Asad Umar was presented by the PTI as financial wizard who will fix every problem in the economy as finance minister, despite his questionable performance at Engro. The impression was created by Imran Khan and other PTI leaders that Asad Umar is fully capable of dealing with challenges faced by the Pakistani economy. He was the only leader of PTI who was named finance minister long before the 2018 general elections. There was lot of expectations from him in the ranks of PTI. Even though, the rumors of his removal from the finance ministry were circling around from last two weeks but of PTI government continue to deny such reports. His sudden departure has raised many questions.
The situation has left many in the PTI’s ranks with a feeling of dismay, while others see chaos at the helm of affairs. There is no more important portfolio than finance under these current times, especially since immediately after taking over power; the PTI had pressed the panic button on the economy. He failed to deliver the big promises made by the PTI leaders sitting in the opposition.
The logic of allowing a change in finance minister on the cusp of a deal with the IMF and the announcement of the next budget seems to be rather odd – and ill-thought-out. And the fact that there seemed intense confusion and speculation, without any word from the government after Asad Umar’s resignation. It is clear that if Umar was thinking of quitting or under pressure to do so. He should not have gone or been sent to Washington. It is also becoming clear that the more the PTI says it had a plan for the economy, the more it appears there was no plan. The situation would be comical if not for the seriousness of what awaits us economically in the next few months. The next finance minister faces troubled waters ahead.
There are certain reasons that led to his resignation. The top most seems to be economic performance. Despite his claims that economy has started to improve but economic indicators continue to deteriorate. He failed to stop the fall of economy. Asad Umar leaves a tarnished legacy as finance minister.
Under his tenure, the growth rate has fallen by two percent in nine months, inflation has hit almost ten percent, gas prices have jumped up by over 40 percent and the Pakistani currency has depreciated. Having promised pain for the Pakistani public before light and roses at the end of the tunnel, Umar has left his post before any signs of improvement. While he says he still has faith in Prime Minister Imran Khan, his refusal to take the energy portfolio tells a different story. In his press conference after stepping down, Umar maintained that his assessment of the economy was sound and so were the actions he took, but himself admitted that any change should have happened earlier.
The other reason seems that one group led by Jahangir Tareen was not happy with his economic policies. Tareen represent the most powerful business interests in the PTI. Asad Umar wants to end the subsidies given to certain industries including the powerful sugar industry. The intra party rift also played its part in the demise of Asad Umar.
Another reason is that the powers that be are not happy with Asad Umar. He thought that to kept Imran Khan happy and satisfied is enough to survive in this important portfolio. But he forgets that there are other powers that also need to keep happy and satisfied. He was not keen to listen to the different quarters that matters in this country. He was stubborn and inflexible on some economic issues. This becomes most important factor in his removal.
The delay in getting IMF bailout seems another reason that put him in awkward position. He was not keen to get IMF package. He knew that IMF program will reduce the room for maneuver. It tightens the space to think unconventionally. He tried to resist the IMF bailout but the delay in key economic reforms and slowdown in the economy forced him to sit with IMF to get the bailout.
Whatever might be the reason of Asad Umar’s departure? But it is a big blow for PTI government. It will have an impact on the reputation and capacity of the PTI government. It will be seen as a failure of this government.
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27 September, 2019