Return of the Prodigal Protégé

Hitherto man on the run, Ishaq Dar returns to Pakistan and takes oath as federal finance minister

As expected Ishaq Dar, a close aide and confidante of former Prime Minister Nawaz Sharif, has returned home with a bang – arguably defying all normal legal procedures adopted in the case of a proclaimed absconder in a court of law. He has taken oath as the federal Finance Minister, but for all intents and purposes, he is practically a deputy Prime Minister, Nawaz Sharif’s proxy, taking care of his interests and implementing his dictates for the introduction of some face-saving populist measures ahead of the next general elections.

Five years earlier, in 2017, as a sitting finance minister, Ishaq Dar fled the country to escape investigation and trial on the charge of possessing assets beyond his means in an accountability case. The then Prime Minister Shahid Khaqan Abbasi had facilitated his flight taking Dar along with him in his special plane, and now as a privileged member of the ruling Pakistan Muslim League-N (PML-N) he has travelled back in Prime Minister Shahbaz Sharif’s special plane. Before his arrival, the court suspended his arrest warrant so as he could take oath as a Senate member and then as the federal Finance Minister. Soon after the ceremony, he proceeded to the court for the confirmation of his interim bail, where the Inspector General of Police (IGP) in Islamabad saluted him.

Ishaq Dar is a street smart, self-made man with a typical rags to riches story. He is the son of a poor Lahori man, a bicycle mechanic, who managed to get  higher education, achieving a chartered accountant’s degree. Along the way, he forged the ‘right’ political connections that helped him climb up the ladder. Through the marriage of their children, Dar and Sharif are also related to each other. Given the legal and political culture of the country, Dar’s recent prompt bail from the court is understandable, but the charges against him are serious. He is accused of making a formidable amount of wealth beyond his visible means, by using his position in the government when he held high office, such as Finance Minister (1998-99 and 2013-17).  In BBC’s Hard Talk with Stephen Sacker, when the host asked him about the properties owned by him and his family, he said he only owned one house in Lahore. When the host asked about his properties in Dubai, Dar paused and with visible trepidations admitted that his son owned a villa in Dubai, but explained that his son was an adult and an independent individual. However, according to the documents of the National Accountability Bureau (NAB), Dar owned three houses in Al-Falah Housing, a six-acre plot in Islamabad, a two- kanal plot in Islamabad’s Parliamentary Enclave, one plot in the Senate Cooperative Housing Society, another plot in yet another housing society, besides his house in Lahore.  And more than one shopping mall in Dubai was owned by his front men.

Once, in order to justify his wealth, he produced a letter from a wealthy Arab Sheikh stating that he had paid Ishaq Dar Rs 830 million for his consultancy services for one year between 2004 and 2005.  Dar, however, never presented a bank transaction record to verify this payment. Complaints abound about his underhand deals. Journalist Javed Chaudhry wrote a column about the briefing given to journalists in which some high-ups revealed that the Italian Ambassador to Pakistan, Stefano Pontecarvo, had allegedly complained to the army chief Gen Qamar Javed Bajwa about the bribe Dar had asked for in exchange for issuing permission for the setting up of two manufacturing plants of Vespa scooters in Pakistan.

The most serious charge against Ishaq Dar and his patrons, the Sharif family, was that of money-laundering worth Rs 1.24 billion during 1996-98 in the notorious Hudaibiya Papers Mills case. Later a judge closed the case without an investigation or trial, saying the case had become time-barred. However, many legal experts, including Aitzaz Ahsan said that criminal cases are never time-barred. The National Accountability Bureau (NAB) had instituted the case during Gen Pervez Musharraf’s regime. Dar was arrested and gave a 45-page confessional statement duly signed by him, stating  that he had laundered money for Nawaz Sharif’s family, using his friends’ bank accounts in London. He became the approved witness in the case and thereby got amnesty. Later, with the change in government, he retracted his confession, saying it was extracted under duress.

Dar is a man for all seasons. He knows how to win over political opponents by extending favours to them or how to tackle them by twisting their arms. As Finance Minister in the previous PML-N government (2013-17), he waved a paper in the National Assembly session claiming that Pakistani politicians had two hundred billion dollars stashed in Swiss banks. He announced that the government was going to strike an agreement with the Swiss government to bring this huge cache of money back to Pakistan. The purpose was just to pressure the then main opposition Pakistan People’s Party (PPP) into behaving and cooperating with the government. The PPP, whose leaders are notorious for Swiss bank accounts, fell in line. Dar never struck any deal with the Swiss authorities. And today, the PML-N and PPP are close allies and part of the current coalition government.

As a chartered accountant, Dar is considered a skilled manipulator of statistics. As Finance Minister in 2016-17, for example, he showed the GDP growth rate at 5.6 per cent, while independent economists put it at 4.5 per cent. But his manipulations had registered much earlier. During his tenure as the federal Finance Minister in 1997-99, the International Monetary Fund (IMF) charged the Finance Ministry for presenting false statistics and subsequently fined Pakistan 5.5 million dollars as punishment.

The economic policies Dar pursued in his previous tenure as Finance Minister were disastrous to say the least. He sold  22 billion dollars in the open market to keep the Pakistani rupee over-valued, causing a severe foreign exchange crisis, which continues to date. In order to shore up the tax revenues through import duties and jack up the growth rate, he opened a floodgate of imports, which took the trade deficit to 38 billion dollars in 2017-18. In the process, he was accused of have damaged the domestic industry and agriculture. Pakistan’s exports plummeted to $20 billion in 2017 from $25 billion in 2013. He took expensive foreign loans against sovereign guarantees and parked them in several public companies, so that they were not reflected in the overall national debt. The list of his machinations goes on and on. And now again he wants to keep the rupee artificially inflated. As a result, international investors have panicked and Bloomberg reported that Pakistan’s dollar bond has started losing value. Dar is adept at creating an illusion of growth, while undermining the foundations of the economy, as he did in his previous two tenures as federal Finance Minister.

Ishaq Dar replaced a Karachiite, Miftah Ismail, as Finance Minister. In a recently leaked telephonic conversation with Prime Minister Shehbaz Sharif, his niece, Nawaz Sharif’s daughter Maryam Nawaz, was heard sounding quite unhappy with Miftah Ismail, using disparaging  language against him and stressing on her uncle the need to bring Ishaq Dar back from London to take charge instead.

The Sharif family’s inner circle comprises trusted men from the Kashmiri clan, such as Dar, from the central Punjab. Miftah has always been an outsider, a spare wheel to be used in times of emergency. Dar has value for Nawaz Sharif for more than one reason. He has been useful in managing the Sharifs’ financial affairs (such as  Hudaibia etc) and he represents the Nawaz faction within the PML-N against the group led by Shehbaz Sharif. Now onwards, it is almost certain, Nawaz Sharif will run the government long-distance through his protégé Ishaq Dar, ensuring that his brother Shehbaz Sharif does not highjack the party. Arrangements are also underway to frame a legal pathway for the safe return of Nawaz Sharif from his self-exile so that he can lead the party in the next general elections scheduled to be held in 2023.