Ensuring economic recovery

October 2, 2022

Senator Ishaq Dar has been sworn in as the new federal finance minister

Ensuring economic recovery


shaq Dar, a close aide and relative of Nawaz Sharif, has been sworn in as the new federal minister for finance and revenue.

He is the second finance minister of the coalition government and the sixth in nearly four years.

In the past Pakistan Muslim League-Nawaz (PML-N) governments, Dar has thrice served in the same capacity. He is expected to curb inflation and reverse runaway depreciation of the rupee. PML-N insiders say Nawaz Sharif and Maryam Nawaz, unhappy with the recent developments on the economic front, had been insisting on his return.

In a tweet and a public speech a few weeks ago Maryam had regretted a hike in petrol prices, indicating discomfort with Finance Minister Miftah Ismail. In another tweet she had asked Ismail to provide more relief to electricity consumers using less than 300 units.

For its part, the opposition Pakistan Tehreek-i-Insaf (PTI) has alleged that Dar’s return is part of a deal between PML-N and the establishment to strengthen the party ahead of the general elections, which it hopes will be called before the scheduled end of the term.

Some recent audio clips attributed to Maryam Nawaz had indicated that she was not happy with Miftah’s performance and had wanted a say in matters that were nominally in his domain. She had said she was unhappy with the fuel price hike and sympathized with the public rather than the government. The finance minister, she had implied was following policies suggested by the International Monitory Fund. In a leaked audio attributed to her and PM Sharif, she was heard insisting that the inevitable fuel price hike not be delayed.

In another leaked audio clip that has not been denied by the PML-N and the PM’s office, she is heard criticising Ismail for failing to stabilize the currency rate. Ismail claimed that according to State Bank of Pakistan policy they had to leave the currency rate in the market alone.

“I don’t’ know what he (Ismail) is up to. Even he does not seem to know what he is doing. He says strange things on television channels... He has disappointed… there are a lot of complaints against him from everywhere,” Maryam can be heard saying in the audio clip.

Most analysts agree that the statements were aimed at political mileage at the cost of Ismail who has been made a scapegoat. Miftah never responded to the criticism. He has generally received praise and appreciation for his policies as finance minister.

“Strengthening of the rupee will be my top priority, followed by reducing the inflation and interest rates in that order, to revive the economy,” Dar told the media after taking charge of his ministry. He warned speculators not to play with the currency exchange rate. “The speculators should set their direction right. My top priority is to strengthen the rupee. Playing with the value of Pakistan’s currency for four years has caused the oppressive inflation.” He appreciated the efforts of his predecessor, Ismail, saying that four years of devastation could not be remedied within a short time.

Ensuring economic recovery

“Strengthening the rupee will be my top priority, followed by reducing the inflation and interest rates in order of priority, to revive the economy,” Finance Minister Ishaq Dar.

Whether Dar can regain some of the lost political mileage for the PML-N or not remains to be seen. His return is a sign of the hold Nawaz Sharif and his daughter have on the party and the government.

Economist Dr Kaiser Bengali says the challenges faced by Pakistan are huge. “A change of faces alone cannot resolve the economic challenges. There can be a difference of style with a new finance minister. We have to see a substantial improvement to persuade us otherwise. At the moment, the biggest challenge is to control the trade and budget deficits. Things like currency rate control are window dressing. You can do some window dressing but there will be no concrete improvement without focusing on the substance. For stability and sustainable appreciation of the currency, we need to double our exports. The export volume is low at the moment. We are importing twice as much,” he says.

Bengali says serious efforts are needed to bring about a long-term change. “You can do a few things with manipulation or arm-twisting but that will be an artificial change and not real improvement. We have to realise that the economy is fundamentally weak and now State Bank of Pakistan too does not allow fixing the currency rate the old way. So, I am not excited about this. I have little hope and expectation. The real solution lies in a broad-based policy shift and brining all stakeholders to the table.”

“The victory of one faction in bringing a new finance minister can produce political mileage for a party or a faction in it. Real change will come only by controlling inflation, reducing food prices, and lowering electricity and fuel prices. Can this government do all that in the present conditions?” he asks.

On September 29, the Islamabad High Court (IHC) overturned the convictions of Maryam and her husband Captain (retd) Safdar in the Avenfield properties reference.

In July 2018, an accountability court had awarded 10 years of imprisonment along with an £8 million fine to former prime minister Nawaz Sharif, seven years of imprisonment along with a penalty to Maryam, and one year of imprisonment to Captain (retired) Safdar.

The National Accountability Bureau (NAB) had accused the PML-N leader of abetting her father and former prime minister Nawaz Sharif in committing the crime. A two-member bench of the IHC comprising Justice Aamer Farooq and Justice Mohsin Akhtar Kayani heard her plea and announced the verdict after the arguments were completed from both sides. “Maryam Nawaz and Nawaz Sharif’s connection to the assets beyond means has not been proven,” remarked the court.

Ensuring economic recovery

“How do Wajid Zia’s statement and the material presented prove the prosecution’s case?” the IHC inquired. Zia was the investigating officer (IO) who headed the joint investigation team (JIT) that probed the Panamagate case. “Wajid Zia had seen all these records himself,” responded Abbasi but the court appeared dissatisfied with the answer. “What is Maryam Nawaz’s link with Nawaz Sharif in the assets case?” inquired Justice Amir Farooq. “You have not provided a single link yet,” the judge observed. “The IO’s observations cannot be presented as proof,” Justice Kiyani remarked. “The JIT provided no proof,” he further observed.

Speaking outside the court, Maryam said that Mian Nawaz Sharif stood “vindicated”.

Prime Minister Shahbaz Sharif Thursday slammed the accountability system of the country that was allegedly employed to target the Sharif family. The premier took to Twitter after ruling accepting the PML-N leader’s plea against her conviction.

“The edifice of lies, slander and character assassination has come crumbling down today. Maryam Nawaz’s acquittal in the Avenfield Reference is a slap in the face of the so-called accountability system that was employed to target the Sharif family,” the premier said.

The author is a staff reporter. He can be reached at vaqargillani@gmail.com

Ensuring economic recovery