Written by Jacob Dickinson.
Following an intense period of political in-fighting and constitutional meddling, Imran Khan of the Pakistan Tehreek-e-Insaf party (PTI), the Prime Minister of Pakistan since 2018, was removed from power on the 10th April, 2022. His replacement marks a return to Pakistan’s political dynasties. Shehbaz Sharif of the Pakistan Muslim League (PML), former chief administrator of Punjab, came to power with the promise of a return to stability. Yet the new Prime Minister faces acute uncertainty in Pakistan’s politics, economic situation, and security threats from India and Afghanistan. Therefore, despite the hopes of Khan’s detractors for a semblance of stability, Pakistan is facing short and long-term turmoil.
A ‘Managed Democracy’
The new Prime Minister, Shehbaz Sharif, came to power on the back of a complex legacy. In the 2018 general election, Imran Khan campaigned on a populist message against the corruption scandals of Pakistan’s political families. He pledged to build an ‘Islamic Welfare State,’ end the repeated debt cycles of Pakistan’s economy, and curb rampant corruption. He was initially praised for his handling of the COVID-19 pandemic in Pakistan. Infections were low during the initial phases of the COVID-19 pandemic, though the economic and social consequences were dire. Imran Khan was credited with preventing 15 million families from falling into extreme poverty through a cash transfer payment program to low income households. However, Khan was unsuccessful in reducing Pakistan’s pervasive corruption, and under his administration, Pakistan dropped to the bottom third of the Transparency International annual corruption index.
Pakistan is sometimes labeled a ‘managed democracy’ due to the position of the military which dominates the political and economic institutions of Pakistan. Since the Partition of British India and the founding of Pakistan in 1947, the military has seized power 3 times (1958-71, 1977-88, 1999-2008) and retains control of key foreign policy posts. Maintaining a working relationship between the government and the military is a necessity for leading politicians. Pakistan’s powerful Army Chief, General Qamar Javed Bajwa, was instrumental in Imran Khan’s rise to power. With his fall from power, it is noteworthy that the military did not play a part in civilian politics, given its history of coup d’états. While the military declared that there will be ‘no return to martial law in Pakistan,’ the armed forces had originally turned against the political dynasties of Sharif and Bhutto who are part of the current ruling coalition. Civil-military relations could, therefore, worsen under the current leadership.
The effect of Khan’s ousting from power on Pakistan’s political institutions are contradictory. On the one hand, the political institutions showed remarkable resilience in upholding the constitution. On the other hand, there are signs of further political instability. Dismissing his ousting as a US conspiracy, Khan has called for immediate elections and public protests against the Sharif administration. Sharif will struggle to maintain stability under intense public pressure while holding together a coalition government of three parties which share very little common ideological ground, especially with the acute economic pressures facing Pakistan.
Debt without development
Pakistan’s society faces acute developmental challenges owing to Pakistan’s social inequalities. Pakistan is a young country with a median age of 23 and a population of 220 million. Yet Pakistan underperforms when compared with Bangladesh and India. Pakistan’s literacy rate is 62.3% of the population compared with India and Bangladesh which are 74.9% and 74.4% respectively. The conflict in Ukraine and the impact on global energy and food markets has also significantly affected the economic situation in Pakistan.
According to the United Nations Center for Trade And Development (UNCTAD), Pakistan is one of 10 countries facing both a shortage of funds for debt and a substantial trade imbalance. Additionally, the elite’s control of unproductive but lucrative export industries has made Pakistan subject to repeated balance of payments crises. The Pakistani rupee foreign currency reserves supplies are the lowest in 23 months, suggesting that the country will be unable to pay for food and oil imports without comprehensive adjustment.
Image 1. Composition of Pakistan’s external public debt as of end of June 2021. Image retrieved from Dawn News.
As the World Bank has warned, Pakistan and low and middle income countries around the world are facing immediate risk of exorbitant rates of debt servicing costs and unsustainable loans. Shehbaz Sharif has indicated that he is willing to negotiate with the IMF in return for extended debt servicing payments. On 24th April, the IMF reached an agreement with the government of Pakistan to increase the size of the $6 billion loan program by $2 billion and extend the loan payment until 2023. However, the implementation of fiscal austerity measures will severely strain the newly formed government. Additionally, the possibility of debt restructuring is made more difficult due to the emergence of other lenders since the mid-2000s. Global debt markets are populated not only with bilateral governments and international institutions, but also with private commercial institutions. With many actors with divergent commercial and geopolitical interests (see Image 1), it is difficult to envision a comprehensive restructuring of Pakistan’s debt.
Security threats in South Asia
Pakistan’s position on the doorstep of the Indo-Pacific and Central Asia places it at a geopolitical crossroad between Afghanistan, India, and China. The security situation between Pakistan and Afghanistan is worsening since the removal of US forces and the return of the Taliban in August 2021. Conflicts between Taliban affiliated groups and Pakistan security forces have escalated over the Durand Line, a historically disputed region since the boundaries were drawn by British imperialists in the mid-20th century. In April 2022, Pakistan security forces had allegedly launched air strikes on Afghan border villages killing 45 people. While the Pakistan security forces have not admitted carrying out strikes, they targeted the Tehrik-i-Taliban Pakistan (PTT) militant group, who have been attacking Pakistan territory from within Afghanistan.
On the east of the country, Pakistan has looked to China to counter India’s strong military relationship with Russia. While Russia has supplied India with Su-330 aircraft, Pakistan has purchased Chinese-made JF-17 fighter jets. Amidst deepening maritime presence by Western powers in the Indo-Pacific, Beijing is also ramping up naval power to Pakistan, exporting 8 submarines scheduled for delivery in 2024. This is a move to counter what Beijing sees as the new Cold War encircling the Indo-Pacific, which it sees as a vital strategic interest. Sharif has also said that he wants to strengthen ties with China. The China-Pakistan Economic Corridor (CPEC) is the largest investment out of the China-led Belt and Road Initiative (BRI). However, there are financial problems with servicing costs of the CPEC and the Gwadar port, the flagship CPEC project in Pakistan, has run into construction problems.
While India-Pakistan relations will continue to be defined by their history, Sharif has advocated a softer approach to India. The long-standing sovereignty dispute between India and Pakistan over Kashmir had worsened under Imran Khan. The former Prime Minister criticized Modi’s BJP nationalist government and imposition of a draconian citizenship law in contested Kashmir in 2020. In response, Khan reinforced the nuclear capabilities of Pakistan ending with a ceasefire on the Kashmir Line of Control. Sharif has expressed intentions to seek better relations with India, though they will be constrained by India’s concerns over the military’s support for militant groups in Indian-controlled Kashmir.
Pakistan’s political turmoil is likely to continue in the coming months. Sharif’s tenuous hold on power, worsening relations with the military, and a new election scheduled for 2023 suggests that political stability is at risk. Pakistan is also facing, like other low and middle income countries across the world, high risk of debt default and severe cuts in socially necessary public services, as well as rampant inflation derived from rises in global food and energy prices. The divergent holders of Pakistan’s debt suggest that debt will likely become a contentious issue in the future. In the short term, continuing clashes with the Taliban insurgents over the Durand Line and the sovereignty dispute between Pakistan and India could lead to further political turmoil in the region.
About the author: Jacob Dickinson
Jacob studies Global Political Economy at Leiden University. He is passionate about international development and is looking to expand his expertise in geopolitics and crisis management. Curious about other cultures, he has travelled in Europe and Asia for both academic study and professional purposes. His expertise includes subjects like the geopolitics of energy, China’s international political economy, and the implications of globalized supply chains for industrial policy. He is particularly interested in the evolving political and economic relationships between China and ASEAN, and the consequences for regional development and security.