A New Road to Opportunity

By Amir Zia

Monthly Hilal

August 2018

When an elected government fails to perform and loses credibility because of corruption and misrule, the vacuum is filled by other institutions determined to prevent chaos in the country. This has happened many times in Pakistan.

Pakistan’s democracy took another great leap forward on July 25 when the country witnessed its fourth consecutive general elections in a span of 16 years. During this period, despite all the prophecies of doom and gloom about the survival of Pakistan’s nascent democratic system, three elected parliaments and governments have completed their terms.

Yes, at the Prime Minister House there were premature change of guards because of political or legal compulsions, but all the three ruling political parties and assemblies of their time successfully crossed the five-year mark – a no mean feat by Pakistani standards. 

Notwithstanding all the real or often imaginary stories of tussle, friction and distrust within various arms of the government, Pakistan’s democratic experience continues uninterrupted since 2002 and with each passing day, it is getting entrenched and mature. 

All our institutions, including the Pakistan Armed Forces and the judiciary, have played their constitutional role in safeguarding and advancing Pakistan’s democratic experience. The 2018 elections held in an overwhelmingly peaceful manner – barring few tragic incidents of terrorism during the election campaign and on the polling day – itself is a testimony of how various arms of the state are delivering despite being pitted against all odds in a volatile region. The contribution of around 370,000 army personnel and more than 450,000 police officials on the election day made it possible for the Election Commission of Pakistan (ECP) to hold the polling in a peaceful manner. 

The holding of the electoral exercise despite terror threats is not the only achievement of Pakistan’s democracy this time around. The resilience and empowerment of the elected and state institutions can be gauged from the fact that for the first time in our history, a prime minister was accused, tried and dismissed for corruption while in office in July 2017, but the system functioned normally. The ruling party elected a new leader of the house and the process of accountability and democracy went on hand-in-hand without any disruption. 

These developments offer hope that the system will strengthen further through gradual reforms, removing its inherent flaws and weaknesses that often give room to individuals to trample law and institutions as well as resort to anti-people measures.  

Another positive for Pakistan’s democracy remains its vibrant, lively and often sensational media – both traditional and social – that remains free to comment, examine and raise questions on almost every issue and topic under the sun. Now there is no political, social or economic subject which is a taboo or any institution considered as sacred. This freedom of expression is also a sign of consolidation of democracy and democratic culture, reflected through the diversity of Pakistan’s media scene.   

However, despite these positives, Pakistan and its political order face multiple mega-challenges, including how to improve governance, ensure justice, root-out corruption, bring political stability, revive the economy and make this democracy pro-people. Among all these challenges, achieving political stability is a prerequisite if a government aims to deliver on all the other fronts. 

Unfortunately, Pakistan has been in the grip of prolonged instability and uncertainty because of bitter confrontation among political rivals. This has hurt Pakistan on almost every front – from managing the economy to its foreign relations – as the governments of the day focused on survival rather than delivering fruits of democracy to the people, and reforming and strengthening the state and its institutions. 

Therefore, the foremost task for the newly-elected government and the Parliament remains bringing stability to the country and ending the politics of confrontation. This requires foresight and sagacity not just from members sitting on the treasury benches, but also from the opposition. Political reconciliation will be the first step towards putting Pakistan back on track. 

The consensus among major opposition parties to sit in the assemblies despite their reservations about the conduct of general elections is indeed a good omen. The new government and the ECP must now take steps to address the genuine concerns of the opposition and remove misgivings about the electoral process and address its weaknesses and flaws, if any, for the future. The allegations of mismanagement and rigging should also be investigated and addressed in line with the existing rules and procedures. The ECP has already asked political players to file official complaints rather than creating doubts about the entire electoral exercise by leveling unsubstantiated allegations for media consumption. 

Going forward, major political parties – both in the government and the opposition – need to evolve a broad consensus on major national issues that must include structural reforms to improve governance, fix the economy and meet foreign relations challenges. There should also be consensus about the continuation of the accountability process in a free, fair, transparent and independent manner. For accountability and a system of check-and-balances serve as a cornerstone in any democratic order which aims to deliver to the people. The accountability process needs to be strengthened and made autonomous. It must not be sacrificed at the altar of political expediency or opportunism. 

The new government must also be mindful of the fact that running a state needs consensus-building and collective decision-making among various stakeholders and institutions.
Unfortunately, in the past some politicians tried to establish individual or dynastic rule in the name of democracy. By doing so, they not only ignored their cabinet and the Parliament, but also tried to undermine institutions. Their decision-making style remained undemocratic as they banked solely on a small coterie, comprising family and friends. 

This culture of attempting to run a 21st Century state as a fiefdom stands against the basic principles and values of democracy. No wonder, the past few years were so tumultuous and chaotic. It resulted into an unnecessary tussle within political forces and at times dragged institutions into political fray, which could have been avoided. The dominance of anti-democratic mindset in our major political parties and at the highest echelons of power stunted and distorted Pakistan’s democratic system.  

Modern states, especially democracies, work within the constitutional framework with proper checks and balances. However, in Pakistan often party leaders try to act like mini-dictators, who want to remain unaccountable, unanswerable to their followers, the Parliament or any other institution. To prevent this, the new government has to play according to the book and strengthen systems and institutions rather than individuals. Luckily, this has been the position and one of the major election campaign points of the new ruling party. Now it is time to walk the talk. 

Experience shows that when an elected government fails to perform and loses credibility because of corruption and misrule, the vacuum is filled by other institutions determined to prevent chaos in the country. This has happened many times in Pakistan. To prevent a repeat of this situation, the newly-elected government and the Parliament must up their game in terms of performance. 

In the past, even the highest forum like Parliament was used to enact controversial legislation, which benefitted individuals or select interest groups rather than the masses. The new dispensation must focus on delivery and pro-people reforms rather than perpetuating the rule of a family or the vested interests.

In Pakistan, there is a tiny but influential foreign-connected or inspired lobby operating within political parties, the media, academia and the non-government organizations, which always attempts to put the masses against institutions – especially the army and the judiciary. 

This lobby, backed by hostile foreign powers, misleadingly describes and interprets civil-military relations as inherently antagonistic and hostile. Their aim is to pit at least a part of civilian leadership against the state institutions. Their near term goal remains to keep Pakistan politically unstable, while their mid-to-long-term objectives are to weaken the world’s lone nuclear Muslim state to an extent where it is forced to compromise on vital national interests. This can only be done by weakening the state institutions and imposing a puppet government, which can dance to the tunes of regional and foreign powers.

This assault on the State of Pakistan – both from within and outside as part of the fifth generation war – can only be prevented if all the arms of the government and state institutions are on one page on fundamental national issues and prepared to push in one direction for optimum results.  

All modern states work and achieve their objectives on the back of greater integration and harmony within civil and military institutions, sticking to their constitutionally defined role. While the final call and responsibility rests with the civilian leadership in policy-making, input of all stakeholders remains a must as it happens in advanced democracies.
The new government is starting innings on a clean slate. Its leadership does not carry burden of the past. It has a golden and great opportunity to bring much-needed political stability in Pakistan, introduce structural political and economic reforms and unleash the true potential of this nation which has under-performed because of the crisis of leadership.

The grand dream of transforming Pakistan into a progressive, prosperous and strong country can only be fulfilled through national unity and cohesion. The new government has to lead and show the way. It must succeed for the sake of Pakistan for we cannot afford another failure.

ENDs

  

To The Victor The Spoils

By Amir Zia

Monthly Newsline

August 2018

“The first lesson for a man who wants to achieve something, is that there are no shortcuts in life,” Khan said in an interview in July 2017. “You make goals in life and then you pursue them. Only those succeed who do not give up. They stumble, but then they rise again and assess why they fell…”

After a 22-year long gruelling journey in the political wilderness, Pakistan’s most internationally recognised sports celebrity and ladies’ man-turned-philanthropist-turned-politico, has managed to don this dream cap too.

The vagaries of Pakistani politics being what they are, there are no certainties or absolute truths.

After decades of rule by the two families that have virtually institutionalised dynastic politics, each laden with the baggage of alleged corruption, nepotism and even murder, Pakistan was ringing with a call for change. Imran Khan and his party offered just that: a radically different alternative. The PTI carved out a constituency by cutting a swathe across different political and ideological divides. It captured the imagination of the centre, the moderate and the conservative right, apolitical liberals, the westernised elite, the young and the old. People from all classes and ethnic groups, hailing from all the four provinces, harkened to the PTI call, making it the first political party after Zulfikar Ali Bhutto’s PPP to lay down roots across Pakistan.

But hell apparently hath no fury like political demagogues scorned. And so all the traditional political forces — from the far-right to the self-professed political moderates, from sworn enemies to friends of convenience, and every political force in-between that has been spurned in the 2018 election — have come together to form a new grand alliance to counter the PTI.

Having been formally nominated as Prime Minister-designate by the PTI and with the additional votes needed by the induction of independents and an uneasy alliance with the MQM, Khan is, however, now set to take his seat at the helm and get down to the business of governance in earnest.

The question on everyone’s minds is, can he deliver? The near miracle he has vowed to bring about, is a tall order by any standard. But two decades later, Khan is no longer the political novice he once was. Years of setbacks in politics have taught him pragmatism, as opposed to the puritanical and black-and-white approach he began with. This was evident when he embraced the ‘electables’ with open arms and shook hands with those whom he had once rejected.

The Imran Khan of 2018 appears in no mood to repeat the mistakes of the 2013 elections. To begin with, he has clearly realised that the PTI could not have translated its popularity into electoral victory with inexperienced candidates. Hence, the induction of some tried and tested politicians who might have been undesirable in the past. Yet, against the advice of conventional politicians, he has remained uncompromising in his stance against the country’s two oldest mainstream parties — the PML-N and the PPP. For him, Nawaz Sharif and Asif Ali Zardari are two sides of the same coin. This has resulted in the convergence of the PML-N’s and the PPP’s interests against the PTI, as is evident in their cooperation in the joint opposition.  

Khan has made conciliatory statements in respect of neighbouring countries, even while emphasising that Pakistan seeks equality in its relationship with its peers. He has also unequivocally declared that he will seek to rid the country of its begging bowl vis-a-vis international financial institutions.

“He ran a hectic and punishing election campaign,” said Senator Faisal Javed Khan, who joined the party in 1996 at the age of 15 and who has been by Imran’s side in most rallies, including the recent election campaign. “During the last 14 days of the campaign, Imran addressed 60 public meetings… at times, seven public meetings in a day, criss-crossing from one province to another. His younger followers were exhausted, but Imran went on non-stop, skipping meals, preparing speeches and offering prayers during helicopter rides or while on the road — often drenched in sweat from head-to-toe during the oppressive July heat,” added Faisal. “He always says that the match is not over till the last ball. And so it was.”

But with only a slim majority in the National Assembly, making good on election pledges and victory vows, will be a Herculean task. The precarious position of the country’s economy might force the new government to, once again, turn to the International Monetary Fund (IMF) for a bailout, or to friendly countries for injections of funds needed to avoid the looming balance of payment crisis. This means tough austerity measures, higher inflation and unpopular reforms that will hit the common man the most, as little money will be available for development and the social sector. 

These challenges fail to deter Khan’s supporters, who believe that their leader can deliver come rain or sunshine. “People told him that he could never play Test cricket or become a fast bowler, but he did,” said Faisal. “He and his team were ruled out of the World Cup, but he won it… all experts said that a cancer hospital that aims to treat poor patients free-of-cost, could never be built or sustained, but he did both.” He contends that now, under Khan’s Prime Ministership, “we will make the new Pakistan he has promised, that will treat rich and poor alike, and provide justice to all.”

Hunaid Lakhani, founder of Iqra University and its former chancellor, who came all the way from the United States to contribute to Imran Khan’s electoral campaign in Karachi, also claims he has no doubt about the success of his leader as premier.

“Leadership matters,” he said. “Imran inspires people. They trust him with money — including the Pakistani diaspora scattered all over the world. He will make possible what appears impossible.”

And like Lakhani, many expatriate Pakistanis dashed to Pakistan to cast their vote and participate in the election campaign. They aimed to realise the dream of Khan’s ‘Naya Pakistan,’ which may appear elusive and ambiguous to his critics, but is viewed by supporters as representative of diversity and an openness to personal intepretation.

The slogan has struck a chord with hundreds of thousands of Pakistanis —angry and frustrated with decades of corruption – the loot, plunder and misrule of past governments. Khan’s uncompromising pledge to change all of that has captured their imagination.

Clearly, even after decades, Imran’s personality cult and fan club remain intact. In many constituencies, he asked voters to ignore the candidates and just stamp the symbol of the bat. “I take their (the PTI candidates) full responsibility,” he repeated at various meetings.

The 2018 election campaign was different from previous ones. Despite his fan following, larger-than-life image and personal charisma, he failed to politically capitalise on any of these assets in previous campaigns. The PTI was routed in its maiden election appearance in 1997 — the party was unable to win even a single seat. In 2002, Imran managed to secure a single seat in the National Assembly. In 2008, he boycotted the general elections and since then, was widely dubbed a ‘failed politician’ akin to Asghar Khan.

The first surge in the PTI’s fortunes came in the 2013 elections, in which it emerged as the third-largest party in the National Assembly and the second-largest in terms of securing the popular vote. Yet, the dream of Imran becoming prime minister continued to remain elusive. He was seen as a political novice singlehandedly trying to bring down the entrenched Goliaths of Pakistani politics.

While his newly politicised fans followed him, Imran’s political posturing and positioning made him unpopular among liberals and leftists. The sobriquet ‘Taliban Khan’ was conferred on him because of his conciliatory statements towards the Taliban and insistence on dialogue rather than war with the movement. Maulana Fazlur Rehman of the JUI F dubbed him a ‘stooge of the West’ and a ‘Jewish agent’ – presumably on account of his marriage to Jemima Goldsmith, who was of a Jewish heritage, never mind that she had converted to Islam.

Khan’s stance on the blasphemy laws, women and the feminist movement, earned him the wrath of many. While some believed that his conservative views were aimed at winning the electoral support of the conservative and orthodox sections of society, others alleged that he had actually become increasingly orthodox in matters of faith.

Although many of Imran’s rightwing, liberal and left-wing critics enjoy little grassroots following, their clout on the traditional and social media amplifies their voices. These voices, coupled with the influence and propaganda of mainstream political rivals, made a lethal combination as Pakistan’s largest media groups turned their guns on Khan and his team. There were no-holds-barred attacks — from the targeting of his personal life, to questions surrounding his political positions.

The 126-day long Islamabad dharna of 2014, against the alleged rigging of the 2013 polls and Nawaz Sharif’s misrule, helped transform the PTI into a party with popular appeal and helped expand its base from the urban middle class and the elite, to rural areas. It simultaneously engendered another barrage of allegations against Khan. Political rivals of all hues and shades now called him an ‘army puppet,’ used to weaken democracy in the country. ‘Ladla’ (darling of the establihsment), was another epithet coined for him.

These allegations continue to follow Khan, post-elections. His faithful followers trash them, while his rivals and critics reiterate them on every platform – including the media and the courts of law.

Imran’s supporters, however, allege that he is the only national leader who has not benefited from any military ruler. While both Zulfikar Ali Bhutto and Nawaz Sharif started their political careers under the wings of military dictators, Khan carries no such stigma, they claim.

And so there he is, on the eve of assuming office as Pakistan’s 19th Prime Minister, having graphically demonstrated the fruits of tenacity.

“The first lesson for a man who wants to achieve something, is that there are no shortcuts in life,” Khan said in an interview in July 2017. “You make goals in life and then you pursue them. Only those succeed who do not give up. They stumble, but then they rise again and assess why they fell. They analyse their shortcomings. People do take potshots at such individuals — I have been ridiculed my whole life — but a person who is his own best critic succeeds eventually. This has been my life, without any shortcuts. I dreamed big and pursued my dreams without fear and with no intention of giving up.”

ENDs

The Arrow Once More?

By Amir Zia

Monthly Newsline

July 2018

PPP critics predict some nasty surprises for the party in the 2018 elections, but given the track record and the absence of an effective leadership within the opposition, it is likely to win Sindh for the third time in a row, albeit with a slashed number of seats.

Who will be the overall frontrunner in the 2018 general elections from Sindh? The answer to this question is obvious – the Pakistan People’s Party (PPP). Despite all the allegations of corruption and grievances against a decade of poor governance and misrule, the PPP seems in control of the electoral battlefield of Sindh — its traditional stronghold.

It is not just the Bhutto name that still casts its spell; the dominance of the PPP in the second-tier cities and rural parts of Sindh is also due to the fact that there appears to be no effective alternate leadership to pose a serious challenge to the party.

The entry of Bilawal Bhutto Zardari, PPP’s young chairman, in the electoral field for the first time is also expected to give a boost to the PPP in most parts of Sindh.  

Another factor which the PPP hopes will help it not only maintain its grip but extend its gains as well in Election 2018, compared to 2013, is the inclusion of electable candidates – read powerful landlords – in the party. “It may not go down well with the PPP’s ideological old-guards, but Asif Ali Zardari sahib (former president and co-chairman of the PPP) himself took the lead to bring powerful feudal lords within the party fold to ensure seats for the party in the coming elections,” said a PPP insider requesting anonymity.  

The third factor, which is likely to help the PPP’s bid for a third consecutive term to form the provincial government in Sindh and send members to the National Assembly, is its influence over the civil administration. Although there is a caretaker set-up, the neutrality of many administrative officers remains doubtful because they have been cultivated and supported during the past two terms of the PPP. All this gives a huge edge to the PPP.  

However, at least on paper, there are some big names and forces, including the Grand Democratic Alliance (GDA), trying to challenge the PPP in its bastion of power, but the prospect of their candidates giving a tough fight in the elections, barring a few districts, appears bleak. 

“There is a strong negative sentiment against the PPP because of its poor performance, but the GDA has failed to capitalise on this discontent,” says Dr. Jabbar Khattak, chief editor and publisher of the leading Sindh-language daily, Awami Awaz. “The anger against the PPP won’t transform into a wave because of the lack of leadership.”

The GDA comprises traditional anti-PPP forces including Pir Pagara’s Pakistan Muslim League-Functional; Ayaz Latif Palijo’s Qaumi Awami Tehreek; the PPP’s Workers’ faction led by Naheed Khan and her spouse, Dr. Safdar Abbasi; Ghulam Murtaza Jatoi’s National Peoples’ Party and Arbab Ghulam Rahim’s Peoples’ Muslim League. Along with these groups, there are individuals like the powerful landlord Ali Gohar Mahar in Ghotki and PPP dissidents, Dr. Zulfikar and Fehmida Mirza in Badin and several others in various constituencies, who are supporting the GDA. Some Sindhi nationalists, including Jalal Mohammed Shah, are also in alliance with the GDA in select constituencies, along with the Pakistan Tehreek-e-Insaaf. 

Ayaz Latif Palijo, the secretary general of the GDA, claimed that the anti-PPP alliance would form the provincial government in Sindh. “Out of 25 districts in Sindh, the GDA has a clear edge in at least 18,” he said while talking to Newsline. “In Umerkot, Thar, Mirpurkhas, Badin, Sanghar, Naushero Feroze, Shikarpur, Ghotki, Dadu and Jacobabad, we have a clear edge, while in Nawabshah, Sukkur, Larkana, Qambar-Shahdadkot, Tando Allahyar and Hala we expect a neck-to-neck fight,” he said.

However, GDA detractors say that these great expectations do not reflect the ground reality.

According to Dr. Jabbar Khattak, the GDA secretary-general, Ayaz Palijo, himself does not have a solid constituency. “The GDA comprises the same forces which failed to make any impact in the past… the PTI factor has a nominal presence in Sindh. Only Liaquat Jatoi and Shah Mehmood Qureshi are the two serious PTI candidates in rural Sindh,” he said. “The parties and individuals comprising GDA have a few pockets and can act as a pressure group but their presence is confined to holding small demonstrations and issuing press statements.”

In the 2013 general elections, the PPP bagged 32 National Assembly seats out of 60, while the parties comprising GDA and its allies got just eight, including PTI’s lone seat from Karachi. MQM won 18 seats and one seat was won by the PML-N. For the provincial assembly elections, the PPP got 94 seats in a house of 168, while the parties within the GDA and its allies secured a total of 15 seats including the reserved seats for women and the religious minorities. The MQM and the PML-N won 50 and seven seats respectively.

In the 2008 elections, PPP won 33 National Assembly seats, while the parties now comprising GDA and its allies won four. In those elections the MQM bagged 19 seats, while four seats went to PML-Q. In the provincial assembly, the PPP got 90 seats, while parties comprising GDA and its allies secured 11 seats. The MQM, PML-Q and ANP won 50, 11 and two seats respectively. 

Khattak maintains that despite the PPP’s abysmal performance, its opposition stands on a much weaker wicket. “For instance, the stature of the current Pir Pagara is not that of his father. There are differences even within the Pagara family. Unlike his father, who was good at bringing notables together, the current Pir of Pagara lacks this capacity also… And let’s not forget that even the senior Pir Pagara was defeated in the 1988 elections by PPP’s Pervez Ali Shah,” he said. “The GDA is an alliance of convenience, which has many aspirants for the chief ministership of the province. Moreover, the PPP has a far better organisational structure compared to its rivals in rural Sindh and will be able to bring in voters on election day.”

But journalist and analyst, Manzoor Sheikh, who is affiliated with Mehran TV, maintains that the anti-PPP forces in Sindh are expected to perform better than in the last election. “GDA has emerged as an important faction and anti-PPP forces are in a position to dominate at least seven to eight districts and give a tough fight in several others. There have been new political alignments and some powerful families which once supported the PPP, now stand on the other side. I see an anti-PPP tide in Badin, Tando Jam, Tando Allahyar, Naushero Feroze and Khairpur. I see tough competition in Sukkur as well where PPP’s Khursheed Shah is running for a National Assembly seat, while his son and nephew are campaigning for two provincial assembly seats which has created resentment among the people.”  However, said Sheikh, “The Bilawal factor has been overplayed as people know that he is not in charge of the party.” 

In a surprising development, a number of PPP candidates, including Nisar Khuhro, Naveed Qamar and Murad Ali Shah, were either manhandled or aggressively questioned by their constituents when they visited their constituencies. Even Bilawal was not spared when he visited Lyari; his convoy was stoned. A sign of the times perhaps, underlining a growing awareness among the voters who expect their representatives to perform.

PPP critics predict some nasty surprises for the party in the 2018 elections, but given the track record and the absence of an effective leadership within the opposition, it is likely to win Sindh for the third time in a row, albeit with a slashed number of seats.

Behind the Dar Smokescreen

By Amir Zia

Monthly Newsline

July 2018

The former PML-N government, which ended its five-year term on June 5, had created an illusion of economic stability, growth and development on the back of unprecedented heavy domestic and foreign borrowing.

When the new government takes charge after the July 25 elections, the foremost task of the new economic managers will be to knock at the door of the International Monetary Fund (IMF) for a bailout package or make frantic calls to friendly countries for injection of funds to ward off the looming threat of default on Pakistan’s external loan and import payments.

“The situation is really bad,” Dr. Abdul Hafiz Pasha, one of Pakistan’s most respected economist and a former finance minister, told Newsline. “A balance of payment crisis is staring Pakistan in the face. The new government will find itself in a very difficult position from day one as to how to keep the economy afloat.”

But what has gone wrong with the economy?

Wasn’t the Pakistan Muslim League-Nawaz (PML-N) government boasting about achieving the highest economic growth of 5.8 per cent for the first time in a decade till only a couple of months back? Wasn’t the ousted prime minister, Nawaz Sharif, and his “experienced” team claiming that they had managed to turn the economy around?

Leading economic experts and analysts say that the former PML-N government, which ended its five-year term on June 5, had created an illusion of economic stability, growth and development on the back of unprecedented heavy domestic and foreign borrowing. The PML-N government not only funded the mega, and often wasteful, infrastructure projects to create a false bubble of growth through reckless borrowing, but also maintained foreign reserves at a higher level. No wonder, the overall public debt soared to more than 24 trillion rupees by 2018 from 14.2 trillion in fiscal 2013. It was 6.4 trillion rupees in 2008.

But the two top selling points – high economic growth and record reserves – in the PML-N’s highly exaggerated and deceptive performance story were not being backed by the country’s economic fundamentals. The economic growth was pumped up through government spending, which was artificial and unsustainable.

The fiscal deficit is expected to widen to 6.5 per cent of the Gross Domestic Product (GDP) in fiscal 2017-18 against the revised target of 5.5 per cent and the original one of 4.1 per cent. Analysts say that the PML-N government monetised by borrowing from the State Bank of Pakistan.

According to the Pakistan Tehreek-e-Insaaf leader, Asad Umar, who has been tipped as finance minister if his party wins the elections, “Monetising is as good as printing notes.

“The PML-N government monetised 2384 billion rupees… When you create aggregate demand through artificial spending, it means that goods and services remain the same, but the money chasing it increases.”

The other key economic figures also serve as an eye-opener. The current account deficit, which hit around $16 billion in the first 11 months of fiscal 2017-18 (July-June), is expected to close at around the $18 billion mark or so – more than 5.5 per cent of the GDP.

When the PML-N government came to power in 2013, the current account deficit was $3.0 billion or barely 1.0 per cent of the GDP. At that time, the international oil prices were nearly $ 110 per barrel. But luckily for the PML-N government, oil prices dropped sharply in 2014, remaining below $60 a barrel for the most part of its rule. In fiscal 2017-18, oil prices climbed to $80 a barrel, but they still remain much below the 2013 level.

Dr. Ashfaque Hasan Khan, dean at the NUST Business School and a former Finance Ministry advisor, said that Pakistan’s biggest challenge remains how to manage its balance of payment crisis and its large fiscal deficit.      

“Our reserves already stand at a precarious condition,” he said. “In fact, the PML-N jacked them-up through borrowing, but the bubble had to burst. The reserves have now depleted to less than $4.0 billion in real terms.”

Dr. Pasha, too, estimates forex reserves to be $3.0 to $4.0 billion in real terms, which he says could get exhausted within two to three months. “The PML-N government even delayed many of the government payments and refunds to exporters, leaving this burden for the caretakers and the new government.”

He estimates a massive current account deficit of $25 to $26 billion in fiscal 2018-19. “This needs to be curtailed to $10 billion by making imports expensive through devaluation, which would also be the first demand of the IMF for a bailout package, along with other stringent conditions.”

By June 25, the Pakistani rupee had already slid more than 15 per cent to trade at 121.5 in the interbank against the dollar since December 2017. Market pundits say it will drop further against the greenback in the coming days and weeks as the dollar demand outstrips its supply.   

Shamshad Akhtar, the caretaker finance minister, in her June 12 press conference also painted a bleak picture of the state of the economy saying that the current account and fiscal deficit remain the two serious challenges for the economy, but said that the caretaker setup has no mandate to negotiate with the IMF for a bailout package.

Asif Qureshi, chairman of a leading brokerage house, Optimus Capital Management, says that the record current account deficit reflects the excessive import demand, which is fuelling fiscal deficit. “Overall the position is dangerous… the next government will be in a mess. I see no option for the next government other than to go to the IMF,” he said, echoing the alarm of other leading Pakistani economists and market players.

“The problem with political governments is that they initiate reforms under the IMF… but as soon as there is a semblance of stability, politicians go on an overspending drive, keeping the next elections in sight.” For any IMF programme, blessings from the United States remains a must as it wields tremendous influence on the multilateral donor agencies. In the last two programmes – both under the Pakistan Peoples’ Party and the PML-N governments – the US administration was supportive; therefore, the IMF ignored many slips – especially during the PML-N government, despite the fact that Pakistan continued to miss its targets.

But given the current state of Pak-US relations, there are justified concerns about Washington’s possible role. Therefore the IMF programme is expected to come loaded with stringent conditions.

A senior economist, requesting anonymity, said that Washington is likely to seek concessions on key security and strategic issues from Islamabad for supporting its bid for a bailout at the IMF. This may hurt Pakistan’s core national interests, he said.

PTI’s Asad Umar said that Pakistan was headed “towards bankruptcy” because of what he claims are the flawed policies of the PML-N, which has left the country vulnerable on every front.

“We had been predicting this for a long time. Ishaq Dar (PML-N former finance minister) kept the rupee at an artificial level, which compromised the competitiveness of Pakistani exports against the backdrop of high gas and electricity prices… Pakistani exports slumped and imports surged. The Sharif government has created a national security challenge by the kind of economic mess it created.”

Given the precarious forex reserves condition and Pakistan’s external payment obligations, talks with the IMF for a bailout package should start now and simultaneously, a process of reforms, without further wastage of time. But the caretaker government does not have a mandate to take such policy decisions, which means valuable time is being lost as Pakistan’s condition goes from bad to worse.

This means Pakistanis should brace themselves for a massive economic crunch which will bite the common man the hardest as the new government will be forced to take punishing austerity measures, including cuts and belt-tightening in development and social sector expenditure and devaluation of the currency, as well as hiking up the interest rates. The next government will have to curtail the aggregate demand, which can only be done by making imports expensive and through the monetary policy.

Already the PSDP (Pakistan Social Development Spending) has been cut to 750 billion rupees for 2018-19 fiscal from 1,000 billion allocated a year ago. This may go down further. But this strategy is easier in theory than in practice as it is an inflationary measure and has the potential to stoke social unrest.

A sharp devaluation means increasing the overall foreign debt in rupee terms, inflation and slowing down of economic activity, though Pakistani exports can get a temporary boost.

According to Dr. Pasha, Pakistan must make big moves on a war-footing in order to pull the economy out of troubled waters. In the short-term, he suggests the government can introduce an export incentive scheme by offering 10 per cent extra payment to exporters through commercial banks for bringing in their export proceeds. “If this is not done, exporters will keep their money abroad. At the same time, the import tariff should be increased to 35 per cent or so. The amount of cash margins requirement should also be fixed at 30 to 50 per cent so that importers can’t speculate.”

But in the mid to long-term, Pakistan will have to follow the long, hard path of reforms and take unpopular decisions which the PML-N government failed to take, including introducing tax reforms, slashing down of fiscal deficit, cutting down imports, slashing infrastructure expenditure, reviving or privatising loss-making units and reforming the economy rather than just banking on devaluation.

In a nutshell, the new government will find itself stuck in a corner without any fiscal space to come up to the expectations of the people. In fact, it will be forced to adopt some highly unpopular measures and undertake reforms which will hurt the common man.

Electoral Omens

By Amir Zia

Monthly Newsline 

Website

July 2018

The 2018 elections appear all set to change the political landscape of Karachi, though it may not change the fortunes of its citizens.

For the Muttahida Qaumi Movement-Pakistan (MQM-P), the 2018 elections will be the toughest in its entire history. The party – which faced multiple crackdowns and has a history of bloody rivalry with opponents and dissidents alike – dominated the ballot whenever it contested elections. The only time it did not represent the people of urban Sindh in the national and provincial legislatures was when it boycotted the 1993 general elections in the wake of an operation.

But since then, whenever the MQM took to the electoral field, it trounced its rivals, banking on a loyal support-base and an effective use of strong-arm tactics.

In the 2013 elections, the party bagged from Karachi, 17 National Assembly seats and 33 Sindh Assembly seats. In 2008, it won 17 national and 34 provincial seats, while in 2002 it secured 13 national and 29 provincial seats.

In 2018, however, it is unlikely to repeat its past electoral performance. The party, besieged by demons internally and externally, may garner fewer seats from its bastion of power. The reason behind the dwindling political fortunes of the MQM stems from both the subjective and objective challenges it faces in the run-up to July 25.

These are the first ever elections the MQM is contesting without the blessings of its Quaid, Altaf Hussain, who has already announced the boycott of the coming polls from London. Although the MQM has disassociated itself from Altaf Hussain, his influence over voters – at least a significant segment of them – cannot be ruled out. Even a small fraction of the traditional voters decide to stay away from the polls owing to Hussain’s boycott appeal, it will diminish the prospects of MQM-P candidates in many constituencies.

The second problem for the MQM is the emergence of the Pak Sarzameen Party (PSP) from within its ranks. This factor too, was missing in the last elections. The PSP is eyeing the same support-base. This means a further chipping-away of votes from the MQM’s vote bank, which can be damaging for the party in closely contested constituencies.

The third problem the MQM faces is infighting. The PIB and Bahadurabad factions may have joined hands, but the friction within these two groups has shaken the party from within. It will be a huge challenge for the MQM to galvanise its leadership and mobilise workers when the memories of confrontation still remain fresh.

These will be the first elections which the MQM will be contesting minus its nerve center of Azizabad. The famed Nine-Zero – residence of Altaf Hussain – and its headquarters remain out of bounds for the party. Offices in other neighbourhoods too have either been demolished or taken-over by the Rangers as part of the Karachi Operation, which began in 2013.

The Karachi Operation has dismantled and weakened the MQM’s muscle. Many of its workers are in jail, some are on the run, while others have joined the MQM-London and the PSP.

This means that the Rangers-led operation has changed the rules of the game in Karachi and the MQM may find its home turf unaccommodating on D-Day. It will face the challenge of mobilising and managing voters at the polling stations.

In the past, there have been widespread allegations that the MQM increased the margin of its victory and even went so far as to prevent its candidates from losing elections by resorting to high-handed tactics both inside and outside the polling stations. Consequently, these elections will serve as a test-case for the party’s performance in an environment that is less supportive.

The delimitation of constituencies has also emerged as another big challenge for the MQM, which it claims was done with the aim of dividing its vote bank and uniting its rivals. For the 2018 elections, the number of National Assembly seats in Karachi have been increased from 20 to 21.

Given these challenges, other parties – including the Pakistan Peoples’ Party (PPP), the Pakistan Tehreek-e-Insaaf (PTI), the PSP, and the Pakistan Muslim League-Nawaz (PML-N), are looking to expand their base in Karachi. PPP Chairman, Bilawal Bhutto-Zardari, is entering electoral politics from the party stronghold of Lyari, while PML-N President, Shehbaz Sharif and PTI Chairman, Imran Khan, are both contesting for a National Assembly seat from Karachi. MQM dissidents – Mustafa Kamal of the PSP and Afaq Ahmed of Mohajir Qaumi Movement – formerly known as MQM-Haqiqi – are also in the run.

This renewed interest in Karachi from the country’s national leadership is a good omen. It adds colour and diversity to the coming election.

The PPP, which has been ruling Sindh for the last decade, hopes to cash in on the MQM’s plight. It has pitched a mix of the old guard and new names in the heart of MQM-dominated areas, as well as those where it feels it stands a good chance. After a long time, the PML-N is also running a serious election campaign in Karachi in select constituencies, as is the PTI, which had, unexpectedly, performed well in the 2013 elections.

The MQM faces a seemingly impossible task of maintaining its past tally of national and provincial seats from Karachi, which it had been winning from the mid-1980s. It has to overcome, within weeks and days, both its subjective and objective problems if it intends to remain a major player. Many factors, however, are beyond the control of the party leadership, which is facing its first-ever general election minus Altaf Hussain.

Given its many constraints, the size of the MQM seats is expected to shrink come July 25. The MQM needs nothing short of a miracle. But the powers that can make such miracles happen stand on the other side of the divide. The 2018 elections appear all set to change the political landscape of Karachi, though it may not change the fortunes of its citizens.

Book Review: Such Tau Yeh Hai

By Amir Zia

Monthly Newsline

June 2018

"The book effectively highlights some important details about Nawaz Sharif’s advent and ascent in politics under the patronage of General Zia-ul-Haq and his close military aides. The writer also points out the important role the then Inter-Services Intelligence (ISI) Chief, General Hameed Gul, played at crucial make-or-break points of Sharif’s political career."

Chaudhry Shujaat Hussain is one of Pakistan’s frontline politicians, who remained on the right side of the “powers that be” through almost his entire political career spanning nearly five decades. As a young scion of a political family, he witnessed from close quarters, the major ups and downs of the country’s often traumatic history since the late 1960s. However, he started dabbling directly in politics from the early 1970s, under the tutelage of his father. He became a political player in his own right in 1983, when the then military ruler, General Zia-ul-Haq, nominated him to the Majlis-e-Shura – almost two years after the assassination of his father, Chaudhry Zahoor Elahi. 

Hussain, who himself has remained mired in controversies and was often accused of wheeling and dealing during his long and eventful political career, has a huge number of stories to tell about the major turning points in our history, as well as offer insights into the good, the bad and the seamy side of Pakistan’s politics.  

His recently-published memoirs, Succh Tu Yeh Hai (Truth Is This), include some carefully selected “facts” and give a glimpse of the intriguing world of the country’s politics in which kingmakers often lose control of their own creations. While the book provides some interesting background about the political players and the games they play, the reader is left craving for more detail, retrospection and analysis, which are unfortunately missing from this otherwise fairly readable book. 

These appear to have been left out deliberately. In the foreword, the narrator writes that he has tried to present “the truth” without any exaggeration or ambiguity. But in this simple narration of “truth,” the author paints a one-sided and incomplete picture.

However, the book effectively highlights some important details about Nawaz Sharif’s advent and ascent in politics under the patronage of General Zia-ul-Haq and his close military aides. The writer also points out the important role the then Inter-Services Intelligence (ISI) Chief, General Hameed Gul, played at crucial make-or-break points of Sharif’s political career.

The book depicts Nawaz Sharif as a man who failed to honour the promises he made to his allies and hurt those who were good to him. Hussain also pinpoints Sharif’s inability to tolerate dissent, his utter disregard for institutions and his dictatorial mindset.

Chapter 7 of the book titled, ‘Nawaz Sharif’s repeated breaking of pledges,’ provides interesting details of the time his name was first floated for the Punjab Chief Minister’s post in 1985, and of how the military bigwigs requested Chaudhry Shujaat to ensure that his group of Punjab Assembly members supported this relatively new face from urban Punjab, who was a stranger to the landed political elite. In a show of gratitude, Sharif made promises, under oath, to take all decisions in consultation with his backers. But soon after he assumed power with the support of Chaudhry Shujaat and his group, Sharif started to undermine their leadership by buying out their provincial assembly members in a bid “to cut (them) down to size.”

The aforesaid chapter claims that Sharif’s negative attitude forced Hussain’s group to move a no-confidence motion against the chief minister in Parliament, but the then ISI Chief, Hameed Gul, stepped in and convinced General Zia-ul-Haq to help foil this attempt which, ironically, was undertaken with the military ruler’s blessings. This chapter also gives details of a meeting held at the residence of one Brigadier Qayyum, and also attended by General Jillani along with Nawaz and Shahbaz Sharif, in which the two rival factions of the party were asked to bury their differences and shake hands. The writer claims that the Sharif brothers tendered an apology and asked the Chaudhrys of Gujrat (as Hussain’s family is known in political circles) to forgive and forget.

“I remember, on this occasion Nawaz Sharif kissed Pervaiz Elahi’s forehead twice. And Shahbaz Sharif embraced Pervaiz Elahi 10 times in 10 minutes,” shares the author.

But the writer says that the truce was violated by Nawaz Sharif yet again. This was the point, he claims, at which General Zia-ul-Haq intervened and sternly told Nawaz Sharif in a meeting to take back Pervaiz Elahi and his team in the cabinet.

In the chapters that follow, the author keeps giving examples of how Nawaz Sharif betrayed and ditched allies and party leaders, including then prime minister, Mohammed Khan Junejo, and managed to secure the support of the army to make it to the country’s top slot. While these details shed light on Nawaz Sharif’s nature and character, they also highlight the murky side of our politics and the manner in which political developments are orchestrated and the peoples’ mandate manipulated. The author, unintentionally, also reveals that he and his family remained loyal to the kingmakers despite being undermined by them many times, from the days of General Zia-ul Haq to those of General Pervez Musharraf. 

However, it was under Musharraf’s rule that the Chaudhrys of Gujrat reached their zenith of power and glory. Pervaiz Elahi became Punjab Chief Minister, while the author himself led the ruling Pakistan Muslim League Quaid-e-Azam (PML-Q) faction and became caretaker prime minister after Zafarullah Jamali was shown the door by the military ruler.  

The book throws light on Sharif’s second stint as prime minister and how he opened fronts against institutions, including the armed forces and the judiciary. The author writes that Nawaz Sharif was briefed twice about the Kargil Operation in advance – first on January 29, 1999 in Skardu, and then again on February 5, 1999 in Keil, AJK. There was another meeting in Lahore on March 12, 1999 about which General (R.) Abdul Majeed Malik told the author that Nawaz Sharif prayed for the success of the Kargil Operation at the end of a huddle of civil and military leaders. But when tensions with India escalated and Nawaz Sharif planned a trip to the United States, he expressed ignorance about the operation in front of the civil and military leadership, upon which General Musharraf took out a notebook and read out details of the briefings made to the prime minister on the issue.           

In chapter 13 of the book, the author argues that if Sharif had not tried to sack the army chief and divert his aircraft, the army would not have overthrown the government in October 1999. This chapter reveals some interesting details about Shahbaz Sharif’s nervousness on the day his elder brother tried to remove Musharraf and get him arrested, but failed. 

This chapter and the one following also tell readers about how, without taking his jail mates into confidence, Sharif suddenly struck a deal with the military and fled to Saudi Arabia from the Chaklala Air Base, in the dark of the night. Sharif had signed an agreement that he would not take part in politics for the next 10 years, which he showed to his lawyer, Ejaz Hussain Batalvi, in the Attock Jail, says the book.    

A significant portion of the book also focuses on the PML-Q government and its “achievements” and “record of services” between 2002-07, including how the author got Mir Zafarullah Jamali elected as the prime minister, why Musharraf decided to remove him and how he was subsequently elevated to the post. 

Hussain sounds bitter about the last days of Musharraf’s rule, especially the developments of the pre-2008 election days in which the military ruler struck a deal with Benazir Bhutto and passed the infamous National Reconciliation Ordinance (NRO), paving the way for her return to the country and giving a lease of political life to many others accused of corruption and wrongdoing. The author claims that the 2008 elections were manipulated to ensure that the PML-Q did not emerge as a major parliamentary force as it had already been decided to bring back the PPP to power. He also accuses the United States of playing a role in this arrangement.  

The initial portion of the book is dedicated to Chaudhry Shujaat’s family history, its business ventures and details of his father, Chaudhry Zahoor Elahi’s, rivalry with Zulfikar Ali Bhutto in the 1970s. 

All in all, Succh Tu Yeh Hai is an interesting study of how a traditional political family climbs the ropes of power by building the right connections, coopting the conservative and orthodox religio-political forces, and remaining on the right side of the establishment.  

Chaudhry Shujaat’s memoirs may appear shallow and superficial because of the absence of details and analysis and, above all, his one-sided views, but for those interested in Pakistan’s politics, they do shed a light on what’s wrong with the country’s politics and its ruling elite.