Home Editorial Editorial: The Political Cost of Pakistan’s IMF Deal

Editorial: The Political Cost of Pakistan’s IMF Deal

The wave of inflation expected from recent moves to revive a stalled bailout risk triggering public unrest that a weak government can ill-afford

by Editorial

File phot of P.M. Sharif

Given Pakistan’s prevailing political crisis, the ongoing economic crunch has only served to compound the governance problems it has faced for decades. Worsening the situation is a weak, multi-party government opposed by the ‘untouchable’ Imran Khan, while the only path out of the crisis is an IMF deal that comes with conditions that can spell the downfall of any government that abides by them. Khan’s PTI is, naturally, making hay of the crisis, warning that Pakistan will become the next Sri Lanka, a bankrupt nation that leaves its populace in an ever-worsening situation.

According to a Gallup Pakistan survey from April 2022, 62 percent of those with a secondary education or higher were “angry” about Khan’s ouster as prime minister. A key part of his popularity was his claims of being sidelined through a U.S.-instigated regime change conspiracy, which found support in the anti-Americanism prevailing in Pakistani society. That sentiment would likely also make the IMF deal a hard-sell for a population convinced of being pressured by Western hegemony. Khan, once backed by the Army, is expected to exploit this economic mismanagement to secure the support of Pakistan’s middle class, which is disproportionately impacted.

The government’s attempts to rein in Imran Khan have, thus far, proven futile, as the PTI leader continues to defy summons from courts, betraying his own claims of being “ready for arrest.” In addition to losing its political capital, the ruling coalition also appears unable to tackle the economy. The imposition of Rs. 170 billion in additional taxes is already causing commodity prices to soar, even as the country’s current account balance widens and for foreign exchange reserves stand at roughly $3 billion, barely enough for three weeks of imports in a country reliant on the same for food and raw materials.

The key question now is: will Pakistan’s economic woes trigger a public uprising? The PTI feels it could; neutral observers are less sure. What cannot be denied is that the recent closures of industries will inevitably boost the unemployment rate, especially among college-educated youth, making it easier for them to justify mass protests. In less than two months, 2023 has already emerged as one of Pakistan’s toughest years—and the worst is yet to come.

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