New PM’s challenge

Published April 12, 2022

PRIME MINISTER Shehbaz Sharif’s incoming coalition government has its work cut out for it. The new government is inheriting some daunting challenges from the get go. These include, but are not limited to, a worsening economic crisis, growing political turmoil, deteriorating relations with the Western powers, and the resurgence of militancy in some parts of the country.

On top of all this, we have no idea whether the ruling coalition that consists of disparate parties and groups, with often conflicting political and economic aims, will stick together until the elections are called. They may have achieved their common goal of ousting Imran Khan from power, but what is their long-term plan?

With the PTI quitting the National Assembly and pledging to build up strong public pressure on its successors for early elections in the country, it will not be all smooth sailing for the new administration.

Fixing the broken economy is probably the most formidable challenge facing Mr Sharif’s cabinet, and he should place it on top of his agenda. The PTI had inherited a bad economy that it has left in far worse condition; ordinary people are grappling with elevated double-digit inflation, as well as wage and job losses, as macroeconomic indicators decline. The crisis of balance of payments is already back, after a short Covid-related respite, as much-needed multilateral assistance is on hold because of uncertain political conditions in the country. Elevated international commodity prices, particularly food and crude oil, are putting additional pressure on a frail external sector.

Improving the economy requires tough decisions, such as the immediate removal of the cap on electricity and petroleum prices and renegotiating a new loan with the IMF, which will be hard, if not impossible, without repairing diplomatic relations with the US and other Western powers.

Read: Five 'band-aids' the new government must immediately apply to revive the bleeding economy

Can the ruling coalition take these politically unpopular but vital decisions?

New elections are not very far off, and Imran Khan’s PTI will be scrutinising and criticising every move of the new set-up. The populist announcements, like the 10pc raise in pay and pension of government employees and the provision of subsidised wheat flour, made by Shehbaz Sharif in his speech in the House, soon after his election as prime minister, are indicative of the extreme pressure he must be feeling.

With forbidding political and economic realities on one side and high public expectations on the other, the coalition government and its leader do not have too many options on the table as they get ready to deal with multiple crises, at least not at the moment. The enormity of the economic and foreign policy challenges demands a strong government, which is not encumbered by uncertainty over its future and has the public mandate to take tough and unpopular decisions. The wiser course would be to reform the electoral laws and move towards new elections at the earliest.

Published in Dawn, April 12th, 2022

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