Business tycoons to broker peace in historic political crisis

Aim to engage key state actors, including COAS and top politicians, within a week

KARACHI:

Pakistan’s business community has stepped forward to play a crucial role in bridging the gap between political stakeholders, aiming to end the prolonged deadlock and restore economic and business activities that have been severely affected.

With the nation’s economy and the people’s well-being at stake, prominent figures from the business sector have initiated efforts to engage key state actors, including Chief of Army Staff General Asim Munir, top politicians, and leaders from various political parties including the Pakistan Tehreek-e-Insaf (PTI), Pakistan Muslim League-Nawaz (PML-N), and Pakistan People’s Party (PPP). Led by former chairman of the All Pakistan Textile Mills Association (APTMA), Gohar Ejaz, the country’s influential business leaders have held multiple internal meetings in recent days to devise a comprehensive strategy. Notable figures in the group include seasoned businessmen and stockbrokers Arif Habib and Aqeel Karim Dehdhi.

Speaking to The Express Tribune, Arif Habib expressed concern over the nation’s predicament, where political polarisation has taken the entire population hostage, resulting in the deterioration of economic and business activities. “The political divide is directly impacting ordinary citizens, exacerbating their sufferings,” he lamented.

Initially started by a group of 25-30 businessmen, Habib explained that the movement has gained widespread support from the entire business community, all eager to contribute their efforts towards persuading politicians to overcome their differences and resume dialogue to find an amicable solution. Presently, the business community is in the process of securing appointments with senior leadership across the country, aiming to commence high-level meetings within the next week.

It remains undecided whether multiple teams will be formed to meet different stakeholders or if a group of businessmen will engage with each stakeholder individually. It was learnt, however, that Aqeel Karim Dehdhi has already met with PTI Chief and former-prime minister Imran Khan in an individual capacity.

The two internal meetings conducted thus far have unequivocally condemned attacks on institutions and military installations while emphasising the importance of peaceful protests as a fundamental right. Habib emphasised that the ongoing political upheaval has severely hampered the nation’s economy, which is being closely observed by the international community. The stalled International Monetary Fund (IMF) loan program, in particular, is exerting considerable pressure on the economy. To cope with critically low reserves, the government has resorted to import controls, directly impacting businesses.

“The crisis threatens to result in a significant loss of jobs unless it is effectively controlled and economic activities are swiftly resumed,” warned Habib. Many factories have been forced to close partially or entirely, leading to a surge in unemployment. He explained the critical relationship between political stability and economic well-being, asserting that stability in one is indispensable for stability in the other.

According to Habib, the ongoing crisis has contributed to a steep rise in inflation, reaching a six-decade high of 36.4% in April, while the domestic currency hit a record low of Rs299 against the US dollar in the interbank market last week following the arrest of Imran Khan. The depreciation of the rupee is one of the primary factors driving high inflation by increasing import costs.

Furthermore, the political and economic crises have elevated the risk of defaulting on foreign debt repayment after June 2023, as the current stalled IMF program is set to end on June 30, 2023.

Moody’s Investor Services has issued a warning, stating that Pakistan may default on external payments unless it renews its multibillion-dollar loan program with the IMF. Resuming the loan program would also unlock financial aid from other global lending institutions and friendly countries, all of whom are eagerly awaiting the IMF’s approval. Earlier this year, during the Geneva conference held in January 2023, global partners pledged approximately $9 billion in flood relief for Pakistan. However, projections from research houses indicate a contrasting economic outlook for the current fiscal year (FY23), with expectations of slower growth compared to the 6% expansion achieved in the previous fiscal year.

With the eyes of the world focused on Pakistan’s political and economic landscape, the success of the business community’s mediation efforts could have far-reaching implications. The resolution of the crisis holds the key to mitigating the worsening economic conditions, providing relief to struggling businesses, and preventing further job losses.

Published in The Express Tribune, May 18^th, 2023.

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