• Regrets how burning issues like privatisation, tax reform ignored in most parties’ manifestos
• Says one party’s govt preferable to ‘hung’ coalition

KARACHI: The lack of clarity following the Feb 8 general elections has businessmen shaking in their boots, with many expressing the fear that they would not be able to sustain more political instability and economic turbulence, while the incoming government may find it hard to restore some semblance of order, in the shadow of IMF conditions.

“I do not think that any of the parties contending for power appreciate the extent of pain that will need to be taken when implementing the critical reforms that governments should have undertaken at least a decade back,” Pakistan Business Council (PBC) CEO Ehsan Malik told Dawn on Monday.

These reforms are now non-negotiable under a 24th IMF programme, which is inevitable, and any further handouts are unlikely to materialize, he said.

“The immediate task for the incoming government would be to negotiate a longer, larger and more reform-centric IMF programme,” he said, adding that none of the major political parties featured this in their manifestos.

The Pakistan Peoples Party (PPP), he said, talked about an impractical home-grown solution. Strained relations between Ishaq Dar and the IMF are still fresh in people’s memories, followed by his misadventures in exchange rate management.

Repeating these mistakes will be disastrous for an already fragile economy, he said, asking: “So how will the upcoming government avoid procrastination on moving forward with the IMF to secure solvency, sovereignty and autonomy of the country? How will they sell it to the public?”

In his words, inflation was a major issue and the public would expect quick solutions, which may be difficult to deliver. “Tight fiscal discipline will be demanded by the IMF, but even if it were not, it is essential to control inflation, reduce borrowing and bring down the cost of funds.”

He also pointed out that no political party had included privatisation in their manifestos, while the issue of broadening the tax base — which hurts the vote banks of more than one party — may endanger the already disproportionately taxed classes of the country.

“Will the government have the political will to take the hard calls? Will the opposition collaborate? There is no procedure for either. So business has to brace for volatility,” Mr Malik concluded.

Expressing regret over the political confrontation that had come to the fore following the declaration of election results, former Federation Chamber of Commerce and Industry (FPCCI) President Zubair Tufail said that Pakistan, burdened as it is by debts, cannot afford more political instability, adding that the power struggle between political parties was very harmful to the country.

Instead of political fighting, a broad-based national government should be established, said Mr Tufail, who is also president of the United Business Group.

He said the economy needs a sustainable, long-term and broad-based national government, and all major political parties and winning independent candidates must work together to pull the country out of the political and economic crises it faces.

He said that investors were transferring their capital to Dubai and other countries due to the uncertainty.

Auto part maker and exporter Mashood Ali Khan told Dawn the election results have not been able to give one party sufficient numbers to form a stable government.

The dilemma is that all three big parties are puzzled about how to move ahead to form a government, he said. “I am afraid that a multi-party solution does not create credibility and such repeated experiences will not bear any fruitful results, as we have seen in the past.”

Upcoming challenges like high-interest rates and electricity rates, unemployment, and decay in industrial production pose significant hurdles for economic growth. In the last two and a half years, many SMEs have struggled, while some have been forced to close their plants, he said.

He urged the heads of political parties to, firstly, focus on political stability and harmony and secondly economic growth. “This task can only be achieved if one party government is formed supported by other parties in the parliament,” he added.

Johar Qandhari, president of the Korangi Association of Trade and Industry (KATI), while extending a strong recommendation for the new coalition government, stressed the immediate need for a concentrated focus on the economy and the prompt implementation of a long-term economic policy.

He emphasised the creation of employment opportunities through a robust industrial sector and called for a reduction in electricity and gas prices, emphasising the necessity of single-digit interest rates.

Mr Qandhari also called on the upcoming government to focus on the Charter of Economy and implement tax reforms as part of a comprehensive, long-term policy.

The KATI chief underscored the need for the new government to ensure affordable electricity and gas for the industrial sector to enhance the competitiveness of Pakistani products globally.

Petroleum and CNG industry leader Malik Khuda Bakhsh also cal­led on all political parties to put aside their differences and work together for the country’s political, and economic stability and development.

The situation of Pakistan’s external debt is uncertain, he pointed out, as Pakistan has to make many payments in the next six months.

Published in Dawn, February 13th, 2024