Dar’s return

Published September 25, 2022

WITH Interior Minister Rana Sanaullah confirming the return of Ishaq Dar next week to ‘facilitate’ the PM in economic affairs, we may soon have our third finance minister for this year and the sixth since the current National Assembly took oath.

Following opportune developments on the legal front, there had already been much speculation that the former finance minister, PML-N stalwart and Nawaz Sharif confidant would soon be returning to the country to snatch back the reins from Miftah Ismail. The PML-N’s decision to change horses midstream appears to have been driven by the incumbent’s unyielding pragmatism given the state of the economy and his unwillingness to dish out populist ‘relief’ when the economy can ill afford it.

Mr Dar will now be expected by his party to conjure up fiscal space for the government to start spending ahead of the next elections. What financial wizardry he employs to do so remains to be seen, but if the past is anything to go by, Mr Dar’s arrival could portend more trouble. His disastrous exchange rate policy during his last tenure is widely seen as a key reason why Pakistan had to return for yet another bailout programme to the International Monetary Fund.

Read: The aftershocks of a fallen rupee

The future of that programme, which Mr Ismail painstakingly renegotiated recently, will be closely watched if Mr Dar takes over and goes for any expansionary policies. It would appear from Mr Dar’s recent statements that the interests of the two would be at odds with each other.

Meanwhile, the finance minister again faces the prospect of returning unappreciated from a gruelling assignment that required him to clean up someone else’s mess. It will not make it any easier for him knowing it will be Mr Dar who gets to enjoy any fruits that his labours may have yielded.

Also read: Miftah won't mind leaving finance ministry if Dar returns but not open to state minister's role

Mr Dar had overtly challenged Mr Ismail and undermined his decision-making over the past months. Mr Ismail’s looming ouster also hints that the Nawaz camp — which had made no secret of its disdain for Mr Ismail’s economic policies — appears to have prevailed within the PML-N. All of this does not bode well for the economy, which has suffered much from the uncertainty brought about by the party’s infighting.

The country would have done well with a stable hand at the helm. Now, with a new finance minister likely to take over, instability is bound to return as the markets speculate on the direction he will take in the weeks and months ahead.

Published in Dawn, September 25th, 2022

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