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Monday May 27 2019

PTI's economic team shuffle: A new team, a new outlook

Adviser to Prime Minister on Finance Abdul Hafeez Sheikh along with Chairman of Federal Board of Revenue (FBR) Shabbar Zaidi addressing a press conference at FBR. Photo: Online  

The Pakistan Tehreek-e-Insaf’s (PTI) newly installed economic team has gone through a massive overhaul, ever since the finance minister, Asad Umar, was forced to resign in April.

Since then, the revolving door has been ever-spinning. Soon after Umar packed up, the governor of the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) were sacked. And now, this week, the finance secretary got the axe, while the chairman of the Board of Investment (BOI), Haroon Sharif, has called it quits.

The prime minister, say his advisors and ministers, needed a new team. The previous one was not performing. He got one, and now with the shake-up complete, will the PTI-led government be able to achieve its 8.2 per cent inflation target, collect Rs. 5,300 billion in taxes and grow its economy by four per cent by next year?

Umar and Tariq Bajwa, the outgoing governor of the SBP, had spearhead Pakistan’s talks with the International Monetary Fund (IMF). Those privy to the developments tell, on the condition of anonymity, that both these men were able to convince the Fund to relax its most stringent conditions, which were to be implemented from July 1. But when they returned back to Pakistan, they were quickly shown the door.

In comes Abdul Hafeez Sheikh, as the advisor to the PM on finance, revenue and economic affairs and Reza Baqir, an economist formerly with the IMF, as the governor of the SBP.

Separately, the secretary finance, Younus Dagha, was in China pleading Pakistan’s removal from the grey list of the Financial Action Task Force (FATF). On his return, he was to be part of the delegation discussing the IMF bailout package. During the negotiation, has learnt, he was told to keep mum and not resist the IMF demands. When he didn’t agree, his departure was planned.

Haroon Sharif had a similar story to that of Dagha. He too challenged the way the negotiations were being done and is said to have openly contested the point of view of the advisor to the PM on finance. Frustrated by the way things were progressing, he gave in his papers, even though he had a packed schedule of appointments this week, including a conference on investment and meetings regarding future investments by Qatar and Saudi Arabia.

So now, a new finance advisor, secretary finance and chairman FBR, who has in the past been openly critical of the FBR, are preparing the new government’s new budget.

Also, let’s not forget that Umar is back. This month he was named as the chairperson of the National Assembly's Standing Committee on Finance. His mandate includes overlooking the IMF program, Pakistan’s external debt and its progress on the implementation of the FATF demands. Now, what if the ahead of the finance committee and the advisor on finance do not see eye to eye? Will more heads roll?

Ashraf Malkham is a journalist with Geo News 

Note: The views expressed are those of the author, and do not necessarily reflect the official policy or position of Geo News or the Jang Group.