The 2024 elections in Pakistan will likely influence economic sentiment and business activities, especially in the lead-up to and aftermath of the elections. However, how significantly it affects the economy and business environment will depend on the post-election policies, the government’s ability to implement reforms, and the broader geopolitical and global economic context at the time. Predicting the exact impact of a future election on Pakistan’s economy and business landscape is challenging, as it depends on numerous factors, including the policies of the incoming government, global economic conditions, and internal stability.
Notwithstanding the fact, the relationship between the economy and political transition in Pakistan is complex and has significant implications for the country’s development and stability.
Pakistan has a history marked by a series of political transitions, including changes in government, shifts between civilian and military rule, and various constitutional developments.
If we look back at Pakistan’s history of political transitions, it started with the Independence of Pakistan from British rule in 1947. The country initially adopted a parliamentary system with a constitutional monarchy, but in 1956, it became a republic with Iskander Mirza as its first president. However, political instability and disagreements between different political parties characterized this period.
In 1958, President Iskander Mirza, with the support of the military led by General Ayub Khan, declared martial law and suspended the constitution. This marked the beginning of Pakistan’s first military rule. Ayub Khan later assumed the presidency and ruled until 1969. In 1971, an internal crisis in Pakistan resulted in a third war between India and Pakistan and the secession of East Pakistan, creating the independent state of Bangladesh. After the creation of Bangladesh, Pakistan underwent a significant political transition. Zulfikar Ali Bhutto emerged as a key political figure and became the country’s first civilian Chief Martial Law Administrator. Pakistan adopted a new constitution in 1973, transforming into an Islamic republic with Bhutto as the prime minister.
General Muhammad Zia-ul-Haq ousted Prime Minister Bhutto in a military coup in 1977. Zia-ul-Haq’s regime introduced a series of conservative Islamic policies and ruled until his death in 1988. After Zia-ul-Haq’s death, democratic elections were held in 1988, leading to the Pakistan Peoples Party (PPP) forming a government with Benazir Bhutto, Zulfikar Bhutto’s daughter, as the prime minister.
The 1990s witnessed a series of short-lived governments, with frequent changes in leadership due to political and power struggles between various parties and military interventions.
General Pervez Musharraf took power in a coup in 1999. His regime was marked by political repression and efforts to modernize the economy. In 2008, Musharraf resigned as president, and democratic elections were held.
Pakistan transitioned back to civilian rule with the Pakistan Peoples Party (PPP) and Pakistan Muslim League-Nawaz (PML-N) alternating in power. In 2013, the first-ever democratic transition of power from one civilian government to another occurred. The Pakistan Tehreek-e-Insaf (PTI) led by former cricketer Imran Khan, came to power after the 2018 general elections. Imran Khan became the prime minister, and his government focused on anti-corruption efforts, economic reforms, and social welfare initiatives.
In April 2022, in Pakistan’s history, first time a leader of the house was ousted through VONC. Critics blamed him for the country’s economic woes and widespread corruption and accused him of a disastrous response to the COVID-19 pandemic.
Throughout its history, Pakistan has experienced a complex interplay between civilian and military leadership, with multiple transitions between democratic and military rule. Political instability, governance challenges, and power struggles have been recurring themes, impacting the country’s economic development, social progress, and international relations. Political transitions in Pakistan have sometimes been accompanied by uncertainty and disruptions in governance. These uncertainties can impact investor confidence, capital inflows, and business activities. Maintaining economic stability becomes crucial during such times to prevent potential economic crises. Pakistan’s economy has often relied on foreign investment and aid. During political transitions, there might be fluctuations in the inflow of foreign funds, depending on the international community’s perception of the country’s political and economic stability.
Political transitions provide opportunities to implement structural reforms in the economy.
These reforms might include improvements in tax systems, trade policies, regulatory frameworks, and public sector management. However, implementing reforms can be challenging due to political opposition and the need for consensus among various stakeholders. The allocations of resources and the prioritization of projects might shift with changes in government, affecting long-term economic development. The availability of resources for public spending, including social programs and poverty alleviation , can be impacted during political transitions. Ensuring the continuation of essential services and welfare programs becomes important to mitigate the potential negative effects on vulnerable populations.
Pakistan has faced challenges related to energy shortages and resource management. Political transitions can impact the prioritization of energy projects and resource allocation strategies.
The private sector plays a crucial role in driving economic growth. Political stability and favorable business policies are necessary to maintain the confidence of the private sector and encourage investment and entrepreneurship. Careful financial management is essential during political transitions to manage external debt, fiscal deficits, and monetary policies effectively.
In recent years, Pakistan has experienced efforts to improve economic governance, attract foreign investment, and implement economic reforms regardless of political transitions. However, the country’s history suggests that effective coordination between political leadership and economic policymakers is vital to ensure that economic priorities remain a top concern during times of political change.
The term “Charter of Economy” has been resounded often from various sections of the society. The business community strongly voiced and has been advocating getting it implemented letter and spirit. The idea behind a Charter of Economy is to promote stability, continuity, and bipartisan cooperation in economic matters, irrespective of which party is in power.
It’s worth noting that the success of a Charter of Economy largely depends on the willingness of political parties to set aside partisan interests for the greater good of the country’s economy. Political polarization and historical rivalries have often posed challenges to the implementation of such bipartisan economic agreements. Different political parties in Pakistan may have varying positions on the concept of a Charter of Economy, and their willingness to participate in or support such an initiative can vary based on their ideological differences and priorities. The implementation of a Charter of Economy would require extensive negotiations, consensus-building, and a commitment to long-term economic stability from all major political stakeholders.
In the next couple of weeks, the interim set up will be ended and General Elections will be held on February 8, 2024. The business community is very cautious and closely monitoring the situation. The public in general and business community, particularly, expect more partiality and transparency in the General Elections 2024 and smooth transitions of new governments, both National and Provincial levels.
Businesses and investors often closely monitor election-related developments, adapt to changing circumstances, and adjust strategies based on the emerging economic and political landscape. Political stability, continuity in policies, and a conducive business environment remain crucial for sustained economic growth and business prosperity. ( The writer is HOD Media & Communication & Public Relations Officer at Rawalpindi Chamber of Commerce and Industry). (Note: The article reflects author’s opinion, not necessarily the WNAM).
