THE new government has assumed power in an environment marked by political turmoil, polarisation and controversy over the election. In his second stint as prime minister, Shehbaz Sharif heads a fragile six-party coalition, with his party lacking a majority and dependent for its survival on the PPP, which has opted to support the government while declining to join the cabinet.

This means the government will have to engage in sustained efforts to keep the PPP and other allies happy and meet their demands to retain their support. The minority government will face the vulnerabilities of coalition politics and have to deal with unpredictable coalition partners, with little assurance of stability. All this could distract it from the job of governance.

The Sharif government will face other constraints on its exercise of power. With PTI intent on resorting to agitational politics this will present the ruling coalition with a continuing challenge. As the opposition constitutes a large bloc in the National Assembly it will make the task of conducting parliamentary business more difficult. The disruptive conduct of PTI-backed MNAs in the Assembly’s initial sessions indicates the shape of things to come, especially as they promise to stage protests in every session. With little prospect of any pause in government-opposition tensions much less agreement on working parliament, their confrontation will pose obstacles to legislation and even paralyse proceedings.

The continuing hybrid arrangement in which the military establishment has secured an expansive, informal role in governance will also limit the government’s power. In his previous term in office, Sharif ceded even more ground to the establishment. This is unlikely to be reversed or diminish in any significant way. It will mean the establishment will have continuing sway on how the country is run.

Then there is the complex provincial landscape in which PML-N only controls one province, with the other three provinces run by different parties and a hostile government in Khyber Pakhtunkhwa. This will also place limits on the Sharif government. Managing centre-province relations will pose an obvious challenge and require a deft combination of pragmatism and firmness. It will make the task of forging a national consensus on federal government policies more compelling and yet more problematic.

With constraints on its power the Sharif government has many challenges to navigate.

But none of these constraints should deter or prevent the government from charting a way to meet the many challenges the country faces. That, after all, is its responsibility. For this, the prime minister would need to evolve a clear and coherent policy agenda and select a competent team while avoiding the kind of unwieldy, bloated cabinet he appointed in his previous term.

The economic challenge is, of course, the most consequential and the choice of finance minister all-important. The Sharif government has to brace itself to take tough and politically painful decisions in order to secure the larger, extended programme it plans to seek from the IMF given Pakistan’s heavy foreign debt service obligations ahead.

The economic challenge is an imposing one, but the government should see an opportunity in this crisis. The choice for the government is stark. It can steer the country out of the present crisis by the same kind of fire-fighting responses witnessed in the past — more borrowing, bailouts and accumulating greater debt while postponing reform and creating no capacity to repay higher levels of debt. This, however, will only guarantee another crisis down the road and do nothing to spur growth and investment or contain the record level of inflation.

This band-aid approach is, in any case, now untenable. Alternatively, it can use the ongoing crisis as an opportunity to launch wide-ranging structural reforms and break out of the vicious cycle the economy is mired in — unsustainable financial imbalances, heavy domestic and foreign borrowing, soaring inflation, low savings and investment and stagnant growth.

Many countries across the world faced an economic crisis more formidable than the one Pakistan is confronted with. But they were able to use that as an opportunity to bounce back stronger and more resilient. Southeast Asian nations that experienced a financial crisis in 1997 did that by undertaking fundamental reform and addressing structural problems through tough economic measures.

Similarly, India in the 1990s and several Latin American states in the 1980s and 1990s went through severe economic crises; they managed to not just recover but also embark on a path of robust growth and build economic sustainability. In each case, wrenching structural adjustments, tight fiscal policy and other reform measures were launched by leaders aided by able teams who were convinced that long-term commitment and consistent policy implementation were essential to move forward and that patchwork ‘solutions’ were in fact no solutions.

While urgent priority needs to be given to establishing macroeconomic stability, another crisis consequential for Pakistan’s future also warrants the Sharif government’s attention. This is the crisis in human development — with most indicators of literacy, education, health, poverty and other aspects of social justice and human welfare deteriorating in recent years. The World Bank calls it a “silent, deep human capital crisis”, with Pakistan falling significantly in the global human development rankings.

The education emergency is reflected in the grim reality that Pakistan has the world’s second highest number of children — over 20 million — out of school. With 40 per cent of people illiterate, literacy levels are stagnant. Poverty has risen in recent years with an estimated 12.5m more people pushed into poverty in 2023 as compared to the previous year. The overall state of human development is so bleak that it suggests Pakistan may be sleepwalking to a disaster that can only be ignored at great peril to the country’s stability and economic progress.

Admittedly, these challenges have to be addressed in a fraught political environment in which constraints on the government’s power will weigh heavily on its ability to implement major policy actions. For that reason, the government should try to find ways to defuse political tensions and forge a political consensus on key measures. This won’t be easy. The government’s coalition partners will want to distance themselves from tough economic measures. Dissuading PTI leaders from their combative path will be equally difficult. But then, this is the test of leadership that awaits Shehbaz Sharif.

The writer is a former ambassador to the US, UK and UN.

Published in Dawn, March 4th, 2024