In an interaction with the Council of Pakistan Newspaper Editors last month, Prime Minister Shehbaz Sharif reiterated his offer of talks with Pakistan Tehreek-e-Insaf (PTI) chief Imran Khan, saying “all political forces will have to sit for dialogue to rid the country of the ongoing political and economic crises.” However, his insistence on general elections occurring only after the expiration of the constitutional term of Parliament indicates this offer is unlikely to yield any positive outcome. In the same meeting, the premier also offered some hope—likely false—of Pakistan no longer being at the risk of default and the long-pending staff-level agreement with the IMF nearing finalization.
Unsurprisingly, Khan is not biting. Claiming in a recent interview that he did not “need the establishment” and was willing to talk with everyone except “thieves” (i.e. incumbent government), he put to rest any hopes of Pakistan’s political resolving the current impasse. Subsequently, he claimed that any talks between his party and the government would not include him, but could be attended by the senior leadership. Unfortunately, as this political chaos plays out with no end in sight, the economy has taken a backseat at a time when it should be the sole priority of all leaders. Rather than focusing on reforms, such as taxing agricultural income, traders and properties, Pakistani leaders are more concerned about one-upping each other in and outside Parliament.
Years of economic mismanagement have left Pakistan with few choices for a bailout apart from the IMF, which can provide little more than a bandage for a gaping wound. Former finance minister Salman Shah has warned that the revival of the IMF loan would improve the balance-of-payments crisis, but would unleash inflation—already a near-record levels—that would disproportionately impact the impoverished and raise the cost of doing business. “It might be less damaging for exporters as they receive payments in dollars, but it will badly affect domestic producers, industrial raw materials and food items,” he added. The tragedy is that a stable Pakistan would have been able to profit off the gains offered from China’s Belt and Road Initiative, but in its current state, can only watch from the sidelines as its regional neighbors prosper.