Cornering Miftah

Published August 28, 2022

JUST when the IMF is about to take a final decision on the release of much-needed funds to shore up Pakistan’s foreign exchange reserves, an unfortunate controversy has arisen over both the intent and ability of key decision-makers in Pakistan to deliver on commitments made to the international lender. On Friday, observers were left frustrated over media reports that KP Finance Minister Taimur Jhagra had ‘reneged’ on his commitment to run a budgetary surplus this fiscal year. The controversy arose over a letter written by Mr Jhagra to federal Finance Minister Miftah Ismail over KP’s concerns regarding outstanding receivables as well as damages caused by the floods, which, Mr Jhagra warned, would make it “next to impossible” to ensure a provincial surplus in the outgoing year. Whatever Mr Jhagra’s observations, it is worth asking why he felt the need to stir the pot just days before the IMF meeting. Nothing among the concerns he raised seemed particularly pressing and could have waited till later. At the same time, Mr Ismail must take responsibility for not maintaining closer coordination with the provinces and allowing their frustrations to break out into the open. The two have now thankfully decided to meet on Monday to resolve the issue. It is hoped that they will be able to find timely solutions.

However, the fickleness of political opponents is not all that threatens to undo Mr Ismail’s economic plans. ‘Dissidents’ are now popping up with alarming frequency in his own party, publicly wagging their fingers at his efforts to secure a lifeline for the economy. These ‘dissidents’ — Abid Sher Ali, Talal Chaudhry and Hanif Abbasi — are all part of the Nawaz camp within the PML-N and reportedly enjoy the party supremo’s blessing in attacking Mr Ismail. Their warnings — which, among other things, have included the threat to join protests if Mr Ismail does not provide ‘immediate relief’ to the masses — are continuously weakening the beleaguered finance minister’s hand, besides putting pressure on him to take unwise decisions in order to avoid being ostracised by his own party.

If Mr Jhagra’s letter is frustrating, it is just as outrageous that an important faction within the PML-N seems unwilling to accept that populist relief measures remain out of the question until the economy stabilises and returns to a more sustainable path. The PML-N has taken some hard economic decisions so far — which have come at considerable cost to its popularity. With some of its senior members now desperately pushing for populist measures, an impression might be created that the party lacks serious intent to put the economy on the right path, thus undermining its hard-fought battle to regain the Fund’s trust. It is clear to all that the path to recovery is a long and arduous one and there must be some semblance of unity among the country’s leaders when it comes to saving the economy.

Published in Dawn, August 28th, 2022

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