etting aside any notions of conspiracy theories, let us delve into the primary factors that have consistently shaped voter behaviour in the last three general elections. It can be confidently asserted that the electorate’s sentiments gravitated towards the Pakistan Peoples Party following the tragic assassination of Benazir Bhutto in 2008, leaned towards the Pakistan Muslim League-Nawaz with their commitment to alleviating the extended hours of power outages in 2013, and embraced the Pakistan Tehreek-i-Insaf in 2018, driven by their aspirations for a transformative change.

As Pakistan finds itself on the cusp of another election season, it is reasonable to anticipate that the promise of a swift “economic recovery” will hold substantial appeal for voters. However, economic recovery is far simpler to promise than to attain. The concept is subject to diverse interpretations by various stakeholders. For the government, economic recovery implies macroeconomic revitalisation, involving the preservation of a balanced balance of payments, containment of the current account deficit and control over the fiscal deficit. Regrettably, several governments in the past have relied heavily on substantial borrowing to maintain the facade of macroeconomic “stability.”

From the perspective of lenders and development partners, economic recovery hinges on ensuring the nation’s debt sustainability. This entails a particular focus on policies and practices that curtail “wasteful” expenditures, such as bailouts to loss-making public sector enterprises, the withdrawal of non-targeted subsidies and the expansion of revenue through a broader tax base, notably by eliminating most tax exemptions.

For the ordinary citizens, economic recovery signifies their ability to sustain their cost of living through their earned income, containment of inflation being of paramount importance.

Although governments differed on various aspects over the past decade, they were all dependent on China as the lender of first resort and the International Monetary Fund as the lender of last resort. Going forward, despite the uncertainties surrounding Pakistan’s economic landscape, one certainty looms: Pakistan will require another programme from the IMF upon the completion of the current stand-by agreement.

The most formidable challenge in this scenario lies in meeting the expectations of the Pakistani people without deviating from the commitments and promises made to the lenders and development partners. Successive governments have failed in this regard, resulting in Pakistan being considered a single-tranche borrower of the IMF. Governments frequently postponed critical policy and practice reforms to avoid inflicting economic hardship on the constituents. However, when the threat of default became imminent and securing an IMF bailout was imperative, the measures implemented often made life more challenging for the populace. Once the immediate risk of default subsided, governments tended to revert to old practices in an attempt to appease their voters, often at the cost of economic stability.

In July 2023, when the government negotiated an SBA, Pakistan faced economic collapse. The immediate disbursement of the first tranche by the IMF and subsequent measures taken helped restore a semblance of rationality to the economic chaos.

The first review of the current SBA is scheduled to commence on November 2. Pakistan has fulfilled most of its commitments to the IMF, except for securing external financing from sources other than the IMF. Due to unfortunate developments in the Middle East, Pakistan’s request to its Gulf allies for “oil on deferred payment” or additional deposits in the State Bank may face delays. Nevertheless, Pakistan remains hopeful of securing the next tranche in December.

It is quite likely that the IMF will release the next tranche contingent on Pakistan’s consistent commitment to economic reforms both in the lead-up to and after the elections. In this context, the Fund will closely scrutinise the pledges and promises of economic recovery made by political parties during their election campaigns.

As expected, upon his return from self-exile, Nawaz Sharif, in his maiden speech, vowed to reinvigorate Pakistan’s economy. He emphasised the adverse impacts of high energy tariffs and the cost of living, promising relief if the PML-N is given the opportunity to form the next government.

The people of Pakistan, the voters, are indeed feeling the repercussions of efforts to achieve macroeconomic stability in their daily lives. Most measures necessary for macroeconomic stability tend to disrupt the microeconomic stability of the citizens. Striking a balance in this regard poses a formidable challenge to all political parties vying to lead the next government.

While promising to combat inflation by reducing energy prices and enhancing the value of the rupee against the dollar, political leaders must take into account that domestic gas prices will witness a significant increase starting November 1, a necessary step to address the gas circular debt issue. Furthermore, diesel and petrol prices are set to rise over the next fortnight due to the surge in crude oil prices in the international market. It is pertinent to note that crude oil prices are expected to remain high until there is visible de-escalation in the Middle East crisis.

As for the value of the rupee, the hoarding and smuggling of dollars have been curtailed and malpractices by currency exchange companies are under control, reducing artificial demand and panic buying. However, in the absence of a consistent influx of dollars through investment, remittances, exports and loans, meeting the foreign exchange demand in the medium to long term will be challenging, potentially placing the rupee under renewed pressure.

It might be in the best interest of political parties competing for the forthcoming government that the caretaker administration negotiates the next IMF programme and makes the difficult commitments. This way, the government that follows can blame its predecessors while implementing those measures. However, the IMF’s preference is to negotiate the next programme directly with the newly elected government. The fact that the caretaker economic team could not get an appointment with the president of the World Bank or the managing director of the IMF during the latter’s recent annual meetings in Marrakesh suggests that international financial institutions do not think that the caretakers are mandated to provide a long-term economic vision. Therefore, it is prudent to be prepared for potential delays in the next IMF programme and the potential macroeconomic challenges associated with it, should the next elections be delayed beyond February 2024.

Given the context, any party aspiring to lead the next government should refrain from raising people’s expectations of immediate relief, as this strategy will likely backfire. A more effective approach for the “government in waiting” would be to engage the public and offer a detailed plan for achieving macroeconomic stability. Their approach should include a visible reduction in the perks and privileges of the elites.

Simultaneously, they should present a clear roadmap for enhancing social protection and providing targeted subsidies to those most in need of assistance.

The writer heads the Sustainable Development Policy Institute. His X handle: @abidsuleri