Spearhead Opinion – 19.04.2019
By Farrukh Karamat
Senior Research Coordinator, Spearhead Research
Eight months into power and the PTI-led government, under increasing pressure for its perceived underperformance, has decided on a major Cabinet reshuffle. The opening batsman, Mr. Asad Umar – the most powerful Minister after the Prime Minister, has unceremoniously exited refusing to be a part of the reshuffled Cabinet. A major blow for the PTI as they have now lost Mr. Jehangir Tareen, Mr. Aleem Khan and Mr. Asad Umar within their governing team – none of them hold any portfolio. The tall claims of the PTI leadership in their pre-election rhetoric is coming back to haunt them as they traverse the difficult political terrain. The constant U-turns and dithering policy making is costing them in terms of a support base that is starting to question their ability to effectively govern and deliver. The Prime Minister, unfortunately was unable to cobble together a professionally competent team from the outset and a re-shuffling of the same is unlikely to bring about any real change. Perhaps, Mr. Asad Umar made a wise decision in exiting the Cabinet and refusing a reshuffled slot, given his experience in managing the Ministry over the last eight months. There is a lot of speculation around the unceremonious exit of Mr. Asad Umar, and it is best not to delve into that and move towards the future as time is of the essence.
The Pakistan Stock Exchange is on a positive note today and rising, which means that the market has responded positively to the news. There could be a similar impact on the value of the Rupee. Perhaps the market is now factoring in the fact that a real professional is in charge who understands the economy and that would provide the much needed impetus and direction to move forward, after a long period of uncertainty.
The PTI leadership had no replacement for Mr. Asad Umar, and an Advisory slot had to be created within the Ministry to accommodate an imported Finance Specialist. Certainly, Dr. Abdul Hafeez Sheikh is a veteran in the field of international Finance, with extensive experience of dealing with multilateral agencies and it is hoped that he will fare better and prove to be beneficial for Pakistan. The current state of the economy requires immediate remedial action, and strong collaboration with the multilateral agencies is essential to restore the standing of Pakistan within the international financial community. In addition, the reform agenda has to be meticulously followed to bring about long and lasting transformation in the system to make Pakistan viable from a revenue generation standpoint. There will be painful moments, but there is a tremendous amount of resilience and opportunity in this nation of 200 Million plus. Confidence and direction is needed to jumpstart the economy.
Apart from Dr. Sheikh, the Cabinet reshuffle is a basically a recycling of the old in the hope of achieving a better match between competence and the portfolios. Sadly, there still appear to be mismatches and Ministers assigned to portfolios that they have no knowledge of, so expecting any drastic improvement would be a gross mistake. The major hurdle is the economy and if Dr. Sheikh is able to deliver on that the other portfolios would automatically start to fall in place. There is a developing perception that the Imran Khan led government has been unable to deliver given its lack of experience and at times questions are being raised over the competence levels of certain individuals. The reconstitution of the Cabinet so early in its tenure is an admission of the failures. There is little time for experimentation but unfortunately the apparent lack of planning by the PTI has landed them in this precarious situation.
The timing of the Cabinet reshuffle is odd. Mr. Asad Umar had recently returned from the United States having had meetings with the IMF team in Washington DC. He appeared to be upbeat about the future, as was evident from his recent TV interview with Kamran Khan. Things finally appeared to be moving in the right direction after a long delay. What prompted this sudden change that led to the unceremonious exit of Mr. Asad Umar is perplexing. A die-hard PTI supporter and someone who Imran Khan spoke very highly of Mr. Asad Umar is now delegated to the back benches of the Party. The Prime Minister needs to accept the situation and take the Nation into confidence to clarify the reasons for the recent changes and to discuss the strategy going forward. This would put a lot of rumours to rest and reassure the people of Pakistan. In the end change is always good and one hopes that this time around it would benefit Pakistan.