Pakistan’s economy is progressing at a comparatively faster pace. But the recovery is both uneven and unstable, youth unemployment is high and millions of citizens are compelled to live without basic amenities while huge potential in men and material goes to waste.

The country and its people are not destined to be this way. They deserve better.

Finance Minister Asad Umar, a business executive-turned-politician and a self-professed fan of French economist Thomas Piketty of the book “Capital in the Twenty-First Century” fame, seems inclined to amend the orientation of public development efforts for better outcomes for the majority. The selection of the team and potential candidates he mentioned, however, did not inspire confidence. Many are tried, tested and failed members of General Musharraf’s team. The hallmarks of the post-9/11 period were: a windfall of dollars, property and capital market bubbles, huge infrastructure/energy deficit and high income and regional disparities.

After assuming office, Mr Umar shared his intent to democratise the economic decision-making process by bringing key debates to the floor of the house (parliament). This is an apt departure from the past practice of control freaks occupying key positions in the economy-related ministries.

“The country has suffered enough egomaniacs who sometimes acted on personal whims or the advice of party loyalists and nincompoop officials behind the closed doors, leaving the rest of the country guessing. This practice has cost the economy dearly in terms of weak policy and weaker implementation because of the exclusion of parliament from the process,” commented a business tycoon who thinks highly of the finance minister.

Dr Akhtar resented the old bureaucratic mindset that trusts precedents and avoids risks associated with innovation like the plague

“The Pakistan Tehreek-i-Insaf (PTI) with its election platform of ‘change’ has driven public expectations high. The new economic team led by Mr Umar is entrusted with a huge responsibility: delivering on the promise of a shared prosperous future. Though he is not an economist, Mr Umar is a bright man confident enough to prefer a smart team to a pliant one to get the work done,” said a former colleague who now heads a major company.

The fact is that external-front vulnerability is daunting, threatening the gains in gross domestic product (GDP) growth and investors’ confidence. The recovery since the democratic revival in 2008 from 0.3 per cent to 5.7pc GDP growth rate has to be accentuated going forward to maintain the momentum and capitalise on a rare intangible asset: public goodwill that presumably clean and transparent government commands.

As for growth momentum, Pakistan Economic Survey 2017-18, released weeks before the exit of the PML-N government, stated: “During the past five years, the economy continued to benefit from growth-oriented initiatives, including higher development spending, low inflation, vigilant monetary policy, and CPEC-related investment providing impetus for economic recovery.”

The document did point to external-sector weaknesses, but somewhat underplayed their severity.

For their part, the caretaker government did a fairly decent job of holding elections, overseeing a peaceful transfer of power and not letting the economy slip further beyond the critical point. Dr Shamshad Akhtar, a reputed economist who also served as governor of the State Bank of Pakistan (SBP) in the past, in her capacity as caretaker finance minister is understood to have done valuable spadework for the incoming team.

Some senior officers on the condition of anonymity told Dawn that despite limited mandate, using her credentials and links in the global development fraternity, Dr Akhtar managed critical inflows of dollars that moderated risks and shored up reserves. According to the latest data released by the SBP, reserves held by the central bank stood at $10.2 billion, net foreign reserves held by commercial banks were $6.4bn and total liquid foreign reserves amounted to $16.7bn.

People in Islamabad were critical of the finance minister’s decision to retain the finance secretary.

“The current finance secretary is criticised for his change of position on the issue of the International Monetary Fund (IMF) after the Abbasi government stepped down. He also gave up on the amnesty scheme instead of focusing on its implementation,” a person in the know of the situation said. It is true that reservations were expressed initially by the Ministry of Finance. But the scheme later proved to be a success as 82,443 declarations were filed for assets, local and overseas, worth collectively Rs2.5 trillion. The government in stress raised as much as Rs123bn through declarants. It collected $375.5 million (Rs46bn) on foreign assets and Rs77bn on domestic assets. In addition, $32m has been repatriated and

$24m invested in dollar-dominated bonds whereas $8m in taxes on assets abroad is in the process, revealed an official document seen by Dawn.

“Finance Minister Akhtar’s intervention made a difference as she interacted with tax consultants, removed legal hitches and set up an efficient helpline to handle technological glitches swiftly and got the scheme extended by a month on the strength of results,” the gentleman who was privy to many high-level meetings in the Ministry of Finance said.

“With the assistance of a small select team, Dr Akhtar was able to develop multiple policy papers projecting alternative options and their possible outcomes to equip the next team with some base documents to start off with a clearer picture of the situation that they are inheriting,” he said.

His impression was that Dr Akhtar resented the old bureaucratic mindset that trusts precedents and avoids risks associated with innovation like the plague. “We need fresh ideas and planning, but more than that we need to make people at the top of the bureaucratic pyramid remove earplugs and make sense of market murmurs. With an old, tried, tested and failed team of General Musharraf, where exactly does the finance minister want to take the country? Do we want to repeat the follies of the past?” he said while mentioning Dr Waqar Masood and Dr Ashfaque H Khan who are tipped to be on the list on the finance minister’s table.

Another senior finance ministry official contested the press report that Dr Akhtar advised Mr Umar to immediately knock on the IMF window. “From what I know, Dr Akhtar developed a model with key economic indicators and ran it under multiple scenarios to let the foreign minister have an idea of economic repercussions of the choice he finally makes to negotiate a path out of the tight corner,” he said.

Published in Dawn, The Business and Finance Weekly, August 27th, 2018