The worsening economic crisis has triggered human and political crises, eroded social cohesion and posed a risk to our national security. The outlook for the future at the moment appears to be bleak.

In October, inflation — mainly driven by food, transport and energy prices — measured by the Consumer Price Index rose by 26.56 per cent year-on-year against last month’s 23.56pc and 9.2pc in the same month last year. An analyst says the inflation reading was more than double the increase in wages of around 13pc. And after assuming power, the PML-N is losing its political capital in Punjab at an unprecedented speed.

Owing to the country’s political and economic situation, business confidence is stated to have dropped to one of its lowest levels. According to the latest Gallop poll survey, inflation remains the ‘most- cited’ problem of the business community.

To quote Director General ISI Lt General Nadeem Anjum, the worsening economic condition was the number one issue, as national security is directly linked with it.

There has been some official rethinking about shifting from geo-politics to geo-economics

The political instability (worsened by the PTI’s long march and looming elections), according to international credit rating agencies, will make it more difficult for the incumbent government to carry out challenging structural reforms policy. The economy faces rising political uncertainty.

Unemployment and inequality both look set to rise because multiple and overlapping economic and political crises threaten labour market recovery worldwide, according to the latest International Labour Organisation Monitor on the ‘World of Work’. The report says job vacancies will decline, and global employment growth will deteriorate significantly in the final quarter of 2022.

From what has been stated above, it is clear that economics and politics are deeply linked and cannot be separated. Though most of the time, economics shapes the destiny of the nations, in times of severe, prolonged multiple economic crises, politics moves to the driving seat, often triggering transformational change.

The historical record shows that the 1971 tragedy (whose economic and political reasons are well known) was followed by a sovereign parliament’s unanimously approved Constitution in 1973.

And political stability of the federating units was reinforced after they were granted administrative, legislative and financial autonomy under the 18th amendment and by the 7th NFC award. Since then, the elected provincial governments could not be dismissed arbitrarily by the centre, as was the previous practice. Any sound economic system can only be nurtured by a corresponding robust democratic political superstructure.

There has been some official rethinking about shifting from geo-politics to geo-economics. “Pakistan can not remain aloof from the new emerging global world order,” former foreign secretary Jalil Abbas Gilani and President of Punjab Bank Zafar Masud wrote in a joint newspaper article, adding that no country can progress without a working relationship with its neighbours.

They suggest that we must leverage our geo-strategic location and rich endowment of natural resources and human capital to embark on a new path of sustained economic growth, using the full extent of foreign policy and economic tools at our disposal.

Efforts are also being made to build a national consensus — notably on a charter of economy and charter of democracy — but without any success so far. Analyst Umair Javed says a charter of democracy without devolution will fail to resolve the most central failing of Pakistani politics unrepresentative character. It is through devolution that citizen-led accountability of the elites opens up in any meaningful way.

Similarly, the charter of economy, strongly supported by the business community, may help improve macroeconomic imbalances but may fall short of a egalitarian system needed to reduce political temperature and ensure political stability.

In fact, we need to set up a common interest state with the widest possible participation of the people in the conduct of national affairs. Here it may be pertinent to note that the National Human Development Report (NHDR) 2020 based on 2017-18 data found that greatest beneficiaries of the annual privileges, in order of magnitude, were the corporate sector including both industry and the banking sector, the feudal class, high net worth individuals, large traders, state-owned enterprises, the military establishment and exporters.

On an optimistic note, Pakistan was ripe for market innovations as the new generation of Pakistani entrepreneurs was shying from traditional business and turning their focus and energies to disruptive innovations, said Prime Minister Shahbaz Sharif while addressing the Investment Initiative Summit at Riyadh. Here it may be emphasised that the government needs to give the highest priority to the development of human capital and extend necessary support to this pioneering effort to build a new economy as fast as possible.

The skewed system of privileges in favour of the affluent has found political expression in market democracy/hybrid democracy and made the citizen-based constitutional democracy dysfunctional.

Representative democracy has to be reinforced with participatory democracy, whose rudimentary form is visible in coalition governments at the federal and provincial levels. But the promises made to the smaller coalition partners are largely not implemented.

Similarly, the people at the grassroots are denied participatory democracy by depriving local and district governments of representative democracy. Democratic values must be deeply entrenched in society.

A grand national reconciliation of diverse interests and views to evolve a minimum common programme is the only way to move forward with a new political and economic agenda. It is time to seek unity in diversity. Whatever rights an individual, group, political party or region seeks for itself, it should acknowledge the same rights for others and defend them as strongly as one’s own. The country badly needs peace and national unity.

Published in Dawn, The Business and Finance Weekly, November 7th, 2022