Race for new finance minister heats up ahead of IMF talks

ISLAMABAD: Newly-formed ruling alliance is yet to finalise its finance minister, the person who has to lead an immediate effort to negotiate a new International Monetary Fund (IMF) bailout, sources familiar with the discussions said.

The struggling $350 billion economy has a narrow path to recovery and the current IMF agreement expires on April 11, with critical external financing avenues linked to securing another extended programme.

Former four-time finance minister Ishaq Dar remains the top contender, according to two sources in his Pakistan Muslim League-nawaz (PML-N) party, which is leading the coalition.

PML-N’S Shahbaz Sharif has been nominated by the alliance to be prime minister in an election scheduled for March 3. He will announce his cabinet, including the finance minister, shortly ater being elected.

But Dar is not the only candidate being considered, the sources said. Despite being a relative of, and close aide to, PML-N chief Nawaz Sharif, many political allies have criticised Dar’s handling of the economy in the last coalition set up.

He, however, has defended his actions, saying he had to take tough measures to avert a sovereign default by securing the IMF programme, which former prime minister Imran Khan had scutled days before leaving his office, a charge Imran denies.

Pakistan struggled for over four months to lock in the stand-by arrangement last summer when Dar was finance minister, and it took the intervention of his prime minister, Shahbaz Sharif, to secure a last-ditch deal.

Dar also regularly criticised the IMF on public plaforms in the middle of negotiations, and has long favoured market interventions to prop up the Pakistani rupee — something the IMF has warned against.

If Dar doesn’t get the porfolio, his party might consider creating a position of deputy prime minister for him, one of the sources in the PML-N said.

Also being considered are caretaker Finance Minister Shamshad Akhtar, a former central bank governor, who is overseeing key policy measures under the current IMF programme, both sources said.

Akhtar has been a key part of the caretaker set up that has been praised by the IMF for “decisive policy efforts” to maintain stability.

Another name being considered is Muhammad Aurangzeb, president and chief executive officer of the country’s largest bank, Habib Bank Limited, the sources said.

Aurangzeb had also served as the CEO of JP Morgan’s Global Corporate Bank based in Asia.