It needs to be said, clearly, that the process of selecting the Governor of the Central Bank was flawed. For Cabinet to have chosen the ninth governor on the last working day before the expiration of the term of the eighth governor meant that the Cabinet simply did not give itself enough time to make a considered choice. It seems to me that the process of selection started on July 12 when, according to an interview given by one of the candidates, several ministers asked a prominent former UWI economist to send in his resume. One suspects that the three other candidates were only asked to submit their resumes last week. Given the short period that Cabinet gave itself to make the selection, it seems to me that the choice was only based on a review of the resumes that were presented by the candidates. In other words, none of those shortlisted were subjected to a formal job interview. Such an interview would have probed the shortlisted candidates views on, among other things, monetary policy, the intersection between monetary and fiscal policy, the regulation of the financial sector and their leadership abilities. The responses of those shortlisted would then have been recorded and ranked, which would have allowed the Cabinet to have chosen someone based on objective criteria.
As it is, what transpired was a beauty contest and, given the fractious nature of this Cabinet, the selection might have come down to a choice of the least ugly candidate, as a result of the fact that different factions in the Cabinet would have backed different “horses,” allowing for the dark horse to win the prize at the line. There are mid-level managers in the private sector who are subjected to a more rigorous selection process than the governor of the Central Bank and certainly in 2012 no chief executive officer in an enterprise as large and systemically important as the Central Bank would have been chosen in such an off hand and informal way. In fact, for such an important appointment, there would have been at least two rounds of interviews, psychometric evaluations, interviews with people who worked with or supervised the candidate as well as a thorough investigation of the claims made in the shortlisted candidates resume. The fact that governors in the past were not subjected to such a rigorous process, as outlined above, is absolutely no excuse for the failure by this Cabinet to introduce some more rigour into the process of selection of the Central Bank governor. The institution is simply too important to be treated in such a cavalier manner. As it stands, the Cabinet, to borrow another sporting metaphor, ran down the clock until the game was almost into overtime, thereby depriving itself of the ability to engage in a thorough assessment of the shortlisted candidates. The question that must be asked of Cabinet is why did it allow itself to be placed in such a position. Was this a deliberate strategy aimed at achieving a desired result or did this appointment fall through the proverbial Cabinet cracks until it was almost too late?
What does the manner of appointment say about the management of this country’s exchange rate, the maintenance of a rate of inflation that allows prosperity to permeate from the highest to the lowest in this society and the regulation of T&T’s commercial banks, insurance companies, pension plans and soon the credit unions? What signal does the way in which Governor Rambarran was appointed send to the person who may turn out to be the most important arbiter of T&T’s short-term economic future: Olga Kalinina, the Standard and Poors Director of Sovereign Ratings for this region who on Tuesday consigned the sovereign credit ratings of Barbados from investment grade to “junk” status because, in her view: “The economic fundamentals of Barbados continue to weaken, reflecting not only the external environment but also more pronounced competitiveness and other structural shortcomings.” Kalinina is the woman who in 2009 downgraded Jamaica to Triple C, which is one notch above default, when the Minister of Finance there took the decision to dismiss their Central Bank Governor, Derick Latibeaudiere, over questions surrounding money that had been borrowed for a house. Given the weaknesses in the process of selecting the Central Bank governor, one has to hope for the best in Governor Rambarran, who is qualified for the job, according to the Central Bank Act, which states:
• The Governor, Deputy Governors and the other directors shall be appointed by the President by instrument in writing;
• The Governor shall be appointed for a term of five years;
• The Governor and Deputy Governors shall be men of proven financial experience and each shall devote the whole of his time to the service of the Bank and while holding office shall not occupy any other office of employment whether remunerated or not.
The only obvious prerequisite in the law is that the Governor should be someone of “proven financial experience.”
By referring to Jwala Rambarran's appointment as not being a departure from the Reshmi Ramnarine syndrome, I wonder whether former Central Bank deputy Governor, Terrence Farrell, was making a coded reference to the ethnicity as well as the competence of those selected to top positions at NGC, CAL, T&TEC, UTT and other State institutions.
What is the average man in the street to understand from Farrell's reference to the fact that Dr Shelton Nichols, Dr Alvin Hilaire and Ms Joan John came from "humble beginnings" in Tobago, East Port-of-Spain and Laventille respectively? Nichols and John are the Central Bank deputy Governors and Hilaire is the institution's chief economist. The fact is that there is no tradition in T&T (unlike Jamaica and the England) of selecting a Central Bank governor from within the institution. Only one of the eight Central Bank Governors before Mr Rambarran was chosen internally. That person was Euric Bobb, who was appointed as Governor in August 1984 at the age of 40, after serving for more than six years as Deputy Governor. It is noteworthy that Dr Bobb did not serve out his five year term, choosing instead to resign in November 1987. The stories about the differences of opinion between Bobb and the NAR administration and between Ainsworth Harewood (who served from July 1992 to July 1997) and the Panday administration for two years are legendary.
The fact that the three Central Bank candidates were "demonstrably superior" to Jwala (as they are without a doubt) would not have been a factor in the appointment as there were “demonstrably superior” candidates outside of the Central Bank such as Alison Lewis, the permanent secretary in the Ministry of Finance, Wendell Mottley, former Minister of Finance, retired investment banker and Terrence Farrell himself. Is it better to appoint someone who is on the same economic wavelength as the party in power or for there to be squabbling, bickering and “pressure” on the Central Bank? Let’s not rush to judge our new Governor.