Pakistan’s economic crisis looms over last days of election campaign

ISLAMABAD — Pakistan’s economic crisis is taking center stage in the last stretch of the country’s election campaign, which has been marred by a repressive atmosphere and back-to-back jail sentences handed down to former Prime Minister Imran Khan.

Voters will be going to the polls on Thursday under severe and persistent economic pressure. Year-on-year inflation in January was 28%, according to the Pakistan Bureau of Statistics. Fuel prices were increased again last week. And citizens are expected to be hit with huge electricity bills this summer.

Moreover, Pakistan faces $77.5 billion in debt repayment obligations in the next three years, equivalent to nearly a quarter of its gross domestic product.

The parties contesting the elections have pledged to tackle the economic woes. In its manifesto, the Pakistan Muslim League-Nawaz (PML-N) led by former Prime Minister Nawaz Sharif — widely considered the most likely next leader — announced a goal to bring in more foreign currency by increasing annual exports to $60 billion from $35 billion. It also aims to boost yearly remittances from overseas Pakistanis to $40 billion from $27 billion.

The PML-N has also promised to finalize a $10 billion oil refinery deal with Saudi Arabia, which would dramatically increase the nation’s refining capacity and allow it to diversify its sources, including Russia. The party has vowed to follow through on the Main Line 1 rail project with China under the China-Pakistan Economic Corridor (CPEC) as well, upgrading over 1,700 kilometers of track between Karachi and Peshawar.

The Pakistan People’s Party (PPP) of former Foreign Minister Bilawal Bhutto Zardari, meanwhile, has pledged to double the per capita income of Pakistani citizens, currently $1,500, in the next five years. It has also made a commitment to provide free electricity to underprivileged families up to 300 kilowatt-hours.

Neither party has spelled out exactly how they will fulfill their promises.

Regardless, experts say that in the short term Pakistan will need financial help from global partners. Pakistan has an existing bailout agreement with the International Monetary Fund worth about $3 billion in total, although this has come with a slew of tough requirements such as budget adjustments and higher fuel prices.

Adeel Malik, an associate professor of development economics at the Oxford Department of International Development, said that Nawaz Sharif’s possible return to power might unlock backing from the Gulf region. “We might also witness some restructuring of Pakistan’s external debt with Western support, which can help to stabilize the economy in the short to medium term,” he said.

Malik emphasized that there is “no way” the economy can stabilize “without significant external financial backing from Western partners and [Gulf Cooperation Council] states.”

While the economy is the most pressing issue, the conditions under which the elections are being conducted have been a distraction.

After Imran Khan was ousted from power in a no-confidence vote in April 2022, he sparred with the powerful military establishment as he pushed for fresh elections. But his Pakistan Tehreek-e-Insaf party has been all but sidelined — its candidates have effectively been forced to run as independents — while Khan has been in jail since August.

Last week, authorities dropped a legal hammer on Khan.

The cricket star turned populist politician, who denies all wrongdoing, was convicted in three cases and sentenced to a total of 31 years in prison. It was not immediately clear if the sentences of 10, 14 and seven years are to be served consecutively or concurrently.

Police officers gesture next to fallen motorbikes of supporters of former prime minister Imran Khan’s party, the Pakistan Tehreek-e-Insaf (PTI), during a clash in Karachi on Jan. 28.   

The charges on which he was found guilty include leaking a diplomatic cable, undervaluing state gifts while purchasing them, and improperly contracting marriage with his third wife, Bushra Bibi. The convictions, especially the marriage contract case, have sparked strong criticism from the public, rights groups and pundits.

“A politician who has fallen out of favor with the establishment has now been convicted four times over in five months in a series of trials that raise serious questions as to due process, right to counsel and fair trial,” the Human Rights Commission of Pakistan said in a statement, including an earlier corruption conviction. The commission called the situation “a sobering reflection on the state of democracy in Pakistan.”

Some experts say the convictions have tarnished the judicial system. Ikram ul Haq, an expert on economy and taxation who also has a doctorate in law, said they “have once again proved that Pakistan’s judicial system is influenced and controlled by the non-elected powerful institutions.”

The media has also found itself under pressure.

In mid-January, Pakistan’s Supreme Court upheld a decision by the Election Commission of Pakistan (ECP) to deprive Khan’s PTI of its trademark election symbol, a cricket bat. This has forced PTI candidates to run under their own individual symbols — potentially confusing voters, many of whom cannot read and rely on the symbols when casting ballots.

Chief Justice Qazi Faez Isa faced severe criticism on social media over the ruling. In reaction, the government formed a high-powered Joint Investigation Team (JIT) and summoned dozens of people — mostly journalists.

The Supreme Court later granted journalists an extension until after the general elections to respond to the summonses. But Asad Toor, a political analyst based in Islamabad, said the JIT “is used to target those journalists who were critical of the military establishment’s role in politics and elections.”

Toor, who is among those summoned by the government, called the investigation a pressure tactic to stifle criticism of possible rigging on election day.

Malik Siraj Akbar, a political analyst in Washington, agreed that the investigation amounts to bullying journalists — key voices questioning the suppression of the PTI. “The JIT will significantly distract journalists from their professional work by requiring them to appear before [the government] to provide explanations for their social media posts criticizing the Supreme Court,” he said.

Apart from questions of fairness, violence also threatens to mar the polls. The latest in a string of attacks came early on Monday, when at least 10 police personnel were killed by militants in the northwest of the country.

Some fear a dubious election could have far-reaching consequences, including for the economy.

Haq, the economic and legal expert, warned, “If the election results are rigged massively to bring the favorites to power, there will be further political turmoil and economic meltdown.”