Experts weigh in on how politics, economy and peace prospects are likely to pan out this year

Islamabad: With all its positives and negatives, the year 2022 has come to an end. And for Pakistan, the negatives seem to be on the higher side as the country has plunged into a state of unending uncertainty, confusion and chaos.

The year saw the first-ever ouster of an elected government through a vote of confidence. There is a perception that the ouster of Imran Khan’s government was triggered by some “back-channel” moves. But it is also true that the country had been on a rocky ride ever since Mr Khan’s Pakistan Tehreek-e-Insaf (PTI) party came into power in 2018.

Since his ouster, Mr Khan has been on the roads, holding protests, terming his ouster a conspiracy, and thereby making things worse for the 10-party Pakistan Democratic Movement (PDM) alliance which replaced him.

On its part, the PDM government is struggling to overcome a financial crisis which many see as the worst in two decades. They face allegations, mostly from the PTI politicians, that they are more focused on wrapping up corruption cases against them and doling out ministries to their favorites than on sorting economic problems of the people.

An already vulnerable economy was further hit during the year by the monsoon floods. Said to be the worst in history, these floods submerged one-third of the country’s territory, affecting over 30 million people. Besides human losses, the floods also caused material losses worth billions of rupees in the form of destroyed houses, loss of cattle heads, and of standing crops across tens of thousands of acres of farmlands.

Against this backdrop, Bol News has recorded views of intellectuals and experts from various fields to put together a tentative view of what to expect during the new year, 2023.

Maleeha Lodhi

Former Permanent Representative of Pakistan to the UN

The most consequential, make-or-break issue for Pakistan in 2023 will not be who wins the next election but whether the ongoing economic crisis can be successfully managed to avert a meltdown. Political instability, populist and flawed policies over the years, lack of fundamental reforms and an adverse international economic environment have driven the country to the brink of default on its external obligations. Pakistan needs around $33 billion in the ongoing fiscal year to fund the current account deficit and service its external debt. Public debt has risen to a record high with total foreign debt at $130.6 billion. By the end of 2022, foreign exchange reserves had plunged to 5.8 billion, which cover only a month of imports.

The outlook for the economy in 2023 is grim with soaring inflation, the current account deficit at a record high, exports declining, remittances from overseas workers contracting and debt payments piling up. The rupee’s slide also persists against the dollar. International rating agencies have downgraded Pakistan’s credit rating to junk status, highlighting the high level of default risk.

If the political turmoil and uncertainty of the previous year continues into 2023 it will further darken prospects for the economy, teetering on the brink of insolvency. Even if Pakistan is able to conclude pending reviews by the IMF and secure more tranches from its bailout program as well as secure additional funds from friendly countries, it would still not extricate it from a crisis that has structural causes that need to be addressed. The road to a sustainable recovery lies in increasing the level of private investment, without which economic growth is not possible. But investors remain hesitant in the face of political turbulence and unpredictability. Election year uncertainties are likely to further vitiate the investment climate and are already keeping the market edgy.

The only way out is for the country’s quarreling politicians to evolve a consensus on fundamental elements of economic policy and reform that address the structural sources of Pakistan’s chronic budget and balance of payments deficits that have produced repeated public finance and liquidity crises. Unless structural issues are tackled the country will not escape from the trap of stagnant growth, low savings and investment, high deficits, heavy borrowing, growing indebtedness and soaring inflation. Measures needed to salvage the economy should be taken off the political battlefield. Political leaders must know that if the economy tanks everything else will be in vain.

Javid Jabbar

Writer, intellectual and former federal minister

Although political stability is vital for the economic wellbeing of a country, it is not the only factor. Ease of doing business is another major factor that can improve the health of economy. We need to focus on it, and to remove bureaucratic as well as some other hurdles that prevent the flow of foreign investment into the country.

We also need to bring structural changes in the relevant zones. Reforming our tax collection mechanism alone can turn our economy around and transform the country from a loan-dependent to a loan lending entity. We need to introduce structural reforms in our tax and revenue collection mechanisms. We also need to make our tax collection system people-friendly so that more and more people come up to pay taxes.

Our youth is doing marvelously well in earning foreign exchange on internet. Pakistan must promote gig economy by providing opportunities to the educated youth to make their way into the IT Industry.

Recently, the head of a foreign company told me that they are trying to get official clearance for investing in Pakistan, but it has been 11 months and they are still being made to run from one office to another to get this document or that. He said that in other countries in the region, all such formalities take just a couple of months to complete.

We need to remove such hurdles. Although the year 2023 seems to be a tough one for Pakistan, but we can survive and improve our conditions provided we take corrective measures to reform our economy.

Lt. Gen (R) Naeem Khalid Lodhi

Defence Analyst

We have seen political and economic turmoil which started with the regime change in April, and lately the resurgence of militancy has added to our problems.

I don’t see any major improvement on the political and economic front during the first half of 2023 because political players have taken hardened position and not ready to show flexibility. The PTI Chairman Imran Khan wants early elections while the PDM is adamant to complete its mandated term in office.

On the foreign policy front, things remain stagnant and we remain unclear on which way to drift. We know that foreign policy pursued by Imran Khan was the main reason behind the regime change. We need to keep CPEC on course. And we also need cordial ties with Afghanistan which is the gateway to our trade relations with the Central Asian states. But there are certain elements that don’t want us to pursue these venues.

So we need to distinguish between friends and foes as far as our external relations are concerned. We also need to be watchful of the elements trying to ignite subversive activities in the Gilgat-Baltistan region and elsewhere in the Northern Areas. Similarly, we have to once again tackle rising militancy, and for this we need to work closely with the Afghan government. I think it is time for the political forces to forge unity and strive to jointly pull the country out of the prevailing political and economic mess.

Iftikhar Arif

Urdu poet and scholar

We lost some great literary figures during 2022, but it remained an eventful year as far as literary and cultural activities are concerned. During the Covid pandemic we got introduced to the online culture, participating in a series of Mushaira (poetry recitals) events within the country and abroad through the video-link. As Covid subsided, routine literary activities have resumed. A literature festival was held in Karachi, a conference organized by the literary body Khana Badosh (the nomad) was held in Hyderabad, and a Sindh Day was also recently held.

The Academy of Letters has also organized a series of events in connection with the promotion of literature. Platinum Jubilee celebrations were held separately for poetry, prose and short stories in which the works of different writers since the creation of Pakistan were put on display.

Another breakthrough on literary front in recent past has been the digitalization of Urdu script. Also, we saw the promotion of online sale of books during the outgoing year, which is likely to revive the book reading habit among the youth. We have also seen some good Urdu translations of literary works from other languages. This will go a long way in serving the cause of the Urdu literature.

Given these developments, the year 2023 also promises to be an eventful year for Urdu literature. We will be having the Faiz Mela festival in Lahore in February, and other literary gatherings lined up in Lahore, Faisalabad and other parts of the country in coming months.

Aqeel Karim Dhedhi

Leading Businessman

If sincere efforts are made, the country’s economy can be recovered, but it will require the decision makers to rise above their political interests and take stringent corrective measures.

First of all, we have to stop the practice of giving subsidies, because there is no trickledown effect in evidence. For example, subsidies are offered on flour but consumers only get it on market rates – meaning that the subsidy ends up in the pockets of the middlemen. If the government really wants to improve the lot of the common man, it should invest more in education, health and other social services.

The government has to take some tough decisions to control the economic meltdown. I think Pakistan must implement the IMF conditions for the early resumption of its programme. In the given circumstances, it is the only way out for us as we are already at the verge of an economic default, and are failing in payments to clear goods at ports. In order for a fuller economic recovery, in my view Pakistan must go for two or three more IMF programmes, without which it will not receive any funding from sovereign bodies and donor agencies.

So I think 2023 is going to be a tough year in which Pakistan will have to take tough decisions to put the economy back on track.

Mehtab S. Karim

Educationist and demographer

The seventh digital population-and-housing census will likely be completed by coming April, so we will have the latest data on population and its demographic spread. Results of the previous census were questioned by various political parties in the court, leading the Supreme Court to order a fresh digital census.

In countries like Pakistan, we have a greater flux of people moving from rural to urban areas in search of livelihood and economic prospects. Previously such movements could not be effectively monitored, but now with this fresh digital census we will be able to have a clear picture of the on-ground situation. We have a mechanism of de-facto counting – which means counting people present at a certain place at the time of counting. This helps us to avoid undercounting and draw up a true picture of people’s concentration in particular areas.

Once we have this data, we will be better-placed to arrange civic amenities such as health, education, transport etc, for each area in accordance with its needs. Also, migration data and patterns will help the Election Commission of Pakistan to carry out realistic delimitations of the constituencies and thereby ensure due representation of the people in the national and provincial legislatures. Share of each province in the National Finance Commission (NFC) Award is calculated on the basis of its population. Therefore, such data will help keep the NFC share of each province updated. In brief, the accurate and authentic census results will help the government do proper planning for the welfare and benefit of the people living in different parts of the country.

Dr. Maria Sultan

Defence analyst

The recent wave of terrorism in Pakistan is mainly due to cross-border terrorism and we need to tackle it seriously as Pakistan had faced its brunt in the past. To understand the genesis of the problem first of all we need to understand the dynamics of militancy.

I think it will be one of the major issues Pakistan will have to tackle in year 2023. Actually Pakistan is paying the price for what United States has left behind in Afghanistan after fighting the war spread over almost two decades. During this period a whole new generation of Afghans grew up who knew nothing but the skills to fight.  As we know that terrorism has turned into an industry so we need to engage the people who only know the skills of fighting in dialogue only then we will be able to control the menace of militancy. We need to provide them with some alternate means of living as it is the only way to detach them from what they are doing right now.

So in my view Pakistan must evolve national reconciliation strategy to engage these militants in dialogue so that they could be brought back to normal life. In this connection we need to tell the whole world that they should also come forward and help Pakistan in its endeavours as terrorism has become an industry and if we are facing its brunt today the world will have to face it tomorrow. We need to tell the world that we are not part of the problem rather we are victim of terrorism and militancy. We also need to engage people in Afghanistan in this dialogue and also provide them with opportunities to lead a normal life. It is my considered opinion that the only way out and permanent solution to militancy in this region is engagement of these people in a grand dialogue process.

Dr Hassan Askari Rizvi

Prominent political analyst

The recent resurgence in terrorism is a major challenge. It persists because cross-border terrorists have support in Pakistan. On the plus side, our security agencies have controlled it in the past, and have the experience and the wherewithal to control it now.

This latest round of terrorism is linked to either unwillingness or failure of the Taliban Government to effectively control these militant groups. This is because these militants have fought alongside Afghan Taliban against the American forces and consider each other as comrades-in-arms.

The breaking of the fence at various points along the Pak-Afghan border is said to be facilitating the movement of these militants into Pakistani territory. The question is, why have our army and the border security forces not mended the damaged stretches of the fence. Our authorities seem to be a bit confused on this. Fencing the border is an effective deterrent only if it remains well-guarded. I think it is a serious issue and the Government of Pakistan must take it up with the Afghan authorities.

It is important because the law and order situation is directly linked to the country’s economy. At the moment, the economy is already in a downspin, and resurgence of militancy cfan worsen the situation.

As such, during 2023 we need to take some tough decisions to curb militancy and help our national economy recover.