Renowned banker Muhammad Aurangzeb has made headlines in the last couple of weeks for all the right reasons. He gave up his Dutch Dutch nationality, handsome salary, and slew of perks to become the country's finance minister.
He arrives at the Finance Ministry comes at a time when the country is facing grave financial challenges that require skill and tact to navigate, and one hopes his experience can lend to it.
However, Aurangzeb would not be the first technocrat to take charge at the Finance Ministry. Pakistan's history has seen a few bankers and corporate leaders step into politics and try to tame its out-of-control finances with ambitious plans. Their performances are debatable, and from the perspective of the wider public, they all failed to meet the nation's expectations.
Asad Umar
The former Pakistan Tehreek-e-Insaf (PTI) leader made headlines in 2012 when he announced plans to give up his lucrative career as the head of one of the country's biggest companies to follow in his brother's footsteps and join politics.
He is known for having tackled the crisis in his organisation and led its transformation into one of the biggest conglomerates in the country. Umar was heralded as someone who, like the PTI chief, felt "no need to give up a life of luxury to wade the waters of politics." Yet, he retired from the Engro Corporation as the CEO and joined the PTI.
In opposition, he delivered fiery speeches against the Pakistan Muslim League-Nawaz (PML-N) government's economic policies. After the PTI was elected into power in 2018, he was given charge of the Ministry of Finance and Economic Affairs with high hopes and expectations to lead the turnaround he had promised for the better part of five years.
Like his predecessors and successors, he had the challenge of signing a new programme with the IMF. However, he and the PTI government failed to handle the matter, opting to spend an inordinate amount of time on other bailout options only to conclude that there was no option but to go to the Fund.
For all of his bravado and speeches on television and elsewhere, Umar barely lasted in office for a year. He was unceremoniously replaced by another technocrat, Dr Hafeez Shaikh.
Shaukat Tarin
Like Aurangzeb, Shaukat Tarin was a senior banker who worked with banks in Pakistan. He was twice appointed as the country's finance minister under different governments. Curiously, the circumstances in which he found himself in the finance hotseat were similar on both occasions.
He was first brought in by the Pakistan People's Party (PPP) government to replace Dr Shaikh. The second time, the PTI brought him in for the same reason: to replace Dr Shaikh and deal with international lenders.
He managed the country's ballooning external debt crisis well, but his performance could not be termed an achievement.
During his tenure, he did not do much to privatise loss-making state-owned enterprises (SOEs) while inflation soared to record highs.
Shaukat Aziz
Shaukat Aziz was one of the first candidates to move from the banking and corporate sector into Pakistan's power corridors.
A career banker with global experience, Aziz was asked by former dictator General Pervez Musharraf in 2002 to join the federal cabinet as the finance minister. He left his job at Citibank in New York and moved to Pakistan.
Under his charge, the economy witnessed a boom, with the gross domestic product (GDP) rate surging to over 7% for consecutive years in 2004 and 2005. Due to Aziz's liberalised policies, a few sectors recorded significant expansion, including banking, telecommunication, media, ports, and shipping.
Critics, however, say Aziz failed to tackle the high rates of inflation despite the growth and development. Moreover, he was fortunate to see a high inflow of dollars due to privatisation and support from the War on Terror, which kept the economy afloat without affecting poverty.
Later, he served as the country's prime minister, a move that granted him sufficient powers to effect an economic plan that would meet Islamabad's goals.
The finance ministry has become somewhat of a revolving door for ministers, with several characters coming and going after watching their plans to fix the national economy go up in flames. Some have even had multiple tries at this. One must ask what Aurangzeb can do that is different from what his predecessors did.
Aurangzeb and HBL
Aurangzeb came into the Habib Bank Limited (HBL) hotseat shortly after the Department of Financial Services, the state regulator in New York, slapped the bank with a $225 million penalty.
As the President and CEO of the commercial bank, Aurangzeb utilised his rich experience leading banking and financial giants to lead HBL towards recovery, growth, and eventually new achievements. During his five-year tenure, the bank made a profit of Rs12 billion in its first year, and the latest earnings report shows it posted an all-time high profit of over Rs57 billion.
With serious measures required to overturn the bank's fortunes, Aurangzeb adopted an aggressive approach, taking various initiatives that no other bank in the industry had taken. Under his tenure, the bank expanded its operations to China, introduced branchless banking (Konnect), and enhanced its digital banking infrastructure. The bank enhanced its strategic support to promote Tech Destination Pakistan, similar to how it continued its support for the Pakistan Super League. HBL also expanded by setting up a subsidiary called HBL Zarai Services to tap into the agricultural financing market.
During this time, Aurangzeb also served as the chairman of two key business forums —the Pakistan Banks Association and the Pakistan Business Council.
With diverse experience in leadership across the private sector, he now has a bigger role in managing the economy of the fifth-largest country by population.
No stranger to politics
One of the questions that Aurangzeb has had to answer is what motivated such a top banker to give up his career and become a politician.
His predecessors have said things like serving a higher calling or helping a national cause to explain their motivations for joining the government.
Aurangzeb has always been somewhat involved in politics and the national economy.
His father, Chaudhry Muhammad Farooq, served as the Attorney-General for Pakistan on two occasions. The first was during the caretaker government of Moeenuddin Ahmad Qureshi from July 1993 to August 1993. Farooq's second term in government came in the second government of Nawaz Sharif in April 1997.
Further, Aurangzeb's uncle, Asadur Rehman, served as a member of the National Assembly of Pakistan, which was affiliated with the Pakistan Muslim League.
So, politics is very much in his blood.
A bold individual, Aurangzeb was one of the strongest advocates of the Charter of Economy proposed by member parties of the Pakistan Democratic Movement (PDM) and the Charter of Business in the past few years. This reflected the difference in his approach to that of other bankers.
He indirectly advised past governments to separate political affairs from the national economy. Another reason is that he represents businessmen as the chairman of the PBA and PBC.
With his expertise in the financial sector at the foreign and local levels, he is expected to do well in negotiations with the International Monetary Fund (IMF), manage external debts, and stabilise the rupee against the dollar and major currencies. He will be aggressive in privatising loss-making SOEs. However, given Pakistan's acute challenges, he could struggle to enhance the country's foreign exchange reserves.
Being a technocrat, he may be open to making tough decisions, which politicians usually avoid, such as cutting subsidies and enhancing taxes for different sectors.
The outcome may result in pressure from the opposition, the public, the media and even his fellow cabinet members. The uproar will not be easy to handle. An example of this is available in the form of Shabbar Zaidi, the former chairman of the Federal Board of Revenue. He had to give up his ambitious plan of reforms during PTI's government and ended up resigning from his position.
Aurangzeb has some crucial challenges to manage, such as reducing the trade deficit and an extremely high import bill, which will invite pressure from the elite, the business community, and even society at large.
Controlling inflation, which is directly connected with the masses and the media as their representative, will also be crucial to retaining public support. Fialing this, he, too, will gain the moniker of foreign finance minister.
Key structural reforms in the economy, whether in the taxation department or the financial sector, may help improve the overall system — a much-needed measure for the country.
Will the successful banker prove to be a successful finance minister — a deputy PM in terms of power?