Daunting Economic Challenges of Pakistan

By Asif Haroon Raja

Unsavory history of the cluster of 12-party coalition

After the dissolution of the National Assembly (NA) on the advice of former PM Imran Khan (IK) on April 3, the PTI regime was shown the door by the PDM joined by the dissidents from PTI through a vote of no confidence on April 9. This was made possible by the Supreme Court. Shahbaz Sharif (SS) secured two more votes above the magical figure of 172 and got elected as the new PM.

This time it is not the show of PML-N that had bagged two-thirds majority in the 1997 and the 2013 elections under Nawaz Sharif (NS), but it is a collection of 12 parties and each party has a soiled past. Besides PML-N, two other major parties in the coalition are the PPP and the JUI-F.

The PPP which had been reduced to Sindh based regional party in the 2013 elections and was wiped out in Punjab, is aspiring to regain entry in Punjab and once again qualify to become a national party. All others are regional nationalist parties that are opportunists and greedy.

The PML-N has a tag of security risk owing to NS’s fondness for Modi and involvement in the Dawn leaks scandal in late 2016 and his distasteful statement that Pakistan was involved in Mumbai attacks in Nov 2008. The PPP apart from being branded as the most corrupt political party, its leadership was in cahoots with Washington in the release of Raymond Davis, in the US stealth attack in Abbottabad, and in the Memo gate scandal. Zardari had hurled threats to Lt Gen Raheel in 2015, saying he was temporary and political parties were permanent and that he would hit back brick with stone. He and his sister Faryal, involved in mega corruption, were given a clean chit by the courts.

JUI-F leader Maulana Fazlur Rahman remained as Chairman Kashmir Committee from 2008 till mid 2018 but did nothing for the Kashmir cause. He indoctrinated and militarized tens of hundreds of Madrassas run by his party and has raised a militant force named Ansarul Islam.

MQM-P is an offshoot of absconder Altaf Hussain led MQM, but comprises all the leaders and activists of Altaf group that were involved in heinous crimes from 1986 onwards in urban Sindh. Its leader Siddiqui has a list of seven demands which include two federal cabinet seats, seat of Governor Sindh and reopening of the sealed offices that were in use of unit/sector commanders involved in target killings and kidnapping for ransom. Its wish of governorship has been met and Nasreen Jalil nominated. The MQM-P would like the wings of Sindh Rangers to be clipped and influence of Altaf’s unit/sector commanders to return.

BNP-M, led by Akhtar Mengal also carry a six-point demand list, which includes removal of socio-economic grievances of the Baloch, full rights on natural resources of the province, recovery of missing persons, removal of Frontier Corps (FC) and ISI/MI from interior Baluchistan. Shazain Bugti who is part of the government, his party militants have been fighting the security forces in Baluchistan.

The PTM led by Manzour Pashteen, Ali Wazir and Mohsin Dawar, all deeply connected with RAW and former NDS, and with a known anti-army history, demand cancelation of merger of FATA with the KP, removal of army from the tribal belt and making it a separate province.

Cooperation of BNP-M MQM-P and PTM will be conditional to Pak Army/Rangers/FC’s disassociation from counter terrorism and are likely to continue to criticize Pak Army at the behest of their foreign patrons.

The ANP headed by Asfand Wali is an old associate of the Indian Congress. After supping with former regimes of Afghanistan including Karzai and Ashraf Ghani regimes as well as with Russia, it is now cozying up with the Taliban regime in Kabul. The ANP didn’t accept any portfolio in the cabinet due to its reservations and is still tied to the agenda of Pashtunistan.

Immediate challenges

SS had earned fame on account of successfully steering the ship of Punjab from 2008 to mid-2018 as the Chief Minister (CM). He has worn the crown of thorns and sat on the seat of the PM for the first time. His plate is overflowing with an overabundance of compound problems and the overall situation is as gloomy as Sri Lanka which has defaulted and the outraged people are on a rampage. They have torched the house and fleet of cars of the PM Mahinda forcing him to resign, and houses of some legislators have also been burnt.

While restoring the health of the sick economy is the biggest challenge, SS main worry would be how to keep the greedy allies appeased and united, and above all how to deal with the combative politics of PTI as well as pending court cases.

Economic uncertainties

Pakistan’s economy is teetering at the edge of bankruptcy. SS is faced with depleting foreign exchange reserves ($ 10.5 billion), soaring public debt, foreign debt, circular debt, trade imbalance, fiscal deficit, current account deficit, and has little in the national kitty to present the new budget. Extraordinary high inflation and prices of food items and daily commodities are continuing to rise. Balance of payment is obstructing GDP growth. Value of the dollar is appreciating and the Pak rupee depreciating. Petrol price is likely to further shoot up to rupees 200 per liter, and rupee value might dip to rupee 210 to a dollar. Stock exchange is plummeting, imports are high and exports low. Tax base is narrow and revenue generation low. Energy and petroleum sectors are enervated, while the majority of the state corporations are loss making. The CPEC that had slowed down after 2018 has yet to pick up momentum and the CPEC Authority has been terminated.

The IMF that had expressed its readiness to release the stalled 7th installment of $ 6 billion loan package and to further increase it to $ 8 billion, has suddenly taken a U-turn after learning that the new government is not extending the tenure of State Bank Chairman Reza Baqar. Release of the next tranche will be decided in a meeting at Doha on May 15, but subject to Pakistan agreeing to remove subsidies on electricity, petroleum and fertilizer.

No country including close friends are ready to bailout Pakistan from its economic crisis. Financial relief package and oil on deferred payment offered by Saudi Arabia has also run into snags and UAE, Qatar and China are reluctant to dole out commercial loans due to IMF’s attitude. China is threatening to close down its IPPs if $ 2 billion are not immediately paid.

There is no change in the pompous lifestyle of the elite class and so far no steps have been taken to drastically cut down wastefulness and adopt austerity. Gap between the rich and poor is widening and more people have gone below the poverty line. So far no relief has been given to the lower classes groaning under the weight of poverty and deprivations.

No comprehensive economic policy and roadmap has been made by Miftah Ismael guided by runaway Ishaq Dar to ‘fix’ the derailed economy. A meeting of PML-N core leaders including SS chaired by NS was held in London on May 11 to chalk out future plans. It is a clear indication that NS is calling all the shots.

Self-serving agenda of ruling band

Kashmir is still bleeding and is under illegal occupation of over one million security forces. Kashmiris are being killed and tortured and the women raped with immunity. The genocide of Kashmiris is aimed at changing the demography. Modi is giving an impression to the world that all is well in J&K and the region is being developed and modernized. Although the PTI regime couldn’t lessen their pains, for the first time it had exposed the ugly face of the extremist BJP regime through an offensive media war.

Managing the cabal of 12 political parties that were part of the PDM, each hungering for lucrative cabinet seats is taxing for the new PM. He had to labor hard for a week to convince the coalition partners to accept the allotted ministries and take oaths of their offices. In deference to the wishes of the coalition partners, all of them have been taken off the ECL. Zardari was the first to avail it and went in an exclusive chartered plane to London and reportedly carried 20 suitcases with him.

The PPP aspired for the seats of President, Chairman Senate, good number of cabinet seats and Speaker NA, Governor Punjab and seat adjustments in Punjab. The Foreign Ministry is under the exclusive control of Bilawal and Hina Rabbani. Maulana Fazlur Rahman wished for the president’s chair but was happy to get four cabinet slots including deputy speaker NA and the ministry of communications.

Both the PPP and the PML-N would be interested in curtailing the power of NAB and its authority to put an accused in detention for 90 days. FIA has withdrawn from pursuing money laundering cases of SS and Hamza. Almost the whole of Bar Councils in Punjab and the Supreme Court Bar Council are pro-PML-N. Ground is being smoothed to declare NS innocent and thus make him eligible to contest elections and adorn the PM chair for the 4th time.

The PPP might be having a bigger agenda up its sleeves. It had betrayed the PML-N in 1993, in 2007 and has again misused it four times in the last 4 years. During their last honeymoon with the PML-N in 2008, the two had passed the controversial 18th Amendment in 2011, which granted maximum autonomy to the provinces. The PPP is exploiting it to the hilt. This time they do not enjoy two-third majority to pass a constitutional bill, but their ambitions are to civilianize the ISI and to cut to size the meddlesome role of the army.

Hina Rabbani virtually attended the donors conference over Ukraine issue in Poland, while Bilawal has been invited by the US Secretary of State Blinken to attend a food-security meeting in New York on May 18. Probably the loose ends of Pakistan’s foreign policy will be tied up. Initial tuning and netting was done during the last visit of Bilawal in 2021, after which Zardari used to boast that the next government will be of the PPP and it will form governments in all the four provinces.

Indications are that the US is keen to normalize relations with Pakistan and has been issuing clarifications that it was involved in regime change. Ignoring the past track record of the double dealing USA, SS favors deepening relations with the US and is against antagonizing the sole superpower. Mutually respectful and beneficial relationship aspired by our leaders is a pipedream. The US has always regarded Pakistan as a rentier client state. SS will be content with transactional but friendly relations.

Punjab in a predicament

The political situation in Punjab is still in choppy waters. After the physical brawl in the provincial assembly in which the Deputy Speaker and the Speaker Pervez Elahi were injured on the day of voting, the Governor Punjab Cheema belonging to PTI refused to give oath to the newly elected Chief Minister Hamza Shahbaz son of SS. Cheema adamantly refused to reconcile with Hamza’s appointment saying he captured power unconstitutionally. The PTI’s President Alvi refused to de-notify him on the PM’s advice, but he was finally de-notified through the court order on May 9, his protocol and security were withdrawn, and the Governor House sealed. Cheema has refused to step down and the president stands behind him. The Speaker Pervez declined to take over as acting governor. Hamza has so far not been able to form a cabinet.

Disqualification of PTI dissidents

High hopes of the PTI leadership dashed when the ECP in response to the former NA Speaker’s reference to disqualify 33 MNAs of NA, didn’t disqualify them since they had never voted. Case of 25 PTI dissident MPAs of Punjab Assembly will be different since they had voted for Hamza.

War of narratives and sabre rattling

The PTI has succeeded in selling its narrative to the public which is based on ‘foreign conspiracy and imported government of looters and traitors’. Ruling MNAs and dissidents are being heckled and harassed by the public both inside and outside the country.

IK is riding on a high crest of popularity and is attracting huge crowds in his public meetings in various cities. His fading charisma has revived and his inanities during his 3 ½ years rule forgotten and forgiven. The people are not accepting the new set-up whom they see as rotten eggs. IK is demanding early elections and is confident that next time he will sweep the elections with a thumping majority.

The high-pitched fervor and emotionalism on display since April 10th was seen on March 23, 1940, in August 1947 and during the 1965 war, and the heydays of ZA Bhutto in the 1970s. Pumped up by the massive size of his rallies and the gusto of his supporters, IK is castigating his opponents, the ECP, the judiciary and the army chief whom he mockingly calls ‘neutral’, a ‘facilitator’, a ‘handler’ of the conspiracy. After naming him Mir Jaffar in his Abbottabad speech, he changed his stance at Jhelum by saying he meant SS. He and other PTI senior leaders are violating the constitution, endorsing politics of agitation, hate and violence, and are inciting his followers. IK arrogantly crowed that it will be a bloody long march which no power on earth will be able to stop.

IK is watching the large scale protests and violence in Sri Lanka with a twinkle in his eyes. The well-trained and battle hardened Sri Lankan Army which fought LTTE insurgency for three decades and successfully crushed the rebellion, couldn’t disperse and suppress the street power. IK is inwardly hoping for a similar scenario in Pakistan. He is exhorting his 2 million marchers to storm Isbd from two directions like a hurricane and sweep away all the obstacles and the sitting government.

Government’s response

To dampen the rising tide of PTI’s public gatherings, the PML-N, PPP and JUI-F leaders are also holding public meetings but so far the balance is heavily tilted in favor of IK. The government cannot match PTI’s offensive unless it frames an effective narrative which should be as appealing as that of PTI’s narrative. Maryum Nawaz and other PML-N leaders are also resorting to similar tactics and injecting hatred into politics. Worthwhile narrative cannot be framed with two PMs and two finance ministers, and divided thoughts on early or delayed elections. Zardari has ruled out elections without electoral reforms and change in NAB laws.

As a tit-for-tat, a series of corruption cases are being initiated against the PTI leaders. Tosha Khana and Farah Gogi cases are being investigated hoping that it would help in tearing the mask of honesty worn by IK and in belittling him. Unlike the last tenure of PML-N in which it was very soft towards the vandalism of the PTI, this time the coalition government seems determined to handle them more firmly. With hardnose Rana Sanaullah as Interior Minister, it is possible that the protestors are dealt with an iron hand the way the TLP activists were brutalized by the former regime.

The government is pinning hopes on the foreign funding case against the PTI pending in the ECP court since 2016 which is being concluded this month. It is hoping that if the decision goes against the party, it could pave the way for its disbandment. A bill has been moved in the NA to deprive the overseas Pakistanis from voting. There are plans to place IK and other key leaders of the PTI under house arrest.

Tussle for power

While the government is banking on state power, NAB, judiciary and media, the PTI which is a lone warrior is drawing strength from public anger and street power. Outcome of the elections whether held early or delayed would depend upon the performance of the incumbent regime. If SS performs and manages to bring down prices and give some relief to the people, PML-N would win the next round. If it fails, PTI will bounce back.

Tussle for power will be between the PML-N and PTI. Irrespective of the rising popularity graph of IK, PTI’s vote bank is confined to the urban centres. Out of the 40% urbanites, the PTI might receive up to 20-25% votes, and the rest of the votes would go to PML-N, PPP, JUI-F, TLP and other regional parties. In the rural and semi urban belts where over 60% population reside, the vote bank of the PTI is narrow. In rural Sindh the PPP is predominant, in Punjab PML-N has an edge, and in Baluchistan, outside parties have very limited influence. KP is the only province where the PTI is ahead of all other competitors. With the establishment taking a backseat, no political party will be able to win two-thirds majority.

Foreign conspiracy

There are two views in circulation. One is that the claim of IK is genuine particularly after the news splashed by Fox News that the regime change in Pakistan was American inspired. The other view is that it was IK’s created drama in which Donald Lu played the role. Authenticity of this version is being debated on the basis that the threat was made on March 7, and on March 22, the US deputy secretary of state was invited to attend OIC conference in Isbd, and soon after PTI’s ouster a delegation of US officials visited Bani Gala. And now IK is claiming that he had known about the conspiracy in July last year.

Many are questioning that the US which was behind the biggest covert war against Pakistan never mentioned or gave any hint about its involvement and kept RAW and NDS in the forefront to indulge in proxy war. If the US wanted to get rid of IK through a vote of no confidence, what was the big idea of disclosing its game plan beforehand when it had successfully brought the PDM leaders and the dissidents within the PTI in line and allowing IK to denigrate it?

Although a commission is being formed by the govt to close the chapter of foreign conspiracy, the PTI has refused to accept it saying that only a judicial commission of unbiased judges could trace the conspirator with a smoking gun in his hand, the money trail and the covert meetings of the traitors with the US diplomats. This is again self-contradictory since IK doubts the integrity of the judges.

No one is looking at the bigger game of the US which has all along been trying to roll back Pakistan’s nuclear/missile programs. Route to Pakistan’s nuclear program is through its custodians and not the politicians. IK, NS, SS or Zardari are of no significance to the US. For them, the chief concern is to weaken the trunk of the army. To this end, the Indo-US-UK-Israel nexus have been hatching never-ending conspiracies and have used the tool of subversion extensively to poison the minds of the people against the army. They have failed but have not given up their agenda.

India’s jingoism

Finding Pakistan in a muddle, the Indian leaders are back in the game of threats. On April 23, Defence Minister Rajnath Singh stated that India will not hesitate to cross the border if terrorists targeted India from outside. On April 29, air chief marshal Vivek Ram said that “we need to prepare the air force for a short swift war”. On May 01 the Indian army chief Gen Minoj Pande upped the ante by accusing that the narco-terror nexus was being pushed from Pakistan side. He exhorted his army to be prepared to deal with the twin threats posed by China and Pakistan and that the Indian military has the capability to defeat both. On May 2, Amit Shah roared that “we will hit Pakistan from inside after crossing the border”.

SS has extended an olive branch to Modi and the latter has responded positively. A decision has been taken to post a trade minister to Pak Embassy in Delhi. It will however be unfair to normalize relations and renew two-way trade with a fascist regime which feel no compunction in brazenly threatening to breakup Pakistan and has unleashed a reign of terror against the Kashmiris. There should be no talks till India agrees to revert to its pre-August 2019 position in J&K and stop the bloodshed.

Prudence and not violence is the need of the day

In the wake of extensively charged up emotions and hate-filled environments, there is a dire need to tamp down the political rhetoric and to let sanity prevail. Since neither side is prepared to lower their tempers and are bracing for a showdown, which could be bloody as hinted by IK, and the social media as well as the spoilers are sprinkling fuel to intensify hatred and to push the country towards chaos, anarchy and possible civil war, a third party will have to step in fast to act as a referee and to douse the fire. Unfortunately, the two premier institutions – the army and the judiciary – that have always come forward as saviors in testing times stand compromised.

The three pillars of the state – the military, the judiciary and the media – joined by intellectuals, academicians and prominent figures of civil society will have to play a role to put sense into the mind of egoist IK who has thrown tolerance, prudence and sagacity out of the window and is inciting the youth to resort to violence. His hate-filled rhetoric is dangerous, and his utopian narrative of “slavery or independence” is captivating but do not help in putting the crippled economy back on the rails. Disunited house is easy prey for the adversaries, while a united front would keep them at bay.

The writer is retired Brig, war veteran, defence, security & political analyst, international columnist, author of five books, Chairman Thinkers Forum Pakistan, Director Measac Research Centre, takes part in TV talk shows, and delivers talks.