ISLAMABAD — Pakistan and its new finance minister are setting their sights on a fresh deal with the International Monetary Fund, although the former banker’s appointment and other cabinet picks have raised eyebrows.

Muhammad Aurangzeb, 59 and a Dutch citizen until his appointment, was given the finance portfolio last week as returning Prime Minister Shehbaz Sharif assembled his cabinet following the country’s controversial Feb. 8 elections. Aurangzeb was previously CEO of Pakistan’s largest bank, Habib Bank, after a career at major Western institutions including Citigroup and JPMorgan Chase.

Aurnagzeb’s “main job” will be to secure another round of funding from the IMF, Ikram ul Haq, an expert on economy and taxation, told Nikkei Asia. An IMF team this week was expected to conclude a review of Pakistan’s $3 billion standby arrangement, which helped the country stave off a sovereign default but ends in April. A successful review would result in the country getting $1.1 billion from the Washington-based lender.

“[The] government would use the opportunity during the review meetings to make a case for a longer and larger loan program under the IMF’s Extended Fund Facility,” Aurangzeb told local media last week.

Newly appointed Pakistani Finance Minister Muhammad Aurangzeb poses after taking the oath in Islamabad on March 11. (Pakistan Ministry of Finance via Reuters)

But Aurangzeb’s appointment is the latest in a string of controversies related to the elections, in which no party won a majority. Sharif’s Pakistan Muslim League-Nawaz (PML-N) forged a coalition to take power, while allies of jailed former Prime Minister Imran Khan allege that the process was rigged against his Pakistan Tehreek-e-Insaf (PTI) party.

The banker was born in Lahore but is understood to have no longer held Pakistani citizenship. As the law states that foreign nationals cannot hold public office, he renounced his Dutch nationality and reacquired Pakistani citizenship during the cabinet’s first meeting, according to local media.

“Overseas Pakistanis are not even allowed to vote, but when required, foreign nationals are inducted into the cabinet by bending the rules,” said Tahir Naeem Malik, a professor of international relations at the National University of Modern Languages in Islamabad.

The PTI camp wants the IMF to make talks contingent upon an independent audit of the elections. In late February, the fund’s communications director declined to comment on that, simply telling reporters, “We look forward to working with the new government on policies to ensure macroeconomic stability and prosperity for all of Pakistan’s citizens.”

On why the government turned to a political outsider like Aurnagzeb, experts say that key parties in Pakistan lack the necessary know-how.

“It is unfortunate that none of the political parties have established their in-house expertise to tackle the economic challenges faced by the country,” said Haq, who also has a doctorate in law. “A person lacking any experience in public service can never implement an economic agenda that is pro-growth and pro-people.”

Malik from NUML observed that “political parties don’t have their economic reform agenda or the economists to implement it.” He said this is why every government recruits people from the private sector to key positions like governor of the State Bank and others.

“Political governments put bankers in charge of the economy in the hopes that they bring financial discipline to the struggling economy,” Malik said.

The government did have the option of calling on an experienced finance minister, Ishaq Dar, a longtime associate of the Sharifs and a relative by marriage. Instead, Dar was appointed foreign minister, a post he has never held before.

“Ishaq Dar was finance minister four times but he never bothered to undertake structural reforms,” Haq said. He added that Dar’s stints in the job were always spent firefighting, without pushing for fundamental solutions.

A source close to the PML-N, speaking on condition of anonymity, said that “Ishaq Dar as a foreign minister will aim to further improve Pakistan’s relations with Gulf countries, with the backing of Nawaz Sharif,” the party patriarch who had been tipped to become prime minister again before an unconvincing election performance prompted a shift to his younger brother, Shehbaz.

“That’s why the appointment of Dar as foreign minister is a good choice,” the source said.

Another cabinet appointment drawing scrutiny is that of Mohsin Naqvi, who has been handed the portfolio of the Interior Ministry and concurrently chairs the Pakistan Cricket Board.

As head of the Interior Ministry, Naqvi will be in charge of all federal law enforcement in Pakistan. But critics say his previous role as the caretaker chief minister of Punjab province, from January 2023 until last month, makes his selection inappropriate.

Officials in a caretaker setup are supposed to be neutral and oversee elections. If a top caretaker official joins a government after elections he or she supervised, that neutrality is called into doubt. Naqvi is even running in the upcoming Senate elections.

“A minister, chief minister, or prime minister of the interim caretaker set-up cannot contest elections that they supervised. If they can’t even contest elections, how can they even think of joining the cabinet of the incumbent government? Strange things are happening in Pakistan,” Ali Muhammad Khan, a leader of the PTI, posted on X.

A government official, who did not want to be named, expressed concern. “It’s likely that the appointment of Naqvi in the cabinet can be challenged in the courts,” the official said. “An adverse decision by the courts will be a major setback for the government.”