Pakistan on a knife’s edge

Between the economic crisis and the lack of a credible leader, Pakistan is lost

Pakistan is in a death spiral. It is like a terminally ill patient whose hopes rise fleetingly when some health parameter shows a tiny improvement, only to be dashed by the reality that the body is heading for a multi-organ, or in Pakistan’s case, a multi-institutional, failure. Everything that can go wrong, is going wrong. The state is floundering and those running the affairs of state appear clueless, even helpless, on how to put Humpty Dumpty back together. The thinking in top echelons of government and the military establishment is that if they can manage perceptions, everything will work out just fine. Deny the scale of crisis, spin the news (and suppress bad news), pretend everything is normal, even give over the top numbers of how rich Pakistan is soon going to become—US$6 Trillion of minerals, US$100 billion in imminent foreign investment, US$80 billion of exports within no time—and keep your fingers crossed. That, in a nutshell, is the plan—the Sheikh Chilli model of growth and development.

When the International Monetary Fund (IMF) Stand-by Arrangement came through at the last minute in June, there was jubilation that Shahbaz Sharif had saved the day and prevented Pakistan defaulting. The Rupee recovered a little of its value and the stock markets reacted with typical irrational exuberance. The hybrid regime fronted by the unwieldy PDM alliance boasted that it had put the economy back on the path of recovery. Politically, the rampant military went about with its trademark ham-handed, brutish and extra-legal methods to dismantle the biggest and most popular political party—PTI. With former Prime Minister Imran Khan jailed on corruption charges, it seemed that some semblance of political stability was in the process of being restored. The security situation remained fraught but there was a sense that terrorism could be brought under control by pressing the Taliban. Diplomatically, the government was confident that it was on track to attract billions of dollars in investment from the Saudis, the United Arab Emirates (UAE) and other Gulf states, which would also ease the economic crunch.

The hybrid regime fronted by the unwieldy PDM alliance boasted that it had put the economy back on the path of recovery.

But optimism about Pakistan’s future is built on extremely flimsy foundations. It glosses over the terribly harsh economic conditions that ordinary people are facing with back-breaking inflation made worse by colossal economic mismanagement and corruption, joblessness, and industrial and commercial activity slowing down. The collapse in the rupee, which has breached the 300 to the dollar mark (in the open market, it is trading at over PKR330 to a dollar), and the massive hike in fuel prices—petrol prices have shot up by over PKR50 in one month—have imposed a crushing burden on the common people, even the middle classes. But it is the astronomical electricity bills that appear to be the last straw on the proverbial mule’s (Pakistan is known more for mules than camels) back. Country-wide protests by desperate people whose electricity bills were often times more than their monthly incomes has shaken the regime. A panicked government tried to assuage the people by promising some relief but has been able to do precious little. In fact, the caretaker Prime Minister Anwaar Kakar, who is seen as a loyal foot soldier of the Pakistan Army, tried to downplay the crisis only to backtrack and issue abject clarifications.

The simple fact is that, even if it wanted, neither the government nor the Pakistani state has any solution to the crisis, which is only going to get worse with the weakening of the Rupee, the hike in fuel prices, and the resultant hike in electricity tariffs. The thing is that, the per unit cost of electricity—at anything from PKR50 to PKR70—is totally unaffordable for even most middle class families; the lower middle classes and poor are simply in no position to pay. The government is so broke that it just doesn’t have the fiscal space to subsidise electricity, even less so under the IMF programme, without which Pakistan would go belly up within weeks, if not days. Worse, successive governments have been so compromised, corrupt and incompetent that they have proved to be utterly incapable of addressing some of the structural issues that have made the power sector an albatross around the neck of the Pakistani state. For instance, there is little to show in terms of minimising transmission and distribution losses, maximising recovery of bills, and increasing the efficiency of power plants.

The tipping point is nigh
Be that as it may, a tipping point appears to have been reached. The public reaction, it is feared, could boil over and undermine the stability of the Pakistani state. With despondency peaking, and survival becoming difficult even for the middle classes, something has got to give. That the crisis over the electricity bills is only a subset of the larger economic crisis—which itself is so overwhelming, and the magnitude of the adjustment required to stop the slide is so gargantuan—means that it is way out of the league of a caretaker regime, largely comprising of technocrats, to solve. The interim regime is totally out of its depth when it comes to handling the electricity bills crisis. It has neither any political capital to cool things down, nor any technocratic solutions to solve the problem. Even the backing of an unpopular quasi dictator—Army Chief Gen Asim Munir—is of no help in arresting the dangerous slide that is taking place in Pakistan.

The government is so broke that it just doesn’t have the fiscal space to subsidise electricity, even less so under the IMF programme, without which Pakistan would go belly up within weeks, if not days.

This means that the military establishment will have to give up any notions of a prolonged caretaker setup, something that has often been speculated and whispered in the corridors of power in Islamabad. In other words, the current dispensation will find it impossible to push forward the general elections by more than a couple of months beyond when they are due in November. Politically, it will be untenable and sustainable. Many of Imran Khan’s opponents like the Pakistan People’s Party (PPP) are opposed to any delay in elections, in part because they fear that it will be the death of democracy and in part because they fear that once the Army has gotten rid of Imran Khan, it will come for them. An indefinite delay in elections could therefore crystallise the political opposition and isolate the Army, and as such prove disastrous for not just the top brass but also the state itself. What is more, the temptation to indulge in political engineering, which the Pakistan Army and its intelligence agencies are notorious for, could actually precipitate the unravelling of the state.

It is probably not an exaggeration to say that the Pakistani state faces a crisis even more serious than the one in 1971. Unless some Manna from Heaven (tens of billions of dollars) drops on Pakistan, the economic conditions are only going to get worse, and with the tolerance levels of pain running very low, things could spiral out of control quite suddenly. The dribbles of aid coming in from the Saudis, UAE or China can postpone the economic meltdown, not prevent it. Alongside the rising economic distress levels, the security situation is also threatening to worsen. The Tehrik-e-Taliban Pakistan (TTP) attacks are rising in intensity, audacity and geography. The Baloch fighters are also mounting fairly audacious attacks, including on the Chinese who are working on CPEC projects.

The dribbles of aid coming in from the Saudis, UAE or China can postpone the economic meltdown, not prevent it.

Although politically, Imran Khan looks to be history, with the Pakistan Army firmly back in control and once again calling the shots and making the politicians and the media dance to its tune, the situation is lot more complicated. There are forces at play that are just not under the control of the Pakistan Army like they were in the past. The people are sullen, but it would be a mistake to take their silence as acceptance or even acquiescence to the Army’s supremacy. If anything, there is a lot of disgust at the military leadership. The Army has been unable to avoid the blame for the mess that Pakistan is in. Worse, this blame is being heaped across the political spectrum. Even more disconcerting for the military is the fact that despite its sledgehammer approach to dismantling Imran Khan’s popularity, and shut him up, he remains politically relevant and Gen Asim Munir and his cabal are not only terrified of him but also at their wits end on his continuing popularity. Indeed, Imran’s popularity seems to be on the upswing, in large part because of his defiance, but also because of the misgovernance of his opponents. The more the economy tanks, the more Imran Khan gains popularity. Denying him a shot at the elections, or stealing the election from him, could trigger an outburst that even the military might find difficult to contain and control, at least not without indulging in a massacre, which, in turn, will have its own horrendous repercussions.

The way things are unfolding in Pakistan, no one can be sure of when the dam of restraint, or the boiling lava of people’s resentment, will burst and sweep everything aside. Gen Asim Munir’s bull-in-a-china-shop approach to fix the politics and his wave his Malacca cane to fix the economy style is certainly not helping matters. Munir needs to start setting things right and very, very fast or it is all over for him. But the multi-billion dollar question is—how? Neither Munir nor anyone else—not Imran, not Nawaz Sharif, and certainly not Asif Zardari or his son Bilawal—has any coherent roadmap out of the mess. The fact that Munir or his loyalists in the army or in the civilian street have no political capital means that they will be forced to use the blunt instrument of brute force to keep things going. But can they, especially under the circumstances where the Army is so unpopular and fighting on not just the political front but on multiple other fronts? This means that if the drift in affairs of state continues—as seems likely—sooner rather than later, the ‘deep state’ will be forced to fall back on a popular leader to try and save everything from going to dust. That leader isn’t Nawaz Sharif or Maulana Fazlur Rehman or Asif Zardari. That leader has to be Imran Khan.

The way things are unfolding in Pakistan, no one can be sure of when the dam of restraint, or the boiling lava of people’s resentment, will burst and sweep everything aside.

Sure, the very thought of this is abhorrent for Asim Munir and his cabal of generals. After all, it is increasingly clear that it is a fight for survival between Gen Asim Munir and Imran Khan. Everyone else is incidental, even irrelevant. Munir’s dilemma is that if he compromises with Imran, he is finished; but if he resists compromising with Imran, then too he is finished unless he can pull a miracle. The physical elimination of Imran Khan (can never be ruled out in Pakistan) holds the real potential of triggering anarchic unrest and unravelling of the state. All this is a bit like 1971. The military dictator Yahya Khan refused to compromise with Sheikh Mujib. Even after the military debacle, Yahya and his cronies thought they could brazen it out and stay in power. But they were forced out and Bhutto was handed the reins of the state to save it from further disintegration. Regardless of the spin being put or the frenetic efforts to talk up the economic, security and political situation, the state of affairs is in many ways much worse than what it was even after the separation of East Pakistan. And unlike 1971 when Pakistan had a Bhutto to fall back on, a man with the brains and smarts to stabilise a broken country, today all that Pakistan is left with is a vacuous, vindictive, vicious Imran Khan who has neither the intellect nor the ideas to fix things.

Counter-intuitively, notwithstanding Imran Khan’s continuing travails and tribulations, as of now, he is winning, Asim Munir is losing, but Pakistan is lost.