Pakistan's economic and political instability is expected to worsen after the upcoming general elections, which are scheduled for November this year. The military establishment, despite claiming neutrality, is busy attempting to form a political coalition with the support of like-minded politicians sans political forces inimical to last year's parliamentary revolt against Imran Khan's Pakistan Tehrik-e-Insaf (PTI) party.

The Pakistan Tehreek-e-Insaf (PTI), garnering significant backing from the populace, notably in the densely inhabited province of Punjab and the northwestern regions of Khyber Pakhtunkhwa, has experienced a division into three distinct factions after Khan's loss of control over authority in April last year. Numerous confidants of Khan have proclaimed their resignation from the party, coinciding with his ongoing legal entanglements encompassing an extensive array of over one hundred criminal, treasonous, and corruptive allegations. According to political analysts, there is a prevailing belief that Imran Khan is poised to face disqualification before the forthcoming November elections within the country.

IMF bailout

At a time when the country is in an economic quagmire and requires drastic measures to bring the wealthy into the net, the unity government, which has the support of the powerful army, is happy that the International Monetary Fund (IMF) released some more loans. They boasted of their success in convincing the IMF to provide a temporary breather to the resource-starved economy.

The IMF released last week the first tranche under a Stand-By arrangement (SBA) amounting to $1.2 billion out of a total of $3 billion over a 9-month arrangement, sparing the country from a potential default on the foreign debts.

This payment replaces the earlier Extended Financing Facility program, which former Prime Minister Imran Khan signed in 2019 and had a $6.5 billion value. Experts believe that Pakistan's relief is only a temporary respite as a result of the nation's failure to take significant economic action to avert a potential default on its foreign loans.

The economy has encountered significant challenges, primarily due to a balance of payments crisis resulting from efforts to manage substantial external debt and cope with severe inflationary pressures.

Preceding the implementation of the bailout, the nation's foreign reserves were precariously situated at approximately $3 billion, a sum deemed insufficient to finance the imports of hardly a few weeks. The situation partially improved to some extent when the government imposed restrictions on certain imports as a measure to conserve foreign currency. However, the piles of foreign loans and projected repayments over the coming months left hardly any room for the government to get relief.

Economic analysts assess that the nation must secure a minimum of $20 billion within the upcoming biennial period to fulfill its obligations to repay foreign loans along with accrued interest. No doubt China, the United Arab Emirates, and Saudi Arabia have contributed almost half of the debt burden; however, over $10 billion is still needed to stay clear of the impending default.

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Political forecast

In the realm of politics, the current unity government led by Prime Minister Shehbaz Sharif is scheduled to step down in the coming month, thereby facilitating the establishment of a caretaker administration responsible for overseeing the upcoming elections in the country, which are expected to take place within 90 days. 

Nevertheless, due to the lack of equitable conditions for all political actors, including the PTI, the upcoming elections are likely to exacerbate political turmoil and hinder economic progress in the country. Following May 9 mayhem when hundreds of Khan supporters stormed the military installations in retaliation for his arrest, over a hundred PTI activists are currently undergoing trial in Pakistan's military tribunals in connection with the violence that erupted in various cities following the detention of former Prime Minister Imran Khan.

Describing the events of May 9 as a significant and abhorrent plot targeting Pakistan, Major General Ahmed Sharif Chaudhry, the military spokesperson, informed the media early this month that a political party had incited and inflamed public sentiment against the armed forces. He further revealed that a total of 15 military personnel, comprising three major generals and seven brigadiers, have faced severe disciplinary measures for their ‘negligence.’

In the latter part of May, Pakistan’s Defense Minister Khawaja Asif asserted that the government was considering the possibility of prohibiting the Pakistan Tehreek-e-Insaf (PTI) party due to its perceived act of undermining the fundamental principles upon which the state is built. According to his statement, the occurrence of setting military and state assets ablaze is unprecedented and cannot be deemed acceptable.

Khan’s party fragmented

Khan's popular Tehreek-e-Insaf party was divided into at least three groups before the country's general elections, each of which claimed to have the support of the PTI workforce. Shah Mehmood Qureshi, vice chairman of the PTI, is in charge of one side of the party and announced shortly after being granted bail that he will take over for Imran Khan. If Khan was detained, Khan personally proposed Qureshi to represent the party. Insiders contend that he lacked the charismatic leadership qualities needed to maintain the PTI's support base as well as the party chairman's confidence.

The Istehkam-e-Pakistan party was created by sugar tycoon and former Imran Khan confidant Jehangir Tareen, who has recruited more than a hundred PTI MPs and former members of the ruling party. Ex-Sindh governor Imran Ismail, ex-shipping minister Ali Zaidi, ex-federal minister Amir Kayani, ex-information minister Fawad Chowdheri, and ex-information minister Firdous Ashiq Awan are among the PTI heavyweights who have defected to the new party.

On Monday, former PTI leader and defense minister and Khyber Pakhtunkhwa chief minister Pervez Khattak entered the fray by announcing the launch of a new political party under the name of the Pakistan Tehreek-e-Insaf Parliamentarians (PTI-P), which was carved out of the PTI by cobbling together defectors.

The Khan party has suffered a setback with Pervez Khattak's defection, as it was twice elected to power in the province of Khyber Pakhtunkhwa. At least 57 province and National Assembly members, including ex-K-P chief minister Mehmood Khan, have defected to the splinter group, potentially dealing a devastating blow to the erstwhile ruling party.

It has to be seen whether Imran Khan's support base follows the multiple breakaway factions of the erstwhile ruling party or chooses to abstain from voting altogether in the absence of Imran Khan.