Asad Umar

Early life and background

Umar says he is the youngest of his siblings. He says no one in his family had been in politics before him. He was ten years old in 1971 and says he remembers the news of the country's breakup. [3]

He says his first love was flying the F-104 Starfighter. His height, he says, ruled out a career as a pilot. He played cricket for the Sindh Under-15 team. [3]

Education and institutional roles

Umar enrolled for an MBA, following his two elder brothers, who had both done MBAs. He says he was among the first batch to receive a new excellence award launched for alumni. He has said he sat on the board of trustees of LUMS and on a selection committee at another institution. [2][3]

Business career

Umar's first job was as a business analyst at Exxon. He worked for Exxon in Pakistan, and Exxon then transferred him to Canada. He says he was far happier after returning to Pakistan than he had been in Canada. He says Exxon sold its Pakistan fertilizer operation in what he calls the country's first employee-led buyout. He says Exxon is no longer in Pakistan and has become Engro. [3]

He became chief executive in January 2004. He says the company had been a chemicals business before it launched the food business, and that the launch came during his eight years as chief executive. He says the food business was headquartered in Canada. He took early retirement in May 2012. [3]

He says the company launched an energy business and built a power generation facility. He says it produced 220 megawatts of electricity from gas that was otherwise being wasted. He says it built a urea plant that he describes as the world's largest, located in Pakistan. He says the company acquired a majority stake in an engineering services company in America. He says the first LNG import terminal project began during his time as chief executive. [3]

He says he was founding chairman of an LNG company and a coal mining company. He says the company formed a joint venture with Mitsubishi and Asahi Glass. He says its first diversification was a chemical terminal built as a joint venture with a Dutch company. He was made chief executive at age thirty-six, and Japanese colleagues reported to him. [3]

Umar has said his team at Engro worked extensively on agriculture, and that he took investment pitches to the Engro board. He says the company recruited Pakistanis from top universities, including Harvard, Stanford and Oxford. He says several members of the management team later became chief executives of major Pakistani corporations. He says he pushed team members to think bigger when he saw their potential. [2][3]

Views on leadership

Umar says the basic cause of the losses was a mistake in the feasibility study, which he led and for which he was responsible. He says a harsh response to that one mistake would have stopped him taking risks. He says a leader should hire people better than themselves, and that most of his team were better than him. He says that when a leader makes a mistake, they should acknowledge it. He says the mantra for building a business is to think big, start small and scale up rapidly. [3]

He says no feasibility study fully predicts what happens once a business starts. He says people naturally have a positive bias and seek out good news quickly. He says society tends to reward inaction, and that leaders should not punish people doing good work for a single mistake. [3]

Joining PTI

Umar first met Imran Khan in the late nineties, when Khan was raising funds. He says he made the decision to enter politics in 2012. He says one argument put to him was that Pakistan needed him, and the other that he needed a major challenge. He says a one-year deal was agreed, under which he would come for one year. [3]

He says he had no intention of entering electoral politics after joining PTI. He says that a few days after an election he was told he was needed in the assembly. He says he spent about three days a week in his constituency while in opposition. He was national campaign manager for the 2013 election campaign, which had many mistakes. He says the team learned from those mistakes and corrected them by the 2018 election. [3]

Government roles

Umar has said he chaired the standing committee on industries while in opposition. He has said that in 2018, a month or two after his government came in, he visited the Karachi Stock Exchange and, asked how long it would take, said two years. He has said winter was coming right after he became finance minister. He has said that as finance minister, six additional secretaries reported to him, and that he chaired the ECC as finance minister. [1][2]

He followed up personally on decisions he made in the planning ministry. He has said he obtained Prime Minister approval for a technical agreement with Harvard. He has said he organized an event for the top 100 taxpayers, where the Prime Minister gave awards. He has said his second supplementary finance budget included measures on renewable energy and digitization, and that he got the law changed through a supplementary finance budget. [2][3]

He has said he called market participants before a State Bank launch he was invited to, and that he personally phoned private sector figures before the State Bank policy was announced. He has said he wanted to create a deputy governor post for digitisation at the central bank. He has said his government made an agreement under which satellite-based reports reach him every four days. He has said that instead of filling posts with government officers who have no career path or incentive, private sector firms should be taken on a competitive basis. [1][2]

He has said he held meetings with 80 to 90 large Chinese textile players. He has said Chinese textile investment came to Pakistan and the investors were happy with the team's work. [2]

He says the NCOC met daily and made and implemented decisions. He says the country coming together was the defining feature of its COVID response. He says Bill Gates visited the NCOC and commented on the quality of the work done. He says his comment at an NCOC event read that Pakistan can meet any challenge when it comes together. He says the military side is better than civilians at operational execution. [3]

Views on the economy

Umar has described the economic situation as the darkest period Pakistan has ever seen. He has said the provisional GDP growth rate was 0.3 percent and that the economic slowdown is the sharpest since 1971. He has said inflation is the highest in Pakistan's history. He has said there is no exogenous shock or major natural disaster behind the current crisis. [1]

He has said State Bank reserves have fallen below 4 billion dollars and that Pakistan's import cover is at the lowest level in the country's history. He has said interest payments next year are above 7 trillion. He has said interest expenditure is 7.3 trillion and defence expenditure is 1.8 trillion. He has said the expected FBR revenue was 9.3 trillion. [1][2]

He has said almost the entire optimistic FBR revenue was eaten up by interest and defence spending. He has said inflation is already running at 38 percent and that Pakistan could enter a hyperinflationary environment it has never seen before. He has said Pakistan's sustainable growth rate keeps falling, and has cited an ADB estimate that it is no more than 3.5 to 4 percent. [1]

He has said the IMF's purpose is debt sustainability, not raising people's living standards, and that the IMF was created as a global lender of last resort. He has said Pakistan had reached a point months earlier where an IMF programme was necessary. He has said the rupee was artificially controlled with billions of dollars, which created a macroeconomic crisis. He has said that in a National Assembly speech he said the Titanic was about to hit the iceberg. [1]

He has said his government moved exchange rate management from a managed float to a market-based system, and that Pakistan moved to a market-based exchange rate for the first time in its history. He has said a free float does not make sense for Pakistan, but a market-based flexible system is acceptable. He has said the economy was moving in a positive direction while Imran Khan was prime minister. He has said COVID slowed reform progress on top of the crisis the government inherited. [1][2]

He has said federal PSDP, once about 7 percent of GDP, is closing this year at half a percent of GDP. He has said government development spending crowds in private sector investment. He has said development funding is now small and dominated by infrastructure spending. He has said the Sukkur-Hyderabad motorway, the first big project under that structure, is moving to implementation, and that the viability gap funding was split into capital and operational VGF. [1]

He has said structural reform takes time to implement and longer to show results, and that people should prepare for a tough period of three to five years. He has said Pakistan cannot exit its crisis without structural reforms and that it needs a debt restructuring. He has said a deep reform commitment cannot come from a government that does not know how long it will last. [1][2]

He has said Pakistan's implementation capacity in government has become very weak. He has said sustainable growth needs structural change without running down existing industries. He has said the finance ministry's job has become short-term revenue and meeting government financing needs. He has said he is not very keen on negative incentives. [1][2]

He has said the non-level playing field is destroying the productive sectors. He has said real estate players are the largest single source of money going into politics. He has said money going into real estate is the biggest killer of productivity in Pakistan, and that the economy cannot be fixed while real estate is used as a sink for black money. He has given the example of land bought at 200 and declared at 20, with the rest unrecorded. [1]

He has said real estate has a net negative effect on productivity. He has said land about two hours outside Melbourne was cheaper than land in interior Sindh. He has said Pakistan's saving rate is too low and taxing savings punishes people for saving. He has said taxing agriculture is an equity issue more than a revenue issue, and that agriculture's revenue potential is very limited. [1][2]

Digital economy

Umar has said the government's single-minded focus should be moving the economy toward digitisation. He has said spectrum licences and the bandwidth that goes with them are the digital motorways, and has described spectrum as the digital motorway. He has said he pressed the cabinet to release spectrum rather than hold it. He has said the economic benefits of broadband penetration far exceed license fees. [1][2]

He has said digital transactions give the state data to target tax collection better. He has said he wanted data analytics run on tax returns to check tax evasion. He has said the solution to documenting the economy will come from digitization, not from the FBR, and that documentation follows economic growth rather than causing it. He has said a digital account brought billions of dollars into the country. [1][2]

Energy

Umar has said that allowing wheeling alone creates competition. He has said nearly every well has a different price, with different formulas and different zones in Pakistan. He has said removing state control of the energy market is not a small step. He has said LNG should be deregulated, and that market-based electricity and market-based gas are the two biggest reforms needed now. [1][2]

He has said the power distribution companies (discos) should be at the top of the privatization list, and that the discos and power plants should be considered for privatization. He has said privatizing PIA is easy on paper but hard in reality. He has said Pakistan was importing LNG at 10 to 12 dollars. [2]

Trade and growth

Umar has said exports as a percentage of GDP have fallen to less than half and that Pakistan exports almost nothing to China. He says Pakistan's chronic economic problem is a current account deficit, because it does not export enough. He says exports rose by more in one year than in the previous ten years. He says farmers earned more money than ever before. [2][3]

He says creating economic opportunity for young people was a core objective of his strategy. He says his team prioritised several sectors, including agriculture, IT and construction. He says agriculture is the biggest employment sector in Pakistan. [3]

Youth and the future

Umar has said two-thirds of Pakistan's population are youth, and he says Pakistan has one of the youngest populations in the world. He has said young people are hungry for massive change and that people of his generation will gradually phase out and young people will take over. He has said Pakistani youth can plug into the world through freelancing or jobs and bring money home. [1][2][3]

He says Pakistanis can compete with anyone in the world when given an equal chance. He says he always encourages young people to pursue entrepreneurship. His standard advice is to believe in yourself and in your country. He has said he had never seen the hopelessness he now hears about. [1][3]

Political outlook

Umar has said he planned to quit in 2023. He has said he has zero chance of becoming finance minister again and expects no cabinet portfolio for himself. He has said people have urged him to become energy minister and he may do so. He has said the ministry he would want to run is the IT ministry. [1][2]

Personal life

Umar says he was held for 25 days in total across four different places, including jails, and that all 25 days were spent in solitary confinement. He says political work left him away from family and without a social life. He has said the personal sacrifice of time away from family and loneliness has grown. [1][3]

Timeline

1971

Aged ten, remembers the news of the country's breakup[3]

2004

Became chief executive in January[3]

2012

Took early retirement in May and made the decision to enter politics[3]

2013

National campaign manager for the election campaign[3]

2018

Visited the Karachi Stock Exchange and said it would take two years[1]

2023

Said he planned to quit[1]

Appearances

Frequently asked questions

References

1. Pakistan's economy has never been this dark . Thought Behind Things , 2023-06-09.
2. Asad Umar: Pakistan cannot grow without deep reform . Thought Behind Things , 2023-03-10.
3. Journey of Asad Umar | Engro, PTI, Jail & more | Hustle E59 . Hustle , 2023-12-20.