When Shahid Khaqan Abbasi assumed the office of Prime Minister in August, he had promised that he would not just keep the seat warm for his successor and would try his best to deliver on promises his leadership has committed.
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When Shahid Khaqan Abbasi assumed the office of Prime Minister in August, he had promised that he would not just keep the seat warm for his successor and would try his best to deliver on promises his leadership has committed.
He may feel satisfied about the overall performance of his government but there are few vulnerable areas where he needs to give attention on priority basis.
His top-most priority should be to address the economic challenges faced by the country.
Whenever these challenges are mentioned, the only defence put up by his cabinet ministers is to draw comparison between the present economic situation and that of the 2013.
The economy, undoubtedly, is in better position than what it was in 2013 but they should keep in mind that extraneous factors like oil and commodity prices in the international factors also played a major role in improving the economic conditions.
When the Pakistan Muslim League-Nawaz (PML-N) assumed power in 2013, the oil was traded for 130 to 140 dollars per barrel that resulted in exceptionally high inflation. But the steep decline in the oil prices over the past couple of years brought down inflation to single digit which significantly eased public pressure on the government.
The high oil prices are now staging a comeback which will intensify challenges for the government.
Moreover, the macroeconomic stability achieved over the past four years runs the risk of being lost in view of sharp rise in fiscal and external deficits.
The government takes solace from the increase in exports in the first quarter of the current fiscal year, which ultimately contributes to easing external debt, but just a one-off improvement in the export situation does not mean that the worse is over.
The government has added over 67 billion rupees to the already hefty exports package announced by the ousted prime minister Nawaz Sharif, but exports cannot be increased only through such lavish packages. The government has to address other problems faced by the export sector.
The government leaders keep on claiming that the foreign exchange reserves were precariously low – around 7.5 billion dollars – in 2013 and their economic team led by Finance Minister Ishaq Dar managed to make it cross the 20 billion dollars mark.
However, these reserves are fast depleting for meeting external liabilities, and currently hover around 13 billion dollars.
In view of impending payment for more such external liabilities in the coming years, these reserves are bound to come under more pressure, raising possibilities of Pakistan reverting to the International Monetary Fund (IMF) for another bailout package.
All these challenges need timely and concrete decisions and these can only be ensured by a strong economic team.
Unfortunately, the leader of the government’s economic team, the finance minister, himself is facing grave political challenges.
Finance Minister Ishaq Dar is already facing a court case for amassing wealth beyond his known means of income.
The reopening of the Hudaibiya papers case has made his position more vulnerable as he is the key witness in the money laundering case involving Sharif family.
A National Accountability Bureau (NAB) court last week recommended Dar’s name to be put on the exit control list as he needed to be questioned in the high-profile case.
The finance minister is already abroad for the medical treatment of his ailing heart and now he is unlikely to return in near future in view of increasing legal challenges he is facing.
A non-bailable arrest warrants for the minister have already been issued because of his failure to appear before the court for a long time. Such a situation has made the finance ministry rudderless as there is no one to guide them to take correct policy decisions.
A close confidante and a member of the extended family, Dar has served as a one of the key aides of Nawaz Sharif.
Besides handling economic matters, he has worked as a political trouble shooter for the Sharif government. But it seems his position is untenable in view of the serious challenges emerging for Dar as well as his boss.
The finance ministry is said to be in complete chaos in the absence of Dar.
Miftah Ismail, who served chairman of the Board of Investment under Nawaz Sharif, is working as advisor on finance for the present government, but the finance ministry baboos are said to be not taking him seriously.
Insiders say the finance minister is now communicating with his subordinates through Whatsapp and this is how the finance ministry is being run now-a-days.
The government needs a full-time and effective finance minister who could handle matters properly. The long absence of Dar from the country has also prompted the opposition to set up calls for his resignation and demanded that either Prime Minister Abbasi takes charge as the finance minister or appoint a full-fledged minister to look after the key ministry.
Though the sitting Prime Minister Abbasi himself was a member of the economic team of the ousted prime minister Nawaz Sharif, in view of his workload he cannot spare enough time to handle the economic affairs.
The other key member of the economic team is Ahsan Iqbal who worked as Minister for Planning under Sharif and has been overseeing matters relating to the China-Pakistan Economic Corridor (CPEC). Iqbal, currently interior minister, stood-in for Dar in the recently held Council for Common Interest meeting but he too has his hands full with the interior ministry issues and cannot focus much on the economic issues.
He should either be spared from the interior ministry responsibilities or moved to the finance ministry or a full-fledged finance minister be appointed.
Dar reportedly has already submitted his resignation with the prime minister citing his deteriorating health. The prime minister has yet to accept the resignation and appoint Dar’s replacement as in view of mounting economic challenges the country cannot afford the finance ministry to be run on ad-hoc basis.
It needs a full time leader who could guide them on drawing a strategy to meet the upcoming challenges. With each passing day, the political challenges are increasing for the PML-N and it is important for it to draw a clear distinction between government affairs and party affairs.
It should ensure that the government work does not get affected by the political challenges it is facing, otherwise the main loser will be none other than the country.
The writer is a senior journalist based in Islamabad
