The debate on whether to employ a technocrat, with no party affiliations, over and above an ideologue, who supports the party's ideology, was never under serious debate on Pakistan's political scene - be they military adventurers or civilian governments. This has been particularly evident in the choice of the federal finance minister (adviser to prime minister on finance).
PML-N is perhaps the only party in power which can boast of qualified and experienced economists though disturbingly the party opted to appoint Ishaq Dar, an accountant by education and experience, to the position - a decision for which the country is paying a heavy price to this day. Imran Khan during his years in opposition repeatedly stated that Asad Umer would be the party's finance minister if the party formed a government - a pledge that he kept for no more than eight months.
The question is why did Imran Khan dismiss Umer and appoint a technocrat, Dr Hafeez Sheikh, a man whose previous three year stint (2010-13) as the finance minister led to suspension of an ongoing International Monetary Fund progarmme due to failure to implement tax and power sector reforms and initiating preliminary negotiations for yet another programme with the IMF though the decision was rightly deferred till the 2013 election results.
Imran Khan's supporters cite two reasons for his cabinet selection(s): (i) pressure linked to political considerations with a large number of turncoats (before and after the elections) who would not have joined his party without getting a cabinet position (and his coalition partners with signed agreements specifying the number of their federal ministries); and (ii) after taking oath Khan realized that his hard core long-term party supporters did not have the necessary experience/qualifications to deal with issues that the party was not prepared for and inherited. Thus Asad Umer, with experience in running a large organization though never occupying a position that required macroeconomic decision making, lasted two days less than 8 months - a time period whereby his policies could not possibly have begun to bear fruit though two visible positive signs were apparent at the time of his dismissal on 18 April 2019.
Firstly, a rupee that was no longer over-valued by December 2018; the Khan administration inherited a current account deficit of 19.8 billion dollars which came down to 11.58 billion rupees by April 2019 - a decline of 45 percent, an achievement not to be scoffed at. In December, the current account deficit declined to 2.153 billion dollars - a decline of 81 percent from April 2019. In actual terms the difference Umer's achievement as the minister of finance narrowed the current account deficit by 8.2 billion dollars while during Dr Hafeez Sheikh's tenure it declined by 9.4 billion dollars however the cost of that additional 1.2 billion dollar decline has been considerable - throttling of economic activity due to a discount rate of 13.25 percent accounting for lower imports of raw materials and semi-finished products and an undervalued rupee whose impact on raising foreign debt servicing and on domestic prices especially on petroleum and products is being ignored
Second Sarmaya-e-Pakistan (SP), a holding company for state-owned enterprises, was launched in February 2019, which as per Umer was to "turn around the state-owned enterprises and eliminate their losses which are eating up resources which should be used for development and welfare, vital for the economic turnaround of Pakistan." It was to be chaired by the Prime Minister and had eight board members including Nadeem Babar who was not at the time appointed as Special Assistant on Petroleum.
In September 2019, Asad Umer's replacement Dr Hafeez Sheikh stated that the board will be reconstituted to improve governance and active supervision though no subsequent meeting has reportedly been held since. Dr Hafeez Sheikh, in the Letter of Intent (LoI) submitted to the IMF as a prerequisite for programme approval stated in the last para on the government's commitment to improving state-owned entities governance that, "as part of our broad SOE reform agenda, we have established a holding company to manage SOEs. The objective is to increase their independence and improve their performance. We are consulting with IMF staff to ensure that adequate governance and proper safeguards are in place." It is unclear what if any consultations have taken place with the Fund staff on this matter while Dr Sheikh's priorities/focus with respect to SOEs was evident as the first para of the relevant section in the LoI related to jump starting privatization - clearly a shift from the priorities laid down by Umer.
It is unclear why the need for consultation with the Fund was felt necessary on SP as it has little, if any, experience in this matter. Umer had cited Indonesia as the role model - a country which set up a sovereign fund modeled after Malaysia's Khazannah Nasional which in turn had modeled it after Singapore's Temasek which transferred the stakes of the Ministry of Finance Incorporation into a sovereign wealth fund and later created specific sector subholdings. The objective: decrease dependence on the government budget. The total assets of these sovereign funds is significant and as per SOE Annual report 2017 released by the Ministry of Finance, Pakistan indicated that total assets of 204 SOEs were 17,114,042 million rupees, a sizeable amount of the 2017 dollar rupee parity.
There is a pervasive consensus in the country a year and a half after Imran Khan became the country's prime minister that he and his large cabinet have not been able to improve governance in any sector, a charge that the government maintains is spearheaded by a partisan media publishing/airing fake news necessitating a tightening of media laws and improving the performance of its rather large media team.
However, sources reveal that the Prime Minister is increasingly becoming aware of serious shortcomings in the performance of finance and other critical ministries including the Law Ministry, Power Ministry as well as the Interior Ministry as those heading these ministries are engaged in supporting policies widely divergent from PTI's manifesto and thereby eroding the Prime Minister's popularity.
To conclude, the Prime Minister heads one of the largest cabinets ever in the country's history (47) out of which 24 are from PTI, 4 from coalition partners, and a large number of turncoats head key ministries including Energy, Interior, National Food Security and Research, Aviation, and Privatization. The unelected consisting of 40 percent of the cabinet head key positions as special advisors (seven) and special assistants (twelve) with the status of ministers including Finance, Commerce, Textile, Industry and Production, Establishment Division, Accountability and Interior, Information and Broadcasting and Petroleum. It is little wonder that PTI's manifesto is not being followed though the extent of the political cost remains a subject of discord between the prime minister and those who claim it is on a downward trajectory. One can only hope that the PM undertakes a fact check rather than claim rigging for a possible defeat in the next elections like his predecessors.
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