Prime Minister Imran Khan and his ministers are confident that they would easily defeat the opposition’s no-confidence motion. However, the way the coalition partners of the government are trying to extract the maximum benefit out of the current political situation, they can join hands with the opposition parties and the PTI government could fall, which would have serious consequences for the country and its economy.

The PTI government may not have been ideal in terms of governance and rising prices, but it had inherited the biggest economic mess from the previous PML-N government, which destroyed all national institutions for the personal benefits of its leaders. The Supreme Court of Pakistan called the PML-N a mafia after its leaders started threatening the court and judges after they took up the Panama case against former Prime Minister Nawaz Sharif and his family. The opposition parties, which have alternately remained in power for decades, are responsible for the current situation of Pakistan, and now they are promising to bring prosperity to the country after dislodging the government of Prime Minister Imran Khan. However, most people’s past experience proves otherwise. Undoubtedly, Prime Minister Imran Khan’s accountability drive has miserably failed for many reasons, but it is a fact that corruption has harmed every institution of the country. There is also no doubt among the public mind that leaders of the PML-N and the PPP deliberately promoted a culture of corruption in the country. They corrupted every institution to save their loot, tax evasion and money laundering. Pakistan’s economy, which was among the top three in Asia in the 1960s, is only better than that of Afghanistan now, because of the two opposition parties, not Prime Minister Imran Khan. Pakistan’s economy has improved immensely under the PTI government, though people had to suffer because of high prices of food and essentials.

The two opposition parties are raising the same old slogans to come to power, but they demonstrated that they have no capacity to reform the economy and national institutions when they were in power. However, the question is: Can Pakistan and the economy survive another term of the PML-N? The PTI had to immediately contact the International Monetary Fund (IMF) after coming to power because Pakistan’s current account deficit had reached an all-time high of $20b after the end of the PML-N rule in 2018. According to economist Ashfaque Khan, the current account deficit for 2018 was actually $21.2 billion and Pakistan’s external financing requirement was more than $31 billion. The State Bank of Pakistan data showed the trade deficit had widened to $31.074 billion in FY2018 from $26.68 billion in FY2017 as exports of goods recovered to $24.772 billion from $22.003 billion, while imports rose to $55.846 billion from $48.683 billion. The deficit had reached an unsustainable level and the economy was burning through around $1.5 billion a month and foreign exchange reserves had fallen to cover less than two months of imports. The central bank’s reserves stood at just $9 billion.

Seeing Pakistan’s heightened external vulnerability risk in 2018, Moody’s Investors Service had downgraded the outlook on Pakistan’s rating to negative from stable.“Foreign exchange reserves have fallen to low levels and, absent significant capital inflows, will not be replenished over the next 12-18 months. Low reserve adequacy threatens continued access to external financing at moderate costs, in turn potentially raising government liquidity risks,” it said. The rating agency also expected Pakistan’s external account to remain under significant pressure. “The coverage by foreign exchange reserves of imports will likely fall further from already low levels, while coverage of external debt payments due will weaken from currently adequate levels. In turn, higher foreign currency borrowing needs, in combination with the low levels of foreign exchange buffers, risks weighing on the ability of the government to access external financing at moderate costs. Unless capital inflows increase significantly, Moody’s does not expect official foreign exchange reserves to replenish from their current low levels. Under baseline projection, the import cover of reserves will likely fall to around 1.7-1.8 months over the next fiscal year, below the adequacy level of three months generally recommended by the International Monetary Fund,” it noted.

The World Bank, in its Global Economic Prospects report in June 2018 said Pakistan’s economy would slow down in the next fiscal year after a high growth of 5.8pc. It saw slowdown in economic activities on the assumption that Pakistan could avail an IMF programme, which would require the country to implement tighter monetary and fiscal policies. However, the PML-N government painted such rosy pictures of Pakistan that Pakistanis believed their country would become an economic superpower in a few years. However, Pakistan’s economic outlook changed after the PML-N government completed its five-year term. The true picture of Pakistan’s economic conditions appeared when the caretaker government was installed. It warned the nation the country was in dire straits.

Now all economic indicators of the country are improving. Even international financial institutions have praised Pakistan’s performance, especially during the pandemic, when the global economy suffered badly. If the no-confidence motion succeeds, it will only benefit the opposition leaders, not the country. It will add to political uncertainty and hit the economy badly. On the other hand, Prime Minister Imran Khan still has many options. He can announce an early election and become the prime minister again after winning it, with even a better position and a clear-cut majority.