An adviser and a minister of state

At long last, the finance ministry has its managers, an adviser and a minister of state. The combination of a specialist adviser and an elected minister was first witnessed in the cabinet of prime minister Zulfikar Ali Bhutto. When his finance minister, Dr Mubashir Hasan, became an eyesore for the donors, he was replaced by a goody-goody Rana Mohammad Hanif Khan in 1974. Even Rana Sahib was found too political to donors’ taste. Syed Shahid Husain was imported directly from the World Bank and was made adviser on finance in 1976. Under the first Benazir government, President Ghulam Ishaq Khan forced on her a seasoned bureaucrat with a long experience of economic ministries and the State Bank as adviser, while Ehsanul Haq Paracha was the political face of the ministry as minister of state. With the portfolio of finance with her, Benazir used to chair the meeting of the Economic Coordination Committee herself. The second Benazir government followed the same model, by choice this time, bringing V A Jaffrey back and appointing Makhdoom Shahabuddin as minister of state. In August 1998, Hafiz Pasha was made adviser when prime minister Nawaz Sharif shifted Sartaj Aziz from finance to foreign affairs. By November of the same year, Ishaq Dar was moved from commerce to finance as full minister, putting an end to Pasha’s brief stint as the sole in charge of the Ministry of Finance.

While military regimes and caretaker governments rely on technocrats as ministers or advisers on finance by their very nature, the combination during elected governments does not work well. The political class works better with one of their own, as political economy considerations are not fully appreciated by non-political or unelected technocrats. Fulfilling the aspirations of their constituents to get re-elected is the main agenda of the elected members of Parliament, while a technocrat adviser is supposed to work out policy alternatives, ensure economic discipline and efficient use of resources. If our finance secretaries are professionally qualified and trained, and not the generalist bureaucrats who pick up donors-speak on the job, they will do a better job than a politically-appointed technocrat adviser working in parallel with an elected minister. At the time of appointment of Hafiz Pasha, Qaiser Bengali, then at Islamabad’s Sustainable Development Policy Institute, remarked: ‘’It’s not the job of a technocrat. They lack vision. It is a politician’s job.’’ In addition, a technocrat lacks the skill to negotiate his way through contending political interests, ensure timely legislation and sell government policies to the public at large.

Besides the typical lineage of advisers, good foreign education and experience of working for a donor agency, Miftah Ismail has local business background. He also has the advantage of being associated with the PML-N for the past decade or so, but he hasn’t had the taste of electoral politics. That is where his naivety lies. Just look at his overoptimistic agenda for a short tenure. He recognises fiscal and current deficits as major challenges. To meet the fiscal challenge, he wants to broaden the tax base, reduce personal income tax rates, reform corporate taxes to make them investment-friendly, implement offshore tax amnesty scheme, guarantee payment of tax refunds and declare non-filers criminals. He said nothing specific about the other deficit. In contrast, his political minder, the astute Rana Muhammad Afzal, minister of state for finance with experience as parliamentary secretary for key economic divisions, made no such statement. Miftah mentioned political consensus, but it is a no-go in the present polarised state. The two should rather act as effective caretakers to demonstrate the dispensability of caretaker governments.

Published in The Express Tribune, December 29^th, 2017.

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