View from Mcleod road: Now that Shaikh is gone, can we have a bully please?

KARACHI:

He was always smart enough for the job, just never mean enough.

Abdul Hafeez Shaikh – after privately threatening to do so countless times – has finally resigned as finance minister, leaving most people wondering: “why now?” But rather than dwelling on the past with that question, a more interesting question is: who should be finance minister of Pakistan? What does it take to do the job well?

There is absolutely no questioning Shaikh’s credentials: a PhD in economics from Boston University, professional experience at the World Bank, a private equity fund, and the federal cabinet of Pakistan itself (during President Musharraf’s administration).

On paper, he was the perfect finance minister. There is one small problem: he is too polite, too soft-spoken, and not at all threatening.

The truth is that the job of finance minister in a country as badly managed as Pakistan is really the job of a very highly educated bully: a person who would be perfectly comfortable in front of the technocrats at the IMF and World Bank, but also one who can go toe-to-toe with the thugs who roam the halls of Parliament posing as lobbyists. Oh, and his or her cabinet colleagues should tremble at the very sight of them.

Shaikh fit the bill on the first criterion, but not the latter two. If it is any consolation to him, neither does his successor, Saleem Mandviwala.

And this raises the important question: who, exactly, would be the ideal finance minister of Pakistan? It is a question that voters should ask themselves almost as much as they ask who they want the next prime minister to be. Because this is the often-overlooked part about the finance minister’s job: he (it has almost always been a he) is effectively the deputy prime minister.

The finance minister not only decides matters of fiscal policy, but precisely because of his control over the national purse strings has veto (or should have veto) over every other ministry’s plans. The finance ministry has to agree to the budgets assigned to every other ministry. That is an enormous power and responsibility, and the finance minister has to be very comfortable being blunt and saying no – very often – to his cabinet colleagues.

And it is not just in Pakistan that the finance ministry has this kind of power. There is a reason that the building next to Number 10 Downing Street, 11 Downing Street, is the office and residence of the British Chancellor of the Exchequer. And the building next to the White House is the headquarters of the United States Treasury.

Simply put, money matters and so the choice of who manages the money matters a great deal. Being honest is not enough. Being technically proficient is not enough. Even being tough is not enough. The person should also have the absolute, unflinching backing of the prime minister and president.

The ruling Pakistan Peoples Party has struggled to fill the role of finance minister from the very outset. Benazir Bhutto was her own finance minister during both of her terms in office as prime minister. The current PPP government will have had five finance ministers in as many years in office. Who they will pick should they win the election is anybody’s guess.

The Pakistan Muslim League-Nawaz will likely go with Ishaq Dar, who is relatively unknown in this capacity. He was commerce minister during Nawaz Sharif’s second term as prime minister. His first year in office was within months of India granting most-favoured nation (MFN) status to Pakistan and he was unable to push through a reciprocity.

The Pakistan Tehrik-e-Insaf (PTI) is a bit of a wildcard. They are unlikely to win the elections outright, but may yet end up providing a finance minister if they become junior coalition partners with whoever does win. The PTI promotes Asad Umar and Jahangir Tareen as their policy experts. Of these two, Umar is the more likely candidate as custodian of the Q block. How effective he might be remains an entirely open question – uncomfortably so, considering how much of the country’s economic fate may depend on it.

Published in The Express Tribune, February 20^th, 2013.