Pakistani cabinet resigns as part of revamp plan

Thursday, 10 February 2011 01:31 - - {{hitsCtrl.values.hits}}

ISLAMABAD: Pakistan’s federal cabinet resigned on Wednesday to allow Prime Minister Yusuf Raza Gilani to set up a new, smaller cabinet and reduce government expenditure, officials said.

The country’s opposition parties have long demanded that Gilani trim the size of his cabinet, one of the largest in the world, at a time when Pakistan is struggling to pay down its bills and is dependent on an IMF loan programme.

Farahnaz Isphahani, a spokeswoman for the ruling party, said the dissolution of cabinet was made “to deal with the economic reality of Pakistan”. “It’s necessary to have a smaller cabinet at this time,” she added.

Pakistan’s already feeble economy was battered by floods last year that inflicted $10 billion in damage. Foreign aid has been slow in coming, in part because of concern about the government’s ability and willingness to implement financial reform.

Political stability in Pakistan, a vital U.S. ally, is crucial to the war effort in neighbouring Afghanistan and to combating militancy in Pakistan’s northwestern ethnic Pashtun lands along the Afghan border.

Analysts, however, said the cabinet revamp would do little to address the structural problems that the economy faced.

“This move may be be good for politics or to make headlines but not really for the economy as the government has to make a more concerted effort in order to build up its credibility,” said Asif Qureshi , director at Invisor Securities Ltd.

“It’s an eye wash. We actually need to see something, as in what and who is being inducted.”