Only days after reports of a reshuffle in the cabinet were rubbished by the government's spokesperson, Finance Minister Asad Umar announced his resignation earlier today and said he would not be taking any other portfolio.
Prism reached out to analysts to give their take on Umar’s decision.
—Uzair Younus, Director South Asia at Albright Stonebridge Group
Umar’s resignation brings to an end a chaotic eight months during which the Pakistan Tehreek-i-Insaf (PTI) government fuelled uncertainty at home and abroad.
His departure also indicates that the reform-oriented wing of the PTI is going to take a backseat for the foreseeable future, and Pakistan’s economic future will be managed by those who don’t want to rock the boat too much.
Umar had his own faults and failures during this period, but the bigger issue lay with the fact that he never seemed to have the trust of the prime minister, whose backing is essential if a finance minister is to succeed in pushing structural economic reforms.
He inherited an economy facing an imminent downturn. This had been predicted months before the elections. However, Umar’s likelihood to succeed was low given that neither he nor Imran seemed to fully grasp the seriousness of the issues until they came to power.
The main challenge was to stabilise the economy and bring certainty to the market, while pushing through tough decisions during the first 100 days. The PTI failed there, and every passing day meant that they owned more of the problem than they should have had.
—Zahid Hussain, senior journalist
Umar inherited a difficult situation, but one cannot say it was an impossible one. Basically, there was no direction as far as the economy is concerned, so even if it was a difficult situation, it was mishandled.
Umar, being finance minister, should take the blame, but it would not be correct to put the entire blame on one person. Imran Khan should also accept responsibility because it’s the prime minister who should have given him guidance.
The finance ministry is probably the most important ministry in the cabinet, but it is also something to do with lack of direction this government has in every aspect.
Umar’s main challenge was to stabilise the economy and end uncertainty, as uncertainty is the worst thing to happen to the economy — and that is the biggest mistake of the former finance minister. He could not give confidence to the markets, he could not give confidence to the general public that things could be fixed.
For any other person who’s going to replace him, the challenges are the same. We need somebody who knows the economy and can also work with the team because when we talk about fixing the economy, it is also collective work.
That’s one of the shortcomings of Umar, in my view: he was not willing to work with others. I think from the very outset, Imran made some drastic mistakes that affected the working of the finance ministry.
When he established the so-called Economic Advisory Council, there were some good people on it initially, but under pressure, Imran removed some of them, for example Atif Mian, who is one of the best-known economists in the world
I think after that, nobody was prepared to work with Imran and his government.
It says a lot about the way Imran is running this government. He had ample opportunity to improve not just the performance of the finance ministry but also other ministries.
Again, the major problem with this government is there is no sense of direction, there is no vision. Look at the kind of people he has picked for the two major issues facing this government, on which its future depends: the economy and Punjab.
If you look at them both, they’re not working out. The worst is Punjab and the way the Punjab government is being run — he’s picked somebody who’s completely inexperienced, does not have weight and cannot run a province like Punjab.
Everybody’s now criticising Umar, but I think it is the prime minister who should be questioned about his decisions and vision; he does not have any.
It’s been eight months and the government seems to be in disarray and Imran needs to fix it. The next few months are going to be critical, the new budget is coming. If Imran fails to fix the major issues, this government is in deep trouble.
It doesn’t have a clear majority in Parliament, so I think the government is still in opposition mode. They have to see what’s going wrong; just changing a few ministers is not going to help.
The whole attitude has to be changed. Imran has to take things more seriously; he should go to Parliament and learn to work within the framework of the parliamentary democracy.
In this kind of difficult situation, you need to develop a national consensus on the economy. We all know the tough decisions they have to take, but in a confrontational atmosphere, Imran will not be able to implement that.
There needs to be a national consensus so you can implement tough decisions.
—Ali Hasanain, assistant professor of economics at Lums
We have relatively little data on which to judge Umar as a financial manager. The details of the negotiations with the International Monetary Fund are not yet public, and he left before presenting a full budget.
In contrast, it is clear that he, and PTI generally, have failed on a key task: controlling the narrative. When you need the sort of deep-cutting economic reform we are facing, resistance and outcry are a given.
The government needs to articulate for the public precisely what is needed, present a plan and sequence of actions, and inform us of the misdirection of the past. As absurd as Pakistan Muslim League-Nawaz’s resolution to bring back Ishaq Dar was, the PTI committed the greater sin of failing to explain to the public the harm that Dar’s policies caused. His successor will need to fix this rapidly.