“A crisis takes much longer time coming than you think, and then it happens much faster than you would have thought” (Rudiger Dornbisch). This quote has accurately summed up political and economic crisis that have afflicted mankind. Each empire or country initially develops a rot that is allowed to fester for decades or even centuries, until one day it implodes. This is how Rome fell from grace in the fifth century through political strife and economic meltdown and it is the same conditions that are now threatening Pakistan as well. The power struggle between PTI and PML-N has been ongoing for a year now and along with it so has our country’s economic crisis. The word default has been used so much in the media that it seems to be the default setting of any conversation over the past one year. There are two aspects to the current crisis Pakistan faces with a political crisis that started in 2017 on one side and an economic crisis that has been brewing since late 2002 on the other.
The political crisis began when the establishment decided in 2017 to oust Mr. Nawaz Sharif and his government. He was disqualified in the Panama papers case by a bench headed by the then chief justice Saqib Nisar in which the Supreme Court acted as a trial court in order to achieve the political objectives of the establishment. A second blow was dealt to PML-N when various means such as the RTS system shutting down to shifting of electable candidates to PTI was carried out by General Faiz Hameed and Army chief Bajwa in order to ensure that PTI emerged victorious in the 2018 general elections and formed the federal government as well as provincial governments in Punjab and KPK. Pressure tactics to prevent campaigning by candidates from opposition parties to outright vote rigging was done which ensured our record of not having had a fair election since 1970 was maintained. The media was completely managed by the then establishment to ensure that unfavorable news about PTI was not shared and those that didn’t tow the official line were punished with job losses, harassment, abduction and violence by the state. Corruption cases were opened through National accountability bureau to hound political opponents and imprison them on false charges for months or even years and the judiciary was managed to ensure that no relief could be granted to them by denying right to bail as well as freezing assets and bank accounts to cause financial hardship. However as is the case with all marriages of convenience the marriage between PTI and the establishment to could not last. The establishment, true to its policy of ensuring that no civil government becomes too powerful, after a honeymoon period of three and half years decided in April 2022 to send Mr. Khan’s government packing through a vote of no confidence. A tussle then began in which Mr. Khan tried his upmost to pressurize the federal government to hold early elections through long marches as well as resignations from national assembly but couldn’t succeed. A struggle for Punjab government also began in this time period which ended in a victory for Mr. Khan with the support of the judiciary which re wrote the constitution through article 63-A and through disqualification of those MPA’s who vote against party lines. However this advantage was squandered when they dissolved the KPK and Punjab assembly for the purpose of holding general elections only for the government to extend the date of elections to October through the election commission with caretaker governments of their choice in place till then. In the meantime the army chief also changed in November 2022 with the new setup more favorable for the PML-N which has allowed it to extend elections for provincial assemblies with the excuse that soldiers, judicial officers, policemen and 15 billion rupee funds required for election are unavailable.
In the midst of all this drama the economic crisis has only continued to spiral out of control with no end in sight. Inflation is breaking 50 year records with weekly inflation at 47% and annual around 35%. Imports worth billions of dollars are stuck and industry of all kinds is shut down leading to millions unemployed. Debt repayments are barely being met with genuine fears that unless the long stalled IMF programme is restarted by June and foreign inflows to the tune of 6 billion dollars from friendly countries materialize, Pakistan faces the prospect of default on its international repayments. It’s a crisis that began in the Musharraf era when tens of billions of dollars of foreign aid was squandered on projects that didn’t increase our exports in proportion to the increase in our debt and imports. The national debt grew by 130% in Musharraf era and has continued since at a walloping pace. The fiscal and trade deficit that began in 2005 have continued to grow at an alarming pace with interest payments now being equal to the federal budget raised through taxes and the foreign debt repayments standing at 52 billion dollars in next two fiscal years not including the current account deficit of several billion in same fiscal years. A lot of this debt, taken under the umbrella of CPEC, was used for building roads, bridges and power plants which fail to generate return in dollars only increasing debt and dues. 1.5 billion dollars is just the Chinese IPP payments Pakistan has defaulted on this year with billions more stuck of MNC’s in profit repatriation. Who will invest in Pakistan when they know they cannot take their profits back from the country.
One can only hope that sanity prevails and somehow we can come out of both these crisis through dialogue between the various stakeholders fighting for power but in all likelihood things are going to get much worse before they get better. The people should buckle up as it is going to be a bumpy few years ahead.
