Fourth time lucky?

April 25, 2021

PM appoints Shaukat Tarin of Nawaz and Zardari regimes as the finance minister. Will it be a brief stint or has the PM found his perfect candidate?

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Prime Minister Imran Khan’s claims and actions point to fault lines in economic policies and decision-making as he claims success on the economic front on the one hand and keeps changing his finance ministers on the other.

In his address to the nation in the wake of protests by the banned Tehreek-i-Labbaik Pakistan, the prime minister claimed that the economy was getting better. If this claim is justified, why have the finance ministers been changed continuously? During the 34 months of this government, this is the fourth finance minister. The first was Asad Umer, a close aide to Khan and an elected parliamentarian who was replaced by Hafeez Shaikh, a technocrat who lost the Senate election against Yousaf Raza Gillani. According to the Constitution, a non-elected person cannot serve as a minister for more than six months. It is believed that Shaikh wanted to resign right away but the PM asked him to continue until this reality sank in. Hammad Azhar, the MNA and minister for industries, was appointed the new finance minister on March 29. However, he did not survive more than three weeks in the office and was replaced by ‘The Shaukat Tarin’, who has earlier served in the PPP and PML-N governments. Now, he will captain the economic team of Imran Khan.

Inflation, depreciation of rupee, increasing debt, trade deficit, low GDP growths, power crisis and unemployment are the major challenges to the economy. The PTI government that came to power with promises of change and prosperity in the country appointed its ‘man of crisis,’ Asad Umer, to turn the ailing economy around. As the economy plunged deeper into trouble, Khan and his team blamed the previous government for the country’s economic woes. Later, as PM Khan sensed that Umer was unable to bring about significant positive changes, he removed him from this portfolio, and appointed Hafeez Shaikh, a minister during the PPP and Gen Musharraf’s governments – both regimes that were under constant criticism by Imran Khan during his election speeches. It is believed that Shaikh was selected to finalise the bail-out package with the IMF. PTI insiders say that Khan never wanted Shaikh to be his minister but he was advised to tolerate him.

Tarin was already a member of the economic and finance committee since April 2019 and in a position to advise the prime minister on economic policies. His selection as the finance minister is a puzzle to some PTI leaders too.

How prepared Shaukat Tarin is for the challenge of putting the economy on the right track should be clear once the annual budget is announced. He will need to make an impact quickly; otherwise, who’s to say that Imran Khan will soon start looking for a replacement for him?

Tarin, having expertise in the banking sector, has family links with Jahangir Tarin and Hamayun Akhtar Khan. As of CitiBank in Pakistan, he was well-connected in the power corridors. Tarin is the majority shareholder in Silk Bank and was twice elected chairperson of Karachi Stock Exchange. In 1997, Nawaz Sharif asked him to join Habib Bank Limited as its president and effect structural improvement. He brought in some improvement but the bank’s employees were reportedly unhappy with him.

In 2008, the PPP government appointed him as an advisor on economic affairs, before making him the finance minister. To keep him in the cabinet, the PPP got him elected as a senator from Sindh. In 2009, he negotiated a $11.2 billion bailout package with the IMF but then left the government saying that he wanted to improve Silk Bank and avoid the conflict of interests. He also negotiated and announced the 7th National Finance Commission Award.

While still holding high stakes in Silk Bank, he has not talked of a clash of interest while accepting the portfolio.

As for challenges he faces as the finance minister, inflation is on the top. How he will handle the gargantuan task before him is yet to be seen. The biggest factor apparently is excessive printing of currency by the state bank to pay the power producers and for payment of domestic loans. Will Tarin be able to stop that?

It is important to note that Tarin has, in the past, criticised Asad Umer for accepting the portfolio without be prepared. He has also criticised the terms and conditions of the IMF bailout package negotiated by Hafeez Shaikh.

How prepared he is for the challenge of putting the economy on the right track should be clear once the annual budget is announced. He will need to make an impact quickly; otherwise, who’s to say that Imran Khan will soon start looking for a replacement for him?

The writer is a senior journalist, teacher of journalism, writer and researcher. He tweets at BukhariMubasher

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