PML-N choices for finance minister limited

Dar, two bankers’ names float about as options remain few

ISLAMABAD:

The Pakistan Muslim League-N has not yet finalised its choice for a new finance minister, as it faces a hard decision between appointing the highly experienced Ishaq Dar as the finance minister and bringing in a new face at one of the most critical economic junctures.

The party’s dilemma is that if it decides to replace Dar, it may end up selecting a technocrat, which would deprive it of the claim of having an experienced economic team. The PML-N has not groomed second-tier economic leadership, and without Dar, it might end up relying on technocrats like the Pakistan People’s Party (PPP) and the Pakistan Tehreek-e-Insaf (PTI).

Sources in the PML-N told The Express Tribune that the party is also exploring other options, including considering the names of two bankers. They said that neither Dar nor anyone else has yet been finalised. However, a strong camp in the PML-N is not in favour of appointing Dar to the post for the fifth time, they added. However, the final decision would be made by former Prime Minister Nawaz Sharif, who has not yet to share his thoughts about his choice for the position. Dar’s name cannot be ruled out until Sharif shares his thoughts, they added.

Dar has served as finance minister four times and earned the reputation of a ‘tough negotiator’ with the International Monetary Fund. His relations with the IMF are now one of the reasons for the reconsideration of his appointment. However, Pakistan could not successfully complete the last $6.5 billion bailout package, and the blame has been placed squarely on Dar for his handling of the programme. In his speech at the Senate Standing Committee on Finance on June 16th, 2023, the former finance minister said that geopolitics was behind the stalled loan programme, as global institutions wanted Pakistan to default like Sri Lanka and enter negotiations.

The IMF has publicly denied this, while behind closed doors, the US had also complained about Dar’s statement. Sources said that in one of the meetings after Dar’s statement, US Ambassador Donald Blome had explained to Dar that his country did not have any influence on the IMF – a stance that the then finance minister did not agree with. The current IMF deal was finalised after the intervention of the then-PM Shehbaz Sharif.

Where Dar is blamed for the failure of the last programme, he has also been credited with completing the 2013-16 IMF programme.

The sources said that relations with the International Financial Institutions (IFIs) and foreign powers, and the future role of the Special Investment Facilitation Council (SIFC), are the key considerations for selecting the nominee for the slot of finance minister.

Read Deadlock persists as fifth PML-N, PPP meeting ends inconclusively

However, criteria like clarity on strategic relations, political weight, and experience in managing the economy have not been given due weight at this time, according to party insiders.

In case Dar’s name is not chosen and the party decides to appoint a politician, former Minister for Economic Affairs Sardar Ayaz Sadiq and former Power Minister Khawaja Mohammad Asif could be possible replacements. Former Planning Minister Ahsan Iqbal might not be keen on taking the responsibility. The PML-N’s choices for appointing a politician as finance minister are limited after the exit of Miftah Ismail and Shahid Khaqan Abbasi.

Newly elected Member of the National Assembly Bilal Kyani could either be appointed as the Minister of State for Finance in the centre, or he might be the next finance advisor to the chief minister of Punjab. The PPP has publicly opposed Dar’s candidacy, but its opposition does not carry weight until the party formally joins the next cabinet. The names of Muhammad Aurangzeb, the incumbent President of the Habib Bank Limited (HBL), and Sultan Ali Alana, the chairman of the HBL board, are also being considered for the position, according to some party insiders.

Aurangzeb is considered close to Shehbaz Sharif. Sultan Alana’s name had also been considered for the position of the caretaker finance minister, but then Dr Shamshad Akhtar’s name was finalised. The next finance minister’s first task will be to sit with the IMF, get the last loan tranche of $1.2 billion, and at the same time kick-start negotiations for a new long-term deal. Any inexperienced appointee might find it difficult to sit across the table and negotiate a deal that strikes a balance between economic stabilisation and people’s growing miseries.

One of the considerations for the next IMF programme might be the restructuring of unsustainable public debt. Bringing in a banker as finance minister might raise questions about conflicts of interest. The sources said that the establishment didn’t seem keen on importing a finance Minister this time, particularly after the experience of appointing a central banker from abroad.

Published in The Express Tribune, February 20^th, 2024.

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