The Pakistani business community aspires to a stable, supportive government. While their stance on the duration of the caretaker setup remains ambiguous, they seemed to hold a positive view of individuals chosen for economic ministries in Caretaker Prime Minister Nasrullah Kakar’s cabinet. However, a few have voiced concern about the cabinet size, comprising 16 members and three advisors.

The Constitution mandates Pakistan caretakers to facilitate power transfer following the general elections. They are responsible for managing the state’s administrative functions during the interim period, bridging the gap when one elected government exits on the completion of its term and the subsequent one emerges after the elections.

“Caretakers have a limited mandate and a short life. Ideally, they are supposed to be neutral to ensure an even playing field to all contestants in the elections, guarantee continuity of policies, support the Election Commission in its prime duty and oversee the smooth power transfer post elections.

“However, eyeing economic challenges and the hesitancy of the political parties, the interim government can push ahead with politically difficult reforms such as extending the tax net to realtors, retailers and agriculturists, reforming state-owned enterprises (SOEs) for privatisation, etc,” commented a leading tycoon.

Former caretaker prime minister Moeen Qureshi indeed disrupted the established system of patronage in his 91-day tenure in 1993. He unveiled the intricate web of rent-seeking facilitated by political patronage by publicly releasing lists of taxpayers and bank defaulters. In addition to these proactive measures, he undertook various other initiatives.

Most business representatives exhibited caution, possibly aiming to avoid any unfavourable stance towards the new government and its backers, especially considering the likelihood of tenure being extended beyond 90 days.

A handful expressed unease over the reappointment of Dr Shamshad Akhtar as caretaker finance minister for the second time. Their hesitance stems from their memories of her previous roles as governor of State Bank (2006-2009) and interim finance minister (2018), which weren’t universally positive for them.

Others convinced of her credentials as an economist consider her a worthy choice. They argued that besides regular duties, Dr Akhtar could perhaps clinch a better deal with the International Monetary Fund (IMF), given a chance to negotiate the next programme after the completion of the current $3 billion Standby Agreement in March 2024.

They were concerned over the sliding exports, remittances, tax collection and currency value and dreaded a possible fallout of runaway inflation — public frustration spilling over in the streets.

Ehsan Malik, CEO of Pakistan Business Council (PBC), provided a comprehensive response regarding his outlook for the future. He expressed confidence in the abilities of the new economic team led by Dr Akhter to effectively steer the economy while maintaining a positive relationship with the IMF. He also mentioned their potential to rectify crucial issues in the energy sector and boost exports.

“It is unrealistic to expect an interim government to fix deep-rooted economic flaws or to undertake fundamental reforms. If the term is extended over a year, then some major reform-centric measures can be expected,” said Mr Malik.

Counting key challenges, he mentioned the culture of living beyond means, reliance on debt to fund imports, high cost of supporting an over-sized administrative framework, bleeding SOEs and unsustainable distribution losses in the energy sector besides a very narrow tax base.

“If in the next five to six years, the (24th) IMF programme can be negotiated by the interim economic team in place of front-loaded short-term arrangement, with tranche releases contingent on progress on fundamental reforms, it will serve the country better,” he said.

M Abdul Aleem, Secretary General, Overseas Investors Chamber of Commerce and Industry, expressed contentment with the impartial interim cabinet and anticipated a period of professionalism and quality governance during their tenure. His sentiments aligned with those of PBC.

“Appropriate, robust actions against those responsible for the regrettable incidents in Jaranwala targeting minorities can effectively communicate their competence to business partners overseas,” he emphasised. “There is a need to instil hope in youth, including professionals, that their prospects lie within Pakistan rather than abroad,” he added.

Some tycoons were reluctant to share their minds. A top businessman said: “It’s too early to comment.”

Khurram Mukhtar, a leading textiles manufacturer and exporter from Faisalabad, sounded upbeat. “Dr Shamshad Akhtar brings a wealth of experience and expertise to the office of the finance minister,” he said. Mr Mukhtar expects her team to deliver on economic stability, fiscal discipline, revenue generation, poverty alleviation, proactive debt management and strengthening institutions.

Nasser Hayat Magoon and Achakzai Daroo Khan, former presidents of the Federation of Pakistan Chamber of Commerce and Industry, also pinned high expectations on the caretaker economic team. “The creation of a conducive environment for the local and foreign investors must be prioritised,” Mr Magoon noted.

Zubair Motiwala, CEO, the Trade and Development Authority of Pakistan, who sits on multiple boards, rooted for out-of-box solutions to support trade and industry for regional competitiveness.

Since 1973, the year when the Constitution was unanimously adopted, the country has witnessed eight interim governments, including the current one. The preceding ones were helmed by Gulam Mustaffa Jatoi (1988), Mir Balkh Sher Mazari (1990), Moeenuddin Ahmed Qureshi (1993), Malik Meraj Khalid (1996), Mohammad Mian Soomro (2002) and (2007), Mir Hazar Khan Khoso (2013) and Nasirul Mulk (2018).

With the exception of three, each of these governments adhered to the stipulated timeframe of 90 days, as laid out in the Constitution. In 2007, Mohammad Mian Soomro’s tenure was extended for four months, eight days, following the tragic assassination of Benazir Bhutto in December 2007. Moeen Qureshi’s administration fulfilled the mandate in 91 days, and Mairaj Khalid’s in 102 days.

Published in Dawn, The Business and Finance Weekly, August 21st, 2023