‘Imran jeopardising Pakistan’s attempts to fix economy’

ISLAMABAD: Ousted prime minister Imran Khan is "jeopardising Pakistan’s attempts to fix its economy" as he rallies his supporters and workers to march to Islamabad and causes disruption, an article published in The Economist said Thursday.

The publication said that "ritualised displays of street power, in which political parties rally their supporters and lead them towards the capital, are a favourite tactic for anyone trying to rattle the government". It added that in the current situation, no one is keener on rallying supporters to Islamabad than Imran Khan and since being ousted from office -- through a no-confidence vote in April -- he has refused to sit at home and is adamant about marching to the capital. Imran Khan blames a United States-backed conspiracy that led to his ouster. He also maintains that the incumbent "imported government" has worked "hand in glove" with foreign powers.

However, when he came to the capital on May 26, he called the sit-in off and gave the government a six-day ultimatum for calling early elections, which has expired. The government claims there weren't enough people in his march, therefore, he cancelled it. But Imran Khan has persistently claimed that he called off the march to prevent bloodshed. There has been much speculation about why the march was dispersed. He says he wanted to prevent bloodshed. His opponents say he was disappointed with the size of the turnout. PTI insiders claim that the march was halted after he was given assurances that elections, at present scheduled for late 2023 when the current parliament’s term ends, would be brought forward to this year.

He blames his inauspicious exit on a conspiracy between the opposition and America, which he claims was keen to see the back of him because he refused to pander to America’s foreign-policy demands. America says this is nonsense. Mr Khan’s supporters have lapped it up anyway. Over the past few weeks, huge crowds have rallied to him, demanding new elections to kick out the “imported” government.

Mr Khan’s latest deadline came and went. He has not called a new march. Some observers suspect that he may need time to rally his supporters after the anticlimactic ending to his last push on the capital. His allies think he is unlikely to return to Islamabad imminently.

Given the scenario, it is “hard to see” why Prime Minister Shehbaz Sharif -- the younger brother of three-time premier Nawaz Sharif -- would "agree to call early elections". "His government, less than two months old, has taken tentative steps towards repairing relations with the West. But it has not yet devised a strategy to tackle the economic crisis it inherited. In part that is because Mr Khan’s protests have kept it distracted," the article read.

Shehbaz also "failed to seize the political initiative" as last month, he went to London to seek advice from Nawaz -- who has been there since 2019. The move caused speculations that the decisions were being taken abroad. Coming back to the economic issues, Pakistan's foreign reserves, according to the publication, are at their lowest level since 2019 and the International Monetary Fund (IMF) programme is also stalled.

In part, it is because of Imran Khan, as his government had originally agreed to cut power and petrol prices, but later they decreased it. “The country is running deficits on both its budget and its current account. It needs some $37bn worth of financing for the fiscal year beginning in June, reckons the finance minister," the article read.

However, in its bid to revive the IMF programme, the incumbent government massively raised the price of petroleum -- boosting hopes of getting the loan. "The currency and the stock market rallied slightly in response to the move. A bail-out will also unlock credit from allies such as China and Saudi Arabia, which are unwilling to extend more help without assurances that the IMF will release the bail-out money."

And to obtain the bail-out money, the government is likely to take unpopular decisions -- as indicated by Finance Minister Miftah Ismail that the government will introduce reforms before the budget.

But there's still an issue. "The IMF is unlikely to take seriously a government that may not be in power for more than a few weeks, particularly given the risk that Mr Khan might return to power." Despite early elections not appearing to be possible, according to the publication, Imran Khan does not seem to be giving up hope. But in the country's interest, it needs stability to progress.

The country’s finances are in wretched shape. The pandemic and the fallout from the war in Ukraine have battered an economy already reeling from decades of mismanagement and a focus on debt-driven infrastructure projects that generated no returns. Inflation hit 13.8% in May, driven largely by the price of food and transport. The rupee has lost 8% of its value against the dollar since early April. Foreign reserves had dwindled to $10bn by May 20th, enough to cover imports for only about six weeks.

The reserves are at their lowest level since 2019, when Pakistan last sought help from the IMF. Only half the $6bn bailout agreed at the time has been disbursed. Mr Khan, then prime minister, originally agreed to cut subsidies and reform the economy but reduced fuel prices instead. The country is running deficits on both its budget and its current account. It needs some $37bn worth of financing for the fiscal year beginning in June, reckons the finance minister.

Even so, Mr Khan does not appear to be giving up hope. He is petitioning the Supreme Court to guarantee safe passage for potential follow-up marches. The coming spate of painful economic moves will supply him with plenty of excuses to paint the government as American stooges and enemies of the people. The appointment of a new army chief, due in November, will add yet more uncertainty to the political balance. To fix its economy, Pakistan badly needs stability.