Islamabad, Pakistan – When Pakistan's new 19-member cupboard was sworn in on March 11, one man stood out on the record: Muhammad Aurangzeb, a political outsider charged with the problem of main the nation out of its financial woes.

Aurangzeb, a veteran banker who beforehand headed certainly one of Pakistan's largest industrial banks, Habib Financial institution Restricted (HBL), was given the reins of a $350 billion economic system over a number of different contenders, together with four-time finance minister Ishaq Dar.

A graduate of the Wharton Faculty of Enterprise on the College of Pennsylvania, Aurangzeb additionally labored at main worldwide banks, similar to Citibank and JP Morgan, earlier than his six-year stint at HBL.

A twin nationwide, Aurangzeb had to surrender his Dutch nationality to carry public workplace in Pakistan. Though he isn’t a member of parliament, in accordance with the nation's guidelines, he has six months to turn into a member of parliament to proceed as a federal minister.

Aurangzeb will not be the primary banker to turn into Pakistan's finance minister. Earlier than him, Shaukat Aziz held the submit for eight years (1999-2007) underneath the tenure of Normal Pervez Musharraf, earlier than changing into prime minister.

Later, underneath the federal government of former Prime Minister Imran Khan and his Pakistan Tehreek-e-Insaf (PTI), banker Shaukat Tarin was given the portfolio which he held for one 12 months (2021-2022) earlier than that the PTI authorities was ousted by a parliamentarian. vote of no confidence in April 2022.

Aurangzeb's appointment comes at a essential time when the nation is going through extreme financial challenges as he works with Prime Minister Shehbaz Sharif and the Pakistan Muslim League-Nawaz (PMLN) authorities. Sharif and his PMLN got here to energy after forming a coalition authorities following the latest February 8 elections, which have been marred by allegations of widespread rigging.

Certainly one of Aurangzeb's first duties, analysts say, shall be to urgently negotiate a brand new Worldwide Financial Fund (IMF) mortgage program after the present $3 billion, nine-month deal expires in April.

A brand new mortgage program with the worldwide lender is important for the nation that’s presently burdened by greater than $130 billion – at the least a 3rd of its gross home product – in exterior money owed. Pakistan was anticipated to repay $24 billion by June this 12 months, however managed to safe some reduction from bilateral collectors by means of rollovers. The nation now has to pay virtually $5 billion earlier than the top of the fiscal 12 months in June.

In the meantime, Pakistan's present overseas change reserves stand at $7.8 billion, sufficient to cowl simply eight weeks of imports.

Its forex has devalued by greater than 50 p.c previously two years, whereas inflation, presently greater than 23 p.c, has risen to just about 40 p.c in 2023, with a speedy enhance in tariffs power and the value of primary meals merchandise. .

Inflation in Pakistan hit a record high of nearly 40 percent last year. [Shahzaib Akber/EPA]
Inflation in Pakistan hit a report excessive of almost 40 p.c final 12 months. [Shahzaib Akber/EPA]

Many observers imagine that Aurangzeb's expertise with world banks and publicity to worldwide monetary markets is essential, contemplating Pakistan's debt challenges.

Sajid Amin Javed, a senior economist related to the Sustainable Growth Coverage Institute in Islamabad (SDPI) stated that Aurangzeb's appointment is a sign from the federal government that it’s dedicated to introducing financial reforms – even when they may being politically unpopular.

“Partially, this may occasionally even be a step to dilute the notion that the PDM authorities couldn’t do previously,” he informed Al Jazeera, referring to a coalition that Sharif briefly led after the elimination of Imran Khan's authorities. , and that his brief mandate. it coincided with hovering inflation and rising financial struggles for Pakistanis.

However Aurangzeb will want greater than his background to reach his job, advised Karachi-based economist Khurram Schehzad.

“The important thing level will not be essentially who the finance minister is, however slightly, what the particular person would do, what their imaginative and prescient is, and what long-term pondering they bring about to the desk,” Schehzad informed Al Jazeera .

Islamabad-based SDPI's Javed says these are powerful instances for any finance minister, however Aurangzeb's lack of political baggage may work in his favour.

“We are able to see a extra targeted dedication to reforms [the] IMF as a substitute of political stability,” stated Javed, referring to the pressures from voter lobbies in opposition to reforms that conventional politicians usually face. Most significantly, it brings a brand new mind-set in regards to the conduct of politics financial. Given his world expertise, he’ll have the ability to deepen somewhat extra within the evaluate of financial coverage and the nation can see a renewed concentrate on financial progress.”

Karachi economist Ammar Habib Khan, whereas acknowledging Aurangzeb's expertise in finance, informed Al Jazeera {that a} macroeconomist could be higher suited to the job than a banker.

“Often, those that are on the helm [of the government] they aren’t capable of perceive the lengthy process time related to the reforms, and the macroeconomic stability that should be achieved,” he stated. lengthy tail reforms”.

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