FeaturedNationalVOLUME 18 ISSUE # 39

Assessing the impact of Shehbaz Sharif’s tenure

The tenure of outgoing Prime Minister Shehbaz Sharif has stirred a range of reactions among the general populace. The policies and decisions made during his time in office have sparked debates and controversies, reshaping the political and economic landscape.

The outcome of policies adopted by outgoing Prime Minister Shehbaz Sharif has angered the general public, leading to the constant chipping away of the party narrative within the electorate: that the economic impasse today is entirely due to the policies of the previous government. Shehbaz Sharif is criticised severely with good reason on three counts. Firstly, decisions show that the budget for the current year is an election year budget, which is unsustainable in view of the current economic impasse.

Thus a 26.5 percent rise in current expenditure has been budgeted and around 61 billion rupees disbursed to parliamentarians, considered as pre-poll rigging. And while he did extend subsidies, including free wheat, prior to the SLA on SBA was reached yet the budgeted subsidies in the revised budget documents (revised after IMF approval) have been reduced by only 10 billion rupees or a mere 3.6 percent from the revised estimates of last year. Secondly, his penchant for inaugurating new projects is being viewed as inappropriate for a prime minister though all are agreed it is in the terms of reference of a chief minister. While previous prime ministers have also engaged in such activity yet this cannot be condoned.

Thirdly, appointments in boards of directors and key positions in state- owned entities gathered momentum during the last weeks of the government, which cannot be supported. And finally, the indecent haste with which dozens of laws and amendments in laws have been enacted through a massive bulldozing exercise in parliament without any meaningful debate or discussion or routing through parliamentary committees and all this in the absence of requisite quorum is and will remain a cause of embarrassment and blot on this coalition government.

There are, however, some glaring failures of the Shehbaz Sharif administration too. Among them, the absence of any evidence as regards implementation of structural reforms agreed with the IMF in poorly performing sectors – power, tax structure and state-owned entities, which cost the exchequer over a trillion rupees a year, stand out along with overwhelming evidence that elite capture continues not only in terms of the budgeted expenditure outlay but also the budgeted revenue sources. Had the Shehbaz Sharif-led government implemented these reforms he would have gone down in history as the prime minister who began the process of turning the economy around. That task now rests with the next elected government.

The Shehbaz Sharif-led government ended its two-day short of a 16-month stint, and three days short of the scheduled end of the National Assembly tenure to allow for stretching the period within general elections to be held by another 30 days as stipulated in the Constitution.

However, there is a general perception fuelled by comments from members of the outgoing cabinet that elections are unlikely to be held within 90 days, a perception strengthened by the approval on 5 August 2023 of the seventh Population and Housing Census by the Council of Common Interests (CCI). This prompted the Election Commission of Pakistan to state that it would require more than three months to conduct fresh delimitation of constituencies. While this reason may act as an effective buffer against a possible challenge in the courts on the grounds that two of the participants, chief ministers of Punjab and KP, of the CCI were caretakers and therefore not empowered to speak on behalf of Punjab or Khyber Pakhtunkhwa yet the general opinion is that extra time has been sought to smooth out the perceived major lacunae prevalent in the country’s political and economic arena.

The 16 months of the 11-party coalition government have been marked by a few ripples amongst the partners, which were swiftly eased through direct intervention of Shehbaz Sharif – whether with respect to failure to disburse funds for the flood victims or the much publicised Nawaz Sharif-Asif Zardari meetings in Dubai that excluded the Pakistan Democratic Movement (PDM) president Maulana Fazlur Rehman. While Shehbaz Sharif has not been long enough in the Prime Minister’s House, unlike his predecessors including his elder brother Nawaz Sharif, to be tempted to leave the proverbial one page in a test of wills, yet as a prime minister, he has exhibited a policy of conciliation.

However a word of caution is required: even with the best intent in the world, the capacity of a sector expert, as opposed to a generalist, to provide the critical guidance to ensure the best possible use of scarce resources must never be underestimated. Or in other words, good governance is not only about ensuring security and no kickbacks/corruption but is also about choosing the optimal option from a technical and financial standpoint.

Shehbaz Sharif’s legacy in securing the nine-month 3 billion dollar Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) that averted the threat of the looming default must not be underestimated. He was compelled to directly engage with the Managing Director of the IMF to reach the SBA agreement while Finance Minister Ishaq Dar consistently jeopardized the staff-level agreement (SLA) on the ninth review (due in November 2022) under the now suspended Extended Fund Facility programme with 2.5 billion dollars remaining undisbursed – a feat he achieved by violating agreed conditions on two counts: control of the rupee-dollar parity with appallingly low reserves that cost the country 4 billion dollars in lost official remittance inflows and raising current expenditure by 21 percent from what was budgeted for the year which in turn was funded by heavy domestic borrowing that led to a 98.2 percent decline in credit to the private sector accounting for negative 9.9 percent large-scale manufacturing sector growth and an inflation of 29.2 percent. And his refusal to acknowledge, in spite of overwhelming evidence to the contrary, that the friendly countries will release pledged and additional assistance only if the country is on the IMF programme.

In evaluating Shehbaz Sharif’s time as Prime Minister, it becomes evident that his policies have left an indelible mark on the nation’s trajectory. The economic and political landscape has been significantly influenced by the decisions made during his tenure. While his administration managed to secure a critical IMF arrangement and navigate complex challenges, it also faced substantial criticism for its handling of various sectors. As the nation moves forward, the impact of his governance will continue to shape the discussions and strategies of the successive governments.