In an otherwise very uncomfortable economic scenario, a redeeming feature is the reconciliatory approach of all major political parties thrown up by the electorate on the February 18.

Leaders of the PPP, PML (N) and ANP have already entered into a broad understanding to support each other in government formation. The PPP is also making attempts to woo the MQM. They all appear to share a common perception that they need to cooperate to avert a worsening political and economic situation turning into a grave and wider crisis.

‘’ Economic compulsions and the political pressures have brought these parties together to steer the economy and country out from the present difficult situation, a local business leader remarked. The mandate of the electorate-- given the party positions in various provinces-- does not leave them much choices. The fact that leaders of Karachi Chamber of Commerce and Industry went to Islamabad early this week to meet Asif Zardari and other political leaders to convince them to enter into some sort of understanding with MQM on the formation of government in Sindh manifests the business considerations of bringing political parties together.

How difficult is the economic situation? It can be assessed by observations made by none other than State Bank of Pakistan Governor Dr Shamshad Akhtar recently. She warned of a destabilisation threat to Pakistan’s macro economic balance. Asif Zardari, the leader of majority party PPP was quoted on Thursday saying: ‘’we will have to take some hard decisions’’. He said this in context of subsidised oil prices in domestic market as international oil prices touched $102 a barrel last week.

What are the challenges? A record current account deficit of more than $7.5 billion in first seven months of 2007-08, Rs285 billion borrowing by the government to finance expanding budget deficit till February 16, stagnant exports, rising import bill, un-controlled inflation and the high level of poverty, particularly in rural areas, are some of the disturbing challenges facing the future government.

‘’We have drawn up a road map for recovery,’’ Naveed Qamar, the PPP leader who may be given some responsibility of economic management in next government said on Wednesday. But he did not spell out how the party intends to provide ‘safety valves’ for the poor when it will pass on the international price hike to the consumers.

What is reassuring is the realistic approach of PML(N) and MQM in the current scenario. Ahsan Iqbal, a member of the think tank of the PML(N) acknowledged the seriousness of the economic situation and expressed support for ‘all hard and unpopular decisions to be taken by the PPP government.’’ .

The MQM appeared to be somewhat hesitant on Thursday to join government with PPP in Sindh. But its leaders declared their support for the government on every positive move and saying, even if they opt for opposition, their job will not be to destablise the government.

The business world is happy over holding of relatively peaceful elections .But what has impressed businessmen is the amount of goodwill and reconciliation shown by political leaders of different parties. Even the leader of the ruling PML(Q) accepted the defeat openly without indulging in mud-slinging. These are all good signs, says a textile industry representative.

‘’There is a lot of goodwill in the international investors for new elected leaders,’’ Mohammad Ali Khoja, a former Chairman of PICIC said. He was confident that the future political set-up will get a positive response from international community of investors and businessmen.

Businessmen now wait for the formation of a coalition government. ‘’Coalition is now rule of the game world over,’’ a textile industry leader said.

Ahsan Iqbal of PML(N) in a television talk show mentioned example of two rival parties of Germany cooperating together to take jointly the hard and unpopular decisions and putting country back on road to progress. ‘’It can be done in Pakistan also’’ he said.

Given the current soaring food inflation and imports, the PPP-led coalition government is expected to accord a high priority to the development of agriculture, where the vast majority of the poor live. It is a sector which has escaped much needed reforms so far, resulting in stagnant or fluctuating crop yields. The PPP’s focus on farming is also assured because the party’s vote bank is primarily in the rural areas.

Karachi industry faces a big challenge of 700 megawatt shortage in the coming summer. The chambers and the trade associations are preparing papers to spell out strategies as how to tackle this problem. There are long and short-term proposals. The PPP in its previous government from1994 to 1996 took bold decision of approving private power projects.

For this, the PPP was blamed for accepting inflated cost of project and high tariff rates of power. Projects based on Lakhra coal was approved by the same government but later scrapped.

Businessmen now expect the coming government to go for setting up coal-based electric power generation projects.