The Senate defeat of incumbent Finance Minister Dr Abdul Hafeez Shaikh came as a severe blow for the Pakistan Tehreek-e-Insaaf (PTI) government. Despite this public setback, and growing calls from the opposition alliance demanding his removal, the PTI cannot afford to lose him; he remains the right man to successfully complete the Extended Fund Facility (EFF) Program of the International Monetary Fund (IMF). As such, official sources maintain the government is considering electing him as a Senator again.
Dr Hafeez Shaikh joined the government as Advisor to the Prime Minister on Finance and Revenue in April of 2019 when Pakistan’s negotiations with the IMF were headed nowhere. The current account deficit stood at $13 billion; which was unbearable for Pakistan’s fragile economy and the relatively inexperienced PTI government at the helm didn’t help matters. The foreign exchange reserves were depleting at a rapid pace and the country was on the verge of default.
However, in the short span of two years, Hafeez Shaikh stabilised the economy by bringing fiscal discipline to government expenditure. The current account is now in surplus, after hitting an all-time low of 167 against the US dollar, the rupee has now regained much of its lost ground by appreciating significantly to reach 157 in the interbank market. Along with this, exports are showing signs of growth after a long time, despite a hike in electricity and gas tariffs.
As the adviser on finance, Hafeez Shaikh not only successfully reached the EFF agreement with IMF (of $6 billion in loans) but later successfully renegotiated the terms and conditions of the loans with IMF and other donor agencies such as World Bank (WB) and the Asian Development Bank (ADB) during the economic crisis caused by the COVID-19 pandemic.
Currently, the IMF’s stalled programme of $6 billion under EFF is at an advanced stage of revival; the Fund’s Executive Board is set to consider Pakistan’s request for approval of combined second to fifth reviews and release $500 million by end of the on-going month. As such, Dr Shaikh’s continuation would give the right kind of signals to international financial institutions, prompting them to provide uninterrupted support to Pakistan
Keeping in mind Dr Hafiz Sheikh’s contribution in stabilising the economy, Prime Minister Imran Khan held a meeting with him at the Parliament House following the Senate polls and asked him to continue performing duties as the Adviser to Prime Minister on Finance and Revenue.
The premier had appointed Dr Shaikh as Minister of Finance on Dec 10, 2020, so he would be required to become a member of the parliament within six months under the constitutional requirement. As the Islamabad High Court (IHC) had barred advisers from chairing cabinet committees, the government was forced to appoint him as Minister for Finance. However, the six-month constitutional requirement is still active till June 10, 2021, and therefore Dr Shaikh has been asked to continue working till the expiry of that timeframe. After that, he would be appointed as the Adviser to the Prime Minister on Finance and Revenue once more.
However, sources said that the government is weighing the option of getting Hafeez Shaikh elected as a Senator again. Interior Minister Shaikh Rashid also confirmed that Hafeez Shaikh might become a Senator soon while talking to a private TV channel following the polls. He revealed that PTI and its allied parties were confident that Hafeez Shaikh will be elected easily. However, his claim comes at the heel of 17 members of the government voting away from party lines, and must be taken with a pinch of salt.
A senior PTI leader told The Correspondent that their party needs qualified and experienced people like Hafeez Shaikh to run the financial affairs of the country. Commenting on Dr Shaikh’s defeat in the Senate, he said politics had never been forte of Hafeez Shaikh whereas his competitor, the former Prime Minister Yousuf Raza Gilani is a seasoned politician who knows all the tricks of the trade.
Government sources continue to maintain that there would be serious challenges for the government if Dr Hafeez Sheikh does not return to the cabinet. Dr Hafeez Shaikh will not be able to chair crucial meetings of ECC, NFC, ECNEC, Cabinet Committee on Privatisation, and others.
It is yet to be seen whether the premier will hold the portfolio of the Finance Ministry with himself or would he appoint someone else as the Finance Minister for delivering a budget speech, chairing different cabinet committees, and appearing before the parliament for replying to different questions and relevant issues.