The Pulse

Early Warning? The Resignation of Pakistan’s Finance Minister Raises Unpleasant Questions

A longtime member of Imran Khan’s inner circle steps down. What does it mean?

Early Warning? The Resignation of Pakistan’s Finance Minister Raises Unpleasant Questions
Credit: CC0 Image via MaxPixel

Pakistani Prime Minister Imran Khan’s confidant and a longtime member of the ruling Pakistan Tehreek-e-Insaaf (PTI) party, Asad Umar, resigned as finance minister last week. The development comes at a time when Pakistan is facing a serious economic crisis. Umar’s resignation raises fresh questions regarding Pakistan’s plans for averting an economic crisis amid bailout talks with the International Monetary Fund (IMF).

The nature of Umar’s resignation shows that all is not well within the PTI’s government. The ongoing speculation about flaring divisions in the party’s ranks is one explanation for Umar’s hasty departure. For months, a group of supporters of the PTI have argued that Umar should have gone to the IMF right after the party came to power. Umar has not only criticized the group for interfering in his ministry but has also accused such people of undermining Khan’s mission of taking Pakistan away from international loan dependency. While the politics within the party’s ranks may have created pressure, the deteriorating economic situation of Pakistan’s foreign exchange reserves attracted a host of external pressures that ultimately forced Khan into sacking Umar within hours’ notice.

This situation has created another scenario that doesn’t look good for the PTI when it comes to the party’s ability to govern effectively without any credible opposition in the country. Opposition parties are claiming Umar’s resignation is the manifestation of Khan’s failed economic policy. This position may not be devoid of truth: after eight months of claims that PTI was not planning to go to the IMF for a bailout, the party has chosen the same route. This shows two things. First, the fact that former finance minister had to approach the IMF even after some friendly states financial assistance shows the enormity of the economic crisis which exists in Pakistan. Second, expectations of generating funds from sources other than the IMF to a level where the ruling party wouldn’t need an IMF’s bailout package was an example of poor policy planning. In this context, a decisive, prompt, and workable solution was needed, which the former finance minister failed to provide.

The PTI’s policy of wait-and-watch  has not yielded good results. It shows ineffective planning and the poor anticipation of a crisis that has not only taken the government back to the IMF, but has also accelerated debates related to divisions within the party. However, what’s more important is that Khan’s party may have annoyed various state institutions in the process that expected good governance from the party. It wouldn’t be imprudent then to argue that from here onward, Khan’s governance challenge is likely to become tougher. If Khan fails to deliver on the question of good governance, anything is possible.

Pakistan’s massive security structure is directly linked to the performance of the country’s economy. The existing confusion and untimely decision-making on the part of the government need to stop if the party is to sustain the support of the various state institutions whose interests rest with Pakistan’s economy doing well rather than in a collapse within a ruling party’s ranks.

The change at the finance ministry, and the ongoing reshuffling in a number of other major portfolios, show that PTI is under a lot of pressure due its inability to deliver effectively. These changes are also likely to happen at the provincial level, particularly in Punjab. On the other hand, however, these ongoing changes including the finance ministry are likely to bring in people that can perform better than the previous team. It’s important that PTI delivers on its promises of reviving Pakistan’s economy, because that has been one of the party’s key electoral agendas. Khan needs to make sure that his party is completely focused on the issue of governance as any form of politicking for personal and regional gains will not work out for the country. However, if the existing nature of governance, chaos, and mismanagement continues, it’s unlikely that the party will complete its legal tenure in office.