Pakistan Elections: Foreboding of a fraught future

The economic crisis confronting Pakistan is the worst in its history and will be a priority for the next government.

Only the most die-hard optimists believe that Pakistan's general elections on February 8 will usher in a period of stability and certainty into a country that has been buffeted by a storm of crises that have all come simultaneously. The realists are convinced that the elections will only add an additional layer to an already fraught situation caused by a fragile economy, a fragmented polity, a frightening security situation and fraying foreign relations.

The existential challenges confronting the country are unlikely to be solved by an extremely controversial election of a government that will be as empowered as a glorified municipality. Not only will it be a government bereft of popular support — arguably the most popular political party, Imran Khan’s Pakistan Tehrik-e-Insaf (PTI) has been enchained — it will be hemmed in by an overbearing, interfering and interventionist military.

Politics In A Mess

The next government will neither have the political capital nor the political space to do its own thing, even less so because it is not expected to have a clear majority in the National Assembly. It will be dependent on the support of the Army to survive in office and will be forced to swallow some very bitter pills that will politically be extremely damaging. Simply put, far from being the path to power, the elections in Pakistan could well prove to be the road to perdition.

Political pundits in Pakistan are predicting that former Prime Minister Nawaz Sharif’s Pakistan Muslim League (PML-N) is likely to emerge as the single largest party. Unless the Pakistan Army’s fixing of the electoral battlefield goes horribly wrong, PML-N will be well short of a majority in the National Assembly. This means it will have to cobble together a government with the help of smaller parties and independents, most of whom will act at the behest of the Pakistan Army.

There is some speculation of alternative coalitions that could be formed without the PML-N at the helm, but the chances of this happening appear slim. Despite all the obstacles placed in their path, the PTI candidates who are in the fray, albeit as independents, are likely to win a handful of seats. But it would be nothing short of a miracle if they manage to win 40 to 50 seats out of the 266 directly elected seats.

If that happens, the entire political apple cart of the military will be overturned. The bottomline is that regardless of the permutation and combination of the next government, it will by definition be weak. And yet it will be expected to pull Pakistan out of the ditch in which the country finds itself even if this is at the cost of its own political future.

Broken Economy

The economic crisis confronting Pakistan is the worst in its history and will be a priority for the next government. The caretaker government has managed to keep a lid over the horrendous problems afflicting the economy - an unsustainable debt, high inflation, virtually no growth, high fiscal deficits,  low savings and investment, very low revenue collection, a totally broken energy economy with high tariffs and exponentially rising circular debts, bankrupt PSUs, collapsing industrial sector, and an unaffordable but inalterable scheme for sharing resources between the federal and provincial governments.

But the deep systemic and structural problems will not only require correct policy prescriptions but also the political will to implement the reforms without which the economy will sink even deeper into the morass in which it is caught.

Because the new government will have pretensions of being popularly elected, it will want to give some relief to the economically distressed population. But given that Pakistan will be entering into yet another structural adjustment programme with the IMF (its 24th) by June (when the current stand-by arrangement ends), there won’t be any financial space to dole out funds or indulge in grand projects.

Not only will the government have to contend with an empty and stressed treasury, it will also have to put up with a super-government in the form of the Pakistan Army dominated and controlled Special Investment Facilitation Council (SIFC) that is now the main economic policy decision making body calling the shots on everything from investment to privatisation and from new laws to pricing decisions. Somewhere along the line, there will be a conflict between the nominal government of civilians and the real government of the military, something that makes the incoming arrangement inherently unstable.

Clueless Politicians

The other problem is that even if PML-N was to form the next government, it doesn’t really have a clear, cogent and coherent plan to revive the economy. Nawaz Sharif and his party are still living in the past. Their pitch is their past performance which really is what set the stage for a lot of the current problems. The old days of growth on borrowed money are long gone. But not for Nawaz Sharif or Ishaq Dar his close relative and former finance minister, the man who revels in his ignorance of economics, and his ability to keep mouthing half truths and plain falsehoods - “Pakistan was the 24th biggest economy in 2017” (factcheck: it was 36th in GDP terms).

Ishaq Dar who is Nawaz’s finance man thinks that being an accomplished chartered accountant who can fudge data and window dress the balance sheet is what makes for good economics. The PML-N economic plan is best described as a fuzzy economics based on a combination of good old voodoo economics and hopes and prayers of money pouring in to end Pakistan's economic troubles. They think that selling some assets, borrowing lots of money, striking deals with Chinese, Saudis, UAE, Qatar will be enough to pull Pakistan out of the rut.

But this ain’t happening. The price of money has gone up in direct proportion to the fall in Pakistan’s geopolitical and geo-strategic importance.  Wooly headed schemes to reduce electricity tariffs, doling out freebies and funding mega projects, are no longer possible. But Nawaz and other political players think they can indulge in fiscal profligacy because ultimately Pakistan is too dangerous to fail.

The trouble is that not just the politicians but even the military thinks they can keep doing business as usual with a few tweaks here and there. It is almost as if the entire country is in denial over the reality of the magnitude of the crises confronting it. The people probably sense it because they are suffering it; but the elite that has captured the state is having its ‘Marie Antoinette moment’.

Sushant Sareen is Senior Fellow, Observer Research Foundation. Views are personal, and do not represent the stand of this publication.