A photo of Abdul Hafeez Shaikh during a press conference. PHOTO: AFP
ISLAMABAD: Finance Minister Abdul Hafeez Shaikh resigned on Tuesday, two officials said, amid speculation that he may lead a caretaker government that must be set up before national elections scheduled for this spring.
Minister of State for Finance Saleem Mandviwalla was sworn in as Shaikh's replacement.
The law stipulates that the cabinet must step down and a caretaker government be in place for 90 days before an election. The date for the election has not yet been set.
"He's the government's top nominee for the prime minister in the caretaker government," said one of the officials.
The opposition leader and ruling party must agree on a list of officials to head the caretaker government.
But the opposition may object to Shaikh's appointment because he is seen as being too close to the military and served as privatisation and investment minister under former military dictator Pervez Musharraf.
Shaikh will be replaced by the state minister for finance, Saleem Mandviwalla, said one official in the finance ministry and another high-ranking government official.
Shaikh, who holds a PhD in economics, taught at Harvard University and worked at the World Bank for several years, advising 21 countries, including a stint as World Bank country head in Saudi Arabia.
He leaves as the Pakistan currency has slid to a historic low of 98 rupees against the dollar and the economy is beset by inflation, daily power cuts and plummeting foreign investment.
Pakistan only has enough foreign reserves left to pay for two months worth of imports. In 2008, that situation prompted a balance of payments crisis only ended when the International Monetary Fund offered a bailout package of $11 billion.
But in 2011, that program was suspended after Shaikh was unable to push through key reforms, most notably widening Pakistan's tax base.
The IMF has said it will not consider rescheduling repayments of the $6.2 billion Pakistan still owes without a comprehensive plan for reform agreed on by all political parties.
COMMENTS (28)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@abdussamad: Finance ministers are bureaucrats in their mind set, whether elected or not. They have a team who is interested in only data and it is left to the politicians to sell the suggestions of the financial team. He did everything he could, as good as any economist around the world given the chaos of PAK but PAK politicians did not go along with him. He can only lead the horse to the water.
He is not going to change the course in 90 days,(incidentally no one can Including IK) but he could sign on the dotted lines, if he becomes the interim PM at a time the economy will be predictably free falling.
In PAK history, everyone did the same, except it was generals before! Now who is ready to tie the bell. Macroeconomy is like a train wreck. Happens over night and takes three years to get back to previous levels and another three years to cross the red line.
No politician is interested in this since he has to win an election in-between the periods. So they meddle and delay the prospects further.
@John B: Total BS. He hasn't been able to do anything all these years and he's going to clean up the mess in 90 days?! Rubbish!
Good move.. as caretaker PM he do tax reforms as agreed wth IMF.. good for country..
@meekal a ahmed: If the rumors are correct, he is the candidate chosen by the financiers and political parties as a sacrificial goat to head the interim office as PM to clean up the economic mess with interim executive orders, execute IMF agreement and institute interim tax reform to safeguard the balance of payment crisis, and political parties will wash their hands and point fingers at him in election campaign and promise a better day if they are elected.
He is the only person who can understand the financiers language at this stage, and has nothing to lose politically. Needles to say, he will be rewarded whoever comes to power.
The exodus to Dubai has begun.........................
@Zahra:
110% agreed.
Hasan
The IMF said they would not reschedule loans made to Pakistan?
I must have said this a hundred times and while this is a Reuters report, they should know better like others.
IMF loans CANNOT be rescheduled.
Returning to topic, I don't know anyone would want to be PM for 90 days except that it would burnish his CV.
Is that all there is to it?
A Phd primeminister for us, i must be dreaming
@Shamy: Isn't he a dual national?
Now he will say. I resigned against the govt corruption. You were part of it, dear!
Such an impressive CV. Unfortunately he is not a good administrator .He is knowledgable no doubt.
leaving? after all the demage is done? who will fix such a big financial mess?
If he opts for Interim PM then this can be seriously challenged in Supreme Court. A person, who has been part of the Govt for so long should not be assigned any responsibility in the Interim Setup. Interim Govt should comprise of neutral people who had no affiliation with any political setup.
His family enjoying vacation in Europe must be proud of his services to Pakistan....right!
There goes number 5.... or was it 6?
After 05 years?
PAK did not know how to utilize him.
Today's end in economy was predicted long time ago; the SBP previous governor and him were advocating for tax reform, autonomy of SBP, subsidy reduction and reorganization of financial structure, import duty reform, and was screaming for reduction in government borrowing from banks.
Every political parties opposed his suggestions, went on strike when the gas price was increased and so on. It is a miracle he stuck around this long.
Anyone who takes up the finance ministry at this late in the game will only make it worse than before, and no one can escape the reforms proposed earlier, and no reform will happen until the new elections, and so further sliding in the economy unless emergency injection of funds or delay in loan payments happens.
Read between the line guys. He is a strong contender for caretaker PM.
Prime Minister????
All....Abandon ship!!!
The cat is out of the bag. Unimpressive personality both as Privatization Minister in Musharraf era and as FM in this full of misseries set up.
Are we expecting him to have an international passport and migrating now ?
INTERIM PM
@Water water everywhere not a drop in Pakistan: People like you have begun to confuse me. It is our own shortcoming that we are in this economic mess. Can we stop blaming external forces? Do you not see how the ruling elite have kept their power and made us masses always blame the external element? If something is wrong economically its the IMF's fault, if a bomb explodes then it is USA's fault, if an earthquake happens thats a zionist conspiracy. Come on you cant be this naive?! The economic disaster in our country is due to our governments failed policies on taxation, budgeting, an ineffective monetary policy, not enough deregulation, state-owned enterprise bleeding the economy dry and so on - to sum up, economic mismanagement on our part.
He should have resigned much earlier instead sharing the the blame of bad economic policies of the government.
Rumors in Pakistan are never wrong:) ++++++++++++++++++++++++++++ IMF is the big elephant in the room.
he will be given role in interim setup! agreed between PML N and PPP
Unimpressive as an FM, his exit was long overdue