The Dar(nomics)

Soon after Dar took the office in 2022, he declared that the country would not default and the economy would return to normalcy; the populace received his word with skepticism.

By Qamar Bashir

Federal Minister for Finance and Revenue Mr. Ishaq Dar has been known to me since I were Press Minister at the Embassy of Pakistan in France. After my assignment in September 2015, Finance Minister and his close associate Miftah Isamel as head of the Board of Investment (BOI) visited France. They met with nearly all of France’s key business, trade, and investment stakeholders from both the public and private sectors.

In addition to meeting with the French Chamber of Commerce, he also met with the French Minister of Finance. At the outset, Ishaq Dar bombarded the minister with impressive statistics, presented compelling arguments regarding Pakistan’s bright financial and economic outlook, and solicited French investment in multiple disciplines.

This was the time when I got deeper understanding of Ishaq Dar, particularly at a lunch at the Scribe hotel in Downtown Paris, which was owned by PIA but managed by a renowned French hotels chain.

Dar shared his innermost feelings with us. He told how assiduously he was devoted to rescuing Pakistan from its economic and financial difficulties. How he worked tirelessly after Pakistan’s nuclear tests in 1998 followed by economic sanctions? How he tactfully convinced the IMF for a bailout which helped the economy to stabilize?

He also shared with us his economic vision and philosophy behind a number of reforms to improve Pakistan’s economy and reduce poverty. He also recalled his role to improve relations with the US and his meetings with politicians and decision makers which helped bridge the gap between the two countries. How his efforts to engage China for various economic and infrastructure projects, including China-Pakistan Economic Corridor (CPEC) worked for Pakistan?

We also came to know his warm and passionate heart when he donated $1 million to the Earthquake Relief Fund in 2005, and $5 million to the Flood Relief Fund from his personal account 2010. In addition to managing two charitable institutions namely Hajveri Trust and Hajveri Foundation to provide shelter homes for over 100 orphans, with boarding, lodging and educational facilities.

Ishaq Dar is currently an effective member of the newly formed Special Investment Facilitation Council (SIFC) due to his valuable political, financial, constitutional, and economic insight.

His other aspects of life like arrangement of pool marriages of destitute couples, helping needy students through scholarships and financial assistance, and providing medical assistance to non-affording patients requiring dialysis and other medical treatment.

Let us fast forward to 2017 and recall Mr. Dar’s statements prior to his self-imposed exile to London where he was making an impassioned plea to the opposition and so-called pseudo financial and economic wizards to stop their criticism of Pakistan’s economic and financial policies, and to stop creating unwarranted pessimism about Pakistan that frightens investors, traders, businesspeople, regional and international investors.

They did not stop, and as a result, the economy sank immediately after the change of government in 2018 and worsened until it was on the edge of default by 2022 which was inherited by the current government. 

When the economy was in its most precarious state, with negligible foreign reserves, higher utility prices, and soaring inflation and the bearish stock exchange and when everyone was nervously awaiting the imminent default, Ishaq Dar was summoned once again in December 2022 to assume control of the Ministry of Finance.

Soon after Dar took the office, he declared that the country would not default and the economy would return to normalcy; the populace received his word with skepticism.  But he proved himself worthy of his words by effectively steering the country out of its worst-case scenario. Thanks to his demonstrated knowledge, sagacity, and deeper understanding of political-economic-financial complexities, his comprehension of compulsions, and dos and don’ts of our dilemma.

He successfully negotiated the IMF deal, securing loans and rollovers from friendly countries, discouraged imports and encouraged exports, and ultimately averting the impending default. Businesspeople, merchants, and investors are cheering and clearing their products from the ports, as the availability of dollars on the market has improved.

Since signing the agreement with the IMF, the stock market has been positive, and the rupee has begun to show signs of life. Foreign currency reserves, which were less than $5 billion at the time, are now $15 billion, or three months’ worth of imports. Ishaq Dar demonstrated his worthiness of the trust bestowed upon him time and again amid the most trying years of economic and financial difficulty.

He is a hard taskmaster and a result-oriented negotiator who has been assigned by Mr. Nawaz Sharif broke the ice on a number of occasions in the most difficult political situations and deadlocks which he accomplished with unequal expertise and sagacity.

The floating the name of Mr. Ishaq Dar as caretaker prime minister seemed to be an attempt to get the reaction of stakeholders and them address their concern.

He was the only cabinet minister in the current setup who I saw as the Press Secretary to the President meeting with the President Alvi on a number of occasions, including an important meeting prior to the appointment of the army chief, prior to the introduction of sensitive policy initiatives, seeking the president’s opinion on the legislative process and political and governance matters.

He was also a member of the ministerial delegation that met with the President to seek his intervention in advising the provinces of KP and Punjab to adopt energy conservation practices while they were governed by the PTI.

Dar served as Convener (Punjab Government’s Committee) and National Finance Commission (NFC) due to his diverse personality, skills, and abilities. Because of his expertise in constitutional matters, he was appointed to the Parliamentary Committee on Constitutional Reforms, which finalised the 18th, 19th, and 20th Constitutional Amendments.

He is currently an effective member of the newly formed Special Investment Facilitation Council (SIFC) due to his valuable political, financial, constitutional, and economic insight.

The Prime Minister chairs the SIFC, which has two movers and shakers as members. Ishaq Dar, who is providing quality financial, economic and political input, and Army Chief, who is ensuring that all projects and initiatives under SIFC are launched and completed within the given timeline and using the institute of army to do the wonder in getting things moving with electric speed, as against our civilian institutions which are neither capable, motivated, nor committed to moving high-intensity projects ahead with the required speed and intensity.

During its brief existence of more than two months, the SIFC has added record-breaking initiatives, such as the $500 million Livestock and Dairy Modernization and Improvement Support (LIMS) Programme, to increase the profitability and productivity of Pakistan’s livestock and dairy industries.

In a matter of hours, if not days, the four Karachi port terminals were sold for a total of $220 million to a Dubai-based company, which is anticipated to generate $7 million annually in revenue for Pakistan.

The next initiative of SIFC was to auction Pakistan Steel Mills, which is anticipated to generate an additional $ 1.5 billion.

It has launched the Green Pakistan initiative with an initial investment of $500 million and expects to attract between $40 billion and $50 billion in investment over the next four to five years from the Kingdom of Saudi Arabia and Gulf states.

On July 7th, SIFC launched the Land Information and Management System – Centre of Excellence (LIMS-COE), which aims to transform unproductive acreage, assure food security, increase agricultural exports, and reduce the burden on the national economy.

On 10 July, SIFC hosted a national seminar in Islamabad on food security and agriculture.  Numerous investors and specialists from the United Kingdom, Italy, Spain, China, Bahrain, Qatar, Saudi Arabia, and Turkey attended the seminar.

Unyieldingly, SIFC launched on July 25 its first corporate farm covering 2,250 acres as part of the Green Pakistan Initiative, with the intention of expanding corporate farming throughout Pakistan. 

Later, during another seminar, SIFC unveiled a further strategy for attracting investments in the field of information technology, with the goal of increasing IT exports to $20 billion over the next three years and attracting an expected $10 billion investment to revolutionize the IT industry.

The establishment may be right in its thinking to appoint a caretaker Prime Minister who has firsthand knowledge of the complexities of all ongoing SIFC projects.

The floating the name of Mr. Ishaq Dar as caretaker prime minister seemed to be an attempt to get the reaction of stakeholders and them address their concern to ensure the continuity of SIFC its intensity and smooth operations without snags or bumps and without being stalled until caretaker government is installed, the SIFC is reconstituted, started working and gathering speed which can take a lot of time which is perhaps is not acceptable to the establishment.

The establishment may be right in its thinking to appoint a caretaker Prime Minister who has firsthand knowledge of the complexities of all ongoing SIFC projects, has proven negotiation skills and experience of engaging foreign investors and international donors, and has a deeper understanding of the overlapping of civilian and military bureaucracy and leadership.

With the Army Chief as a symbol of continuity, it may have been thought more prudent to nominate a senior member of SIFC as caretaker prime minister who is acceptable to the military leadership including Ishaq Dar who may be acceptable to the army leadership and may have Mr. Nawaz Sharif’s blessing. And if this is the case, then he would be. — The writer is the former Press Secretary to the President of Pakistan, former Press Minister to the Embassy of Pakistan to France and former MD, SRBC.