KARACHI, Nov 30: The political reforms designed by the military regime to create stability and sustained economic development has been put to a critical test.

As the current situation indicates, the transition from military to civilian and constitutional rule has not been as smooth as generally anticipated. There is lack of sophistication in building up stable political institutions that can support and sustain the growth of an emerging market.

A manipulated process is also throwing up uncertainties, as created by MQM’s withdrawal of support to Prime Minister Zafarullah Jamali and postponement of Sindh Assembly session for second time. These events have impacted adversely on the stock market though a rally was witnessed by the weekend on the MMA promise that it would not let the government collapse for want of a majority.

Prime Minister Zafarullah Jamali has moved fast to control the damage caused by the MQM’s withdrawal to cobble a coalition government with MMA in Balochistan and to resume talks with Maulana Fazl-ur-Rehman. If PML (Q) and MMA strike a deal on LFO with the approval of President Musharraf, the Jamali government would acquire some semblance of stability and broad-based support in the parliament.

Yet, this would not help resolve the situation in Sindh, where no government can be formed without either MQM or PPPP unless a sizable number of turncoats form “forward bloc” to support the PML(Q) sponsored coalition. It also appears very difficult in context of Sindh’s politics. Without the Sindh assembly, the Senate, a symbol of federalism, cannot be constituted.

The emergence of the hung parliament has not helped the mainstream political parties but it has also made the task of the ruling party far more difficult.

As it is evident, reconciliation among major political players is imperative to build and nurture the democratic institutions.

In the field of economics, de-regulation, economic liberalization and privatization are creating an even playing field for all economic agents. Similarly, emerging market needs democracy and pluralism, where power is not concentrated but shared among the various stakeholders.

If Sindh is engulfed in a political turmoil, it could have serious consequences for the province and also for the national economy. Karachi is the country’s financial centre and harbours two seaports. Bulk of the multinationals have their head offices in the city. When the city was hit by worst rioting, some multinationals moved their offices to Islamabad. These have been brought back. It is the situation in the port city that sends positive or negative signals to foreign investors.

The re-surfacing of conflict between the two factions of the MQM over “no- go areas” that coincides with the restoration of constitutional rule, does not appear to be a good omen for Sindh or for business.

As past experience indicates, any kind of political confrontation is likely to breed political instability which would tend to impact adversely on the economic gains made in the last three years.

Whereas the political reforms that created district governments and restored joint electorate and reserved seats in the parliament, have had positive impact, some key factors that could ensure political stability, have been overlooked. The failure to accept the verdict at the polls and absence of federal democracy is a recipe for political instability.

In 1983, the MRD “democratic” movement against Zia-ul-Haq turned into a “nationalist” movement in a matter of weeks. Sindh appeared to be isolated then and yet, it set the pace of transition from military to constitutional rule.

The crisis in Sindh can have serious political implications for country’s political stability and economic growth.