The four candidates who are in the run to replace Tarin are (clockwise): Minister for Planning and Development Makhdoom Shahabuddin (APP photo), economist Hafiz Pasha (photo courtesy www.adb.org), former State Bank Governor Ishrat Husain (photo courtesy www.sbp.org) and Arif Habib Investment Ltd chief executive Nasim Beg (photo courtesy www.arifhabib.com.pk).

KARACHI: Pakistani Finance Minister Shaukat Tarin said on Tuesday he was stepping down to focus on his private business interests.

Tarin’s resignation (as aleady reported earlier) is not expected to destabilise the government but international donors will be keen to see a respected minister appointed in his place.

Prime Minister Syed Yusuf Raza Gilani accepted Tarin’s resignation at the Prime Minister’s House later on Tuesday.

In his resignation Tarin offered to extend his services and advice to the government when necessary.

Gilani said that in order to ensure the continuity of policies, the government would like to acquire Tarin’s services in the National Economic Advisory Council.

Pakistani stocks fell on the news as well as on confirmation of a 10 per cent capital gains tax that will soon be applied to the purchase of shares, dealers said.

“Tarin knows and understands the market well and there’s a bit of uncertainty about who will replace him,” said Sajid Bhanji, a dealer at brokers Arif Habib Ltd.

The Karachi Stock Exchange (KSE) benchmark 100-share index was down 1.22 per cent at 9,831.19 at 0916 GMT.

There has been speculation for weeks that Tarin, who negotiated an International Monetary Fund loan in 2008, would resign.

“It is our duty, we should not mix up our official duties and personal business,” Tarin told Dunya Television.

Earlier, government officials said Tarin was stepping down to focus on his private banking interests.

In March 2008, a consortium comprising the International Finance Corporation, Bank Muscat, Nomura and Sinthos Capital, led by Tarin and another Pakistani banker, Sadeq Saeed, bought an 86.55 per cent stake in Silk Bank for about $213 million.

“He will be leaving soon, maybe as early as this week,” said a government official, who declined to be identified.

“He said he needs to focus on his business and that he can’t do both things at the same time,” he said.

The News newspaper said new investors in Tarin’s bank wanted him to step down and concentrate on the bank.

“New investors in his Silk Bank had set preconditions that they will invest billions in the bank provided a seasoned banker like Tarin pays full-time attention,” the News said.

FOUR NAMES
Another government official said four candidates were in the run to replace him.

One was former central bank governor Ishrat Husain, another was Hafiz Pasha, an economist on a government panel, and a third was Nasim Beg, the chief executive of Arif Habib Investment Ltd.

Minister for Planning and Development Makhdoom Shahabuddin was also in the running for the job, the second government official said.

But another official with knowledge of developments said former State Bank of Pakistan governor Husain had declined the offer.

“He was approached by the government but he has told them that he is not interested,” said the official, who also declined to be identified.

Tarin, asked by reporters this month about the possibility of his stepping down, said he had not resigned nor had he discussed stepping down with anyone.

But on Monday, Prime Minister Yusuf Raza Gilani was caught advertently by media microphones telling a former finance minister, Ishaq Dar, that Tarin would be leaving.

Tarin was appointed the prime minister’s top adviser on economic affairs in October 2008 and later sworn in as finance minister.

Tarn negotiated an IMF emergency loan package of $7.6 billion in November 2008 to avert a balance of payments crisis and shore up reserves.

The IMF increased the loan to $11.3 billion in July and the central bank received a fourth tranche of $1.2 billion Dec.28.