Last month saw a dramatic turnaround in Pakistan’s political landscape when former Prime Minister Nawaz Sharif flew back home from a self-imposed exile of four years spent in London.
When he was last in Pakistan, he was serving time for corruption, but was allowed to leave jail over poor health concerns in 2019.
His political rival, Imran Khan, who replaced him as prime minister in 2018, is now himself in jail over corruption charges.
Pakistan has delayed its general elections due to be held this year, to February 2024.
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But Sharif, who is clearly ambitious for another term as the country’s leader, is faced with a different Pakistan than the one he left four years ago.
It is one with a deeply fractured economy and political crisis.
“It is actually a polycrisis,” says Uzair Younus, director of the Pakistan initiative at The Atlantic Council’s South Asia Centre. “Pakistan is facing political, economic, social, and security crises together. And that makes the current situation very volatile,” he told The Diplomat in an interview.
“The government is so broke,” adds Sushant Sareen, senior fellow at the Observer Research Foundation (ORF). “Any dribbles of aid coming in from the Saudi Arabia, UAE or China can only postpone an economic meltdown – but not prevent it,” he explains in a report published by the ORF.
Economic upheaval
Pakistan is currently running on foreign loans taken on high rates of interest.
The country needs upwards of $22 billion to service external debt and pay bills for fiscal year 2024, according to 2023 data by the International Monetary Fund (IMF) and the World Bank. Earlier this year, the IMF agreed to a bridge loan of $3 billion.
But with Pakistan’s external debts standing at $126 billion at the end of 2022, experts say there are serious questions about how long Pakistan will be able to avoid defaulting on its loans.
Adding to the economic chaos is the extremely high rate of inflation – it touched a record high of more than 30% at the end of last year. In October 2023, it is still showing a surge of 26.89% year-on-year, according to the Pakistan Bureau of Statistics.
The high rate of inflation means it is all the more difficult for people to put food on their table, many of whom are still struggling to recover from the devastating floods of 2022.
In addition to foreign debt and high inflation, unemployment is another major problem facing the economy today.
At least 5.6 million Pakistanis are without a job this year, a report by the International Labour Organization indicates. It is an increase of 1.5 million since 2021.
“Pakistan’s employment-to-population ratio for 2023 is at a historic low of 47.6%,” the report says.
So, how did the country end up here?
According to a Pakistani journalist who works with a leading English daily, the current condition is much worse than what it was even after the separation of East Pakistan in 1971.
“At least at that time, there was a leader like (Zulfikar Ali) Bhutto to fall back on. Today all that is left is a growing political vacuum,” he told PressXpress on condition of anonymity, noting how journalists are under immense pressure due to an escalation in violence against them.
At least 140 cases of threats and attacks against journalists, media professionals and media organizations were reported in Pakistan since May 2022, according to Freedom Network’s annual Pakistan Press Freedom Report 2023. It’s an increase of 60% since the same period in 2021-22.
Political vacuum
Sharif has returned to a very different Pakistan than the one he left in 2019, says Sareen.
In addition to economic bankruptcy, the country is facing a deepening political vacuum.
The country’s main opposition party, Pakistan Tehreek-e-Insaf (PTI), and its leader, former PM Imran Khan, have faced months of a nationwide crackdown. Khan continues to serve time in prison and despite sweeping popularity and a huge voter base, is banned from contesting the election as well as any public office or political duty for a period of five years.
“How can the country ensure free and fair polls?” asks Younus. “One has to say that the caretaker government (to be in power till the election) is actively failing in its constitutional duty.”
“These questions are unlikely to bother the power players in Pakistan,” adds Sareen, explaining that even in the past, there have been many elections in which the dice was loaded against one or the other party. “But that never stopped the victors from claiming legitimacy.”
Is Pakistan heading down the Sri Lanka way?
Many observers say no, citing signs of the different political and economic environment of Sri Lanka.
But David Brewster, a South Asia and Indian Ocean specialist at the Australian National University disagrees. He explains in an article for The Lowy Institute, that Pakistan may find itself in a “tougher position compared with Sri Lanka”.
Sri Lanka received emergency assistance from India, allowing enough time to renegotiate loans with international lenders, Brewster says. “But Beijing would likely have limited options when it comes to providing more funding or forgive existing loans.”
If at all it happens, it will be at a huge cost for Islamabad such as “granting China additional access rights to Gwadar port and airfield and other military facilities in Pakistan,” Brewster explains.
“This will firmly establish China’s military presence in the western Indian Ocean,” notes Brewster.
Sharif’s endgame?
At a recent formal party meeting that Sharif chaired in Lahore, core members discussed at length how to “re-launch” the elder Sharif brother.
The ruling PML-N (Pakistan Muslim League – Nawaz) party also discussed its ties with other political parties as well as a new manifesto.
So far, Sharif is making economic recovery the centrepiece of his narrative reset. There are no clear plans yet, but controlling inflation is his key goal. Inflation was around 4% during Sharif’s tenure as PM in 2017.
“Things have worsened to the extent that people have to chose whether to pay electricity bill or feed their kids,” Sharif exclaimed at a rally in Lahore upon his return.
Sharif says his ousting from the government was due to the powerful military who play an outsized role in the country’s politics. But word is now rife that Sharif has had a truce with the military’s top generals to revive his political career and safeguard his return to power. The military denies any involvement.
Sharif is clearly playing his cards right. He has openly expressed he isn’t back to “seek revenge” on any institution or individual, but to “serve the nation”.
As the old Sharif in new avatar gears up for a promising political future, his party’s new anthem sums up his long-term endgame.
“Ye mulk bacha lo Nawaz Sharif, fir se sambhalo Nawaz Sharif.” (Save this country Nawaz Sharif, take charge again Nawaz Sharif)
