Wanted: finance minister

So the PML-N chose a middle path and didn’t fire Ishaq Dar. A man on the run, though on paper he is still a minister, Dar has been let go for all practical consequences. This column has previously written on Dar’s mixed legacy, so there is no point writing a political obituary of arguably the strongest and longest-serving finance czar Pakistan has seen in recent times. Now is the time to look towards the future. What will PM Abbasi do?

A number of news reports suggest that the premier would likely keep the finance portfolio with himself. That’s not advisable, though. Sure, with the PM running the finance ministry, his orders will carry the full weight of executive authority. But his ability to single-mindedly and swiftly make critical economic decisions (the PM already holds multiple portfolios) will be tested.

What Pakistan needs at the moment is a full-time finance minister who can understand, manage and resolve the foreign exchange troubles that are in the offing. With elections – and another political transition – less than a year away, Pakistan needs steady hands on the wheel to see through external account challenges.

Besides managing the forex situation, a dedicated and influential finance minister is also needed to maintain fiscal discipline in the house. Historically, election-year fiscal loosening and spending spree have become a real headache for the economy immediately after the polls.

But, ‘heavy is the head that wears the crown’! Who will it be, if not the PM himself? As things are, the leading PML-N stalwarts are busy leading key cabinet portfolios, defending their embattled party chief, or strategizing for the coming polls. It makes sense for the premier to look for outside talent that is sufficiently detached from the political dynamics at the moment.

The names of Ishrat Husain and Shaukat Tareen have been floating for some time as potential advisor to the PM on finance. Such individuals do have the prior experience of managing the economy in bad macroeconomic times.

Another option that is said to be under discussion is to have a council/committee of economic advisors. But that can only work if the council is empowered enough to take major decisions such as currency adjustment, debt management, and if needed an IMF bailout just before the polls. Such empowerment may require a change in law. In addition, members of such a council have to be competent individuals who can get along with each other and build consensus.