Changing of the guard

There is always a scapegoat, and some feel, this time, it was Dr Abdul Hafeez Shaikh.

Resigned or asked to leave? What now for Abdul Hafeez Shaikh? What is in store now for the economy? The last question is really the easiest to answer. Because the fact is, there really won’t be, and shouldn’t be much of an impact. It is too late in the game, and with indicators that an interim set-up could be coming in shortly, the entire cabinet was expected to be vacating parliament soon. But the other two questions are not so easy to answer. The government’s official stance is that Dr Shaikh resigned. He has refused to comment but one can assume that would be his stance as well, at least in public. But many sources in the government or close to it suggest that this was not the case. There is really no way to prove it, either way. But he is gone, and Saleem Mandviwala, the former minister of state for investment — during whose tenure foreign direct investment dropped from about $5 billion to about $1 billion — is his replacement. One can take that as a comment on his performance and subsequently, on his eligibility for this post.

So what next for Dr Shaikh? There is overwhelming unanimity in the off-the-record and anonymous tip-offs that he is going to figure in the incoming caretaker set-up. Some say he left the post of finance minister because he is going to be the government’s top choice for prime minister. Some say he is going to be chief minister of Sindh in the interim set-up. But he is not without opposition either. Many feel he is too close to the army because he served as privatisation and investment minister during General (retd) Pervez Musharraf’s tenure and might face objections on these grounds.



Many feel he let the country down, economically. The rupee has hit a historic low. There are just enough foreign reserves for two months’ worth of imports. In 2008, such a situation prompted a balance of payments crisis, which only ended when the IMF offered a bailout package of $11 billion. In 2011, that programme was suspended after Dr Shaikh was unable to push through key reforms, most notably, widening Pakistan’s tax base. Of course, this failure is not his alone, but in politics, there is always a scapegoat, and some feel, this time, it was Dr Shaikh.

Published in The Express Tribune, February 21^st, 2013.