Muhammad Aurangzeb is a veteran banker with no previous political experience and is tasked with helping Pakistan overcome its current financial and economic crisis. Aurangzeb, 60, a graduate of the Wharton School of Business at the University of Pennsylvania, has worked at major international banks such as Citibank, ABN AMRO and JPMorgan Chase, and in 2018 became Pakistan's largest commercial bank by assets. He became the president and chief executive officer (CEO) of Habib Bank. His appointment as Minister of Finance and Revenue last month comes from the newly reappointed Prime Minister Shehbaz Sharif and his party, Pakistan Muslim League, which has shown confidence in Ishaq Dar, who previously served as Finance Minister four times. For (N), it is a departure from tradition. .
Aurangzeb faces a daunting challenge.
Pakistan suffers from a huge external debt of $130 billion, almost a third of its $340 billion economy. With inflation soaring more than 20% and a currency devaluation of more than 50% in the past two years, Mr. Aurangzeb's first job will be to finance a $24 billion loan that is due by June, plus the International Monetary Fund. It would be best to secure a multi-year loan. . The country's foreign exchange reserves are only $8 billion.
Obtaining the best possible agreement from the IMF will only buy time for Aurangzeb to address Pakistan's deeper problems.
“The new finance minister appears to be being asked to find a way to finance the 24th IMF program, but most of the previous 23 programs have failed for the same reasons. “They can't take reform seriously,” says Stefan Derkon, professor of economic policy at the Blavatnik School of Government and the Oxford University School of Economics. “The new government and its backers, governments and businesses, will first need to come up with their own plans that are worth investing in from the IMF and others, rather than asking for new loans all the time.” Delcon argues that the plan must not only harm the enemy but also require sacrifices from elites. “The only approach that can be successful is one that redirects resources toward a more outward-looking, less distortive economy, one that serves the many rather than the few.”
