertainty or controversy about policy is not required at this stage.
The opinions of the Governor, however learned, about the policy of “going to the market” to borrow foreign exchange, or on the merits of the VAT, are not matters normally for general public attention. Nor is it necessary to release into the public domain advice given by technocrats to their ministers.
There is good reason for this practice. It is the minister’s call and that of his cabinet colleagues whether they should borrow on the international markets.
It is their judgement call, and the role of the Governor, and others of his ilk, is to render their best advice through the established channels. Once that advice has been rendered their role is to carry out the policy to the best of their ability. They are not policymakers.
Sir Courtney Blackman was right. Governors of the Central Bank are creatures of the Minister of Finance and not the other way round.