October 23, 2018 @ 2:00 am

23 OCTOBER 2018

A shocking mystery

Saudi Arabia’s official version of Jamal Khashoggi’s death just doesn’t add up

Saudi Arabia’s admission that Jamal Khashoggi, the dissident journalist who was last seen entering the Saudi consulate in Istanbul on October 2, died in a “fistfight” inside the building raises more questions than it answers.According to the latest Saudi version, a general despatched a 15-member team to Istanbul to confront Khashoggi as there is a general order in the Kingdom to bring back dissidents living abroad. Inside the consulate, a fight erupted between Khashoggi and the security men, and the journalist died when he was put in a chokehold. His body was handed over to a local collaborator. Saudi Arabia says it has arrested 18 people in connection with the death and dismissed five senior officials, which U.S. President Donald Trump has termed a “good first step“. It’s hard to agree with Mr. Trump. The Kingdom is clearly trying to distance Crown Prince Mohammed bin Salman, its de facto ruler, from the Khashoggi affair. Riyadh says MBS, as the Crown Prince is widely known, was unaware of the operation. But there are several gaps in this theory. First, it is difficult to imagine a rogue general carrying out such a complex operation inside a consulate in a not-so-friendly foreign nation without clearance from the top. And MBS, over the past year, has amassed such huge powers and has even been micromanaging policy decisions, that it would be difficult for an operation of this scale to be executed without it being brought to his notice. Second, it is difficult to believe that a rogue general would send to Turkey in two chartered aircraft a 15-member security team, including a forensic expert who was reportedly carrying a bone saw, just to confront a 59-year-old journalist.

The official version also does not explain why there was an effort at a cover-up for a fortnight if it was indeed a rogue operation gone bad. All these questions remain unanswered. The Saudi admission that Khashoggi had died came only after it became untenable for the Kingdom to stick to its position that he had left the consulate freely. Turkish officials gradually leaked out to the media information on Khashoggi’s death, forcing even Saudi Arabia’s Western allies to demand the truth from the Kingdom. The Turkish authorities claim to possess an audio recording relating to the assassination, according to which Khashoggi was tortured and killed inside the consulate, and his body dismembered. The world needs to know what actually happened to Khashoggi. Given the dubious role Riyadh has already played in trying to cover up the facts, it is unlikely that its own investigation will be seen to be impartial. The U.S., which has a special relationship with Saudi Arabia, should look beyond its own economic and diplomatic interests, and work towards setting up an international probe. Such an inquiry should establish the facts around Jamal Khashoggi’s murder and reveal who ordered it.

Turf battle 

The RBI makes a valid case against the proposal for a separate payments regulator

The Reserve Bank of India (RBI) and the Union government are once again at loggerheads over the legitimate extent of their powers. In a rare gesture, the central bank last week made public its reservations against the government’s plans to set up an independent payments regulator, potentially setting the stage for a regulatory turf war. In a strongly worded dissent note against the inter-ministerial committee for the finalisation of amendments to the Payment and Settlement Systems Act, 2007, published on its website on Friday, the central bank observed that it would prefer the Payments Regulatory Board to function under the purview of the RBI Governor. “There is no case of having a regulator for payment systems outside the RBI,” the note read. In support of its stance, the RBI stated that the activities of payments banks come well within the purview of the traditional banking system, which the central bank oversees as the overarching financial regulator. So, according to this logic, it might make better sense to have the RBI oversee the activities of payments banks as well instead of creating a brand new regulator for the growing industry. “Regulation of the banking systems and payment system by the same regulator provides synergy,” it noted. The RBI, in essence, is pointing to the interconnection between the payments industry and the banking system to back the extension of its regulatory powers.

The RBI’s case makes good sense when seen from the perspective of the cost of regulatory compliance. As stated above, there is definite overlapping between the current regulatory powers of the RBI and the proposed regulations for the payments industry. A unified regulator can thus help in lowering the compliance costs and enabling the seamless implementation of rules. Further, there is the real risk that a brand new regulator may be unable to match the expertise of the RBI in carrying out necessary regulatory duties. So it makes better sense to have the RBI take charge of the rapidly growing payments industry which can ill-afford regulatory errors at this point. The fact that the RBI has made public its dissent against the Union government’s idea, suggests that the central bank has serious problems with the dilution of its current powers over the financial sector. However, the RBI’s demand for the centralisation of regulatory powers also brings with it the need for exercising a greater degree of responsibility. At a time when there are increasing risks to the stability of the domestic financial system, both the government and the RBI must look to work together to tackle these risks instead of battling over regulatory powers.

Leave a comment