Deadlier Than Ever: Return of The Dollar Killer, Bad News For Aurangzeb?

Foreign Minister Ishaq Dar is now Finance Minister Muhammad Aurangzeb’s boss. The ex-banker is out of options, but does it really matter?

After intense negotiations among members of the ruling coalition government, the country now has another deputy prime minister after 12 years. With crucial meetings with the International Monetary Fund (IMF) for a new and bigger bailout fast approaching, it seems our foreign minister wants in on the action.

Perhaps a return to the budget podium is more likely? Our imagination can only take us so far.

In March 2024, winners of this year’s General Elections hinted at giving the position of Deputy Prime Minister (a job nearly as useless but not quite so useless as President) to the good senator. It’s the least they could come up with to give him the opportunity to perform some of the miracles he is best known for.

A notification was issued last week declaring that Dar, who now holds the portfolios of Privatization and Foreign Affairs, as a deputy prime minister, second in command to PM Shehbaz Sharif. However, the ambit of the post remains undefined, akin to giving a title without a job description.

The post, for which there is no constitutional provision, had been a longstanding demand of a few politicians, insiders told ProPakistani. They said Dar had joined Shehbaz’s cabinet as foreign minister based on this promise.

No court has so far resisted the move on any grounds. It is expected that the former finance minister will put forward a request for the creation of the deputy prime minister’s office as a pre-condition for further support as PM Shehbaz’s No. 2.

The language of the notification indicates that, so far, the role of the deputy premier has not been defined and would be a cosmetic post. There has been a legal debate on the powers of such an office – however, legal experts are of the view that there are precedents in other countries and the holder acts as prime minister in the premier’s absence.

As Finance Minister in 2022, Ishaq Dar reacted strongly to a comparison made by economist Atif Mian, who had likened Pakistan’s economic situation at the time to countries like Sri Lanka and Ghana which had defaulted on their debts. While Pakistan hadn’t defaulted then, Dar’s tenure was still marked by disastrous economic policies and raised questions about the country’s future. The key issue is whether Pakistan is ready to face such challenges once more, with Dar potentially getting more authority over matters of the Finance Division.

Many countries have overcome similar financial crises by first acknowledging the reality of their situation and then implementing tough reforms. India, for example, faced a severe crisis in the 1990s when it was on the brink of defaulting on its external commitments, with foreign exchange reserves dropping near $1 billion.

But our situation is different. The default gossip is dead and some of our economic numbers are getting better.

Recent indicators suggest a glimmer of hope. The IMF recently approved the release of $1.1 billion to Pakistan, so reserves will hit $9 billion this week (to be reflected in the upcoming SBP schedule). This, coupled with improving metrics such as a growing current account surplus and lowest weekly inflation in 7 months, paints a cautiously optimistic picture.

However, challenges loom on the horizon, from global oil price swings to the thorny issue of extortionate electricity/fuel prices. In this uncertain landscape, can we trust Deputy Prime Minister Ishaq Dar to navigate the ship of state towards smoother waters? Maybe he’s just another character in today’s complex political saga.

One thing’s for sure: with Dar at No.2 expect the unexpected.