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April 19, 2019

‘Asad Umar’s unceremonial departure comes at a bad time for economy’


April 19, 2019

KARACHI: The ‘bad timing’ was a common terse remark from businessmen, economists and analysts to abrupt removal of corporate leader-turn-politician Asad Umar from the top position of the finance ministry as they believed the reshuffling should have been avoided with the budget exercise around the corner and the economy staggering towards stability on IMF hope.

“He should not have left at this time as this is not the right time,” veteran businessman Siraj Kassam Teli said, expressing concern over the removal just before the federal budget announcement.

Umar earlier announced his decision to quit through a message on Twitter. “As part of a cabinet reshuffle PM (Prime Minister Imran Khan) desired that I take the energy minister portfolio instead of finance,” he said. “However, I have obtained his consent to not take any cabinet position.”

Teli, who is chairman of Businessmen Group, said he (Umar) couldn’t alone be held responsible for the prevailing economic crisis.

Junaid Ismail Makda, president of the Karachi Chamber of Commerce and Industry agreed that only one minister was not responsible for the government’s affairs. “The entire finance team dragged the country’s economy to this stage… the entire team including bureaucrats should resign,” emotionally-charged Makda said.

Asad Umar, who was touted as the choice for finance ministry’s chief even before the present government took charge last year, remained in tight spot to bring the economy out of balance of payments crisis.

It’s been a couple of months since the country was in talks to get economic assistance from the International Monetary Fund (IMF). The country’s growth forecast was cut to 2.5 to three percent for the current fiscal year compared to 5.2 percent a year earlier.

Economist Asad Saeed said it was a very bad timing for a finance minister to leave and the economic situation would likely go further south.

“It would be better if he was removed couple of months earlier or might be in July after the budget,” Saeed said. “Umar and his team were negotiating with the donor agencies, and now the new minister and probably a new team would have to continue the process, which would not be easy.”

Saeed further said Asad Umar and his team might have made numerous mistakes on the economic front, “which I think would deteriorate further because of the timing of his removal.”

Now, fretful businessmen and equity dealers are looking forward to the new finance minister or adviser, as well as the policies to be pursued.

Mazhar Ali Nasir, adviser to the FPCCI President, said the actual reasons for Umar’s resignation are not clear. It could be a personal reason, he said.

“We cannot judge now whether it is a good or bad decision unless a new minister is appointed,” Nasir added. “The government should immediately appoint the finance minister or the adviser as the federal budget is approaching and IMF’s team is due in late April.”

Ahsan Mehanti, chief executive of Arif Habib Commodities said the market closed positive on Thursday. “Though there is an uncertainty in the market once the new name is announced the stability would be back,” Mehanti said. “Investors are awaiting the name and I hope there would be positive developments overall once the name of new minister/adviser is communicated.”

Nasir of the Federation of Pakistan Chambers of Commerce and Industry said if the incumbent minister/adviser brings improvement and restores business confidence this would be considered a positive decision. “There is a sense of economic as well as political uncertainty and government should ensure consistency of pro-business policies.”