Pakistan appoints economist to head finance ministry in run-up to election

Monday, 1 January 2018 00:00 - - {{hitsCtrl.values.hits}}

Karachi, Pakistan (Reuters): Pakistan has appointed an economist, who was recently chairman of the board of investment, to take charge of the finance ministry after the former minister was relieved of his duties amid accusations of corruption.

Miftah Ismail has been made an adviser to the prime minister for finance, with the status of a federal minister, the government said in a notification.

”Although I will have stewardship of the Ministry of Finance for only 5 months, the prime minister has tasked me to help him implement a very ambitious agenda,” Ismail said in a post on Twitter.

He was referring to general election due next year and widely expected in May, though no date has been fixed.

The former fiance minister, Ishaq Dar, was relieved of his portfolio on 22 November amid mounting headwinds for the $ 300 billion economy battling to stave off balance of payments pressures due to dwindling foreign currency reserves and a widening current account deficit.

Dar, who was widely credited with navigating Pakistan out of a 2013 balance of payments crisis, is facing corruption charges in connection with accusations he amassed wealth beyond his known sources of income.

Dar has denied all charges. He is receiving treatment in London for a heart condition.

Ismail is a member of former prime minister Nawaz Sharif’s political party, which is still the ruling party even though Sharif was ousted amid corruption allegations in July.

Sharif has also denied any wrongdoing.

The party has been reluctant to allow the rupee to weaken ahead of elections as it may stoke inflation, though many investors and economists say a weaker rupee is needed to shore up lagging exports.

Samiullah Tariq, director of research at Arif Habib Limited, said he expected Ismail would let the rupee soften if he though it necessary.

“Basically, he’s pro-business, if he feels that a stronger rupee is hindering exports, he will let it weaken,” Tariq told Reuters.

”He has plans to introduce tax reforms, rationalize tax rates, create a scheme to release refunds and initiate a scheme to bring back and declare foreign assets owned by Pakistanis,” Tariq added.