Asad Umar - The Scapegoat

TakhreebKaar

Politcal Worker (100+ posts)
So Asad Umar asked to resign, bold step indeed. Performance is the first priority in this time of crisis and if Khan didn't find his performance to be satisfactory and good enough then it's a brave call. Asad Umar is a selfless person, I always respected him and respect him even more after today's press conference۔


Despite all the media hype against him it is also truth that he inherited the worst economic crisis of country's history that was designed specially for him by the previous government. With a bleak foreign reserve condition, with the country having the capacity to purchase only few weeks of imports, he still managed to get the country out of that absolute misery. He managed to give 4 basic economic indicators a positive direction, decreased imports, increased and facilitated exports, decreased trade deficit, decreased petroleum tax levy as promised. Things seemed right on paper and in numbers but maybe still not good enough as the crisis was humongous.

People labelled him failure for two basic things, inflation and the price of dollar. As for the dollar price, recently Hafeez Pasha in his book and the ex finance minister of PMLN Ayesha Ghous Pasha on a show admitted how Ishaq Dar spent billions of dollars to keep the dollar stable at Rs.100 artificially. And when all those spending on dollar were stopped, dollar jumped to its actual price, that is almost 140 and all the blame is put upon Asad Umar. And inflation was an obvious outcome and consequence of all this. It was an inevitable trap set for him, inevitable because these technicalities can never be explained to layman and an average street Joe, but at least Imran Khan could have seen all this, we are still not sure what or who forced him to remove his Waseem Akram from the pace attack. But Asad Umar did very well for a beginner, he actually did the fire fighting and also became the casualty. Alas he paid the price and took the blame for what he wasn't responsible at all. I'll call him a scapegoat.
Hope the new finance minister takes this boat even further and remembers Asad Umar when he reaps the fruits of his initiatives.
 
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gumnam123

MPA (400+ posts)
the sad thing is his policies were right. jo banda mehnat kere aur sahi steps le humare log us ki hi kadr nh kerte. agar is jahil awaam ko jeetna ha tu mehengae kam kerdo, free subsidy dedo aur mulk ko bankrupt kerdo. Jese ishaq dar ne kya hae.
 

Sohail Shuja

Minister (2k+ posts)
the sad thing is his policies were right. jo banda mehnat kere aur sahi steps le humare log us ki hi kadr nh kerte. agar is jahil awaam ko jeetna ha tu mehengae kam kerdo, free subsidy dedo aur mulk ko bankrupt kerdo. Jese ishaq dar ne kya hae.
Even sadder is that his policies were not right for Pakistan's economy. He might be good in Financial Management, but Economy is a much bigger canvass than Finance.

1- The decision of increase of KIBOR rate to attract foreign capital into local financing market was a big blunder. This increased the price of commodities and decreased the exports through the multiplier effect.

2- Blunder in Gas overbillings

3- Not considering China while going to IMF. He totally ignored the fact that China has greater stakes in Pakistan than IMF. So he missed on the Geo-Strategy as well.

4- He used the money borrowed from Mid East countries, whereas he was only supposed to keep that money in bank account.

5- He had a total disinterest in the development of the Public Private Partnership (PPP) mode. A method of infrastructure financing where the loan does not reflect on Govt Balance sheet and the people who use the facility pay the price, not everyone is burdened by tax. But, he clearly missed on that.

There are many other bad decisions he made, the above are only a few major ones
 

gumnam123

MPA (400+ posts)
Even sadder is that his policies were not right for Pakistan's economy. He might be good in Financial Management, but Economy is a much bigger canvass than Finance.

1- The decision of increase of KIBOR rate to attract foreign capital into local financing market was a big blunder. This increased the price of commodities and decreased the exports through the multiplier effect.

2- Blunder in Gas overbillings

3- Not considering China while going to IMF. He totally ignored the fact that China has greater stakes in Pakistan than IMF. So he missed on the Geo-Strategy as well.

4- He used the money borrowed from Mid East countries, whereas he was only supposed to keep that money in bank account.

5- He had a total disinterest in the development of the Public Private Partnership (PPP) mode. A method of infrastructure financing where the loan does not reflect on Govt Balance sheet and the people who use the facility pay the price, not everyone is burdened by tax. But, he clearly missed on that.

There are many other bad decisions he made, the above are only a few major ones
first thing we have to understand there is nothing black and white in economics. one decision may have its advantages and disadvantages and u dont know what u r gonna get. And how was he responsible for gas overbilling? does it come under his job description as financial minister? And what as China to do anything with the IMF? Im sorry but the reasons u have imo they are not enough or even valid to sack him. I think you have nitpicked things to try to prove your point. Lastly u have only outline the negatives. Here are the positives:
  1. decreasing various tax on industries
  2. providing cheap loans to the youth
  3. curbing down imports.
4)trying to increase exports(by his economic reforms bill that was lauded by business community)
  1. our trade deficit was decreasing rapidly.
  2. foreign account deficit was decreasing.
  3. trying to decrease fiscal deficit by increasing utility rates and curbing electricity and gas theft(partly successful)
7)started to revise SMEs
there are many other things that i cant remember. the point is we were starting to go towards being export oriented and trying to rejuvenate our exports and skilled labour. and decreasing our foreign loans.
 

gorgias

Chief Minister (5k+ posts)
یہ ہے وہ شخص جس کی کمینگی۔ نااہلی، فراڈ، چوری اور فورجری کی قیمت اسد عمر کو ادا کرنی پڑی۔

 

Hussain1967

Minister (2k+ posts)
So Asad Umar asked to resign, bold step indeed. Performance is the first priority in this time of crisis and if Khan didn't find his performance to be satisfactory and good enough then it's a brave call. Asad Umar is a selfless person, I always respected him and respect him even more after today's press conference۔


Despite all the media hype against him it is also truth that he inherited the worst economic crisis of country's history that was designed specially for him by the previous government. With a bleak foreign reserve condition, with the country having the capacity to purchase only few weeks of imports, he still managed to get the country out of that absolute misery. He managed to give 4 basic economic indicators a positive direction, decreased imports, increased and facilitated exports, decreased trade deficit, decreased petroleum tax levy as promised. Things seemed right on paper and in numbers but maybe still not good enough as the crisis was humongous.

People labelled him failure for two basic things, inflation and the price of dollar. As for the dollar price, recently Hafeez Pasha in his book and the ex finance minister of PMLN Ayesha Ghous Pasha on a show admitted how Ishaq Dar spent billions of dollars to keep the dollar stable at Rs.100 artificially. And when all those spending on dollar were stopped, dollar jumped to its actual price, that is almost 140 and all the blame is put upon Asad Umar. And inflation was an obvious outcome and consequence of all this. It was an inevitable trap set for him, inevitable because these technicalities can never be explained to layman and an average street Joe, but at least Imran Khan could have seen all this, we are still not sure what or who forced him to remove his Waseem Akram from the pace attack. But Asad Umar did very well for a beginner, he actually did the fire fighting and also became the casualty. Alas he paid the price and took the blame for what he wasn't responsible at all. I'll call him a scapegoat.
Hope the new finance minister takes this boat even further and remembers Asad Umar when he reaps the fruits of his initiatives.
Just one question. Is Usman Buzdar capable? Has his performance been satisfactory so far?
 

Sohail Shuja

Minister (2k+ posts)
. And how was he responsible for gas overbilling? does it come under his job description as financial minister?
(Source: Ary News)

No, it is not his direct JD, but he surely was there playing in the background. Getting 2.5 Billion extra in Govts account, showing it as an increase in revenue. Its a very cheap tactic which the FMs like him play. Get the 2.5 billion extra in the account... keep it there for one to two months, get some interest out of it, then return the original amount, but keep the interest. For that one month, your Govt balance sheet shows greater reserves by 2.5 billion. In the next, your income increases by what you have earned through interest on that 2.5 Billion. Its all a Finance Gimmick they played and which infuriated IK. The fall out started from that point on, when IK came to know it. Ever wondered why Petroleum minister is also shuffled? IK found about the nexus B/W him and AU.

And what as China to do anything with the IMF? Im sorry but the reasons u have imo they are not enough or even valid to sack him. I think you have nitpicked things to try to prove your point.
Looks like you do not understand the strategical impacts of decision making. Tell me why would US make the statement for IMF that they need an assurance that the money of IMF will not be going to repay the Chinese debt? Are they fools? have you heard of anything like a trade war? and what is its current international scenario between US and China? I must say that I may be ill informed, but surely, I try not to live in my dreams.

Lastly u have only outline the negatives. Here are the positives:
  1. decreasing various tax on industries
  2. providing cheap loans to the youth
  3. curbing down imports
I guess that when the "Cost of Capital" increases, as the case is in the KIBOR, it rebounds with a multiplier effect in your economy. Perhaps a 2% rise may mean a 20% rise in the prices of goods and commodities.

4)trying to increase exports(by his economic reforms bill that was lauded by business community)
  1. our trade deficit was decreasing rapidly.
  2. foreign account deficit was decreasing.
  3. trying to decrease fiscal deficit by increasing utility rates and curbing electricity and gas theft(partly successful)
7)started to revise SMEs
there are many other things that i cant remember. the point is we were starting to go towards being export oriented and trying to rejuvenate our exports and skilled labour. and decreasing our foreign loans.
A simple answer is a plain "No" as far as the reforms of Asad Umar are considered.

Decreasing Trade Deficit by borrowing from Mid East countries, on such conditions and reducing the imports on paper by importing oil on defer payments, restricting the imports of plants and equipment etc is all a cheap gimmick, putting your long term solvency at stake, but they do decrease big figures on your balance sheet.


Can you explain why our Trade deficit is decreasing but the Fiscal/Budget Deficit is increasing?

https://tribune.com.pk/story/1915028/2-budget-deficit-hits-six-year-high-rs1-03tr/

https://www.thenews.com.pk/print/434552-budget-deficit-widens-to-2-7pc-in-first-half

https://www.dawn.com/news/1461137
 
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back to the future

Minister (2k+ posts)
Fiscal deficit due to increased borrowing increased expense of interest
Incease in Sbp discount rate increase in Govt interest expense atleast Ishaq Dar a chartered accountant knew that

Imports needs to be curtailed by increasing duties
And exports need to be increased how by increasing agricultural and industrial output at competitive rates
Increasing industrial output is a tricky question as many textile units have closed down
So the role of commerce minister is important here
Who need to ensure that maximum industrial units are running labour dispute is referred to labour minister and trade disputes are resolved so that maximum units are producing exportable goods
Fbr was required to be reformed which mr Asad failed with a businessman background allowed concessions etc
With increase revenues you can repay loans etc
 
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