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Prime Minister Imran Khan has appointed the third finance minister in the government’s tenure. The abrupt ouster of Hafeez Shaikh before the annual budget came as a surprise as the government has just received the third tranche of $500 million from the IMF and was negotiating several reforms.
The prime minister has repeatedly stressed that the economy is on the right tract, citing the rising exports, remittances, shrinking current account deficit and rupee price appreciation. Under such circumstances, the decision to sack the finance minister casts apprehensions on the government’s policy. Perhaps, the prime minister has made Shaikh a scapegoat over failure to control rising food inflation or the recent move to grant unprecedented autonomy to the State Bank of Pakistan. However, it is certain that the minister’s removal will neither end the controversy nor control food prices.
The prime minister has not commented on the issue and his close aide have maintained that the premier was not satisfied with failure to control prices and implement his ‘pro-poor’ policies. The decision could be political rather than his performance as Shaikh was an unelected official, which was rather unsettling for the government and the courts. There was also a failed attempt to get him elected after Shaikh suffered a shocking defeat in the Senate elections. Thus the government probably had no choice but to remove him from the highly coveted position.
The prime minister has brought the younger and dynamic Hammad Azhar to the post. He is considered a close confidante and the prime minister has been impressed by his performance. But merely changing the minister is unlikely to make things easier as the IMF bailout package contains tough condition which the government will need to negotiate. It would also be an arduous task for him to present the budget and fix the economic problems.
The government needs a more coherent economic policy framework to generate employment through economic growth rather than cash handouts. As the prime minister seeks to reshuffle the cabinet once gains and bring a new economic team, it needs to be seen if there will be any radical changes by bringing competent people who can make a difference. It is imperative that the government controls runaway inflation to regain the public’s trust.
