He may never realise this, but Dr Tahir-ul-Qadri's four-day long sit-in on Jinnah Avenue in Islamabad has caused substantial tangible and intangible losses to the country's struggling economy by the time he called it off.

He had launched the protest to force dissolution of the assemblies and wide-ranging electoral reforms.

"Our two dealerships in the federal capital were closed since the arrival of the protestors in Islamabad," an executive of Indus Motors told Dawn a day before the sit-in was called off. "Many other businesses, offices and bank branches on Jinnah Avenue and areas around were also closed. The business in the rest of the city was slow in anticipation of something big happening as all sorts of speculations were flying around," the executive said.

Qadri's arrival last month in Lahore to launch his long march to ‘save the state’ from the ‘corrupt politicians’ has deepened political instability at the expense of the economy. But he isn't the only one to blame for the perpetual uncertainty about the future of the democratic setup gripping the country for last five years and negatively affecting business sentiment across sectoral and geographical spread.

While Qadri's protest was responsible for the closure of businesses in the capital, the Supreme Court's order to the National Accountability Bureau to arrest, among others, the prime minister on yet unproven charges of corruption in the rental power case wiped off more than a trillion rupees in stock market capitalisation at the cost of unsuspecting investors in just one day.

"The closed businesses reopened once the dharna was over and the stock market will recover its losses in due course of time. Still, it won't be business as usual for the economy for a very long time. Political instability is as damaging — if not more — for the economy as energy crunch and security of life and property. It doesn't send the right message to our trading partners," argues Shahid Zia, financial analyst based in Lahore.

Political instability remains a major risk to the economy as it creates uncertainty in the market. Several international studies have shown that political stability, or lack of it, and economic performance of a country are deeply inter-connected. Empirical evidence shows that political instability slows down economic growth, reduces pace of private investment and pushes inflation.

Economic growth in Pakistan has declined to an annual average of three per cent in the last five years and fresh investment contracted by 9.3 per cent a year since 2009/10. Inflation, which came down over the last few months, is projected to rise again to double digit.

"A factious relationship between politicians and the state institutions undermines the government's ability to formulate policies to address economic issues and problems," asserts Shahzad Ali Khan, chairman of Aptma-Punjab. "Political instability has damaged Pakistan's country image in the international markets as a reliable trade partner and supplier of goods. With the business facing severe energy crisis as well as security problems, political instability is the last thing we want in the country. We support that every institution remains within its constitutionally defined territories and elections are held on time for the sake of the people and the economy."

The poor economic performance, in its turn, has triggered further political uncertainty. "Television interviews showed that a large number of people participated in the dharna because the government has not delivered and failed to mitigate their (economic) hardships in the last five years," says Zia. If the economy was performing well, he insists, the participants would have thought twice before joining the protest.

Many businessmen from Punjab complain that the government is totally focused on politics ever since its inauguration. Trade and economy don't figure anywhere on its radar.

Sialkot-based textile manufacturer and exporter Ijaz Khokhar points out that trade and industry are facing multiple threats — growing energy crunch, deteriorating security conditions, etc. "With the government more focused on its political problems, it has failed to address the economic challenges hampering growth and creation of jobs. Politicians don't realise that the state of the economy directs impacts upon the life of the people whose votes they would soon be seeking.

Khokhar also doesn't see improvement in the business environment before the new elections expected in the first week of May. "That too will depend on peaceful elections and acceptance of the outcome by all political parties."

Will the peaceful elections bolster the investor confidence and lead to a better business environment? The next elections are projected to throw up a more factious and fragmented coalition government than the present one, delaying implementation of crucial financial and governance reforms to fix the economy.

Farooq Iftikhar, president of the Lahore Chamber of Commerce and Industry, is of the view that all the political parties must develop a consensus on broad economic policies that the next government should pursue to fix the ailing economy no matter who wins at the polls.

“The economy requires tough decisions to bolster private investment and boost growth to create jobs for millions entering the labour market every year. This is not going to materialise without a broad-based political consensus on how the economic issues need to be resolved," he underlines.

Prominent business leader Almas Hyder asserts that the economy affects the people the most and it is the last thing on the agenda of the political parties. His advice to the politicians is to come out with a sound economic programme and a clear-cut direction for the economy before the next elections. "Unless politicians focus their attention on rescuing the faltering economy to mitigate the hardships facing the common man, rest assured, political instability will not go away. Nor will the forces using it to wind up the democratic setup every few years be tamed."