The Going Gets Tough

Was the PTI’s decision to dissolve two provincial assemblies a self-defeating move?

The Pakistan Tehreek-e-Insaf (PTI) is all set to brace for the tough times it knows lie ahead, as the Shehbaz Sharif-led government explores ways to put the general elections in the Punjab and Khyber Pakhtunkhwa, as well as those for the vacant National Assembly seats, on the backburner amidst an intensifying economic crisis.

“The government does not want elections this year… this is now boldly written on the wall,” a senior Pakistan Muslim League-Nawaz (PML-N) leader told Bol News. “The country’s ever-growing economic crisis leaves no room or time for the coalition government to go to the people soliciting votes in the coming months,” he said, requesting anonymity.

And the unwillingness of the ruling parties to hold polls is understandable. Pakistanis, who are already facing the brunt of record-high inflation, declining incomes and a slowdown in the economy, will now be tested by another round of steep-inflation, following the sharp erosion in the value of the rupee against the dollar earlier this week. In a single day — i.e. Thursday — the rupee slid by nearly 10 percent in the interbank market against the greenback. The declining trend continued on Friday as the rupee shed another 2.8 percent to slum to 262.60 against the dollar. According to market pundits, the total loss in the rupee’s value this week is around 14.09 percent.

The sharp slide of the rupee came as the government finally appears set to resume the stalled International Monetary Fund (IMF) programme on which it has been dragging its feet since Ishaq Dar assumed charge of the Finance Ministry in September 2022. But Dar’s obsession to keep the Pakistani currency artificially propped up proved damaging for the economy. According to market pundits, Dar’s flawed policies dried up the normal flow of foreign currency in the Pakistani interbank and open markets, which is evident from the sharp fall of remittances and a booming black market.

Sakib Sherani, a leading economist, said that the possible resumption of the much-awaited IMF programme will help “gradually stabilise the external accounts,” but the implications on the real economy will be severe. “There will be a significant impetus vis a vis inflation from already inflated levels.” Inflation in Pakistan is hovering at a record-high level of 24.5 per cent, forcing the State Bank of Pakistan (SBP) to jack up the interest rate by one per cent to 17 – the highest since 1997 — earlier this week.  Economists believe that the sharp devaluation of the currency will further push energy and food prices up, with inflation all set to hit 35 to 45 percent in the coming days.

Sherani maintained that Dar has messed up the economy and should resign.

Abid Hasan, another leading economist who served at the World Bank, said that Pakistan has never faced such a situation in the past. “We only have examples from abroad – from countries like Sri Lanka, Ghana, Argentina and Brazil, where such situations led to record-high inflation, resulting in economic and political turmoil.” He continued, “However, our economic hardwiring is so flawed that it is bound to crash after every few years. Had the process of reforms started say five years ago, the situation would not have been so devastating today. The impact of devaluation would have come gradually.” Hasan added that “for the past 40 years or so, Pakistan has been keeping the rupee artificially high resulting in an increasing appetite of imports which are all set to crash after the sharp rupee devaluation.”

And now, as calls for Ishaq Dar’s resignation increasingly reverberate, the ruling alliance finds itself cornered because of all the wrong choices it made in managing the economy.

“The artificial myth of Ishaq Dar has been smashed,” admitted another senior Pakistan Muslim League-Nawaz leader, who is based in Karachi. “He has been made the Finance Minister only because his son is married to one of Nawaz Sharif’s daughters. He wrecked the economy in the past by artificially propping up the rupee and he has wrecked it again,” he said.

PML-N insiders admit that the party leadership – the Sharif family — mistreated Dr. Miftah Ismail whose policies now stand vindicated. Had he been allowed to carry out the reforms he proposed and had the IMF programme not stalled because of Ishaq Dar’s insistence, the situation would not have been this bad, they maintain.

But as the harsh economic realities sink in, exposing the hollowness of the much-touted claims of the experienced team of the PML-N and its allied parties, the government is finding itself lacking choices in relation to electoral politics. Therefore, according to official sources, while on one hand the government is trying to find ways to delay the elections, on the other hand it is set to use state power against former premier Imran Khan and his supporters at all levels.

The arrest and mistreatment of senior PTI leader Fawad Chaudhary on the flimsy charges of threatening the Election Commission of Pakistan (ECP) officials and their relatives is only one indication of what lies in store for the opposition and all dissenting voices in the days to come.

While during the days of the PTI government opposition leaders were arrested in old mega-corruption cases – most of which were filed either by the PPP against the PML-N leaders, or vice-versa – Imran Khan supporters are mostly being held on charges of sedition and terrorism, stemming from their statements, which the government is finding too hot to handle.

In the coming days, the arrest of more PTI leaders and activists is expected as the authorities plan to crush any of the party’s planned protests. The authorities are also weighing options for the arrest of Imran Khan and the possible fallout of any such move, say official sources,

The PTI camp, which had been celebrating the dissolution of the Punjab and KP Assemblies until a few days ago, may now regret this decision as it has deprived them of the protection of their provincial governments. The naïveté of the PTI leadership appears to have trapped them in a tight corner as all the country’s major power stakeholders appear to be lined up against the party in a bid to deny it early elections.

Only a massive show of street power can bail the PTI out of this situation, but there is no history of a popular uprising ever being successful in Pakistan in toppling a government. Can Imran Khan’s party write a new chapter in Pakistan, where only palace intrigues and behind-the-scenes wheeling and dealing usually orchestrate a change of guard in the corridors of power? This is anybody’s guess but the powers-that-be appear focused on bulldozing their decisions, as is evident from the appointment of a controversial media figure like Mohsin Naqvi as the caretaker Punjab Chief Minister.

For now, the PDM government, which despite its growing unpopularity, appears to have the solid support of the country’s institutions, is in a dominant position and preparing to take on the Imran Khan challenge by using excessive state power.

Also, the government is getting ready to manage the social and traditional media to stifle dissenting voices as it explores options to delay the elections using the pretext of a national census, economic emergency or political instability. While the future of this government and elections remain in limbo for now, at least one thing is crystal clear: the going is going to get tougher for Imran Khan and his supporters.