The return of Pakistan Muslim League-Nawaz (PML-N) leader Ishaq Dar as the country’s new finance minister is an attempt to strengthen former prime minister Nawaz Sharif’s faction in the ruling Pakistan Democratic Movement (PDM) government. The developments suggest that Pakistan’s military establishment may have improved relations with the Sharif brothers and may be allowed to complete the remaining term of the coalition government by July next year.
With Dar’s return to the country, it is widely speculated that Nawaz Sharif will soon return to Pakistan. For the Imran Khan-led opposition, Dar’s appointment as the new finance minister and reports of Nawaz’s return will further increase their agitation against the elected PDM coalition. This will further increase political instability in Pakistan.
Dari’s appointment comes after months of economic uncertainty in Pakistan due to the devaluation of the rupee and crippling inflation. The military establishment is concerned about the country’s worsening economic situation amid growing political instability as former prime minister Imran Khan remains Pakistan’s most popular leader and calls for early general elections.
In addition, the recent floods in many parts of Pakistan will cause the government to face further economic crisis amid food shortages and a higher likelihood of fuel price hikes. Pakistan’s government estimates the economic damage and reconstruction costs at at least US$30 billion, or about 10 percent of the country’s GDP. Based on these developments, Rawalpindi believes that the Sharif brothers, their allies and longtime stalwarts of Pakistan’s politics, such as Bhutto-Zardari’s Pakistan People’s Party (PPP), can bring short-term stability to the country’s shaky economy.
However, Imran Khan’s agitation against the elected government and the deteriorating security situation in Pakistan could pose major challenges to the ruling PDM coalition and the security establishment in the coming months.
Besides, General Qamar Javed Bajwa will retire in November this year. It will take some time for the new boss to understand everything and he can formulate a different policy to handle the issues. However, there is speculation that General Bajwa is seeking outside support to extend his tenure on the pretext of ensuring political stability and security in the country, which has been plagued with numerous allegations and failures.
However, Dar’s return to Pakistan shows that the military establishment is still dependent on established political actors after a failed hybrid regime experiment. Ishaq Dar has been appointed Pakistan’s finance minister six months after Miftah Ismail handled economic affairs under the PDM government. Ismail managed to secure a $1.17 billion bailout from the International Monetary Fund (IMF) to prevent short-term defaults.
This is the fourth time that Dar has been appointed as the finance minister of Pakistan. He belongs to Nawaz Sharif faction of PML-N and belongs to Sharif family. Dar is the sixth finance minister of Pakistan in the last four years. He returned after five years of self-imposed exile in London following allegations of corruption. In 2017, Pakistan’s National Accountability Bureau (NAB) filed a case against Dar for possessing assets disproportionate to his known sources of income.
In a public meeting last week, Imran Khan called Dar Pakistan’s biggest thug and claimed he was returned under the National Reconciliation Ordinance (NRO) deal, an anti-corruption amnesty. Meanwhile, Pakistan Tehreek-e-Insaf (PTI) senators called Dar a fugitive (absconder) and displayed placards in Parliament on September 27 to protest his appointment.
In 2014, Dar had said that Pakistan would become the 18th strongest economy in the world by 2050, but the country is now staring at a possible bankruptcy crisis and a complete failure of the economy, aggravated by floods. The PDM government has predicted that the recent floods could reduce the country’s economic growth rate to less than 3 percent, from the projected 5 percent for FY 2022-23.
Dar has favored a strong stance in his previous terms as finance minister in 1998-99, 2008 and 2013-17. Dar has already made his intentions clear that he will work to curb inflation by cutting interest rates, saying the rupee was undervalued and undervalued due to the country’s worst economic crisis. promised a strong response. On October 4, Dar criticized former finance minister Miftah Ismail and said he had been influenced by his policies.
The two main members of the PDM alliance, the PML-N and the PPP, are trying to formulate people-centric policies ahead of the upcoming general elections. But for Dari and other PDM leaders, stabilizing Pakistan’s faltering economy will be a tall order, especially after the recent floods.
Moreover, Imran Khan is trying to take advantage of the PDM government’s internal differences and the growing impatience among the population over price hikes and record inflation. The only saving grace for the PDM alliance is the apparent support from the military establishment. However, it is not clear how long this support may last, given that the new army chief is likely to take office in November.