If appointed, Senator Dar faces immediate challenges including presenting next year’s budget in the shortest possible timeframe, while finding a solution to the looming threat of a national default on international payments. PHOTO: FILE
In all probability, veteran politician Senator Ishaq Dar is likely to become the country’s next finance minister. He will be burdened with the task of fixing the teetering economy, amid hopes that he will refrain from hurting business sentiments through politically-motivated statements.
If appointed, Senator Dar, a two-time former finance minister, faces immediate challenges. He has to present next year’s budget in the shortest possible timeframe, while finding a solution to the looming threat of a national default on international payments due to external debt amortisation.
The options in front of him dictate that either he go straight to the negotiating table for a bailout package from the International Monetary Fund (IMF), or bet on timely help from friendly countries. However, analysts say that relying on friendly countries may not be immediately possible.
Senator Dar was appointed Leader of the Opposition in the Senate of Pakistan on March 14, 2012. He has also served as finance and commerce minister in the past. His first tenure as finance minister was under Nawaz Sharif, and he was appointed to the office again for a short stint under former prime minister Syed Yousaf Raza Gilani in 2008.
Dar achieved his certification in chartered accountancy from the Institute of Chartered Accountants in England and Wales, and was one of the youngest Pakistanis at the time to have passed the professional qualification in the minimum time period. Senator Dar is now a Fellow Chartered Accountant.
In 2008, when Dar was appointed finance minister under Gilani, he presented an extremely bleak picture of the economy which, according to many, had shattered investor sentiment when it was in dire need of diligent rebuilding. Senator Dar had stated in 2008 that the budget deficit would become bigger than 9% of the Gross Domestic Product that year. The announcement shattered the confidence of the business community and foreign investors, who had been hoping to invest in Pakistan in hopes of some stability following a decade of dictatorship. This caused the rupee to plummet and there was a run on the banks.
Former finance ministry officials, however, claim the establishment had actively misled Senator Dar. They say bureaucrats had deliberately painted a sorry picture by taking into account the coming year’s liabilities by applying the accrued accounting model, but took revenues only for that year by applying the cash-based accounting method.
Analysts say Senator Dar must countercheck the facts presented to him by bureaucrats this time around before making them public. There are chances that the bureaucrats may repeat the same episode in a bid to remain in the good books of the government by throwing responsibility on the previous government.
Another allegation against Senator Dar is that he stopped the issuance of Global Depository Receipts (GDRs) of some entities as finance minister in 2008. These had been planned to raise $4 billion from international markets. They included the GDRs of National Bank of Pakistan, Kot Addu Power Company, the sale of 15% shares of Habib Bank and 10% exchangeable bonds of the Oil and Gas Development Company.
The stoppage had led to panic in the market and forced the government to discuss a bailout package with the IMF later on.
However, according to former finance ministry officials, President Zardari had been calling the shots behind the scenes, and had stopped Dar from moving forward on the issue. Former adviser to the finance ministry Dr Ashfaque Hasan Khan, who was serving in the finance ministry at that time, said Senator Dar had been all for the transaction.
Ahsan Iqbal, who was the deputy chairman of the Planning Commission in the 1997 setup, is also tipped to be handed the same post with the status of a federal minister. The Gilani government had abolished the Ministry of Planning and Development, and Nawaz Sharif may revive this ministry.
Following the elections, Standard & Poor’s Ratings Services termed them a key achievement for Pakistan’s maturing democracy in the face of general economic malaise, widespread and incessant sectarian and political violence, large-scale domestic insurgencies, and on-going tension with neighbouring India. S&P said the election outcome puts the incoming government in good stead to seal a deal with the IMF soon.
Published in The Express Tribune, May 14th, 2013.
Like Business on Facebook to stay informed and join in the conversation.
COMMENTS (22)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@Ammar: Read the article: he is a chartered accountant and is referred to by the Sharifs as 'Munshi'. Having said that, I suppose if you can have a private banker as Finance Minister, why not a chartered accountant (anything but an economist)?
God help us!
Really, OLD Wine in a new bottle. Been there done that. Can't believe our cattle is so gullible.
As a show of confidence both Ishaq Dar and Sharifs can invest their own money in Pakistan for starters.
May be as a show of confidence he can declare his total wealth and also invest some of his dubai money in Pakistan as well.
It would be the best show of confidence.
As a Pakistani, I can only see tax burden will be unfairly put on existing tax payers. Of course do not expect any new sources of tax revenues.
As a businessman, I can see business as usual.
I can't believe that people like Mosharraf Zaidi are calling him "well respected" and "highly competent" after all the blunders he's made.
Still, I am happy with this guy because I got my hoard of dollars that will surely appreciate if he continues in power!
Nepotism at its best
@Ahmed: Most of the budget has been devolved to the provinces. He can prove his worth in KPK
Looking forward to law & order, peace and business friendly policies, faciliation and actual delivery. Hope focus will not be limited to couple of industrial hubs but across Pakistan including Karachi, Hub, Quetta, Lahore, Faisalabad, Peshward ......
Islamic republic of Pakistan Family limited corporation -- headed by Nawaz sharif and backed by foreign investors on the stage
@Ammar: How is he an economist? He has had no training in economics. Ishaq Dar is woefully undereducated to serve as the finance minister.
@Ammar He is not economist, he is a Management Accountant but close! I think Sartaj Aziz, though very old now stays the best economist Paksitan ever produced will be heavily engaged with Mr. Dar.
@Ammar: A CA is not an Economist and vice versa. These are two separate disciplines. Its like saying cardialogist is a very good brain surgeon. Ask any CA. Lol.
First thing first he is not an economist, he is a chartered accountant cum businessman, CA's are good with number crunching or forensics mostly. His experience has been with audit all his life, nothing with advisory or investment banking. He is said to be more interested in looking after his business empire in dubai along with his indian business partner. He owns a whole 34 story complex in dubai and his sons are running a fleet of (Worlds most Elite Cars) in dubai for hire, by wealthy holiday tourists in JLK dubai. Time shall tell about his 3rd stint, common sense predicts something else..
If only Asad Umar could handle our country's finances, what a world would that be.
What about his multi million dollar investments in Dubai, in partnership with Shoba Developers.
He is a v good economist...IA lead the country out of troubles...
Interesting choice. Isn't he the one who file afftidavit against the future PM for money laundering.
PML-N may have the will (I doubt) to improve the economy BUT they certainly do not have the required capabilities.
2 year countdown started for Mr. Khadim-e-Ala...you know I am talking about energy crisis.