Storm clouds

Published March 11, 2021
The writer is a business and economy journalist.
The writer is a business and economy journalist.

A STORM is gathering on the government’s horizons, and it all begins with tomorrow’s elections in the Senate. Priority one for them is to get Sadiq Sanjrani elected to the position of Senate chairman, because if they lose the election they will lose control over the legislative agenda, for starters.

More importantly, defeat in the Senate tomorrow will provide a new impetus to the opposition which will feel emboldened and push on with renewed vigour. Even back in 2019 their attack against the government began with the position of the Senate chairman when the opposition introduced a no-confidence motion against him, only to see defectors in their own ranks stymie their effort. That victory was much celebrated by the government, and they lost no time or opportunity to mock the opposition for their failure.

The game plan being followed now is similar. After the Senate chairman the next in line could include the Punjab chief minister, the speaker and deputy speaker of the assembly and the Balochistan government. Even if the opposition doesn’t win in those contests they could keep the government occupied on a full-time basis with each confrontation. So winning tomorrow must be priority one if the ruling party is to forestall what could be a rolling series of political challenges that could eat up the remaining years in power.

After that, the next order of priority will be securing Hafeez Sheikh a role in the set-up. With the IMF talks at a critical juncture the government is in no position to shift horses at this point. The problem is that their options are limited. By temperament, Sheikh is a quiet individual, who eschews the public limelight and prefers to work with a small, close-knit group of trusted aides. Those who have worked with him in the past say it is very hard to earn his confidence and be admitted into his inner circle where crucial decisions are discussed and made. These are qualities he has acquired in the course of his career at the multilaterals and they have served him well in that environment. But such a person is ill-suited to take the pressure of politics.

With the IMF talks at a critical juncture the government is in no position to shift horses at this point.

Getting him back into parliament is crucial for the government because they need somebody who commands the confidence of the multilateral lenders that are such an integral part of economic policymaking in Pakistan. The PTI has nobody else in its ranks who can perform this function, to serve as an interlocutor between the political elites of this country and their creditors, and bringing in another ‘technocrat’ from outside carries its own drawbacks because a new face will require some time to figure out the position, and time is not on the government’s side.

Without a position in parliament — whether the National Assembly or the Senate — he cannot continue as finance minister as per a court decision that disallowed advisers from being members of the cabinet or exercising executive powers. This means, among other things, that he cannot chair the Economic Coordination Committee, one of the most critical decision-making bodies of the cabinet where crucial economic decisions are made and perhaps most importantly, he will not be able to chair the National Finance Commission that is currently trying to deliberate on important changes in the sharing of federal government resources with the provinces.

In short, if he is not ordained as a minister, it will be next to impossible to wield executive powers which will make it difficult for him to steer the government through the forthcoming IMF programme or have any say in government decision-making.

But the question is how will they get him there? He is ill-suited for the rigours of a National Assembly seat, even if it is a ‘safe seat’ of the sort they got for Shaukat Aziz. Either they will have to ask one of their senators to step down and try fielding him once again for a Senate seat, or perhaps find a way to get him in via a reserved seat (the dynamics of which are not clear to me at this point).

Either way, under even a best-case scenario that assumes they pull off both of these tasks in the weeks ahead, the real problem lies just beyond the horizon of these challenges. By June, this government has to start the process of unwinding the ‘fiscal stimulus’ that it began administering during the Covid days.

Here is the pesky thing about these fiscal stimulus packages: they are easy to launch, given the resources. But they are very difficult to extricate oneself from because the relationships they create between government and controllers of capital are fickle and can prove politically costly in the event of a disruption. Already murmurs of consternation are being heard from the various chambers around the country as the rupee appreciates, corporates face a new round of income taxes, subsidies on power and gas have to be unwound, cotton prices rally, oil climbs, exports hit a plateau and seem to be trending downwards since January, incomes in urban and rural households continue to erode and inflation continues to climb, driven mostly by food prices and fuels.

This is a heavy agenda for any government even in the best of times. For a government consumed by political challenges emanating from within its own fractured ranks as well as from the opposition, they can be crippling. One thing the prime minister does not seem to have understood properly is that the electorate will not judge him based on his rhetoric on corruption. They will judge him based on how well he can bring about an improvement in their circumstances. Halfway through his tenure, facing a rising arc of political headwinds, can he now swivel and start doing what he and his government have not managed to do in two and a half years? Count me among the sceptics.

The writer is a business and economy journalist.

khurram.husain@gmail.com

Published in Dawn, March 11th, 2021

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