A complicated road ahead

In a recent and highly anticipated report, Fitch, the globally renowned credit rating agency, has offered a detailed and intricate analysis of Pakistan’s political and economic future. This comes amidst a backdrop of ongoing legal victories for former Prime Minister Imran Khan, whose influence and controversy continue to loom large over the country’s political landscape. Khan’s potential release from jail, buoyed by his fervent supporter base, could profoundly disrupt the government’s carefully laid plans for economic stability and reform.

Imran Khan’s legal saga has seen him achieve significant victories in cases that have captivated the nation, such as the Toshakhana and Iddat cases. These wins have fuelled speculation about his possible return to the political arena. However, despite these courtroom successes, Fitch predicts that Khan’s immediate release remains unlikely. Following his acquittal in the Iddat case, new charges have been swiftly levelled against him, including fresh probes by the Anti-Terrorism Court (ATC) related to the tumultuous events of May 9th. This relentless legal pursuit underscores the establishment’s determination to keep Khan at bay.

Fitch is particularly struck by the judiciary’s resilience in delivering rulings favourable to Khan, despite considerable pressure from powerful political factions. This resilience, however, seems insufficient to secure Khan’s freedom, as the state appears committed to his continued detention. PML-N leaders, including the outspoken Rana Sanaullah, have openly declared that Khan will remain imprisoned for at least five years. This assertion reflects a broader strategy aimed at preserving political stability, which is deemed essential for the nation’s economic recovery and growth.

In its analysis, Fitch forecasts that the current PML-N government will endure for another 18 months. This period is expected to be marked by the successful implementation of IMF-driven economic reforms. While these measures are designed to stabilize the economy, they are also likely to lead to increased inflation, posing a significant challenge for the government. Despite these efforts, the government will face relentless opposition from Khan’s supporters, who, although unable to launch widespread protests, remain a potent destabilizing force.

Interestingly, Fitch also delves into the possibility of a technocratic government emerging if the current administration collapses under the weight of public discontent over inflation. Such a scenario, seemingly favoured by the establishment, posits that technocrats could navigate the economic challenges more effectively than traditional politicians. However, historical precedents indicate that even technocrat-led governments struggle to escape the political dynamics that inherently accompany governance. The tenure of Ayub Khan, Zia-ul-Haq, Pervez Musharraf, and even civilian leaders like Zardari, Nawaz Sharif, and Imran Khan, all of whom included technocrats in their cabinets, serves as a testament to this complex reality.

The economic projections for Pakistan are sobering. Fitch estimates a modest growth rate of 2-3% over the next decade, starkly contrasting with India’s anticipated 10% growth. This sluggish economic outlook is attributed to enduring political instability, a depreciating rupee, and an escalating national debt. Fitch warns that without significant political stability, economic progress will remain a distant dream. The agency emphasizes the critical need for respecting the democratic process. Historical evidence suggests that while technocratic governments may offer a veneer of efficiency, they often falter in delivering sustainable progress. Ensuring free and fair elections and empowering elected representatives with the necessary state support is crucial for achieving long-term political and economic stability.

Fitch’s analysis extends beyond immediate economic concerns, highlighting the broader implications of political manoeuvring. The agency stresses that while a technocratic government might offer short-term stability, genuine and lasting stability can only be achieved by honouring the democratic will of the people. This democratic legitimacy is essential for unifying the nation and fostering a collective commitment to difficult economic decisions.

As Pakistan navigates these turbulent waters, the path forward remains fraught with challenges. The interplay between legal battles, political strategies, and economic policies will ultimately define the country’s trajectory. Fitch’s insights provide a sobering reminder of the complexities at play and the critical need for a balanced approach that respects democratic processes while striving for economic stability. In this intricate dance of governance, respecting the people’s mandate and fostering a genuine democratic ethos will be key to unlocking a brighter and more stable future for Pakistan.