Dream over?

The cabinet has been reshuffled, and the champions of status quo are in full swing. The day the cabinet was formed and CMs of Punjab and KPK were announced, those who were hoping for a 'Naya Pakistan' got disgruntled, and waited for changes in right direction. But with recent shifts, it is crystal clear that nothing Naya is in the offing, and it is business as usual.
However, that does not mean that the country will suffer from these changes. The land of pure will keep on running on principles it has been operating for decades. The diehard fans of PTI are disappointed with the captain of the ship, and they are not necessarily expecting smooth sailing for the next four years or so.
The most important shift earlier this week was in the finance portfolio. Asad was considered the brain of PTI and he came across as an honest individual and a well meaning finance minister. He was upright with not much diplomacy and maneuvering abilities. And that is probably the reason of his exit.
He was believed to be closer to the SMQ (Shah Mahmood Qureshi) group within the party, but lately his supporters in the club were not happy with his performance. The business community - especially capital market, was too critical of him. There were two groups in business community - pro-Imran and anti-Imran. In the past few months, the pro-Imran people slowly became anti-Asad.
On the international front, the IMF and donor community were not happy with Asad. He came across as a stubborn finance minister, showing not much flexibility to the IMF. A few blame him for delaying the IMF programme; however, that is probably his best achievement. The balance of payment (BoP) crisis is largely been averted by squeezing the demand through currency and interest rates adjustments. Had Asad entered into the Fund programme on day one, conditions would have been harsher.
In the process of these adjustments and uncertainty of going into the IMF or not, he lost investors' and party members' trust. Partly, he has to be blamed for not managing the expectations right as he was not the best when it came to perception management. But the economic situation was no good for anyone to assume the finance minister's position. He was supposed to be the economic wizard well before the elections and, being part of the finance committee, he was well aware of the economic mess he had to inherit.
Still, he did not have a game plan. He did not have a core team to operate with. He chose to continue with a lame duck finance secretary for months. Apparently, he was clear on going to the IMF and based on this writer's interactions, he could see the economic slowdown in the next two years before things improved. However, the market perception was that he is confused. His perception management skills were not up to the mark.
He was cornered. The advisors close to the PM were turning against him whilst the JKT (Jahangir Khan Tareen) group became strong in the process. The feedback from the IMF and other power circles was not in his favour. The buck of poor governance of PTI stopped at him. He is being replaced by a technocrat who has no affiliation with PTI whatsoever.
Imran may or may not have the realization that the economic woes are not going to be over anytime soon. Dr Hafeez Sheikh is a capable manager with wealth of experience in managing economic portfolios in the country and is well respected in the donor community and international investors. He does not have any public appeal and he may not think much of the cost of economic stabilization to be borne by public at large.
The rumor in Islamabad is that the budget is already formed in DC and Asad was showing resistance to a tough budget. Sheikh may take it as prescribed by the IMF. Expect new taxes in the upcoming budget, electricity and gas prices are to increase further. Forget about any allocation in Ehsaas programme, Karachi package, FATA merger funds and other similar development programmes. There is no fiscal space for that. The economy is going to slow down further before improving.
The catch is in tough structural reforms that are required to take the economy out of the rut of frequent boom and bust cycles. A new economic advisory board is in the process of formation. The change is transiting from the club of theoretical economic advisory council to economic advisory board of practitioners.
JKT is playing the shots within the PTI, and he is a smart man with good business ideas and the story of Shaukat Tareen and other members is no different. But these have been part of the previous governments and are beneficiaries of status quo. Expect change in economic and perception management, but not much to offer for those who dream for 'Naya Pakistan'.