Newly-elected Prime Minister Shehbaz Sharif has formed a coalition government in Pakistan after overthrowing Prime Minister Imran Khan’s government through a no-confidence motion. He faces a number of serious challenges, including high inflation, a weak economy, terrorism and unemployment, almost what Imran Khan had inherited from the government of Nawaz Sharif. The younger Sharif’s immediate test will be how to bring down prices and improve the living standard of the common people as the country is coming out of the adverse effects of the pandemic.
Prime Minister Shehbaz Sharif is heading a government, which has over 11 coalition partners. Former Prime Minister Imran Khan had only three major coalition partners, which continued to blackmail him till the end of his government. Shehbaz Sharif will also face the same problem. His party, the Pakistan Muslim League-Nawaz (PML-N), and the main coalition partner, Pakistan Peoples Party (PPP), have opposite ideologies and have been bitter rivals until the recent past. It is sure they cannot work together for long and will contest the next election against each other, riving their bitter rivalry.
The former ruling party, the Pakistan Tehreek-i-Insaf of former Prime Minister Imran Khan, will pose a serious challenge to the new government. Though his party has resigned en bloc from the National Assembly, yet Imran Khan is pulling huge crowds in public rallies. He has also tarnished the image of almost all of his rival politicians, including Prime Minister Shehbaz Sharif, former President Asif Zardari, PPP Chairman Bilawal Bhutto, Maulana Fazlur Rehman and others. According to Imran Khan, the conspiracy to remove him through the no-confidence motion was hatched by the US, which it denied several times. The former opposition leaders and now coalition partners of the newly-elected government also rubbished the allegations, but most people believe Imran Khan is right. It is why they are attending his rallies in a large number. His popularity, which had decreased after massive price hikes and bad governance, increased immensely when the former opposition parties brought the no-confidence motion against him and openly resorted to horse trading to bring down his government. His sympathisers say it was his great achievement that he brought Shehabz Sharif and Asif Zardari together, who accused each other of massive corruption in the past. They still face serious corruption and money laundering cases.
Despite different ideologies and interests, it is a shocking fact that all anti-establishment parties and politicians have joined hands and they are in the government now. It could pave the way for the return of Imran Khan to power with an overwhelming majority in the next election. He will also not give a free hand to the new government to implement its agenda.
The new government will have to continue with harsh “harsh measures” taken by Imran Khan’s government for sustainable economic growth. It will be difficult for it to provide immediate or meaningful relief to people from rising prices. In fact, it will have to withdraw subsidies on fuel and power, which are hurting the economy badly. If withdrawn, it would add to inflation in the country. In the current situation, the government has not been left with much room to maneuver.
According to the Pakistan Development Update of the World Bank, Pakistan’s economic growth will strengthen to an average of 2.7pc for FY2022-23. “It is crucial to sustain the positive reform momentum to continue to boost the competitiveness of Pakistan’s economy and lay a strong foundation for a more robust, inclusive and sustainable recovery. Increasing competitiveness and stimulating private investment and exports will require continued macroeconomic stability, maintenance of a market-determined exchange rate, and improving the business environment to enable all firms, particularly SMEs, to access markets and compete openly in a leveled playing field. The potential for a strong recovery and a growth acceleration is there. Reforms to make it happen need to be further sustained,” it said in its last report on Pakistan.
The Asian Development Bank has forecast Pakistan’s economic growth rate to slow down to 4pc this year from 5.6pc in FY21 owing to tighter fiscal and monetary policies and Russia-Ukraine war fallout. In its annual flagship publication Asian Development Outlook (ADO) 2022, the ADP said, “Pakistan’s growth is forecast moderating to 4pc in 2022 on weaker domestic demand from monetary tightening and fiscal consolidation before picking up to 4.5 in 2023. Slower growth in the current fiscal year reflects the government reactivating its stabilisation programme under the International Monetary Fund (IMF) Extended Fund Facility to narrow the current account deficit, raise international reserves, and cut inflation”. Alarmingly, it expected inflation to pick up in FY22, averaging 11pc, reflecting higher international energy prices, significant currency depreciation, and elevated global food prices from supply disruptions. Because Pakistan is a net importer of oil and natural gas, with both comprising almost 20pc of total imports, the country will continue experiencing strong inflationary pressure for the rest of the current fiscal year from the jump in global fuel prices related to the Russian invasion of Ukraine, it observed.
The new government is facing challenges which are difficult to resolve in a few months or years. All the issues are decades-old and deep-rooted. It is also a fact that the PML-N and the PPP have ruled the country for decades and they are also partly to blame for the current situation. It is yet to be seen how they turn around the economy now.
Decades of dedicated efforts are needed to resolve Pakistan’s issues. The government will need a strong political will and the cooperation of all provincial governments and political parties to resolve them. People have high hopes for the new government. Like Imran Khan, Prime Minister Shehbaz Sharif has also made tall claims. People of Karachi will also look to him to resolve their issues. He has little time to meet too many expectations of his large number of coalition partners and the common people. His performance in difficult times will set the tone for his success in the next election.