Finance Minister After the elections
Finance Minister After the elections of February 8, 2024 in Pakistan, the phase of government formation in the federation and provinces has been completed. In the new federal cabinet announced yesterday, some new faces have been included along with old faces, among which the prominent name is Muhammad Aurangzeb, who has been given the portfolio of the federal finance ministry.
Although Ishaq Dar is also included in the new federal cabinet of the country, this time he has not been given the responsibility of the finance ministry, instead this responsibility has been handed over to Muhammad Aurangzeb, who is a banker by profession and has been in charge of the finance ministry for the past five years. He was the President of Habib Bank Limited.
The absence of Ishaq Dar as the federal finance minister in the federal cabinet is surprising to many, on the other hand, the selection of Muhammad Aurangzeb for this responsibility is also a new development because in the last three terms of the Nawaz League, Ishaq Dar was the minister. The difficult responsibility of finance has been fulfilled.
While the finance minister is a new experience for Muhammad Aurangzeb, it is a huge challenge to deal with the current economic condition of the country, because Pakistan is currently burdened by a mountain of internal and external debt. The total value is currently more than 130 billion dollars. On the other hand, the inflation rate in the country is at a high level of 23.1% in the month of February, due to which the common man has additional bills from food and drinks to electricity and gas.
The volume of foreign investment in the country is very low and there is no significant increase in domestic exports to overcome the trade and current account deficits, all of which are contributing to the depreciation of the domestic rupee. And the value of one dollar has become 280 rupees and has inevitably become a major cause of inflation in the country.
Who is Muhammad Aurangzeb?
Muhammad Aurangzeb is not a member of Parliament in Pakistan, but he has been the President of Habib Bank Limited, one of the few largest banks in Pakistan.
Bankers have been Finance Minister in Pakistan in the past too. According to the details released by the Pakistan Banks Association, Muhammad Aurangzeb assumed the post of President and Chief Executive of Habib Bank on April 30, 2018.
Prior to that, he was also the Chief Executive Officer of JP Morgan Global Corporate Bank Asia. Mohammad Aurangzeb also has 30 years of experience in senior management positions at ABN AMRO Bank and RBS.
According to the Association, they are the only Pakistanis who have exclusive membership of the Global CO Council, which is overseen by the WSJ and the Dow Jones Group.
Muhammad Aurangzeb received his BS and MBA from Wharton School, University of Pennsylvania, USA.
Munir Kamal, former chairman of the National Bank of Pakistan, told the BBC that Muhammad Aurangzeb has had an outstanding banking career and so far his track record in this field has been excellent.
What could be the reason for not making Ishaq Dar the Finance Minister?
In the Pakistan Muslim League-Nawaz governments, the Finance Minister was entrusted to Ishaq Dar, a close associate of party leader Nawaz Sharif. Ishaq Dar became the Federal Finance Minister for the first time in 1998 during the Nawaz League era. In 2013, he became the finance minister once again in the Nawaz League government, but after the disqualification of Nawaz Sharif from the Supreme Court in 2017, when Shahid Khaqan Abbasi became the prime minister, Miftah Ismail became the finance minister.
Miftah Ismail was the Finance Minister for the first five months of Shehbaz Sharif’s Prime Minister ship after the fall of the Tehreek-e-Insaf government in April 2022. However, Ishaq Dar became the Finance Minister again at the end of September 2022.
However, Ishaq Dar could not become the Federal Finance Minister in the current new coalition government of PML-N. Speaking to the BBC, senior journalist Khurram Hussain said that the reason for not making him the finance minister is that he could not deliver as a finance minister during the previous government’s tenure. Pakistan’s program from the International Monetary Fund (IMF) was almost de-tracked in June 2023 due to
In this regard, Pakistan’s renowned economist Dr. Qaiser Bengali said that the main reason for not bringing Ishaq Dar is his statements against the IMF in the past, which gave the impression of a confrontation.
He said, “So instead of Ishaq Dar, a person who can talk to him in a better way has been brought.”
It should be noted that due to some statements of Ishaq Dar in the previous regime, the restoration of the IMF program was delayed and at that time Prime Minister Shehbaz Sharif had to speak directly to the top officials of the IMF.
Economist Ali Khizr said in this regard that ‘Ishaq Dar’s policy to run the economy has ended.
He said, ‘Ishaq Dar’s policy of fixing the value of the dollar is no longer effective, on the other hand, his policy of accounting and changing the data has completed its life, so it seems that now he is the minister. The treasure was not created.
What is the reason for making banker Muhammad Aurangzeb the finance minister?
The new Finance Ministry of Pakistan, Muhammad Aurangzeb, is a banker who is a new face for the finance ministry in the PML-N government this time.
Bankers have been finance ministers in Pakistan in the past too. Banker Shaukat Aziz was the finance minister of the country during the tenure of former President Pervez Musharraf, while banker Shaukat Tareen held this responsibility during the tenure of PPP and Tehreek-e-Insaf.
Khurram Hussain said that Pakistan’s biggest problem at present is the management of internal and external debt and a banker understands the financial market and the debt sector in a better way. According to him, one of the main reasons for bringing in Muhammad Aurangzeb was how he dealt with the problem.
According to him, the biggest problem for the state of Pakistan at the moment is the country’s debt and a banker can be a better option to deal with it.
Economist Ali Khizr says, “The selection of Muhammad Aurangzeb seems to be a good decision as he has extensive experience in managing finances internationally and locally which is better suited to tackle the country’s economic challenges.”
Regarding whether a banker is able to deal with the problems of the economy instead of an economist, Dr. Qaiser Bengali said, “Be it a banker or an economist, he does not make decisions alone, but the entire cabinet makes decisions related to the country’s economy.” If the finance minister takes a decision, the commerce minister is also taking decisions related to the economy.
He further said that in Pakistan, the finance minister has only one job left, that is to take new loans to pay off the old debts and the new finance minister has to do the same.
How will the new finance minister deal with the IMF?
Pakistan is currently included in the IMF’s Standby Arrangement Program under which it has received two billion dollars so far. Pakistan also wants a new program in June after the end of this program.
Economist Ali Khizr said in this regard that the new finance minister will have to face major economic challenges, one of which is dealing with the IMF.
He said that when he negotiates, a general impression will also go with him regarding the mandate of the present government, which is alleged to be rigged. This perception has spread at the local and international level and due to which it will be a difficult task for the new finance minister to walk with this perception.
He further said that ‘along with this, the letter written by Imran Khan, founder chairman of Tehreek-e-Insaf to the IMF may come up as a background during the negotiations due to which he may face a lot of difficulty.
What will be the economic challenges for the new finance minister?
Due to Pakistan being in the IMF program, there was a historic increase in the inflation rate due to the increase in electricity and gas prices in the last one and a half years, on the other hand, the depreciation of the rupee has worsened the economic condition of the common man. .
If the new finance minister takes new loans from the IMF for the country, he will have to fulfill some strict conditions.
Ali Khizr says that whoever the finance minister is, if he wants financing from the IMF for the country, he has to accept the terms of the IMF.
He says, ‘Until there are reforms in the energy sector, the rates for the consumers will continue to increase. Likewise, if the tax base does not increase, the tax rate will also continue to increase, which would have caused a problem for the common man. will remain.’
He said the new finance minister will have to deal with five sections including the bureaucracy, politicians, the establishment, the IMF and the business community on how to deal with them.
Ali Khasar explains that ‘the biggest problem with this is the common man, in which the new finance minister has to take care of him while doing economic management, who is already worried due to inflation.
