A highly negative recurring theme in the history of Pakistan is that good events do not last long. In fact, their length is getting shorter with time. For instance, Musharraf’s spurious economic spurt lasted four to five years while the Pakistan Muslim League (N)’s lasted two.
The shelf life of positivity has shrunk even more under the “tsunami” party, to a few months and even weeks. There was first the economic story sparked by its dubious claim that the growth rate for 2020-’21 was 3.9%. The euphoria barely lasted three to four months before a fast-increasing current account deficit, high inflation and precipitously falling Pakistani rupee got together to perform the burial rites for that story written in Islamabad.
Economic realities
Lady Luck was even more cruel to Pindi as the euphoria over the Afghan Taliban win and Indian loss vanished within weeks given the stark realities. No state, not even China and Russia, has recognised the Taliban regime. Naya Taliban are in no mood to change their savage, mediaeval ways.
Afghanistan may face economic and security collapse with big spillover effects on Pakistan. In fact, these two factors plus two others – domestic political tensions and a surly mood towards Pakistan globally – have unleashed a gathering storm that may not miss us, unlike Cyclone Gulab. These four factors may feed each other to create a vicious, widening circle.
First, the economy. States strive for macroeconomic stability, ie a stable and high growth rate, low current account and fiscal deficits, debt and inflation, stable interest and exchange rates and adequate foreign reserves. All these are headed the wrong way, except foreign reserves which too may deplete fast.
The Pakistani rupee’s nosedive in particular has created a huge market panic. While Pakistan’s State Bank cannot and should not pump dollars into the market, the continuous fall will fuel inflation, curb growth and discourage investment without perhaps increasing our inelastic exports. Thus, the State Bank must find other ways to halt this free-fall.
An International Monetary Fund programme resumption may help stabilise the currency and in fact the Pakistani rupee’s steep fall, and utility and energy rate hikes may partly be prior actions to resume it. But it will consign Pakistan to slow growth and public misery for the rest of the Pakistan Tehreek-e-Insaf’s term. It will become the first government in a long time to spend almost its entire full term under the International Monetary Fund care with a negative impact on its electoral fortunes.
Political turmoil
Second, the domestic political situation could deteriorate fast as the Pakistan Tehreek-e-Insaf seems hell-bent on bulldozing through contentious political initiatives. This includes extending the term of the controversial National Accountability Bureau chief through dubious ordinances so that he can continue victimising the opposition while ignoring government cases.
More worryingly, it includes implementing the full use of electronic voting machines in the next elections despite almost complete consensus among the Election Commission of Pakistan, opposition and neutral experts that this could badly undermine poll credibility.
Electronic voting machines emerged in the West not as anti-rigging tools but efficiency-enhancing and labour-saving devices as part of broader automation trends in society. There is little evidence and in fact, much concern even globally about their rigging-reducing potential. The Pakistan Tehreek-e-Insaf’s claims about their anti-rigging potential without evidence raise suspicions about its real agenda. Political turmoil will aggravate the economic malaise.
Third, there is the rapidly slipping situation in Afghanistan that is now saddled with arguably the worst regime globally given its autocratic tendencies, mental backwardness and sheer incompetence for running a modern state. The major risks from that are huge human rights violations against women, minorities and the press; increased political tensions; and resumption of war and economic collapse.
The chances of all this are heightened by the global reluctance to recognise the Taliban despite our pleas. Economic and political turmoil could dash our fond hopes of regional peace and connectivity and catalyse a strong wave of refugees and terrorism to cross the Durand Line.
Perception in West
Finally, there is the surly mood in key Western capitals towards us, as reflected in parliamentary discussions both in the European Union and the United States. Given Pakistan’s weak economic status, the country needs Western help from International Monetary Fund, Financial Action Task Force and Generalised Scheme of Preferences Plus. In fact, it is not ties with just the West. The Chinese also seem disillusioned while the Saudis remain cool. Pakistan has perhaps never been so estranged.
These four factors could together destabilise both Pakistan and Afghanistan badly. The root cause underpinning this multidimensional malaise is the desire of our powerful forces to impose meek regimes on both sides of the Durand Line and control the destiny of both states. Given their obviously limited capacities, it is no surprise that both countries are in deep trouble.
This article first appeared in Dawn.
