WITH coalition parties affirming their support for the PML-N on any tough measures needed to right the listing economy, it is once again up to the prime minister and his cabinet to decide what course they want to set for the government.
The allies have formally communicated that they expect to see the unity government remain in power and complete legal, electoral and accountability reforms before the next general elections are announced. However, though their commitment to providing support throughout should give the PML-N some confidence, that is unlikely to make things any easier for it. This is perhaps the reason why the government reportedly also wants the military establishment involved.
According to reports, it plans to communicate the strategy agreed upon by the ruling coalition to Rawalpindi, and the military’s ‘receptiveness’ to the actual intent of this outreach effort is likely to decide the matter.
Despite all this, however, many observers feel the PML-N may already have taken too long. Fearing public backlash, the party squandered the opportunity to make corrections to the economy immediately after taking over, even though the markets had been expecting it to. The party’s unanticipated internal differences subsequently degraded its goodwill to a significant extent as they caused considerable damage in capital markets.
Editorial: Cold feet
Five weeks later, the PML-N is back at the starting line. Its failure to take timely decisions is evident in the fact that negotiators are currently in Qatar for parleys with the IMF for desperately needed funds without anything to offer in return.
Fuel and electricity subsidies, which the IMF had demanded be withdrawn as a precondition to any future disbursements, had not even been touched when the scheduled talks began.
Withdrawal of subsidies is also not the end of the challenge facing the government. A sharp increase in fuel and electricity prices will spill over in the form of rising prices of nearly every commodity due to higher transportation and production costs. Inflation may be further compounded by higher prices of food staples due to shortages caused by global supply chain disruptions and climate change.
Any attempt at economic course correction in such a scenario will bring with it months of intense criticism from the public before it even starts to bear fruit. Anyone leading the reforms can expect to be criticised severely and lose public support.
The PML-N, as the face of the unity government, should therefore ask itself: does it have the patience and fortitude to implement reforms just for the sake of the national good, especially if they will cost it dearly even if polls are held next year?
If there is any hesitation in the minds of the party’s bigwigs regarding this, it is far better for them to bow out and call elections immediately. The same decision taken weeks or months from now will have far more devastating consequences.
Published in Dawn, May 19th, 2022