ISLAMABAD: Pakistan’s Finance Minister Asad Umar resigned from the cabinet on Thursday after Prime Minister Imran Khan tried to move him to the energy portfolio, heightening uncertainty about ongoing bailout talks with the International Monetary Fund and the government’s plan to deal with an economy in crisis.
Speculation has been rife in recent days that Umar would be replaced, mostly over delays in reaching a deal with the IMF at a time of worsening economic outlook for the South Asian nation of 208 million people.
“As part of a cabinet reshuffle PM [prime minister] desired that I take the energy minister portfolio instead of finance,” Umar said in a Twitter post. “However, I have obtained his consent to not take any cabinet position.”
At a press conference later in the day, he said Khan needed to pick a new finance minister “as soon as possible” but declined to comment on who would replace him.
Umar’s successor will have the monumental task of not just finalizing the IMF deal but also the national budget, due to be announced in May.
“We are at an advanced stage [of talks] with the IMF and this will also reflect in the upcoming budget,” Umar said. “Whoever comes in, he will have to face a thorny situation … Nobody should expect any miracle from the new finance minister.”
As part of a cabinet reshuffle, Umar said other changes in the cabinet would “be announced either tonight or tomorrow morning.”
Khurram Hussain, the business editor of Dawn newspaper, said Umar’s resignation was “ill-timed” and would add to uncertainty about the country’s economic future.
“At a time when the finance minister was engaged with the IMF and preparing the budget, his resignation is beyond comprehension,” Hussain told Arab News, adding that any new official would now have to start from scratch.
Dr. Athar Ahmed, a senior economist based in Karachi, said Umar’s resignation would shake the confidence of the IMF in Pakistan and possibly prolong the finalization of a deal.
Talks with the IMF began soon after Khan was appointed prime minister but stalled over austerity conditions imposed by the Fund, which has pressed Pakistan to improve tax revenue collection, bolster foreign currency reserves and narrow a current account deficit expected to top 5 percent of gross domestic product this year.
Pakistani officials say they agree on the need for reforms but do not want to sign up to conditions that would derail the economy, with growth set to slow this year to around 4 percent from 5.2 percent last year.
“We have finalized the IMF agreement on much better terms than before as I refused to take decisions that would have crushed the nation,” Umar said at Thursday’s press talk.
Pakistan finance minister steps down amid IMF talks, budget preparations
Pakistan finance minister steps down amid IMF talks, budget preparations
- Asad Umar says was offered energy ministry by prime minister in cabinet reshuffle but declined
- Warns no one should expect miracles from the new finance minister
Pakistan seeks operationalization of World Bank’s $20 billion framework to advance reform priorities
Pakistan seeks operationalization of World Bank’s $20 billion framework to advance reform priorities
- Pakistan’s finance chief meets World Bank Country Director Bolormaa Amgaabazar in the capital
- The Bank’s 10-year Country Partnership Agreement for Pakistan was approved in January last year
ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb on Wednesday called for the operationalization of the World Bank Country Partnership Framework (CPF) to advance the government’s key reform priorities during a meeting with the Bank’s country director, according to a statement.
The Bank’s Board of Directors approved a 10-year CPF deal with Pakistan, indicating $20 billion in financing for Pakistan under the framework. The amount will include public and private financing from the World Bank Group, with roughly half expected to come from private-sector operations led by the International Finance Corporation (IFC).
“The Finance Minister emphasized the importance of effective operationalization of the CPF, particularly in priority areas such as population management and climate change,” the finance ministry said in a statement after Aurangzeb’s meeting with the Bank’s Country Director Bolormaa Amgaabazar.
“He underscored the need for strong coordination between federal and provincial governments to ensure coherence in policy design and implementation.”
Discussions focused on population, human capital development, climate resilience, agricultural reform and energy sector sustainability, it added.
The ministry said both sides exchanged views on enhancing institutional coordination, improving transparency in project design and strengthening monitoring mechanisms to deliver intended outcomes. It highlighted that the World Bank expressed readiness to continue supporting agricultural transformation efforts in collaboration with the IFC.
“Both sides agreed to continue technical-level engagements to explore feasible solutions in line with Pakistan’s reform agenda and fiscal framework,” the finance ministry added.
Climate resilience and population control are major concerns for policymakers in Pakistan, a country whose population exceeds 241 million, making it the world’s sixth-most populous country. Limited infrastructure, health care, and educational opportunities place added strain on public services, contributing to unemployment and poverty.
The South Asian nation is also among the countries most affected by climate change. Unusually heavy monsoon rains in 2022 killed more than 1,700 people and caused over $30 billion in damages. Torrential rains and floods since late June last year have claimed more than 1,000 lives, as authorities continue surveys to assess the full extent of the destruction.
