A Family Business

The Sharifs’ decision to reappoint Ishaq Dar as finance minister has backfired

LAHORE: After Miftah Ismail was summarily dismissed, Ishaq Dar, a close relative of Pakistan Muslim League-Nawaz (PML-N) leader Nawaz Sharif, was given the task of overseeing the country’s economy and “providing relief” to the people. This is the fifth time he has held this post in the Sharifs’ assorted tenures. This, it is widely believed, because the Sharifs have always assigned the most important government positions to members of their family.

After assuming the office of Prime Minister, Shehbaz Sharif went to London to see his brother Nawaz Sharif and returned to Pakistan with Ishaq Dar, apparently having been foisted on him by his elder brother. For those whose political memory is clouded, Ishaq Dar was an unknown chartered accountant before becoming the Sharifs’ financial factotum. He held the post of Finance Minister in 1998-99, 2008, 2013-17, and briefly again in late 2017.

During each stint in power, he was dubbed the “deputy Prime Minister,” chairing at one time 45 parliamentary committees. Out of power, he “collaborated” with the establishment, spilling lots of beans against the Sharifs while in custody at Chamba House. Once released, however, he reneged on his statements, disowning his damaging revelations about the Sharifs’ financial plotting over the years.

Connected with Nawaz Sharif through his son’s marriage, Dar has benefited from the Sharifs’ good fortune. From working in the Libyan government’s audit department in 1976, 40 years later Dar’s last declared assets revealed a dramatic increase to Rs.583 million, plus Rs.325 million in Pakistan Investment Bonds. This does not, says one report, include the alleged £5.5 million he has in the UAE or his “undeclared property in Pakistan, the UAE and the United States.”

When Nawaz Sharifs was ousted from power, Dar applied for political asylum in the UK, managing  to successfully evade an Interpol Red Alert demanding his repatriation to Pakistan. He was, in fact, given a clean chit by the organisation.

In September 2022, he returned to Pakistan as Nawaz Sharif’s loyalist mole in Shehbaz Sharif’s cabinet and as Finance Minister for an unprecedented fifth time. Shortly thereafter, he applied his unique brand of ‘Dar-onomics,’ purportedly to rescue Paki­stan’s economy from its downward spiral. But the move backfired and pushed the country to the brink of default.

PML-N loyalists who were convinced he could deliver are now stunned. They said that Miftah Ismail was doing an excellent job, but the party’s top leadership had made it a habit to award key positions to their family members because they don’t trust others, hence his exit and the entry of former Finance Minister Ishaq Dar, who had been living in London since 2017.

Currently, the Pakistani currency has reached its lowest level against the US dollar in the country’s history and the country’s foreign exchange reserves are continuously decreasing. The economic situation was further aggravated when the floods devastated the agricultural sector in one-third of the country, which according to initial estimates, resulted in the loss of 30 billion dollars. That coupled with the return of the IMF and its stringent conditionalities has resulted in hyper inflation, with huge increases in the price of oil, electricity, gas and food items. When Dar took charge of the Finance Ministry, the level of inflation was already at 27 per cent. And it is expected to keep soaring.

So why was Ishaq Dar reappointed as Finance Minister for the fifth time?

Charges that the Sharifs like keeping power in the family ring true given the history of their stints in office. When Nawaz Sharif became Prime Minister for the second time in 1997, it was decided in a party meeting that Pervaiz Elahi would be the Chief Minister of Punjab. However, Muhammad Sharif intervened and forced the party to make the younger Sharif—Shehbaz — Chief Minister instead. And after Musharraf toppled the Nawaz Sharif government, the Chaudhrys left the party. Similarly, after Shehbaz Sharif became Prime Minister, he appointed his son Hamza Sharif Punjab Chief Minister. Most recently, Maryam Nawaz was appointed as chief organiser of the PML-N, which raised many eyebrows in the party. Shahid Khaqan Abbasi, a PML -N stalwart  resigned from his party office, indicating his disapproval of dynastic politics.

Regarding former finance minister Ishaq Dar’s return to Pakistan after five years, a senior Nawaz League leader told Bol News on condition of anonymity that it was fast becoming clear that the economy had been battered and high inflation was crushing the common man, making for a dismal first five months of the PDM government. The party’s defeat in the July by-elections was also cited as a fallout of the economic situation. Apart from the growing frustration of the common man, he said, commercial and business circles were also expressing concern about the country’s bleak economic situation. According to him, when members of Pakistan’s business circles contacted Nawaz Sharif in London complaining that the PML-N’s  current economic team was not managing affairs. Nawaz Sharif decided to give this responsibility to Dar.

Muhammad Zubair, a senior party told Bol News, that due to the IMF programme, many decisions had to be taken, due to which Dar was recalled. Zubair added that the former government’s refusal to give Dar a passport for three years was the main reason for him not coming to Pakistan earlier, and after he got his passport in May last year, talk of his return began.

Zubair emphatically maintained that Ishaq Dar has the ability to change the economic situation. “A political party looks at both, the economy and the people, because it is a political economy and the people cannot be burdened beyond a certain limit,” contended Zubair

Economic expert Dr. Farrukh Saleem said that Ishaq Dar did not have any ‘out-of-the-box’ solution with regard to the economy, and his previous economic model does not seem to be working in the dire current economic situation. Saleem believes that it does not matter if anyone is made the Finance Minister in Pakistan at this time, because after the IMF programme, the Finance Minister of Pakistan does not have discretionary powers and can act only under the IMF’s conditions.

He continued that the Nawaz League government wanted Ishaq Dar to do two tasks: “One is to bring down the local currency against the US dollar and the other is to create financial space, because this is the year of elections and without financial space, development projects such as infrastructure cannot be started.” So far Dar has proved a complete failure on both counts, he maintained, adding that Ishaq Dar’s model has been to run the economy by overvaluing the rupee and building hard infrastructure i.e. bridges, so that jobs can also be created. “Under this IMF programme, the currency is left to the market forces and neither the State Bank nor the government can intervene. In any case, the hard infrastructure cannot be worked on due to the floods.”

Farrukh Saleem continued, saying that “the Nawaz League had high expectations from Ishaq Dar, which seem difficult to fulfill in the presence of the IMF Programme.”

A senior leader of the Nawaz League, on condition of anonymity, said that “due to Miftah Ismail’s economic policy, inflation had increased, due to which party leader Nawaz Sharif was contacted in London. According to him, “the Nawaz League always has the agenda of reducing inflation and creating jobs through development projects, which has not been seen in the current government.’

Dr. Farrukh Saleem disagrees. He said Miftah Ismail fulfilled the agenda given to him, and the reasons behind Miftah’s removal were purely political as he had done nothing wrong. In fact, he maintained, Miftah Ismail had an agenda: to revive the programme to save the country from default. According to Saleem, the agenda of improving the country’s economy cannot be fulfilled by the old economic model that Ishaq Dar had adopted. He said  the country has run out of dollars and  Pakistan has to import petroleum products worth 25 billion dollars, edible oil worth three billion dollars, and coal worth two billion dollars.

Given this, measures like a financial emergency will have to be imposed. Senior journalist Sarmad Bashir said: “Dar is their financial wizard and the closest to the Sharifs. He is family. He has personally managed the Sharifs’ finances for nearly three decades. When Nawaz was the Prime Minister, Dar was his unannounced deputy. When Nawaz was ousted, Dar was his inside man in Shahid Khaqan Abbasi’s cabinet, as the mega minister. He was PMLN’s one-window financial operation.

Bashir added that the PML-N leadership believed that when funds were needed to be channelled for development projects and elections, it was Dar’s budgetary sleight of hand and administrative maneuvering that made it possible. In his retracted confession in the Hudaibiya Paper Mills case, he had admitted to opening bank accounts under fake identities to launder money on behalf of the Sharifs. This made him the key that unlocks the door to the allegations of corruption against the Sharifs,’ the family’s Achilles’ heel.

Legal experts say that the confession, even though retracted later, has provided evidence and clues of what had happened. The information provided has references to the actual documents involved and the processes. Those details cannot be erased. But Supreme Court judge Justice Qazi Faez Isa dismissed the petition seeking reopening of the Hudaibiya Paper Mills case.