Preview of 2012: The predictable uncertainty of Pakistan’s political economy

New forces rising on the political horizon, continuing civil-military-judiciary tension and a limping economy.

KARACHI:

Pakistan enters 2012 with a great deal of uncertainty. Many predict this will be election year in the country as tensions continue between the government, the military and the judiciary. Others argue that the government has regained its balance and is now in a position to trudge through to 2013 - the scheduled end of its tenure.

However, if one were to be part of the numerous rallies taking place in the country, what is clear is that most major political parties have already started their election campaigns. The question is: when will the prime minister take a decision to follow suit?

As things stand, the ruling party is in a comfortable position. Any challenge from the Tehreek-e-Insaf will cut into the vote bank of the PML-N. Yet there are also reasons to be worried. While the prime minister has managed to gain the distinction of being the longest serving elected chief executive, one wonders how long it will be before the state of the economy catches up with him politically.

The country is already grappling with a power and fuel crisis. This will impact prices at home as well as hurt exports, which in turn means dampened foreign exchange earnings. At the same time, it will limit the already limited foreign direct investment which is much needed for the country to create both economic activity and employment.

The problem is that as elections approach, the government will be unable to take the tough economic decisions needed to set things right. The bailouts will continue and tax shortfalls will be met through borrowing and arbitrary taxation measures.

On the political front, a lot depends on how President Asif Zardari and General Ashfaq Parvez Kayani move forward. The relations between the government and the army are increasingly based on mistrust – initially created by the discovery of Osama bin Laden in Pakistan and later exacerbated by the Memogate scandal, which led to the prime minister accusing the military leadership of conspiring against his government.

It is still unclear who is actually in the driving seat in Pakistan. In the standoff over the detention of Raymond Davis in January 2011, it was the ISI that paved the way for a solution. The military also nurtures alternate parties and groups as if to keep a check on the rise of any one mainstream political party in Pakistan.

What became clear after the murder of former Punjab governor Salmaan Taseer in January was that the establishment abetted religious parties in challenging the state. It was a dangerous precedent. The TTP raid on a naval airbase in Karachi and the subsequent murder of journalist Saleem Shehzad suggests that our angels are not learning from their past experiences.

The rise of Imran Khan’s PTI is being attributed to support from the ISI’s officially defunct political wing. The party went from being a non-entity a year back to now challenging the main opposition Pakistan Muslim League Nawaz (PML-N) for seats in Punjab, and has emerged as a credible third force in Pakistan’s turbulent political scene.

If that is not enough uncertainty, more will come in the form of an active Supreme Court which continues to pull the government into court in various cases. Many analysts believe that the ultimate objective of those cases is to bring down President Zardari. The president, who has a lot to answer for, is claiming immunity by sheer dint of his office. This tussle is expected to continue in the year.

On the external front, while Pakistan’s relations with its immediate neighbours, including India, continue to improve, there seems to be a shift in its relationship with the United States, its biggest source of external funds.

Overall, the internal security situation in Pakistan will remain uncertain with the military operation continuing in the tribal areas and the insurgency gaining ground in the Balochistan province.

With sectarian violence being fuelled by pro-Taliban outfits operating all over the country, there are fears that suicide attacks will continue. However, with the TTP and the government entering into negotiations, the attacks on government installations and functionaries are expected to reduce in the year.

It is a mixed bag that awaits Pakistan in 2012, though most of it is bad news. If at all, the silver lining may be that the country continues to move along with all its problems, in the hope that things will get better in the coming years.

Published in The Express Tribune, January 1^st, 2012.