The political drama has been ripe with surprises and betrayals. No one could have expected Pakistan to be heading towards early elections – at least not until February. But now, the scenario feels like straight out of a Bollywood movie. In an astonishing bid last Sunday, the Deputy Speaker of Pakistan’s National Assembly, Qasim Khan Suri, declared the impending vote of No-Confidence as “Unconstitutional.” His decision was preceded by a compelling spiel of Information Minister Fawad Choudhry, who resonated with Khan’s rhetoric of “an operation for a regime change by a foreign country.”
The showdown that was expected after a successful vote of No-Confidence in the Prime Minister collapsed. The opposition alliance – enraged by the unilateral decision to shun the resolution – resorted to imposing a sit-in in the National Assembly. The opposition conducted a pseudo vote immediately after the motion got dismissed. The quasi-vote passed with 197 members in favor – surpassing the required majority of 172 votes by a massive margin. The question stands:
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What is next in store in this political pandemonium of Pakistan?
Amid the mayhem, Imran Khan addressed the public via state TV, reiterating his commitment to a free and independent state. Unlike his incendiary speeches earlier, however, he instead narrated his plan to take the country forward in a democratic fashion. Highly ironic (sorry, I can’t hold that back). He requested the President of Pakistan, Dr. Arif Alvi, to dissolve the assemblies and kickstart the formulation process of a caretaker government. Meanwhile, the opposition alliance – led by opposition leader Shehbaz Sharif – approached the Supreme Court of Pakistan. “This is an urgent matter. The case is fixed for tomorrow [Monday]. Notices [are] issued to all political parties and state functionaries,” stated Chief Justice of Pakistan Umar Ata Bandial.
Now, while the situation unfolds, Pakistan – one of the strategic cornerstones in Asia – is without premier leadership: perhaps indefinitely. Imran Khan no longer enjoys the office while the working Federal Cabinet has been effectively dissolved via a Presidential ordinance. Official sources from the Treasury benches claim that National elections would be held within 90 days. However, the matter now awaits a ruling from the Supreme Court before the President formulates a committee to structure an interim regime.
This constitutional crisis is also interesting due to the rumors that Imran Khan has lost the anchorage provided by Pakistan’s army – the alleged kingmaker in Pakistani politics. In a statement on Sunday, Inter-Services Public Relations (ISPR) – the media wing of the military – stated: “We have nothing to do with what happened today [in the parliament.” However, the statement deftly avoided tagging the move as unconstitutional.
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Pakistan is already going through a rough patch in terms of economic instability
The Rupee has slumped to a record low of 185.23 against the greenback. And according to the Pakistan Bureau of Statistics (PBS), foreign exchange reserves held by the State Bank of Pakistan (SBP) have dipped below $11 billion – the lowest since April 2020. The trade deficit recently breached the $35.4 billion mark – more than 70% compared to the previous year – as even the rate hikes haven’t helped curtail the pressure of imports.
While some ally nations are rolling over debt payments due this year, the national forex reserves have still nosedived by 25% in less than two weeks. Therefore, the panic in the financial markets is not entirely due to the premature collapse of the government. Yet, Political chaos would only exacerbate the difficulties in Pakistan unless a clear path gets paved in the following week.
The country is now left with barely enough reserves to finance two months of imports. Almost all traditional options have been exploited: floating sovereign bonds, approaching the IMF program, obtaining loans from neighboring countries, etc. Still, Pakistan is nowhere near economic stability. According to SBP sources, the finance ministry is now planning to approach a consortium of international commercial banks to borrow $1 billion in cumulative loans.
However, in absence of political leadership, the bureaucracy would be unable to negotiate a favorable deal. Higher interest rates would further debilitate the economy in the long run. While the IMF is not reluctant to convene again for talks with an interim government, the Law Division of Pakistan bars a caretaker regime from entering any long-term contracts. Hence, without a competent cabinet, Pakistan is surely following in the footsteps of Sri Lanka towards bankruptcy.
In all fairness, the fiscal indiscipline of the PTI regime has gradually led to this fiasco. In March alone, the Khan government offered rebates and subsidies worth almost PKR 1 Trillion – over and above the budgetary costs – a scheme of political point-scoring in the guise of fiscal relief to the public. Now inflation is lingering in double figures, but the country is sailing into a political black hole with a handful of dollar reserves. The ride forward is inevitably painful, but absolute chaos can be avoided. A concrete timeline for national elections could alleviate the pains of uncertainty – a much-needed relief for the financial markets of Pakistan.
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A successful negotiation with the IMF could still reimburse the depleted forex reserves. And a conservative fiscal budget alongside a strict monetary policy could still rein redundant expenses and imports respectively. However, a lack of political consensus or a similar disregard for constitutional directives could plunge Pakistan into a vaguely familiar yet vicious cycle of military takeovers and authoritarian rule spanning indefinitely. This time, the economic repercussions would be devastating.
The writer is currently working as a writer for South Asia Magazine and a columnist for Modern Diplomacy – a European Think Tank. The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.