We would request that everyone take a moment to send their thoughts and prayers towards Finance Minister Miftah Ismail. And no, he does not just need our prayers right now because he is on the precipice of cutting the biggest deal of his professional life with the IMF, but because of the shadow he continues to live under.
It is always a tough gig to follow into office a great man. In his two stints as finance minister, particularly in the current one, Miftah has proven to be a sensible actor that manages to strike a balance between honest-policy making and loyalty to his party cadre. He seems to possess the trust of the prime minister and has moved him on important issues like petrol prices.
Despite this, the embattled finance minister is fighting off more than a recession. He is also constantly reminded of the man he may never live up to – the PML-N’s iconic former finance minister and perpetual samdhi Ishaq Dar.
Living up to Dar was always going to be a challenge. It is testament to his towering intellect and economic prowess that an entire school of economics popularly known as ‘Darnomics’ has popped up and become a household name in Pakistan. Dar, to his credit, is not one for false modesty and has been seen publicly accepting and acknowledging the services of Darnomics to the country. A recent heartwarming exchange shows how the sentiments of the nation, despite the best efforts of Miftah Ismail, continue to be with the finance minister of hearts Ishaq Dar.
https://twitter.com/MIshaqDar50/status/1539355182886273024
It makes sense in many ways that the nation is clamouring for Ishaq Dar to return. After all, on the one hand you have Miftah Ismail, who has raised petrol prices, has returned to the IMF, and is continuing to steady a ship that is going through some seriously choppy waters. On the other hand is Ishaq Dar, who has a proven track record of maintaining a ‘strong’ currency at all costs.
What is a little strange perhaps, and we must stress that it is only a little strange and not a lot considering the stature of Ishaq Dar, is that even the PML-N seems to be clamouring for Mr Dar to return and replace Ishaq Dar.
In a recent tweet, the official account of the PML-N tweeted a picture of Miftah Ismail but in the caption wrote “finance minister Ishaq Dar.” At first, it seemed that perhaps it was a Freudian slip – the PML-N social media handle remembering fondly a time of great prosperity when Pakistan’s economy was in the fiscal wild west.
But then it began becoming clear that PML-N associated accounts were tweeting quite strongly for the former finance minister to make a comeback. A recent statement by interior minister Rana Sanaullah had him openly admitting that Dar was “guiding” the government’s economic policies.
https://twitter.com/UzairYounus/status/1539198080851095554
Naturally there have been detractors to this. All visionaries are told at some point that they are mad. People have said that despite Ishaq Dar’s towering persona, his 32-Watt smile, and the calm his presence instils in the nation, perhaps he is not strictly speaking an economist and hence not the best person to lead the economic agenda right now.
https://twitter.com/arhuml92/status/1539625912873918464
One feels for Miftah Ismail here of course. Much like any person, he has made mistakes. The response to the petrol subsidy, for example, was not quick enough. But at the same time he has done a decent job at implementing the necessary, despite the difficulty of the decisions. Perhaps that is why his situation has been seen sympathetically in some quarters.
https://twitter.com/mosharrafzaidi/status/1539586736837337089
And there is of course the little detail that all of this noise might have been kicked up by Ishaq Dar himself. He has not been shy in making mind (and rule) bending graphs and posting statistics on his twitter handle. He has also been sharing on private channels youtube analysts claiming a big ‘change’ is coming on the 15th of July. In addition to this, the PML-N, despite the social media slip-ups, is denying the rumours. Former Sindh Governor Muhammad Zubair very recently said in a talk show that he had not heard any mention or whisper of Miftah Ismail being replaced by Ishaq Dar in any senior circles of the PML-N.
That does not, however, change the fact that the shadow of Dar will always hang over Miftah Ismail. Why would it not? The shadow of Dar and his Darnomics hangs over all of us today as well. The obsession with a strong rupee, the failure to regularise the taxation system, and unsustainable and inequitable growth are all legacies of Ishaq Dar’s time. It is a shadow that must haunt Miftah Ismail on a personal level.
As a businessman in charge of Ismail Industries, he must have struck a lot of deals in his life. But he is currently in the middle of striking the biggest and most important deal of his entire career. At such a time, to be undercut by whisperings and musings of a former finance minister must be disheartening. And Miftah is not alone. All of us are under the shadow of Ishaq Dar, and no one is likely to forget the impact he has had for a very long time.
Dar is a very effective monetarist but now is not the time for him. PMLN is Pakistan’s largest conservative party and has this depth that it has both a monetarist Dar and Keynesian Miftah in its team apart from many others among its senators, MNAs and MPAs. It also trains newcomers in these roles as IMF team shows.
Monetarism is a widely known theory that rejects Keynesian economics and criticise Keynes’s theory of fighting economic downturns using fiscal policy (government spending). It argues that inflation is always and everywhere a monetary phenomenon. Dar was very successful in keeping inflation down during his tenure by controlling money. But such approach only works for a given period and eventually a Keynesian approach has to follow and is the need of the hour.
Monetarist policy on economy to follow. Money market’s reaction says it all.