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HE’S got quite the story, but nobody to tell it to. Last week, Finance Minister Hafeez Shaikh and I sat down for dinner and a chat, accompanied by the secretary finance.
The chat was on the record, except for long snippets in between when the minister chose to go off the record to discuss a sensitive matter.
I start by asking him what he has to say to his critics, his fellow economist colleagues in Pakistan, who say that he has shown far too much willingness to accommodate politics and the priorities that grow out of it, too much willingness to bend the knee to his political bosses.
In answer, he begins by listing the longevity of his public service, “this is my fifth cabinet and I have been in governments for five and half years and this is my third term in the Senate also” and goes on to add that “no economist in Pakistan has been elected thrice to the Senate, nor have they served in so many cabinets, so none of them has the perspective on what decision-making at that level is really about”.
He draws a line between the game he has to play, and those that academic economists, or those serving in international agencies, or columnists, or those who have served in “second- or third-tier positions” in government have to play.
The others, he argues, “do not allow for the kind of choices, the kind of constraints and the kind of real world issues” that are involved in working for the top levels of government where he has to operate.
He also asked where exactly his peers would like to see him take a stand, where he is not already doing so. I bring up the fiscal deficit, saying there is a widespread perception that the government has failed to manage its finances, forcing recourse to bank borrowing, fuelling inflation, and crowding out the private sector and thereby hampering growth.
He agrees that there are grounds for a conversation here, and starts by saying that “in evaluating the present, the past matters, and economic decisions work with lags”. He speaks of the inheritance, his own and that of the government, and of a fiscal situation that “may look unsatisfactory from a certain angle”.
Often he speaks like a textbook. He’s meticulous about not stepping on anyone’s toes, and if the conversational line is going in a direction that risks ruffling feathers, he goes off the record.
He’s a thorough gentleman, scholarly in his approach to the problems under discussion, and patient. Our conversation began at 8:30pm in his office; it was past 1am when it ended in his home. Often he spoke so softly I had to strain to hear.
But policy is nasty work. It plays out in full view of the public, it stokes professional jealousies, it creates enemies out of friends and most importantly, policy outcomes never speak for themselves.
Blowhards and charlatans often do better in the policy world than scholarly gentlemen simply because they’re able to create the alliances they need to succeed, or at least shape perceptions to make failure appear like success.
Mr Shaikh may bring credentials and experience to the position he’s in. Going by his version, he has rendered quite a sacrifice in career terms to do this job, and a sacrifice in lifestyle too. No ministerial protocol can match the privileged life he lived in Dubai, he tells me.
I avoid asking him why he chose this life in that case, because I’ve heard enough ‘I want to serve my country’ lines by now. Nevertheless, one thing he doesn’t bring to the position is gravitas, the capacity to inspire fear and awe amongst his much less learned, and much less groomed cabinet colleagues. When he lists all that he set out to do in his first budget, it begins to sound a little like a wish list drawn up in Disneyland. “We wanted to preserve the growth process that had only just begun… to bring austerity to government finances… to tame inflation… to end untargeted subsidies… to make growth more inclusive through social protection… to bring the fruits of growth to underdeveloped regions like Fata and Balochistan….”
That’s an impressive list, but how far down have we really managed to get?
Eventually, he brings the conversation to the root of his difficulties: the latest National Finance Commission award, which has devolved a large proportion of federal tax revenues to the provinces.
By his reckoning, if you add up all the transfers to the provinces in addition to those mandated by the NFC award, almost 77 per cent of all federal revenues get transferred to the provinces and sub-provincial units of the federation. This is the subject of a separate column, one I promise to write one day, because there is a lot that needs to be said on this.
I’m left wondering what sort of a player Hafeez Shaikh really is. Is he the beleaguered champion of an unpopular message? The spoilsport in the cabinet who’s always raining on other people’s plans to spend heavily?
Clearly, he’s very comfortable in the corridors of power, and takes some pride at having commanded the confidence of generals and presidents, of Arab sheikhs and World Bank technocrats, of opposition MNAs and American diplomats.
Is he the key interlocutor who knows when to speak and when to hold his silence, who preserves his credibility through the messiest of squabbles to always emerge as the trusted mediator who settles all differences?
Or is he a meek gentleman, afraid of his own subordinates, intimidated by the massive egos he serves alongside, just hoping to get through the day without getting bruised?
It’s hard to tell sometimes, but I have to admit I left his company feeling a little bad about the situation he’s in. He’s got quite a story to tell undoubtedly, but unfortunately he lacks the gift of storytelling, and perhaps even more sadly, nobody wants to hear it.
The writer is a Karachi-based journalist covering business and economic policy.
