Caretaker government takes the wheel on a rough road

A new caretaker administration has taken power in the hopes of maintaining the economic changes instituted by the previous administrations, all under caretaker Prime Minister Anwarul Haq Kakar. These are trying times for us. We face internal economic, political and social obstacles portrayed in foreign policy; moreover, understanding the difficulties of foreign policy is the hardest problem. Additionally, in order to maintain relations with other nations on an equal footing, our economy must be strong.

The recruitment of Kakar as a caretaker prime minister signals that Pakistan's civil-military leadership has decided to go forward with someone who may be more focused on present issues than involved in political disputes.

Kakar worked as a spokesman for the provincial government of Balochistan in 2013. He was also one of the founders of the 2018-born Balochistan Awami Party (BAP). Later that same year, he was elected as a senator to the upper chamber of Pakistan's parliament. Kakar is said to be well-connected to Pakistan's influential military elite. Therefore, it will be challenging for Kakar during these times of strife to discover a balance between the elites and the future of the country.

Pakistan's economy is in disarray and narrowly avoided disintegration in July when the previous administration agreed to a three-billion-dollar deal with the International Monetary Fund (IMF). Over the next four to five years, Pakistan is expected to pay more than $80 billion. Pakistan is beset with a slew of issues on numerous fronts. The nation is also dealing with a rise in violent attacks, especially in Balochistan and the north-western region of Khyber Pakhtunkhwa. Dealing with the ongoing political and judicial crisis that has been building for months and upholding the duty of holding general elections as scheduled openly may prove to be his hardest task. Elections may not be held this year, potentially resulting in a constitutional crisis, according to the Election Commission of Pakistan (ECP). It believes fresh delimitations will take at least four months to complete.

Imran Khan, the former prime minister, detained earlier this month on corruption-related accusations, will also be a problem for Kakar's administration. A legislative vote of no-confidence led to Khan's and his Pakistan Tehreek-e-Insaf (PTI) party's demise. It is significant to remember that the ECP still needs to meet or formally declare an election date. The interim premier also has yet to call a meeting or make a public declaration stating his plans to hold elections and uphold openness.

Pakistan has received financing from the IMF under certain terms that call for the government to take particular economic measures. To obtain the loan, compliance with these requirements is essential. The outgoing administration did not take the chance of giving the caretaker administration, which will be subject to the IMF assessment later this year, the responsibility of raising electricity tariffs and fuel costs. The IMF is still wary, partly because of Pakistan's political unpredictability. In conversations with IMF representatives, it was suggested that if elections were delayed, other bilateral and multilateral donors' investments may also be disrupted. Due to the uncertainty surrounding the election date, this presents a significant challenge for the caretaker government.

In a tough business environment, the Pakistani business community is waiting for clarity. Numerous industries have experienced temporary or permanent shutdowns as a result of the reduction in investment levels. Exporters and independent contractors are securing their money in overseas bank accounts out of concern that they may not be able to pay their bills. Interest rates don't appear to be going down anytime soon. It is essential to take actions that reduce regulatory expenses to lower the overall cost of doing business because there is limited scope for significant public investment. The caretaker administration must consider broad criteria, including a progressive tax and tax code, as the next appointed administration might only have a short window to develop the fiscal year 2024–25 budget. For instance, the Pakistani textile industry, one of the largest in the nation, has been terribly neglected for a long time. The failure of our state-owned businesses is another factor contributing to the economy's deterioration.

In Pakistan, the core inflation rate jumped by 18.5% in June 2023. The month of May saw a record-breaking increase in the inflation rate, which reached 38%. We lack the funds to cover goods that are waiting at ports. The trembling economy is still feeling the effects of last year's floods as it attempts to regain some equilibrium. We lost $30 billion in money, and floods forced 30 million people to flee their homes. The nation's lawlessness is making everything worse in general.

The new caretaker administration, led by Prime Minister Kakar, confronts multifaceted challenges in guiding Pakistan. Striking a balance between economic uncertainties, security issues, and a delicate political landscape, the administration's capability to govern effectively until the upcoming elections is pivotal. The administration's leadership and strategic choices will be crucial amid economic turbulence and security concerns. Navigating a business environment marked by reduced investment and inflation requires measures promoting economic growth and fiscal stability. The administration's path will shape Pakistan's future governance and stability. Successfully managing immediate crises while preparing for elections demands adept leadership and dedication to the nation's welfare.

The caretaker government's legacy hinges on its ability to address challenges and foster an environment conducive to democratic advancement. At the same time, the military establishment, bureaucrats, technocrats, and other elites of the country would be the major hurdles for the effective governance of the caretaker government and future elections.