By Husain Haqqani February 23, 2024
The formation of a new coalition government is unlikely to end the country’s political turmoil, but it does create an opening to address the many challenges currently faced by Pakistan. Every country needs a government, preferably one that has legitimacy and popular support. But not having a functioning government is never a desirable option.
That Pakistan’s power structure lacks transparency is now an established fact. So is the questionable role of the establishment and the selfishness of the country’s elite. But there is more to Pakistan’s problems than just that. In Pakistan, personality and victimhood driven politics keeps pushing discussion about economic and security threats into the background.
Pakistanis have become addicted to what can best be described as the political game. This addiction is fueled by ‘revelations’, claims, and counterclaims on dozens of television talk shows and a never ending flow of dubious information on social media. Stories about corruption, malfeasance of various politicians and the establishment, and even gossip about the private lives of public figures keep the nation’s emotions bubbling.
Add to it conspiracy theories about foreign powers, false predictions about a saviour leading us to glory, and religious parties creating controversy over one issue or another. This political game, though entertaining sometimes, is generally totally disconnected from the real challenges that need to be dealt with. It creates a fantasy world of enemies to vanquish, heroes to cheer, and superheroes who will save the day.
It was not long ago that Pakistanis were sharing videos claiming that the construction of Gwadar Port would be a gamechanger that would make Pakistan the hub of global container traffic “larger than Dubai and HongKong.” Never mind that Gwadar Port currently has only three berths while HongKong Port has 24 and Dubai’s Jebel Ali Port has 67. There are eight ports in the world larger than Jebel Ali and nine other ports in the UAE besides Jebel Ali.
Players of the political game, and its addicted audience, did not care to pause and wonder how a port that can handle three ships at a time will somehow overshadow others with much greater capacity. Similarly, the entire nation has, for years, been in thrall to the idea that repatriation of ‘billions of dollars in stolen money’ parked by ‘corrupt’ Pakistanis abroad will somehow solve the country’s economic problems.
Again, the talking heads on television or the ‘forwarded as received’ crowd on WhatsApp do not care to find out that no country in the world has ever been able to do that. Similar was the illusion of Pakistan leading a new world order in partnership with Turkey, Iran, and China. That none of those countries shared the illusion did not matter. After all, Pakistan’s political game is just about feeding rage or building hopes. Reality has little to do with it.
The reality is that the new government faces the unenviable task of reining in Pakistan’s spiralling foreign debt. The country’s outstanding external liability is $126.3 billion and between now and 2026, Pakistan needs to repay $77.5 billion in external debt. The State Bank’s foreign currency reserves stand at around $8 billion while loan repayments due over the next year are around $27 billion. WhatsApp and TikTok videos might be good for influencing public sentiment. But serious negotiations with creditors are needed to reschedule payments, borrow afresh, and figure out how to manage the debt burden over the long-term.
There are other economic difficulties too. The budget deficit of Rs963 billion stands at 6.5 per cent of GDP. There is still a huge gap between expected tax collection and estimated government expenditure. Raging inflation needs to be brought under control. However, the TV talk show pundits, always knowledgeable about who said what to whom and the intrigue involving those who govern the country as well as their opponents, seldom discuss these issues.
One immediate way to reduce government expenditure would be to cut the waste of money that occurs in the form of subsidies to Pakistan’s state-owned enterprises (SOEs). According to a 2023 World Bank Report, Pakistan’s SOEs are “the least profitable in South Asia” and cost the government treasury Rs500 billion ($1.7 billion) every year. Pakistan International Airlines (PIA) alone loses Rs500 million ($ 1.7 million) every day and other loss-making enterprises are no different. But privatizing these enterprises, or shutting them down, has been discussed since the 1990s and has still not happened.
The country’s political addiction makes it difficult to seek realistic solutions to real problems. Each time privatization of any state asset is contemplated, whoever is in the opposition at the time spreads rumours of corruption. Some talk show anchor or the other says that the ‘family silver’ is being auctioned; and stories about the potential buyers being connected to one or another enemy of the nation or the ummah proliferate. This freaks out the buyers or the government gets cold feet, and the privatization is shelved.
Efforts to tax those sectors of the economy, including agriculture, real estate and retailing, that pay little or no taxes have been similarly damaged by political noise. Pakistan could benefit from expanding trade with all neighbours, including India, but normalization of relations with India remains hostage to the political game.
Populist narratives blame conspiracies by India, Israel, and the United States for problems caused by wrong policies or indecision of Pakistan’s elite. Officials engaging with those countries on Pakistan’s behalf have to be careful about being accused of disregarding national honour or, worse, being painted as foreign agents.
It is true that the results of the February 8 elections reflect dissatisfaction with the country’s civil and military establishment. But they are also the outcome of years of Pakistan’s political game. Propaganda and personal attacks without serious discussions on the country’s underlying problems has made it difficult to solve these problems. Pakistan needs economic reforms, foreign-policy changes, and action against terrorists. All it keeps getting is breaking news and WhatsApp forwards about the unending game of one-up-manship involving the country’s politicians or its establishment.
