Institutional insubordination: The Central Bank?

DR BHUSHAN SINGH

DESPITE what appears on the surface, the transition of political power is messier than one may expect. We are currently seeing this being manifested by certain state institutions being less than supportive of the new administration’s efforts. It appears that there is an emerging pattern of passive resistance by certain state institutions, which is raising critical questions about the role and real independence of supposedly non-partisan bodies.

From media reports so far, is this the case with the impasse between the newly elected government and the Central Bank of Trinidad and Tobago (CBTT)? The controversy centres on a request for foreign exchange allocation data information, crucial for economic planning and for addressing the long-standing concerns of transparency and fairness in foreign exchange distribution. Surprisingly, the media reports indicate that the CBTT withheld this information, citing institutional autonomy granted by their governing act.

While independence in central banking is a pillar of good governance, it is equally true that such independence must not develop into unaccountability. Autonomy must not be used as a shield for political partisanship or for obstructing legitimate policy directives from an elected government.

If an institution, particularly one as powerful as the Central Bank, can selectively decide what information it releases, to whom, and under what conditions, then we must ask: Who holds these institutions accountable? And more importantly, can they be truly independent if they are functioning in a manner that impedes the will of the people as expressed in the electoral process?

Line between autonomy and obstruction

The principle of institutional independence was introduced to insulate vital public institutions from political interference. Central banks, commissions, state-owned enterprises, and regulatory bodies are expected to function impartially, acting in the national interest regardless of the political party in office. This model assumes a professional bureaucracy committed to competence, neutrality, and the rule of law.

However, in small developing states like TT, where political polarisation runs deep and appointments are often influenced by political affiliations, the line between independence and institutionalised bias becomes blurred. What happens when senior figures within “independent” institutions begin to act in ways that seem designed to obstruct a new government? Are they protecting their mandate, or are they advancing an alternative political agenda? I ask a legitimate question.

The forex issue

The foreign exchange issue has long been a flashpoint in our economy. Scarce US dollar reserves, uneven distribution to commercial banks and businesses, and the emergence of a growing black market have created an environment ripe for corruption, inefficiency, and public frustration.

In this context, the government’s request for detailed allocation data is not only justified, it is essential. Transparency is the first step in fixing a broken system. The refusal of the CBTT to provide this information undermines the government's ability to respond to economic pressures and fuels public suspicion that the bank may be protecting the interests of select stakeholders.

In that light, the CBTT’s position might be interpreted not as independence, but as institutional insubordination. Isn’t there some regular communication between the Central Bank and the government where confidential matters can be discussed?

Patterns emerging

Unfortunately, this is not an isolated case. Similar patterns of bureaucratic pushback have emerged at other independent institutions since the change in government. Reports of delayed co-operation from certain state boards, tepid enforcement of new ministerial directives, and public commentary from regulatory agencies that appear more aligned with the opposition narrative than with neutral policy oversight raise troubling questions.

This kind of behaviour erodes public trust, not just in the government, but in the institutions themselves. There was also a previous case where the Police Service Commission’s credibility may have been eroded somewhat by the recall of a merit list.

Institutional independence

Independence must be underpinned by integrity, transparency, and accountability. It does not mean isolation from democratic oversight. Institutions must answer to the people through the structures and representatives elected to govern.

If the act prevents certain disclosures, then it should be amended in the interest of the public. We must revisit the frameworks governing our independent institutions. Do we have systems in place to evaluate institutional performance? Can we ensure that independence does not become a smokescreen for political entrenchment?

Moving forward

It is now incumbent on the UNC-led administration to navigate this institutional resistance with strategic firmness and unwavering commitment to good governance. However, the government must also avoid the temptation to replace one partisan network with another. The objective must not be domination, but reform, ensuring that the institutions of the state serve the public good, regardless of which party is in office.

As the dust settles from the 2025 general election, the new administration faces not only the task of implementing its policies, but also the challenge of asserting its authority in the face of institutional resistance. Whether this moment leads to a constitutional reckoning or a political stalemate remains to be seen.

Whether or not one supports the UNC, the principle of good governance demands that institutions respect the will of the people. Let us see how the matter unfolds.