Night of the long knives
Imran Khan’s disgraced former economic chief Asad Umar has been the main victim of a major cabinet reshuffle being described in some circles as “night of the long knives,” a reference to the summer-time political executions Hitler carried out against many members of his own party. The cabinet shakeup has come in the middle of growing criticism of the government’s economic policies and repeated failures of governance.
Khan’s eight months in government have been marked by chaos and governance paralysis, where even the regular functions of the administration have stalled. To many, the restructuring of the cabinet is only a desperate move to stem the rot but the timing, just weeks before the presentation of the annual national budget, has come as a shock.
Just a day before he was sacked, Umar had returned from Washington after concluding negotiations with the IMF on Pakistan’s 13th bailout package. And only a week ago he had claimed that Pakistan’s economy was “on the path to recovery.”
“The crisis is over,” he had declared with a confidence that was hard to buy, surrounded by ground economic realities.
Umar’s wildly optimistic declaration came as inflation approached double digits, as the rupee plunged to a record low against the dollar and the stock market appeared to enter a state of free fall. In the last nine months, revenue collection showed a record shortfall of more than Rs. 300 billion and the economic growth rate is likely to decelerate to 3.4 per cent this financial year, going down further to 2.7 pc next year, according to a World Bank report.
Umar’s de facto replacement is Abdul Hafeez Sheikh, a former World Bank official who was the country’s finance minister under the Pakistan People’s Party government (2010-2013), and has taken charge as advisor to the Prime Minister on finance. The official take on Sheikh’s appointment as finance advisor is the wider push to induct technocrats into the government and inject more professionalism into state departments, but he is widely seen as a military nominee amid rumours that the cabinet reshuffle was provoked by the defence leadership. He has been a surprise choice for the post because he has never been associated with Imran Khan or his party, but served as a member of General Musharraf’s military government that ruled the country from 1999 to 2007.
The official take on Sheikh’s appointment as finance advisor is the wider push to induct technocrats into the government and inject more professionalism into state departments, but he is widely seen as a military nominee amid rumours that the cabinet reshuffle was provoked by the defence leadership.
The challenges for Sheikh will be enormous, notwithstanding his experience. A major problem will be the state of uncertainty fuelled by the government’s failure to formulate a long term strategy. There are few if any signs of reforms or incentives provided by the government to spur investment.
Borrowing billions from friendly countries has helped Pakistan avoid defaulting on the repayment of foreign loans, but this brings only short-term relief as new debts continue to accumulate. The current account deficit will remain a major problem, despite the government’s claims of plugging the gap. Pakistan’s external debt has crossed $100 billion and is predicted to grow further. Whether Sheikh is up to the colossal task ahead of him remains to be seen.
Though Sheikh’s appointment was a surprise, perhaps Khan’s most controversial move is the appointment of ex-Intelligence Bureau chief Brig. (r) Ijaz Shah as the new interior minister, a portfolio that was earlier held by the prime minister himself. A military man and former intelligence head now holds one of the most powerful positions in the federal cabinet, and the optics are doing Khan no favours. The move has reinforced the perception that Khan’s government is representative of General Musharraf’s legacy in power- an administration that is in effect being dictated by Pakistan’s powerful military.
The overwhelming presence of old faces, relics of the past, in the federal cabinet prompts an important question, and one that challenges the very ethos of the Pakistan Tehreek-e-Insaaf. What about Khan’s age-old promises to break with the status quo and introduce a new generation of leaders? What about the oft-talked about new, young faces in government? At this point, the PTI looks no different from any party in the past, albeit still less tainted than the rest. Granted, some technocrats have been brought in, but in the bigger picture, there’s still more of the old than the new and the party image has been badly damaged.
In the end, it is not just incompetence and inexperience that have paralysed Khan’s government but also its political self-righteousness which is beginning to sound like populism without performance, and which no amount of cabinet reshuffling is going to fix.