Annus Miserabilis
The new year is unlikely to bring any good news for Pakistan. Chances are that things will be much worse in 2023. The economy has virtually no chance of recovering, or even stabilising, given that this is supposed to be an election year. The politics will remain toxic and the politicians do not seem to have any idea, much less any plan, to fix things. The
statement issued after the National Security Committee meeting on January 2 is a prime example of the end of imagination when it comes to addressing Pakistan's existential crises. The
presser of the defence minister the next day makes it clear that the government cannot think beyond tinkering around with the problems rather than undertaking rescuing reform. The Army will be watching the continuing drift in affairs of state with deep concern and will be fighting on two fronts—the political and the militant fronts. There will be virtually nothing that will be done for the flood-hit areas, partly because there is no money and partly because most of those areas do not really add up to much politically or economically, and, therefore, can be ignored.
Imran tried his level best to prevent Munir from becoming chief and he had even tried to make the appointment controversial by saying that the next chief will be a lackey of the Sharifs.
Toxic Politics
On the political front, Pakistan has entered a phase of chronic instability and it is unlikely that the next elections can fix it. In fact, if the elections are held, no party is likely to get a majority. Imran arguably remains the most popular leader. Even the multiples scandals surrounding him (sex tapes, financial misappropriations, favours dispensed to cronies) haven’t dented his popularity among his cult. And yet, there is virtually a consensus amongst Pundits in Pakistan that he will not be allowed to become Prime Minister. The new military leadership is quite miffed with Imran. He is seen as a malign force in Pakistani politics—destructive, vindictive and utter vacuous. Gen Munir also has a
history with Imran—the latter had sacked the former as ISI chief because he brought the corruption of his wife to Imran’s notice. Imran tried his level best to prevent Munir from becoming chief and he had even tried to make the appointment controversial by saying that the next chief will be a lackey of the Sharifs.
A Rickety Coalition
There is no way the current Army leadership will let Imran come back to power. They will use every trick in the book and pull out all the stops to ensure he doesn’t come close to forming a government. Imran will, therefore, either be disqualified or be made to lose the next elections with some good old-fashioned political engineering. The Pakistan Muslim League (PMLN) is likely to emerge as the single largest party but will fall well short of a simple majority. This means that a new coalition, similar to the one in power right now, will form the next government. Such a coalition suits the Army because controlling it is so much easier. But such a government will also be susceptible to political blackmail by coalition partners. For it to take really difficult decisions—a massive and very painful restructuring program, without which Pakistan will not remain a viable state—is next to impossible because of resistance from its coalition partners. The bottom line is that the spectre of political instability, which is the enemy of reform, will continue to hang over Pakistan.
The Pakistan Muslim League (PMLN) is likely to emerge as the single largest party but will fall well short of a simple majority.
The Army knows that the economy is on the verge of a meltdown. But this being an election year, the incumbent regime will be forced to indulge in some populism to recover some of its lost political capital. As the elections come closer, the government will be tempted to resort to fiscal profligacy, splurging on new schemes, announcing new development projects, giving freebies and sops to cultivate their vote banks and constituencies. But there is absolutely no fiscal space for such populism. In fact, even giving any relief in terms of subsidies or tax cuts could simply push things to the point of no return.
Army’s Options
The Army will, therefore, be watching, gaming and weighing its options. One option is that the current government declares a financial emergency, which will then allow it to postpone elections for up to a year. The Army could back the government’s move and ensure that the judiciary doesn’t throw a ner in the wheel. But if this period is only used for marginal reforms, then it will not solve the problem, only postpone it. In any case, it is too short a period to implement the structural reforms needed to put the economy back on the rails.
Another option is to hold elections a few months early—around April or May—and get a caretaker government to undertake sweeping economic reforms in accordance with the IMF demands, which is something that politicians are unwilling to do. But does Pakistan have the luxury of time? In the first week of 2023, Pakistan has to repay another
US $1 billion, which will bring down the reserves to around US $4 billion. There is a real fear that panic will set in and a domino effect will start. Even if this is avoided and the incumbents manage to stay in power for a few weeks, they will do what Imran did – announce relief packages, create a feel good sentiment and walk out – and leave a bigger mess than the one they inherited. This will make it even more difficult for the caretakers to manage things. Plus, the time period in which the caretakers will be in power is too short for them to hold elections and at the same time negotiate with IMF and put in place extremely tough measures to keep the economy afloat.
Even if the judiciary rubber stamps it, there will be the politicians who will raise hell and bring not only the caretakers but also their military backers under tremendous pressure.
A variant of the second option is to have an extended caretaker setup, which goes beyond the constitutionally mandated period of three months. But this will be an extra-constitutional step and will need to be sanctified by the judiciary. Even if the judiciary rubber stamps it, there will be the politicians who will raise hell and bring not only the caretakers but also their military backers under tremendous pressure. The military will earn all the ire and opprobrium for all the pain that is inflicted on the populace.
Yet another option is for the military to directly take over power. But that step will have its own repercussions. The political parties will, of course, oppose such an unconstitutional move. The resulting political unrest and discontent will be further fuelled by the tough economic measures that are taken. Moreover, a military takeover will also lead to international sanctions, which, in turn, will only precipitate the collapse that is being sought to be avoided.
A new War on Terror
For the Pakistan Army there is also the issue of tackling the terrorism threat. Here too there are only bad options available, especially given the empty treasury and the dysfunctional polity. The Army could undertake offensive operations against the Tehrik-e-Taliban Pakistan (TTP) and other insurgents inside Pakistan. But as long as safe havens exist in Afghanistan, these operations will be an unending affair. The other option is to attack the terror sanctuaries. This means operations inside Afghanistan, which in turn will pit the Taliban against Pakistan. The entire western border of Pakistan will become a war zone and the destabilisation will be unstoppable. Yet another option is to hold talks and enter into some kind of negotiated settlement with TTP. But this means surrendering sovereignty to the TTP and will be the beginning of a domino that will destroy the Pakistani state.
The Pakistanis believe that if they can once again bamboozle the Americans, they will not only be able to get US support in negotiations with the IMF but also US assistance in getting over the economic crisis.
A small silver lining for Pakistan is that relations with the US seem to be getting back on track. The Pakistanis believe that if they can once again bamboozle the Americans, they will not only be able to get US support in negotiations with the IMF but also US assistance in getting over the economic crisis. In addition, the US will give them aid and weapons in the fight against the Taliban. Perhaps, this thinking is a little over the top and while the US will engage and even aid the Pakistanis, this is unlikely to reach close to what the US was giving when it was physically present in Afghanistan. Pakistan can, perhaps, expect some more aid from Saudi Arabia and China, and perhaps from UAE and Qatar. But it is not clear what the quid pro quo will be.
Annus Mortis?
In any case, no amount of money that is given to Pakistan will be enough if Pakistan doesn’t undertake deep reform, for which there is neither any planning nor any appetite. Reform even if undertaken will cause enormous dislocation, disruption and disturbances, which might be difficult to control. The way things are moving, Pakistan's Annus Miserabilis might become Annus Mortis. Unlike what some Indian economists think, Pakistan is not where India was on 24 July 1991; it is hurtling towards where the USSR was on 25 December 1991.
To read the first part of the series, click here.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
PREV
