Economic instability is a direct outcome of VONC

Irony of all ironies is that current economic instability will force powers-that-be to engineer inorganic stability

Dark clouds are beginning to hover over the Pakistani economy and the storm hasn’t even started yet. The recent petrol price increase is like lightning which captivates the imagination but is actually a curtain raiser for what is to come. Spiraling inflation, steady devaluation, an IMF deal with hard conditions, interest rate hikes and contraction in growth is what comes next. Is there any silver lining in all this? There’s a lesson in this story which, if learned, can transform Pakistan’s political economy forever — don’t throw out an elected, civilian Prime Minister before their five-year term is over. Let me explain.

As he prepares to deliver a painful budget, Prime Minister Shehbaz Sharif is arguing that there can be no economic stability without political stability. He’s right. And the next logical question to ask is: what is the core driver of the political instability in the country today? The answer to that question is simple — the Vote of No Confidence (VONC) against ex-PM Imran Khan. The irony of the comment by Shehbaz Sharif is that when he was seeking to overthrow Imran Khan by cutting unholy deals, his argument was that Pakistan’s economy needed to be saved from PTI’s economic mismanagement and his team had all the answers. Now that his team is struggling to manage the economy, he’s arguing that there can be no economic stability without political stability and that we need a charter of the economy. Be careful of what you wish for in Pakistani politics because you might get it and have to deal with the consequences as Shehbaz Sharif is learning the hard way.

In an alternate version of history, if we behaved like a more normal democratic set-up, the PTI government would be allowed to complete its five-year term versus being booted out. This would have meant that they would have had the political space to take hard decisions like increasing petrol prices in a timely way and we could have avoided this escalatory mess to begin with. Moreover, the people of Pakistan could have voted PTI out via elections if they weren’t happy with their economic management versus a situation where a new government takes over and we now have a he said, she said blame game, which makes for good politics but poor governance.

The fact that a civilian Prime Minister has been ousted before completing his five-year term is the rule and not the exception in Pakistan. What was unique about Imran Khan’s case is that the last two times a civilian PM has been dethroned, their party was allowed to continue to remain in power. So, even when Nawaz Sharif or Yousuf Raza Gillani were ousted, PPP and PML-N governments remained firmly intact. That limited the political instability because a governing power can only gripe so much on the street. In PTI’s case, the baby was thrown out with the bath water and now we are blessed with both political and economic instability as a direct and logical outcome of the VONC.

So, where do we go from here? Hard times have arrived for the next twelve to eighteen months. And there is virtually no pathway out of economic instability in which PML-N isn’t the biggest loser (which is why Shehbaz Sharif is now floating the idea of a charter of economy so that responsibility can be shared). In corporate speak, there’s a saying that a manager is good at solving problems but a leader is good at identifying the right problems to solve. While Shehbaz Sharif may have been a good manager at the provincial level; at the federal level, he should have been wiser before tailoring his Prime Ministerial Sherwani about whether these are the right problems for him to solve or let the incumbent PTI government solve them.

The irony of all ironies now is that the current economic instability will force the powers-that-be to engineer some kind of inorganic political stability, which will delay elections. Politically, even though the stated position of PTI is to call for early elections, a delayed election actually plays better for them because this toxic cocktail of political and economic instability will not bode well for PML-N’s fortunes. If there’s one lesson everyone can learn from this train wreck, it’s that civilian Prime Ministers should be allowed to complete their five-year terms.

Published in The Express Tribune, June 11^th, 2022.

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