For the first time since coming to power, Pakistan Prime Minister Imran Khan seems to have been left to fight his own political battles without the support of his patrons. Threatened by a possible no-confidence motion, he is not only reaching out to estranged allies but is also trying to allay public discontent over the rising cost of living.
His latest announcement slashing fuel and electricity prices amidst rising global energy costs is part of the effort to calm down public sentiments. But can his desperate move salvage the situation? Maybe not. Instead, there is a danger that the outcome will worsen the financial crisis, further weakening the government. Khan is floundering under pressure.
His rambling address to the nation on February 28 raised more questions about his approach to dealing with problems encountered by his government. It was a dangerous mix of populism and naiveté. He covered a range of subjects – from foreign policy to the economy. As per routine, previous governments were blamed for everything that is going wrong in the country. He seems to be stuck in his own odd interpretation of past events, particularly those related to the country’s foreign policy.
Khan’s U-turn
But his decision to cut fuel and electricity charges is seen as a complete reversal of his government’s recent measures that were taken as part of the understanding with the International Monetary Fund vis-à-vis the latter’s latest funding programme. The U-turn came just a month after Pakistan had received a fresh tranche of $1 billion from the multilateral agency.
Under the agreement with the IMF, Pakistan’s government was to increase the power tariff substantially besides removing tax concessions given to many sectors in order to bridge the country’s widening fiscal deficit. The move also raises questions about whether the government intends to continue with the IMF programme that has helped stabilise the fiscal situation to some extent. Abandoning the ongoing IMF programme can have serious economic repercussions.
Indeed, the steep rise in energy prices has contributed to inflation but that is not the only reason. Given the spiralling oil prices in the international market, the reduction in prices at home seems beyond logic and only exposes Imran Khan’s arbitrary approach while dealing with critical economic policy issues.
Moreover, many economists agree that the subsidy may not improve the inflationary situation even in the short term. In fact, these measures can increase the fiscal deficit even more. The cumulative impact of the subsidies announced by the Prime Minister is estimated to be more than 250 billion Pakistani rupees. The government would be required to borrow more money to bridge the fiscal deficit.
Such thoughtless populist actions can prove damaging to the country’s economic stability in the medium and long term. An increase in borrowing could have a huge inflationary impact. Instead of focusing on improving governance and carrying out much-needed structural reforms, the government tends to rely on gimmickry. It will certainly not help the ruling party win back lost political space as some federal ministers believe.
Bad economics
Since coming to power, the government has consistently been changing the course on the economy. The latest action could prove to be yet another costly experiment. Instead of lessening public discontent over increasing inflation in the country, Imran Khan’s latest move could give fresh ammunition to the Opposition’s anti-government campaign.
It is both bad politics and bad economics that have made the government vulnerable to the Opposition’s onslaught. With the two main Opposition parties the Pakistan Muslim League (N) and Pakistan Peoples Party coming together again, the Pakistan Tehreek-e-Insaf-led government’s worries have intensified. Its vulnerability has given the Opposition a clear edge in the ongoing war of narratives, which in turn has lent further impetus to the regrouped Opposition alliance to step up its efforts to move a no-confidence motion against Khan.
The perceived neutrality of the military has also encouraged the Opposition to go for the kill. It is now a numbers game, with the Opposition alliance trying to win over smaller groups in the ruling coalition which hold the balance of political power. With its very thin majority in the National Assembly, it is critical for the government to prevent any breaking up of the coalition.
Sensing the vulnerability of the government, smaller parties such as the Pakistan Muslim League (Q) and the Muttahida Qaumi Movement have also raised their stakes. Wheeling and dealing have increased political instability. What has added to the Pakistan Tehreek-e-Insaf’s worries are reports of growing dissent within the party. That has also forced Imran Khan to climb down from his high horse. The government is certainly feeling the heat.
Serious threat
Imran Khan’s reported telephonic conversation with Jehangir Tareen, who leads a strong dissenting faction within the Pakistan Tehreek-e-Insaf, indicates that the party is taking the threat of a no-confidence motion seriously. Once considered his closest aide, Tareen fell out of favour with the Prime Minister soon after the Pakistan Tehreek-e-Insaf came to power.
The support of the faction with eight Members of the National Assembly is most critical in the numbers game. The Pakistan PM has also called on the ailing Chaudhry Shujaat Husain, the main leader of the Pakistan Muslim League (Q). With five members in the National Assembly, the party’s support is extremely important to the survival of the administration.
It is not clear when the Opposition plans to move a no-confidence motion. But the threat of it has increased the government’s anxiety. The stakes for the Opposition are also very high. A failed attempt would be a huge political setback for the motley alliance. There is no precedent in Pakistan’s political history of any elected government having been ousted by a vote of no-confidence. But given the unpredictable nature of Pakistani politics, anything could happen.
It could prove to be a very close call for a coalition government riven by internal discord. It may not be the end game for Imran Khan but things are not easy either for a fumbling administration. The Prime Minister should watch out for the ides of March.
This article first appeared in Dawn.