Economic meltdown

The stock market again nosedived by 750 points and the rupee continued to shed its already depleting exchange value amid dwindling electoral support in Sunday’s by-elections to the razor-thin PTI-led governments in Punjab and at the federal level. The fact is that it is not just the economy, but also political uncertainty that is further fuelling the indecisiveness within a shaky PTI-led coalition.

As global recession looms large, interest rates rise in the US and strengthen the dollar, which makes it “harder for emerging markets to repay their dollar debts”, as per The Economist’s cautioning. This has pushed Turkey and Argentina into trouble. Coupled with its own financial troubles, the delayed and confusing response of the Imran Khan government has landed Pakistan once again into the lap of the IMF for a vicious cycle of bailout packages. This time it is an unprecedented request for $15 billion, besides $ five billion from the Asian Development Bank and the World Bank.

In anticipation, the rupee continues to fall rather than boosting exports and reducing the current account deficit. Panicking over the dwindling political capital of a fragile coalition, the investors are left with little patience to take further risks amidst confusing policy signals. The line-losses and thefts in the power sector are troubling as well and result in higher charges of electricity and gas to meet the circular debt.

The historically low turnout of 28.31 percent in the NA by-polls has been quite disappointing. It has not only showed a lack of trust within the wider electorate in a doubtful electoral process, but has also raised critical questions about the last general elections. Never has any government, hardly two months into power, lost some of its crucial seats in a by-election.

The PTI lost three National Assembly seats (NA-131 and Na-35 vacated by Imran Khan and NA-56) and six provincial seats in Punjab (PP-3, 27, 222, 292) and Khyber Pakhtunkhwa (PK-3 and 7 in Swat) in the by-elections. This will, at the very least, make the ‘symbol of change’ in Punjab, Chief Minister Usman Buzdar, vulnerable to the block of turncoats that forms the backbone of the PTI-led coalition in the most crucial province in the country’s power equation.

Similarly, if the MQM and the Baloch coalition partners (BNP and BAP) somehow part ways at some point, the Khan government could fall whenever necessitated. This numerical fragility of the PTI governments in Punjab and at the federal level will keep them critically dependent on the real power-brokers.

It is quite astonishing to see ‘the wave of populist change’ lose its stream so quickly. Despair and gloom is writ large on the faces of the petite bourgeoisie. These apolitical middle strata had ever supported the democratic project and always distrusted the political class, content instead with successive authoritarian regimes. They nurtured fascist and authoritarian tendencies, as in Turkey and elsewhere, and yearned for a messiah-like authoritarian emancipator.

In the end, after the fiasco of their political indulgence, they go back to their asylums – either licking their wounds or nursing still greater hatred against perceived curses with an unshattered belief in their make-believe world. It is interesting to note that the PTI leadership, Imran Khan in particular, continues to play with the conflicting aspirations of its middle-class electoral base as if the party is still agitating on the streets from atop the container it once stood on to topple an elected government – without realising that it is now on the other side of the barricades. The roles should have changed, so should have its strategy as a government in power that is condemned to deliver on the loud promises that it had made amid high hopes that it still continues to raise rather than temper.

Still, the PTI government continues to harp on about the selective accountability of its political adversaries, the PML-N and the PPP. With each passing day and with dwindling popular support, it is getting desperate to ‘unravel’ the development projects that were undertaken by the previous government. Instead of bringing down political temperatures, it continues to raise political temperatures, which ends up further panicking a market that is already in deep trouble. The high hopes pinned on Saudi generosity are doomed after the Khashoggi case, and due to greater US demands on the Saudis to increase oil production at lower prices. Ironically, the government is still not refraining from casting aspersions on CPEC projects; the latest tirade is against early-harvest projects that will now be subjected to forensic audit. This is reminiscent of the PML-N campaign against the Independent Power Projects (IPPs) undertaken by the Benazir government.

Thanks to Chinese sagacity, CPEC has survived the confusion. As Prime Minister Khan plans to travel to China, the government should figure out how competently it places its human resource development projects and plans for much-needed social sectors before its Chinese counterparts. This needs to be done, however, without jeopardising the ongoing projects, and recalibrating those already in the pipelines.

The kind of ugly scenes we witnessed during the budget session in the Punjab Assembly and the scene created in the National Assembly on the appearance-in-custody of Leader of the Opposition Shehbaz Sharif show how high the political temperatures are. This is something a new government can ill afford.

The need of the hour was for the government to have lowered the level of political confrontation to consolidate itself and squarely tackle the debilitating challenges we face. Perhaps, it believes that by continuing with the blame-game and keeping the confrontation at a high pitch, it can evade its responsibility to deliver.

The disappointing results of the by-elections should have given it an occasion to contemplate, and persuaded it to get back to the normal business of the state. It seems that this is not its ball-game.

The writer is a senior journalist.

Email: imtiaz.safma@gmail.com

Twitter: @ImtiazAlamSAFMA