The downside of political break-up

In Pakistan, politics is often centre stage and when the plot thickens, the tragic end often plays out on the streets, instead of the assembly.
The three-year long love story between the MQM and PPP appears to have met an abrupt end. And even though similar break ups have been witnessed in the past, the severity of this separation suggests that the two may have parted ways, permanently.
While businesses attempt to remain apolitical in most cases, in Karachi, the economic stakeholders are already reeling with haunting thoughts of what mayhem may come in the aftermath of this political divide.
Since the countrys stock exchanges are supposed to reflect the expectations of stakeholders regarding economic and political developments, it is but natural that the local bourses mirrored the nervousness that is evident among the people.
The political rift between coalition partners resulted in more than 100 points decline at the KSE 100-index, said Topline equity dealer Samar Iqbal. She also pointed out that the broader market was depressed due to the same reason as share prices of 193 companies fell compared to just 75 gainers.
However, not everyone is expecting doom and gloom. "They have left the government so many times before only to rejoin it after some discussions" pointed out InvestCap head of research Khurrum Shehzad.
He asserted that the MQMs latest falling out with the coalition government may also blow over in a matter of days; adding that although the political scenario in the country was bound to be affected; the impact on the economy would be minimal.
Even so, Shehzad cautioned that the law and order situation in Karachi has a deep impact on the confidence of investors at the countrys premier bourse.
But if the change in business sentiment is to be gauged, who better than Karachis retailers can tell? And shop owners appear considerably less optimistic about a quick patch up between the two parties.
"This break up will not only add to political uncertainty, it can also be disastrous for the economy" cautioned chairman Karachi Tajir Ittehad, Atiq Mir. He opined that widening differences between the PPP and MQM could spur strikes, protests and violence in the city, which in turn would impact the already troubled businesses.
Industrialists complain that within 24 hours of the breakdown of the coalition, turf wars have already sparked in various areas of the city. "I am already receiving complaints from businesses about incidents of extortion and violence from different areas" asserted chairman KCCI, Saeed Shafiq.
Shafiq lamented that deterioration in the ties between the two parties would encourage criminal elements in the city. "We are already facing a political crisis and this seems to be bringing on a mid-term election" he said.
"This collapse in the bond between the two parties will also have a dramatic role in the on-going strike of KESC workers in Karachi" said director research, Invest and Finance securities - Khalid Iqbal Siddiqui.
With persistent inflation and less-than-satisfactory business conditions at home and abroad; businesses are already caught between a rock and a hard place in Pakistan. It appears that the breakdown of the coalition between MQM and PPP is expected to add further fuel to this fire. One can only hope that the worst of these fears will not come to pass.