New Delhi: Pakistan finance minister Asad Umar stepped down Thursday, jeopardising Islamabad’s negotiations with the International Monetary Fund (IMF) over a bailout package at a time when its economy is facing major turbulence.
Umar announced his decision on Twitter after he was offered the energy portfolio as part of Prime Minister Imran Khan’s cabinet reshuffle. He declined.
“As part of a cabinet reshuffle PM desired that I take the energy minister portfolio instead of finance. However, I have obtained his consent to not take any cabinet position. I strongly believe @ImranKhanPTI is the best hope for Pakistan and inshallah will make a naya Pakistan,” Umar tweeted Thursday.
As part of a cabinet reshuffle PM desired that I take the energy minister portfolio instead of finance. However, I have obtained his consent to not take any cabinet position. I strongly believe @ImranKhanPTI is the best hope for Pakistan and inshallah will make a naya pakistan
— Asad Umar (@Asad_Umar) April 18, 2019
The finance minister’s resignation comes at a time when talks for a bailout package from the IMF had reportedly reached final stages, with only technical details and other formalities remaining. A Pakistani delegation is scheduled to visit the IMF soon.
Earlier this month, Umar had visited Washington to hammer out a deal for Pakistan’s thirteenth bailout package since the 1980s.
Addressing a press conference after his resignation, Umar said “tough decisions were taken to overcome the economic crisis in the country and his replacement would be taking over a difficult job”.
A new finance minister will be chosen soon, said Pakistani diplomatic sources. Some of the names doing the rounds include Ishrat Hussain, former State Bank of Punjab governor and current advisor to Khan on institutional reforms, and economist Hafeez Pasha.
FATF list
Meanwhile, Pakistan’s final evaluation by the Financial Action Task Force (FATF) is slated to take place at the September meeting of the global anti-terror finance watchdog.
Pakistan is already on FATF’s ‘grey list’, and it has been granted time till September to adhere to the prescribed norms.
Speculation is rife that Islamabad could be placed on the terror watchdog’s ‘black list’ at the September meeting if it fails to meet all the conditions. The move could prove detrimental to the country’s cash-strapped economy.
On Monday, Asad said his team has sent a compliance report to the Paris-based organisation. A FATF team is expected to visit Pakistan for investigation.
Earlier, Umar had come under severe attack from the opposition Pakistan Peoples Party (PPP) over the direction of his economic policies. PPP chairman Bilawal Bhutto Zardari congratulated the country Thursday after Asad quit the cabinet.
‘Not going to be easy for successor’
Speaking to ThePrint, former Indian high commissioner to Pakistan Sharat Sabharwal said, “Umar was a professional and is one of the key figures in Pakistan’s business community. His resignation is definitely going to bring more troubles for Pakistan. He was negotiating the bailout package and the FATF. It is not going to be easy for his successor to achieve progress in the talks.”
Sabharwal said Umar, who was handpicked by Khan when he came to power in August 2018, had become a target for the opposition because of some tough decisions he was taking in terms of ratcheting up of the tax collection which continues to remain abysmally low in Pakistan.
The former Indian envoy also said that IMF had sought details of Chinese investments in Pakistan which the Imran Khan government isn’t keen to share.
“The ruling party is reluctant to bite the bullet and take tough decisions,” added Sabharwal.
Pakistan’s finance budget will be presented in June. It follows a July to June financial year.
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Pakistan cannot continue to be dependent on the generosity of its friends. It needs to place its economy on a path of sustained growth. With visionary leadership in both countries, both peace and regional integration are possible. It is losing a good man for a job that is second only to the PM’s. Difficult to believe the army leadership does not appreciate the gravity of the situation.