Governments around the world take responsibility for providing an enabling environment where individuals, institutions and businesses can flourish and explore various avenues to prosper. This includes, among other things, the provision of food and shelter, access to health care, education, infrastructure and, most importantly, a peaceful and safe atmosphere that can ensure growth and stability for all parties. stakeholders.
Pakistan has a long history of disruption both internally and externally. Internally, the urban-rural divide has existed since its creation. The ethnic divide appeared later. Over time, a vast fragmentation has taken place in the name of religion and politics.
The polarization of society has already reached alarming proportions. People are becoming more and more intolerant and rigid in their social, religious and political beliefs. Many political parties are confined to specific ethnic and geographic areas. Acceptance of diversity and tolerance is fading fast. On the political front, many parties focus more on agitation than on solving the problems facing ordinary citizens through the means available.
Over the past decade, Pakistan has seen a terrifying trend of long marches and sit-ins. From small groups to large political parties, everyone has tried to dictate terms by harnessing the strength of the people who support them. Recently, the Pakistani-led coalition government Tehreek-i-Insaf (PTI) was overthrown by a constitutionally valid mechanism: the vote of no confidence under Article 95 of the constitution. Opposition parties are redefining political partnerships and gaining the trust of most members of the National Assembly. As a result, Imran Khan lost the legal mandate to rule the country as prime minister.
However, the former star cricketer failed to show sportsmanship. In 2013, he did the same after losing the general election. In 2014, Imran Khan and his party disrupted the Chinese president’s visit aimed at cementing the historic China-Pakistan Economic Corridor (CPEC) initiative.
The political chaos created by the PTI caused a setback to the important initiative and gave Pakistan a bad name. Even after the sit-in ended, the PTI continued to call for unrest, rather than playing its role in parliament. The PTI was on the streets creating more problems for the government in general and the economy in particular. Imran Khan also boycotted the joint session of parliament convened in honor of the Turkish president, then a session on the Kashmir issue.
This behavior continued even after the PTI seized power in the aftermath of shady 2018 elections. The focus remained on victimizing political opponents in the name of accountability, rather than achieving political stability and economic.
Despite the party’s manifesto to transform governance and promote economic growth, it has failed miserably to contribute anything positive to these goals. He ended up taking the country to its highest ranking in history on the Corruption Perceptions Index. During his reign, the abuse of state institutions was at its height. This was evidenced by the statement of a former head of the Federal Investigative Authority and several Supreme Court judgments in cases filed by the National Accountability Office.
The polarization of society has already reached alarming proportions. People are becoming more and more intolerant and rigid in their social, religious and political beliefs. Several political parties are confined to specific ethnic and geographic areas.
On the economic front, the PTI government failed to surpass the record GDP growth of the Pakistan Muslim League-Nawaz government which had faced continued agitations from the PTI and Tehreek-i-Labbaik Pakistan, and to frequent interference from the Chief Justice of Pakistan. The PTI government has failed to sustain GDP growth. In fact, negative growth of 0.94% was recorded in 2020. Despite the base revision, the projected GDP for the current fiscal year (YY) is around 5.97%.
The growth of the national debt has been abnormal during the four years of the PTI government. Domestic debt rose to 28 trillion rupees from 17 trillion rupees until June 2018, registering a 65% increase in just four years. External debt fell from $95.24 billion in June 2018 to $128.92 billion. The misdirected policies of the PTI government, despite adding an unprecedented debt burden, have failed to add enough to the public treasury or reduce the current account deficit, which is expected to be around $20 billion. of dollars. by the end of June 2022.
Due to reckless borrowing by the PTI government, foreign lenders now have greater influence over our economic decisions than ever before. They now dictate transactional and strategic issues to the new government – from setting oil and electricity prices to imposing taxes. Reckless economic decisions during the reign of the PTI pushed the country into double-digit inflation, rising POL and electricity prices and a downward trend in growth due to heavy indirect taxes.
It is because of the overall failure of the PTI that the current coalition government is faced with the daunting task of closing the budget deficit, which is expected to exceed Rs 5.5 trillion for the current financial year. He desperately seeks financial support from the International Monetary Fund (IMF) and some friendly countries. A new agreement with the IMF is not possible without the removal of subsidies agreed by Shaukat Tarin and Raza Baqir in February.
Another factor that has contributed to the deterioration of the economic situation is the devaluation of the rupee. Over the past four years, it has devalued by more than 60%. This devaluation increased the cost of doing business. If the IMF does not immediately provide financial support, the stress will increase further.
It is clear that the erratic policies of the PTI government have caused our economy to face multidimensional challenges on both local and foreign fronts. The circular debt of the electricity sector alone has increased from 1.1 trillion rupees in June 2018 to 2.5 trillion rupees in April 2022.
The current government has no choice but to opt for fiscal tightening, tax harmonization and the removal of subsidies which will directly affect an overwhelming majority of Pakistanis. We are going to see historically high deficits – fiscal, current and trade – coupled with an appalling debt burden. This makes it imperative to resume the IMF program.
After creating a deadly mess, the PTI is once again on the streets, further adding to the political instability. The PTI chief’s political shenanigans are sending negative signals to investors. A credible threat of major city closures will shut down economic activity, exacting a heavy toll on businesses, the poor and those on fixed incomes.
The 2014 appeal for Azadi March cost around Rs 149 million in policing in the capital alone. This is without taking into account the suffering endured by businesses and citizens. PTI management must be held accountable for its actions. However, it seems that the government led by Shahbaz Sharif lacks the commitment/mandate to do so. Those who matter in the country must realize that political stability is a prerequisite for economic well-being.
Abdul Rauf Shakoori is a corporate lawyer based in United States. Supreme Court Advocate Dr. Ikramul Haq is Deputy Professor at Lahore University of Management Sciences (LUMS)