Pakistan's perfect storm and what lies ahead

Pakistan, today, is facing another perfect storm with four major crises – economic, political, institutional and security. A serious economic crisis looms, with low exchange reserves and the threat of defaulting on loans.

The Pakistan Tehreek-e-Insaf (PTI), a political party, is on a warpath, aiming to bring the government down. The President has announced an election schedule without consulting the Parliament or the Election Commission. The Pakistan Taliban is on a rampage, and the Pak-Afghan border remains unstable. Will the government be able to keep Pakistan on track?

Pakistan’s foreign exchange reserves have been depleting since 2022. According to the State Bank of Pakistan, the total foreign liquid reserves during the third week of February stood at a mere eight billion dollars, enough to cover three weeks of imports. According to the latest Fitch Ratings, “default or debt restructuring is an increasingly real possibility.”

Pakistan is expecting to finalise the deal with the International Monetary Fund (IMF) by the end of this month. After venomous rhetoric against the IMF during Imran Khan’s period, the Sharif government has resumed the dialogue. The government passed a mini-budget on February 20, aimed at raising taxes, addressing one of the IMF’s primary concerns.

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The government has also announced austerity measures on February 22, towards reducing government expenditure by 15%. The ministers have been asked to forgo their salaries, avoid business class travel and cut their foreign trips. These efforts are aimed at unlocking one billion dollars from the IMF. Pakistan expects that once the IMF agrees, it will open more doors with other financial institutions.

On a warpath

On the political front, Imran Khan has been on a warpath, ever since his government was overthrown in April 2022. He has built a narrow and dangerous, yet powerful narrative, with growing popular support.

A case in point would be what happened in front of the Lahore High Court early this week. Forced to appear before the court to get bail in a case, Khan could not get out of the car, as it was swarmed by his supporters. The judges had to wait for hours for him to enter the courtroom.

Khan is also pursuing a dangerous political strategy at the provincial levels, forcing the Election Commission to hold elections according to his schedule. Ever since his ouster, one of his primary demands has been an early election.

Facing a tough economic situation and bad floods, the government wants more time. The government also wants to conduct the elections as per schedule and not yield to Khan’s blackmail. However, Khan’s persuasion has led to the resignation of two provincial ministers in Punjab and Khyber Pakhtunkhwa, where his party has the majority, causing a constitutional crisis.

What is worse is what Imran Khan is doing to civil-military relations. He is on a rampage against the establishment, in particular, former chief of the army staff General Bajwa. For the new army chief, restoring the establishment’s image and addressing the Bajwa legacy should be the biggest challenge. But Imran Khan is tearing down the establishment with a dangerous narrative that seems to be winning public support. Can the establishment afford this narrative?

Another aspect of the political crisis is the partisan role of the President, who was appointed by the Khan government. The President’s actions seem to be more in line with what the PTI wants, than what Pakistan needs, as evident with regard to the announcement of the election.

Coming to the Tehrik-e-Taliban Pakistan (TTP) crisis: The TTP withdrew from the ceasefire in November 2022. Since then, the country has seen high-profile militant attacks. In January 2023, nearly a hundred people were killed in Peshawar when the TTP attacked a mosque with suicide bombers. Last week, the TTP attacked a police station in Karachi. Despite multiple meetings at the highest level, there is no national consensus or a strong message to the TTP.

Finally, the crisis along the Durand Line — the Chaman border between Pakistan and Afghanistan remains closed once again. A high-profile delegation from Pakistan visited Kabul this week. Pakistan wants to restore the sanctity of the Durand Line and expects the Taliban to curb the TTP. Developments during the last year at the “friendship gate” at Chaman and beyond it along the Durand Line are anything but friendly.

Challenges abound

Pakistan Prime Minister Shehbaz Sharif has one of the most difficult jobs in front of him.

The primary issue for Pakistan is structural. The governments of the day have been looking at a band-aid solution, instead of addressing the root cause of the various crises.

Sharif may succeed in getting the IMF to restart the funding; but, will he be able to address the macro-economic reforms that Pakistan needs?

A similar question remains vis-à-vis civil-military relations. The issue is not between Imran Khan and Gen Bajwa. There is a historic mismatch between the two institutions that no leader has succeeded so far in balancing. While the military leaders have had the upper hand until now, they are witnessing a new phenomenon that they do not know how to handle.

Pakistan also faces a structural issue in dealing with the Taliban, be it Pakistani or Afghan. Islamabad and Rawalpindi want the Taliban, but on their own terms. The basic belief is that a monster can be created in a controlled environment. The recent attacks question the strategy, but they do not change the basic belief.

External assistance

Will other countries be able to help Pakistan? The country’s issues are internal and structural. No country will be able to help Pakistan unless the latter wants to help itself. Even friendly countries like Saudi Arabia and China can only provide immediate relief in addressing the economic situation.

Also Read | Pakistan govt halts clearance of bills, salaries amidst economic crisis

Could India play a role in assisting Pakistan? Unlike the case of Sri Lanka, India would be unable to help.

The magnitude of the required support and the problems faced by Pakistan means India must watch from outside. Indo-Pak trade is minuscule, and India does not have deep pockets. However, India should be able to provide immediate humanitarian assistance, if the situation demands it.

Even if New Delhi is willing, political leaders in Pakistan would be hesitant to accept assistance.

Taking India’s help would be suicidal for them — another structural issue facing Pakistan, based on the decade-long anti-Indian narrative that the State has built.

Pakistan needs surgery, not a band-aid. Unfortunately, that is what it would get, until the next storm.

(D Suba Chandran is professor and dean, School of Conflict and Security Studies, National Institute of Advanced Studies, Bengaluru. He is the also editor of Pakistan Reader)