Calling it quits: One down for finance ministry

PM accepts Saqib Sherani’s resignation submitted on November 23.

ISLAMABAD: Prime Minister Yousaf Raza Gilani accepted the resignation of Saqib Sherani, the principal economic adviser to the finance ministry, on Saturday.

Sherani was reportedly sidelined after former finance minister Shaukat Tarin quit the cabinet earlier this year.

While Saqib Sherani will continue in his present capacity till December 23, the government has already begun the search for his successor. Sherani submitted his resignation on November 23 for the third time. “I have resigned on account of personal reasons and my resignation has been accepted,” Sherani said. He had earlier resigned in June after the presentation of the budget and again in July. Each time he reversed his decision.

Tarin had appointed Sherani as the principal economic adviser in August 2009. “The government confirmed my appointment in September and I worked without salary for a month,” he added.

His predecessor, Zameer Ahmad, a Grade 21 officer, was transferred to another department in order to accommodate Sherani, according to sources in the finance ministry. He was appointed in the highest pay scale. An MP 1 scale official is entitled to over Rs200,000 monthly salary, house rent between Rs75000 to Rs105,000, free utility charges up to Rs12000 and an official vehicle.

“The bureaucracy did not accept Sherani and kept him out of the loop on many key issues,” said a finance ministry official, who did not wish to be named.

At a time when the entire macroeconomic framework was reworked in the wake of floods, the economic adviser was not part of the discussions held at the finance ministry. One of the things held against him was the bristling report he submitted on the adverse impact of the floods on growth and inflation in the country.

When the finance ministry did not take him on board, Sherani prepared his own report in which he claimed that economic growth may spiral downwards to zero per cent, while inflation may shoot up to 25 per cent due to the devastation caused by the floods. The finance ministry had estimated a growth rate of 3 per cent and inflation at 14 per cent.

The inflationary impact of the general sales tax was worked out by the finance ministry and the Federal Board of Revenue without taking input from the Economic Advisory Wing. The study assesses a 0.63 per cent impact of GST on the Consumer Price Index, an indicator to measure inflation.

After Saqib Sherani’s appointment, the practice of issuing monthly and quarterly economic reviews was discontinued. The Economic Advisory Wing issued the last update on the Pakistan economy in September 2009.

Published in The Express Tribune, December 12^th, 2010.