Shaikh out, Azhar in

The government has replaced Hafeez Shaikh as finance minister, citing inflation. The move was not unexpected, but the reasoning given seems to be cover for what really happened. Shaikh would have had to go very soon anyway, given that he failed to win a seat in the Senate and the deadline for his taking elected office, June 10, was around the corner. Even the Lahore High Court chief justice had — during the hearing of a petition earlier this month — questioned why Shaikh did not have the good sense or self-awareness to resign after losing his election.

Not just that, in December last year, the Islamabad High Court too had ruled that while the Prime Minister has the authority to appoint unelected professionals as his advisers and special assistants, such appointees cannot head any government committees. This had already rendered Shaikh, and a couple of others in the advisory role, unable to head vital committees like the ones on economic coordination, national finance commission, and privatisation. Thus it was pretty likely that after the March 3 shock in the Senate, the PM would find a replacement for Shaikh. However, on March 6, the PM directed Shaikh to continue to head the finance ministry.

Democracy is, at its heart, a popularity contest, and Shaikh was clearly not popular. The inflation excuse, however, seems more like an attempt to make Shaikh the fall guy for the poor performance of the government’s entire economic planning team. It is unlikely to expect Shaikh — or any other member of the government team, for that matter — not to be toeing the PM’s policy line and acting in line with his game plan on issues.

And the reasoning given for the appointment of Hammad Azhar as Shaikh’s replacement was also quite vague. Azhar, already the minister for industries, was described by the Information Minister, Senator Shibli Faraz, as “young and capable” — not a high bar. However, it will be interesting to see what other changes come to the cabinet, as Faraz suggested, would be announced soon.

That, however, is not to say that Azhar is a bad pick. He is an established member of the government’s economic team and has already held several ministerial posts. He is also one of the few cabinet members that have consistently been ‘promoted’ from a ‘junior’ role as minister of state for revenue through to ‘full’ minister status, and culminating in his most important job so far. At the same time, his youth may well hurt him. Although he studied development economics at university, Azhar is a businessman, not an economist. While the job doesn’t necessarily require an economist — decades of experience can substitute for book smarts — it helps to have an expert in one of the more technical ministerial posts.

And to add to that, Azhar doesn’t really have ‘decades’ of experience behind him. Additionally, as one of the younger members of Prime Minister Imran Khan’s economic team, it remains to be seen whether Azhar really gets to be the finance minister, or if senior figures in the background will be pulling the strings. Regardless, he and the finance team have an uphill task ahead of them. Even before the impact of the Covid-19 pandemic, Shaikh’s austerity policies were unpopular and hit the poor hard. Recovering from the economic damage of the pandemic without further belt-tightening will require not one, but several strokes of brilliance.

Published in The Express Tribune, March 31^st, 2021.

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