After months of speculation, former Finance Minister Ishaq Dar, who has been in self-imposed exile in the UK for the past 5 years, is all set to return next week as per Interior Minister Rana Sanaullah, following the suspension of an accountability court arrest warrant against him. Officially, according to PML-N’s statements, he is coming back to aid the current finance team being run by Miftah Ismail, but there has been talk of him replacing the latter altogether. One indication of this is that very soon, for Miftah to continue in his current role, a senate seat will have to be found for him, while in Dar’s case, he already possesses one, pending an oath taking formality that he will presumably fulfill once he is back.
A section within the PML-N does not want the present order of the economic team to be disturbed and has very publicly thrown its support behind Miftah, clearly displaying an aversion to Dar. It does not bode well for a party responsible for navigating the country through one of its worst economic crises in decades that a leadership crisis exists at the very top with Mian Nawaz Sharif supporting Dar and PM Shahbaz Sharif throwing his weight behind Miftah. Apart from the internal politics creating division in the PML-N, a relentless Imran Khan is keeping the pressure on the federal government, fueled by regaining Punjab and so far avoiding arrest or disqualification from holding office in the many cases against him.
The possible return of ‘Darnomics’ is a dangerous prospect as it did not work back then and it will definitely not work now. As finance minister in the Sharif regime, being an inflation hawk, he attempted to keep the Rupee artificially appreciated against the dollar using scarce foreign exchange reserves, much to the detriment of stability in the currency market. His propensity to undermine the office of the SBP governor, at times by announcing the monetary policy statement prematurely and regularly intervening in the interbank market, was not only a nuisance for the central bank itself but the IMF as well.
Miftah Ismail has taken the brunt of the blow emanating from executing tough unpopular inflationary measures to introduce relative stability in the economy. His profile is that of an experienced businessman and academic who understands the mechanics and technicality of economics very well. But perhaps the most fundamental reason to not replace Miftah with Dar, apart from his better credentials and relatively acceptable performance given the circumstances, is the instability it will introduce in the market and destabilize the economy further. One hope PM Shahbaz Sharif sees the bigger picture in this instance.