Apart from Prime Ministers, things rarely change in Pakistan … but we are seeing a slight shift. The Supreme Court is beginning to put the law first and forced loyalty second. Recent rulings by the highest judges in the land have, unusually, gone against the will of the military, favouring the people instead. The Court is working hard to dispel the persistent rumour of bias towards the army and that could make things very interesting indeed. The Court is now publicly pushing to uphold the rule of law and democratic principles enshrined in the Constitution.
Opposition. On 15th July the government announced plans to ban Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party. The PTI was stripped of its official party status in the run up to February’s election rendering it unable to form a government despite winning the majority of seats. However, Pakistan’s Supreme Court restored the PTI’s party status on 12th July. And this is where it gets interesting. This move allows PTI take up their reserved seats in parliament. The National Assembly has 342 seats. Of these, 266 are filled directly by the election results. The remainder are reserved for women and religious minorities. It is these seats that are obviously making the government nervous. These seats are filled proportionately by parties holding more than 5% of the vote and the PTI is now, once again, a party. Until the court decision, the reserved seats had been shared by the ruling coalition parties who now have had to vacate many of them. This has seriously weakened the coalition. The PTI is now officially the single largest party in the Assembly. The government has retained the simple majority it needs to stay in power but crucially it has lost the majority needed to make constitutional amendments. For years Pakistan’s judiciary has been pressured by the military to do their bidding but we have been watching the courts begin to flex their muscles and push back, particularly after Imran Khan’s arrest. The Court has now firmly positioned itself as independent and in Pakistan when that happens, a confrontation with the military is sure to follow. So will the government be brave enough to ban the PTI? Perhaps, but it would signal huge political insecurity, weakening them further. This will leave them in a position that opponents will be quick to exploit but more importantly, given the Supreme Court’s recent positions, we are sure that the ban will quickly be declared illegal and thrown out. And that will only massively boost Khan and his party’s popularity. This current government is controlled by the military whether they admit it or not, and all the moves made to suppress dissent and retain command have military finger prints all over them but … whilst the military is playing by the same rules and using the same tactics they have always used, Pakistan is changing around them. In this era of social media, even the smallest man can become the biggest influencer. If the military want to stay at the wheel, they are going to have to recognise that smart phones have the potential to control the roads and change the traffic lights. That is not a position they will relish being put in. After all, they have never been there before and that makes it a dangerous route to be travelling.
Khan. Imran Khan remains behind bars despite the Supreme Court reversing some of his convictions. Khan has said his party is now ready to hold “conditional negotiations” with the military putting the ball firmly in the army’s court. Should they nominate a representative and open a dialogue, as Khan has requested, they give legitimacy to Khan’s status as a major party leader. Should they ignore him his supporters will, once again, cry foul and accuse the military of intentionally ignoring the constitution. Khan has now got the military firmly on the back foot. No matter which option is chosen, points will be lost. We anticipate some mud-slinging and name calling – especially from government benches. The ruling Pakistan Muslim League-Nawaz (PML-N) has accused Khan of trying to “politicise” the military – as if that was a new thing. The PML-N will criticise Khan as they attempt to appear to be in charge but really, they are only puppets to their masters in uniform. Khan is not going to keep quiet and the military must eventually deal with that. His charisma and popularity are his most powerful tools and he will deploy them wisely and well. All that said, as we have seen in the past, the politician (or judge) that underestimates what the military are willing to do to retain power, is a naïve one – Khan is testament to that. What has changed now is the people and their perceptions of the military and its involvement. Recall that, in years past, criticising the military was near blasphemous (not a word we use lightly) across Pakistan but, shortly after Khan’s fall from grace, doing so quickly became more and more socially permissible. Things really are changing in Pakistan – what remains to be seen is how painful, or bloody, the change will be.
Political uncertainty continues to hinder economic progress, but some slight improvement has been evident. The latest inflation figures will be announced shortly and we expect that it will have slowed slightly to around 12%, the lowest in over 30 months. The State Bank has cut its benchmark interest rate for a second consecutive time which is a positive sign. Despite this pressure remains. Pakistan’s Consumer Price Index increased by 12.6% year on year. The government’s latest monthly economic outlook report, however, is optimistic. It reports a reduction of the fiscal deficit to 4.9% of GDP between July 2023 and May 2024. Previously it had stood at 5.5%. Pakistan has finally reached a deal with the International Monetary Fund (IMF) securing a USD7 billion loan that will do much to keep the wolf from the door, but it could also cause problems. The loan agreement includes stringent measures such as increasing taxes and electricity prices. Higher electricity costs will be particularly painful for those already below, or hovering on, the poverty line. Protests and sit-ins cannot be ruled out as new tariffs are rolled out. There are signs of stability but, as yet, any signs of real and tangible substantial growth remain faint. Despite this, we predict an economic growth rate of 3.5% in this financial year. The government has made a good start but more must be done. Now it must focus on increasing tax collection which would greatly benefit state coffers but we fear that they may just introduce new levies instead, increasing the tax burden on those who can afford it least. Standard & Poor’s (S&P) has maintained Pakistan’s long-term credit rating at Triple C Plus (CCC+).
Expat Attacks. After the March suicide attack that killed six Chinese nationals, the government has launched special provincial police units and a dedicated military force tasked specifically with the protection Chinese expatriates. Intelligence units record where the foreigners live and work. Protection details have had extra training and new equipment. Chinese workers normally move in convoys of bullet-proof vehicles with a police escort but police protection and procedures too have been stepped up. Not everyone is happy about this however. Local business report that routes taken by these convoys are often closed for a substantial amount of time and businesses are forced to shut up shop for the duration. Pakistanis are also complaining about the amount of money and resources being devoted to maintaining the safety of Chinese staff yet little is being done to protect Pakistani citizens.We tend to agree.
Surveillance. The Inter-Services Intelligence (ISI) agency, the military’s main spy organisation has been given new powers allowing them to intercept and monitor phone calls. The government has said the move will allow it to track terrorist and criminal activity but that is a half-truth at best. The ISI is infamous for interfering in elections and politics in general, and all of it at the behest of the military. These new powers will permit them to listen in on opponents, political aspirants, human rights activists and more. The PTI has already said it will launch a legal challenge against it. The Human Rights Commission of Pakistan has said it is “deeply concerned” by the decision saying it gives the ISI “carte blanche” to tap into the calls of absolutely anyone. Anticipate a clampdown on dissent, particularly as the Supreme Court continues to review convictions, cases and legislation. Wiretapping, even in Pakistan, is completely unconstitutional. When the Court does get time to review this move we expect them to rule accordingly but a lot of intimidation, harassment and arrests can happen before then. In truth the ISI were always listening, but at present they are doing so legally, allowing warrants to be issued and arrests to be made.
Terrorism. A military base in Bannu was attacked by gunmen and suicide bombers on 15th July. Eight soldiers were killed in the assault. A previously unknown group, Jaish Fursan-e Muhammad (JFM), claimed responsibility but they are not the only new kid on the block. Others calling themselves The Shaheen Group (SG) and Lashkar-e Khorasan (LK), to name but two, are also rattling sabres. The names may be new but we believe those behind the groups are not. JFM and SG are almost certainly fronts for Hafiz Gul Bahadar (HGB). LK, on the other hand, is a front for Tehrik-e Taliban Pakistan (TTP). The TTP and HGB have been coming under increasing pressure from the military. The creation of these new groups creates a buffer between the larger organisations but keeps them strong while also allowing them to deny involvement in any acts of terror. Shifting security forces’ focus from only two targets to what we anticipate will be more and more moving forward will take the pressure off.
The government (military) must proceed with caution. A heavy-handed authoritarian approach will provoke protest and unrest. A softer and gentler approach will imply weakness which will be manipulated, also resulting in violence. Pakistan is in the best economic condition we have seen for quite some time. but much more must be done. The government must get to work and stop looking over their shoulder at Khan. The military too must be seen to back off, at least a little, and let the small gains made so far be seen to trickle down. That will do much to tame the population and keep the peace – at least for now.