File photo of P.M. Shehbaz Sharif
All indications point to the coming months and years being anything but comfortable for Prime Minister Shehbaz Sharif, with the topmost crisis facing his government the economic downturn. The new government must lead from the front, evolving national vision for broader and inclusive development that uses conditions imposed by lenders as building blocks for governance reforms. The success of this hinges on the speed, sequencing, and decisiveness of any actions taken—defining features of any effective leader.
To Sharif’s credit, friendly countries seem to think well of him and this would facilitate the investment the country most needs to move past its prevailing crisis. The country currently has foreign and domestic debts totaling over $270 billion and has yet to fully recover from the 2022 floods that caused as estimated $30 billion in losses. Its cripplingly low foreign exchange reserves also bode ill for the national currency, with authorities hoping a fresh bailout from the IMF would help secure additional lines of funding to slowly return to an economy not reliant on import restrictions to maintain its current account.
A potential spoiler to the government’s plans is the lack of public support for tough measures, with around 70 percent of Pakistanis expressing mistrust in the integrity of the electoral process ahead of the Feb. 8 general elections. Additionally, 88 percent of Pakistanis believe corruption is widespread in the government, making it difficult to build any reform narrative that requires “sacrifice” from the public but little change in the perks and privileges allotted to the ruling elite. A silver lining exists, however, in Pakistan’s main creditor, China, hailing the election of Sharif and reiterating its support for the new government. It also helps that Sharif, as a veteran politician, is able to work with allies and opponents alike and—most importantly—knows the military and their mechanism to control the civil polity all too well. In the prevailing scenario, he might just emerge as the most qualified to handle the situation created by Pakistan’s economic collapse. Whether he gets the chance to deliver remains to be seen.