On 3 March, Shehbaz Sharif was elected as prime minister of Pakistan by a coalition of parties. The Pakistan Muslim League-Nawaz (PML-N) has shown immense courage by taking on the responsibility of leading a coalition government under extremely challenging economic, security, and political circumstances.
In the elections held on 8 February, no political party, including independent candidates belonging to Pakistan Tehreek-e-Insaf (PTI), secured a simple majority (134 seats) in the National Assembly required to form a government. In his speech to party workers on 9 February, PML-N founder Mian Nawaz Sharif urged all political parties to work together to form a government and take Pakistan out of the current crisis.
The government is set to take tough economic decisions that are essential to stabilise the economy and steer it in the right direction.
However, soon after the poll results, PTI spokesperson Raoof Hasan told Al Jazeera that party leader Imran Khan had mandated him to approach all political parties other than the “Pakistan People’s Party (PPP), PML-N and MQM.” Following the PTI’s announcement, the PML-N and PPP decided that they would join hands with smaller parties because it was in the country’s best interest to form a government as soon as possible and deal with urgent matters on war footing
It took some time for the PML-N, PPP, and four smaller parties, Muttahida Qaumi Movement-Pakistan (MQM-P), Pakistan Muslim League-Quaid (PML-Q), Istehkam-e-Pakistan Party, and Balochistan Awami Party to initiate talks, discuss power-sharing modalities, and form the government.
Economic woes, inflation
Currently, the biggest challenge is stabilising the economy as the country faces a grave economic situation. The PTI government’s four years of corruption and mismanagement have caused a serious financial crisis in the country, which was impossible to avert in 16 months of the Pakistan Democratic Movement (PDM) government that followed PTI’s rule. People belonging to low-income segments of society are the most affected by inflation and find it hard to buy even essential commodities.
The new government must manage some crucial issues, foremost among which are reducing the trade deficit and high import bill, which will cause concern among the business community heavily reliant on imports. However, without key structural reforms, the economy will remain on life support, requiring constant intervention to stay afloat.
The year 2023 saw unprecedented inflation, affecting large swathes of the population, especially the poor, yet hard times are far from being over. Rising food and energy prices, expected currency depreciation, and Pakistan’s need to rely on more loans from the IMF are troubling signs that the economy’s health is severely compromised.
According to the Consumer Price Index (CPI), inflation consistently hovered around 29 per cent for three consecutive months until December 2023. It was chiefly due to increasing prices of kitchen items, gas, and electricity. However, the downtrend in inflation, starting from January 2024, presents some hope. As per CPI, inflation decreased to 23.06 per cent year-on-year in February.
Security
As the new government is gearing up to deal with economic turmoil, tensions at Pakistan’s western border are rising. In mid-March, in a suicide and gun attack on a military base in North Waziristan’s town of Mir Ali, seven soldiers, including two officers, were killed, and many more were wounded. In response, Pakistan carried out aerial strikes in Afghanistan to target bases of the banned Tehrik-e-Taliban Pakistan (TTP). Since the Taliban takeover in Afghanistan, the TTP has conducted numerous terrorist attacks in Pakistan from its sanctuaries in Afghanistan, a charge that the Afghan government denies. Unless dealt with an iron hand, the terrorist threat is likely to expand to the rest of the country.
Tackling the challenge
Despite the enormous challenges ahead, the PML-N is well-prepared to handle them. It has the benefit of hindsight, having previously worked with its coalition partners. In 2008, after Musharraf’s eight-year rule ended, PML-N and PPP worked together to bring the country back on the democratic track. In 2022, the parties worked together to remove Imran Khan from the office of prime minister and then partnered in the coalition government that followed. This time around, PML-N will work with PPP to bring political and economic stability.
The government has a clear roadmap to provide relief to the masses, win their confidence, and improve their standard of living through economic development, job creation, taxing the rich, and lowering inflation.
Prime Minister Shehbaz Sharif asked his government to start negotiations with the IMF for a medium-term bailout, after the current agreement is cleared, as Pakistan is still reeling from the blow dealt to the economy during PTI’s corrupt rule. Despite the stringent conditions attached, the IMF’s loan will pave the way for direct investments from brotherly countries, accelerating the speed of economic development. The government intends to broaden the tax net, instead of increasing taxes to boost revenues. During a cabinet meeting, Shehbaz Sharif highlighted the issue of certain high-earning businesses going untaxed and emphasised the necessity for the government to engage in negotiations with them to bring them into the tax net. The government is set to take tough economic decisions that are essential to stabilise the economy and steer it in the right direction.
The government has a clear roadmap to provide relief to the masses, win their confidence, and improve their standard of living through economic development, job creation, taxing the rich, and lowering inflation.
Pakistan Institute of Legislative Development and Transparency President Ahmed Bilal Mehboob was quoted in Dawn as saying that a party demonstrating greater adjustment has a better chance to succeed. Reconciliation will improve the chances of the incoming government to complete its mandated five-year electoral term.
However, concerns loom over the effectiveness of the newly formed government, given the divergent interests and approaches of various political parties and independent candidates such as Mohsin Naqvi and Finance Minister Muhammad Aurangzeb. “This is a very difficult time in Pakistan’s economic history. The elected government will be compelled to make unpopular choices to qualify for a new IMF loan,” Farhan Bokhari, an economic analyst, told DW. “And those decisions will bring the risk of public discontent in the near future. There’s going to be no honeymoon period for this government.”
Another big challenge for the government is managing the parliament in which Imran Khan’s party members form a large bloc. The independent candidates associated with PTI performed well in the polls and emerged as the biggest single group in the National Assembly, with 93 lawmakers.
At a time when national unity is essential to address Pakistan’s challenges, the PTI’s divisive tactics are exacerbating the situation. Echoing its actions in 2013, the PTI has refused to accept the election result and vowed to oppose the government in parliament and on the streets. Unless dealt with judiciously, this could escalate into a significant obstacle for the government to overcome.
However, analysts have pointed out that, currently, the coalition government has a two-thirds majority in parliament and is in a position to pass constitutional amendments. The most PTI can do is create some noise in parliament and take to the streets.
PML-N’s stance
Although PML-N is leading from the front, all coalition partners are responsible to the public for the successes and failures of this government. The party aims to forge consensus on economic policies to combat inflation and seeks cooperation from other political parties.
On March 21, Prime Minister Shehbaz Sharif chaired a special session of the Apex Committee of the Special Investment Facilitation Council (SIFC). During the meeting, the prime minister candidly talked about Pakistan’s economic challenges, emphasising that the federation cannot deal with the economic crisis alone. He urged all provinces, whose chief ministers were present, to work together.
This is a step in the right direction, as an uncertain political environment can never stabilise the economy. It is hoped that all political actors will set aside their differences and work with the PML-N to steer the country out of troubled waters.
