Pakistan is a country that has been fraught will problems since its birth. For Pakistani nationals thinking about the past is bliss as the past is more glorious than the present and the future outlook. It is hard for Pakistani to visualize a strong Pakistan with an independent foreign policy so much so that any thought of the sort is considered a fool’s dream. The person wanting to strive for this becomes a laughingstock. These facts portray an alarming situation, and the decision-makers are not concerned about this. As long as they are financially secure, it seems, whatever happens to the country and its people is not of concern and why should it be, the ruling elites have already prepared for such a situation and established their lives abroad in developed countries. Pakistan is faced with a serious political and economic situation. While this statement has become a cliché in Pakistan, the current crisis is deeper and more serious than anything the country has faced before.
An economic crisis comes every few years in Pakistan, stemming from an economy that doesn’t produce enough and spends too much and is therefore dependent on foreign debt. Each subsequent crisis is worse as the debt bill grows and payments come due. This year it was made worse by domestic political instability and a flood disaster. The crisis also has a significant external element rising global food and fuel prices as a result of Russia’s war in Ukraine.
The combination of all these factors meant perhaps the greatest economic challenge Pakistan had ever seen. Still, the government is mired in politicking and the release of a $1.1 billion loan tranche from the International Monetary Fund (IMF) remains on hold as Islamabad backed away from IMF conditions. The government has now resorted to restricting imports and closing malls and wedding halls early, small measures that do not adequately address the problem.
Pakistan may be able to avoid insolvency for the time being with help from the IMF and loans from friendly countries, especially Saudi Arabia and other Gulf countries. But these will not address the clear underlying malaise of the economy and the fact that something fundamental will have to change in terms of how much the economy produces and how much it spends to avoid insolvency. However, none of Pakistan’s political parties seem to have the political will or ability to make such a change. Pakistan reportedly has to repay $73 billion by 2025; it will not work without debt restructuring.
Politics will likely consume much of Pakistan’s time and attention in 2023, as it will in 2022. The country’s slide into political instability last spring did not end with a dramatic no-confidence vote in parliament last April that ousted then-Pakistani Prime Minister Imran Khan from office. Instability and polarization have only deepened since then: Imran Khan led a popular opposition movement against the existing coalition government and military, holding several large rallies across the country during the year. The power struggle in Pakistan continues until 2023. While the incumbent government has not given in to Khan’s demand for early elections, national elections are constitutionally required to be held by October this year. It benefits the present regime politically to delay them as long as possible as it tries to dig itself out of Pakistan’s pressing economic crisis and its lackluster domestic performance. Khan’s party has done very well in a series of by-elections held in July and October. The state tried to implicate Khan and his party in legal cases, relying on a familiar playbook used against opposition politicians in Pakistan, albeit with limited effect, involving the courts. These moves against Imran Khan and his party are going to be more decisive now with Khan’s decision to dissolve both the provincial assemblies of Punjab and Khyber Pakhtunkhwa (KP). This decision has further worsened the political situation as two of Pakistan’s provinces are operating without assemblies and now the state will resort to discriminatory measures against the PTI which will lead to further unrest and instability.
Pakistan’s problems are often blamed on the powerful military of the country, however, now that the army has become apolitical, it needs to be seen whether the political forces can set aside their differences in the interest of the country or will they continue to destabilize Pakistan in their own self-interest.