Away from the political rhetoric, noise, corruption allegations, and political and social slur, few politicians, technocrats, and officials who matter are understandably concerned over the country’s deteriorating economy. Institutions are no exception, as they are aware of the sharp downward economic trend. They are conscious of the fact that the time is fast running out, and they all must step in to stop the economic slide before it is too late. Any procrastination on taking difficult economic decisions, which have been on hold for a long time, is no longer possible.
The establishment of a strong government is the first step in this direction. The recent meeting between President Arif Alvi and the Election Commission of Pakistan and their “agreement” to hold elections on 8 February seems to be an outcome of the same realization. Though there is a lot of discussion about the likely government setup in the future, the need to introduce painful economic reforms is often overlooked.
Pakistan continues to remain on the verge of economic default, and the change of government will not alter this reality. The success in managing the plummeting exports, rupee devaluation, external debt obligations, privatization of loss-making state enterprises, and burgeoning twin deficits will decide the fate of the next government. The government will have to achieve these goals under the strict IMF diktats, which seldom take into consideration the hardships being faced by the people.
Would any future government like to subdue before the IMF diktats and put at risk its political capital soon after assuming power? Probably not. Would it enjoy leverage to delay the IMF program and postpone the next tranche? Absolutely not. It is in this paradoxical situation that the next government would assume power. Without having any breathing space, its popularity would exponentially erode, which may unsettle it from the very outset.
The prevailing situation is surely not an ideal setting for undertaking the painful economic reforms because the future government would likely face people’s pressure to ensure economic expansion, strong social welfare policies, increase in subsidies, and cut in utility costs. This is not the first time that people’s expectations are absolutely opposed to the diktats of the IMF, but what makes the situation untenable this time are the people’s unprecedented need for immediate relief on the one hand and the IMF’s pressing demand for economic stabilization on the other.
Pakistan has been able to avert the impending default for almost a year, but this is primarily a result of suppressed imports, rupee devaluation, and assistance from friendly countries like China, Saudi Arabia, and the UAE. There is hardly any significant increase in exports or surge in foreign direct investment (FDI). The Gaza tragedy seems to have jolted the very purpose of the Special Investment Facilitation Committee, which is a result of the institutions’ joint efforts to attract FDI in the country.
The prospects of FDI from Saudi Arabia and the UAE no longer look bright as their priorities have diametrically changed after the massacre in Gaza. The flames of genocide pose a threat that the war may spread to neighboring countries and ultimately engulf the entire Gulf region. This situation may further deepen Pakistan’s political and diplomatic predicament. The possible increase in fuel prices and any military adventurism in the neighborhood could further increase the political and economic instability in the country.
This is primarily the economic, political, and geostrategic situation in which the new government will take oath after the 8 February elections. This is certainly not an ideal setting for any political party to start a new innings. The deep fragmentation, which started after the 2014 Faizabad sit-in, could prove to be a huge destabilizing factor for the newly installed government.
It calls for a grand consensus among all stakeholders before elections are held on 8 February. It is easier said than done. The 9 May tragedy of direct attacks on military installations, including the General Headquarters, has made such a consensus extremely difficult. It is not a mere political issue anymore. The terrorist incidents that happened on that unfortunate day posed a serious threat to the security and integrity of Pakistan. It is, therefore, impossible to move ahead for consensus building before an impartial and independent investigation is completed into the causes that led to the mayhem on 9 May.
Viewed in this perspective, the saner elements within the PTI must cooperate with the investigating agencies and express the desire to make a new beginning ahead of the elections. The stigma of the 9 May incidents will not allow the PTI to take part in the country’s electoral process in a normal way. Keeping the PTI out of the electoral process is not a solution either. It remains a popular political party, particularly among the young people in the country.
It is time the PTI and establishment realize the critical situation of the country and accommodate each other, barring the elements who participated in the 9 May mayhem. The PTI’s cooperation in the investigation process will be paramount in this regard. Simultaneously, the party should open talks with other political parties in a spirit of reconciliation and accommodation. Politicians have the ability to hold talks and find a way out, even in the most difficult situation. This should not be difficult this time because they all know the possible repercussions of keeping a popular political force out of the electoral process.
The vexed question is whether our politicians can demonstrate the required maturity and sagacity at this critical juncture of the country’s political history. They must know that a truncated electoral process will not yield the kind of strong government that is necessary to make a new beginning on the economic, political, and security fronts.
It is worth mentioning that there are hardly any differences in the country’s economic challenges, but the political fragmentation deprives the government of the mandate to address those challenges. This has been continuing for decades. The state has been managing this handicap so far, but this cannot continue forever.
