EDITORIAL: As the dust begins to settle on what has proved to be a very closely contested general election, the picture regarding who will form the next government appears to be a complicated one as of now.
What is clear, however, is that PTI-backed independent candidates, despite facing all manner of difficulties and pressures, have performed better than anticipated, and could very well become a factor in how the new governments at the centre and also in Punjab and KP shape up.
It should also be noted that even if the PML-N – which had earlier been expected to form the government with reasonable ease, will now be hard pressed to cobble together a governing coalition – is able to take reins at the centre, the nature of a hung parliament will ensure that it will find its work cut out for itself when it comes to bringing resolution to the umpteen crises the country faces. This will, in fact, be true for any party or bloc that becomes part of the new dispensation.
This, then, is an opportune moment to spell out the huge challenges that the new government will be faced with. As former governor of State of Bank of Pakistan Dr Reza Baqir also emphasised in a recent interview given to Bloomberg TV, the primary task of the incoming rulers would be to combat the precarious economic situation that has plagued Pakistan for years.
With the IMF’s $3 billion bailout programme that has kept the country afloat since last summer due to end in March, negotiating a new programme with the global lender in a speedy manner will be a critical priority for the new government in order to alleviate the pressures on the country’s external reserves and balance of payments.
In addition, signing on to a new IMF deal as soon as possible could also go some way in restoring investor confidence as that could signal a commitment to fiscal discipline and much-needed structural reforms in the economy.
Furthermore, the new government will also find itself faced with the considerable task of improving Pakistan’s debt sustainability as well as initiating tax reforms that focus on broadening the tax base to include larger swathes of the privileged classes instead of the continued focus on squeezing the salaried class, formal sector and lower income groups.
At the same time, as Dr Baqir also notes, programmes that aim to protect the poorest in the country from the burdens of back-breaking inflation will also need to be prioritised.
One should note here that initiating such far-reaching reforms will require the new government to make some hard policy choices that may not be uniformly popular, and given the picture that is currently emerging of there being a fragmented parliament owing to a deeply polarized mandate that a divided electorate has thrown up, taking such tough decisions may become a tall order indeed for any dispensation, even if those at the helm enjoy the backing of important state institutions.
The absence of a strong government at the centre, therefore, could end up complicating the path Pakistan’s economy takes in the coming months.
Apart from taking on the huge challenges posed by the perilous state of the economy, those about to come to power will also find themselves confronted with a polity increasingly marred by militancy and terrorism, disaffection from marginalised groups, as well as extreme societal polarisation and raised political temperatures that have combined to produce a state of significant political instability, which then only serves to further exacerbate our economic predicament.
The newly-elected government will need to break this vicious cycle by working towards lowering political tensions and providing a much-needed healing touch that our strife-torn political landscape and sinking economy desperately need.
The new rulers, as well as our state institutions, must realise that persisting on the path of confrontation and hostility will only deter our economic recovery and future prosperity, making life a continued misery for millions of Pakistanis.
Copyright Business Recorder, 2024