ISLAMABAD - The speculations that have been rife for the past two weeks about a major reshuffle in the federal cabinet became a reality when Prime Minister Imran Khan Thursday made key changes and re-allocated the portfolios of some of his cabinet ministers.

Ostensibly, the prime minister’s move came as a surprise to several ministers as none of them was aware as to who is being changed and replaced.

The impending cabinet reshuffle was confirmed by Finance Minister Asad Umar, who took to twitter early Thursday to announce his stepping down, and later he addressed a press conference over the issue.

The timing of the cabinet reshuffle is significant as it comes following the mounting criticism against the PTI government over its economic policies and the recent wave of terror attacks in Balochistan.

Asad, who was under fire both from the opposition as well as his own party colleagues over his economic policies, told the media that he was asked to relinquish finance ministry and accept the portfolio of energy ministry by Premier Khan but he refused to accept it.

Dr Abdul Hafeez Sheikh has been made adviser on finance and he will assume the responsibilities earlier held by the outgoing finance minister. Sheikh has served as finance minister in the last PPP government.

Information Minister Chaudhry Fawad Hussain has been removed and Dr Firdous Ashiq Awan has replaced him as Special Assistant to Prime Minister on Information. She served as information minister in the PPP government.

Fawad has been made Minister for Science and Technology, the portfolio which was previously held by PTI Senator Azam Khan Swati prior to his resignation following an unfortunate incident at his Chak Shahzad farmhouse.

Senator Swati has been re-appointed as federal minister but with a changed portfolio. He has been appointed Minister for Parliamentary Affairs, replacing Brig (r) Ijaz Ahmed Shah.

The prime minister, who kept the portfolio of Interior with him and kept Shehriyar Afridi as state minister for interior, has now appointed Ijaz Shah as federal minister for interior with a challenging task of implementing the National Action Plan (NAP) in letter and spirit. MNA Shah has previously served as director general of the Intelligence Bureau (IB). Shehriyar Afridi has now been appointed Minister of State for SAFRON.

Another important change in the cabinet reshuffle is in the Petroleum Division as Petroleum Minister Ghulam Sarwar Khan has been appointed as Aviation minister and he has been replaced by Nadeem Babar – who has been appointed as Special Assistant to PM on Petroleum Division. Mohammadmian Soomro, the federal minister for privatisation, shall cease to hold the additional portfolio of Aviation Division.

Another casualty of Thursday’s reshuffle was that of Minister for National Health Services (NHS) Amir Kiyani who has been removed and replaced by Dr Zafarullah Mirza, who has been appointed as Special Assistant to PM on National Health Services.



Asad Umar’s resignation

Earlier during the day, Asad Umar announced his relinquishing the position as Finance Minister on social media saying, “As part of a cabinet reshuffle, [the] prime minister desired that I take the energy minister portfolio instead of finance. However, I have obtained his consent to not take any cabinet position.”

He ended his tweet by saying: “I strongly believe @ImranKhanPTI is the best hope for Pakistan and inshAllah will make a naya Pakistan.”

Later, he sent his resignation to the Prime Minister office. However, he said that he would remain part of the PTI.

“I still believe that Imran Khan will build a Naya Pakistan”, he said. He added that he does not know anything about the politics behind the decision to change the cabinet positions.

Umar was under pressure from the opposition parties as well from Pakistan Tehreek-i-Insaf (PTI) due to the current economic situation of the country. A lobby within PTI was particularly against him.

Jahangir Khan Tareen (former PTI secretary general) had expressed dissatisfaction over performance of Asad Umar with Prime Minister Imran Khan. Some of the ministers had also raised objections on the economic policy and the proposed amnesty scheme, which was prepared under the former finance minister.

The cabinet had not approved the scheme in two consecutive day meetings due to the differences of ministers.

Some of the cabinet members and PTI leaders believed the tax amnesty scheme was against the philosophy of the PTI, others criticised Umar for not approaching IMF soon after assuming the charge.

In a press conference after announcing his resignation, the ex-minister rejected the impression that he left the federal cabinet in protest.

Asad Umar said he took some tough decisions but he refused to take the decisions “that would have crushed the nation”. He claimed that some improvement had been made due to their economic decisions but warned that his successor too would have to take some difficult decision to get the economy out of the danger zone.

On ground, the economic situation of the country is not very encouraging. The Inflation rate had gone to 9.41 percent last month, which is highest ever in last five years. Tax collection shortfall of the Federal Board of Revenue (FBR) had enhanced to Rs319 billion in nine months (July to March) of ongoing fiscal year despite two mini budgets. Massive shortfall in tax collection would increase the budget deficit.

Exports are not increasing despite depreciating the currency massively. The country’s foreign exchange reserves are declining despite receiving loans from friendly countries.

However, Asad Umar defended his policy for stabilising the economy in the press conference.

Economic performance during first eight months (from August 18 to April 18) of the incumbent government is far better than the performances of Pakistan Peoples Party and Pakistan Muslim League Nawaz (PML-N) in their initial months, he said.

“When we came in, Pakistan’s economy was going through its worst time in history”, the ex-minister said, adding that there were good and bad things but the bad were very bad. “We made some tough decisions to get ourselves out of that and we saw some improvement,” he added.

“We have finalised the IMF agreement on much better terms than before. It is the time to take difficult decisions; I have made these decisions, but I refused to take the decisions that would have crushed the nation,” he explained.

Asad Umar informed that tough decisions were taken to overcome the economic crisis in the country and his replacement would be taking over a difficult job. “This is the most difficult job after the prime minister. There is no doubt that we are moving towards prosperity but tough decisions need to be taken,” he added.

The former minister also emphasised that economic decisions do not yield fruits over night rather it takes time to have positive impact.

He believed that selection of his predecessor should be made as soon as possible. “We are about to go to the IMF and about to present the next budget. The next budget needs to reflect the IMF programme and the person going forward will take responsibility for its implementation so they should be a part of the IMF talks,” he said. It will be a difficult budget, he claimed.

Umar further said that the economy is moving towards improvement but more tough decisions and patience were needed. “If we aren’t ready to do that and instead want to act in haste, we will fall into that hole again,” he warned.

“I have one request to the new minister, make tough decisions and stand with them, he said. “Don’t expect that everything will all get fixed in three months. Don’t expect any miracle from the new finance minister [he said to the people].”

The PTI government was criticized by the opposition for compounding country’s problems by not taking International Monetary Fund (IMF) soon after assuming the charge. Even without going into IMF programme, the PTI government had introduced some tough economic measures.

The government enhanced the power tariff by Rs1.27 per unit and gas prices by 143 percent besides introducing mini budget with Rs178 billion new taxes. It also allowed currency devaluation.

However, all these anti people decisions had failed to satisfy IMF for new loan programme. The government had recently assured the IMF to explore the possibilities of hiking tax rates, especially the GST, removing exemptions and slashing down expenditures in budget 2019-20 for striking a staff level agreement with the Fund. The government also agreed with IMF to further increase the gas and electricity prices in next fiscal year 2019-2020.

Asad Umar hoped that the new team will come and it will look at things with “fresh eyes”. “Maybe they will come up with better decisions and either way, they will need to be given time,” he said.

“The new person that comes in may have a different approach, but they will have to work on the same five-six points (to improve the economy). There are three main deficits that need to be fixed in order to fix the economy.”