The threat of a shortage of essential food items or the threat of a stoppage of oil supplies to our industry or to our domestic consumer is something we have not yet started to contemplate. The Ukraine war has brought home the reality that these shortages could become a permanent reality in our national life, or the value of our import bill could touch such heights that we would not be able to pay for our basic requirements. Already, government officials dealing with energy supplies to our industry and our domestic consumers have started to predict that a shortage of energy could become a permanent reality of our national life, and in such a situation, rationing would be the only option available to us. Thousands of miles away, two countries are fighting a modern war and yet Pakistan, a country which has nothing to do with the conflict at the military, political or strategic level, has started to come face to face with the threat of economic collapse and consequent social and political chaos as a result of a situation, which is the outcome of military conflict in the far-off region of Eastern Europe.
Like many countries in Europe and Middle East, Pakistan was dependent on foreign energy supplies and wheat from Ukraine and Russia. Pakistan was the largest importer of Ukrainian wheat after Indonesia and Egypt. The oil price hike in the international market hit Pakistan hard and its import bill went up by 85% in the fiscal year 2021-2022. At the conclusion of 2022, its trade deficit crossed $50 billion—a fact that forced the Sharif government to impose a ban on import of 800 non-essential luxury items in May of the same year. The financially and politically stronger western European nations have secured for themselves limited supplies of LNG and ironically weak countries like Pakistan have been shut out from the spot market.
President Putin is facing the possibility of Western European nations boycotting energy supplies from Russia. In such a situation when Pakistani officials approach Russia for opening a supply line to Pakistan, the Russian government takes solace from such requests primarily because it makes Russia feel that they are still not isolated.
Ukraine is thousands of miles away from Pakistan and South Asia, and yet military conflict in that part of the world has created a crisis like situation for our country. As a result of the Russian invasion of Ukraine more than a year ago, both the United States and United Kingdom stopped all oil and gas purchases from Russia, many western countries followed suit. Media reports say as a result panic buying started, “and as result, oil prices soared to a 14-year high of USD 140 a barrel on 7 March 2022 in the international market”. Pakistan’s economy was among the worst hit. Oil price increases in the international market have eaten away our foreign exchange reserves, which touched precariously low limits last month. We don’t produce anything and we don’t export much. Our foreign exchange reserves are dependent on external loans from international financial institutions or bailout packages from our political and ideological friends. In such a situation, subsidies on oil appear just beyond our capacity. In layman’s language, subsidies will amount to a scheme where we take loans from our friends and international financial institutions and squander them away in the form of subsidies to our industry—which are still not internationally competitive and grants to our middle classes and rich whose extravagance is exemplary.
The most ironic reality of our political and national security discourses is that our political class jumps to grab every opportunity that discontent among the masses generates without realizing how poorly we manage threats to our national security and our national survival.
Here, all of this translates into a political problem for our major political parties, who are in a contest for power to control Islamabad. The Pakistani masses don’t seem to care much about details and mechanics of IMF programs, and why it is interested in forcing the government of Pakistan to withdraw subsidies for oil and electricity. They seem to be in a mood to punish everyone who is ostensibly responsible for withdrawing the subsidies. These middle classes are the most vocal and most visible presence in the political discourse going on in the country. These middle classes are also addicted to state sponsored subsidies for their middle-class lifestyle. An oil price rise in the international market and subsequent rise of oil prices in the domestic market, followed by withdrawal of subsidies by Sharif government have generated massive amounts of discontent. If public opinion polls are to be believed, this discontent is forcing the middle classes in Central Punjab to part company with their “beloved leader”, Nawaz Sharif. Remember that the Punjabi middle classes in central Punjab have always voted for Nawaz Sharif in the period from 1993 to 2013. For the first time, Gallup’s polling, which is generally considered pro-Nawaz Sharif, in its latest survey showed Nawaz Sharif among the figures who are on the receiving end of negative sentiment among the urban population of the country. Ironically, Imran Khan is riding the wave of this popular discontent. Little do the masses in our country realize that this was the man they would have been cursing if the no confidence motion against him would not have been successful.
If Imran Khan had still been in power, he would have been forced to take the same decision Prime Minister Shahbaz Sharif has taken under IMF pressure. If not, he would have taken the country on the path to default and bankruptcy. Cashing in on the discontent that the withdrawal of subsidies has generated is itself a kind of moral bankruptcy. Your political capital is based on a reality that is fast changing and could be equated with the reality of shifting sands. How long will it last? It will last as long as you are out of power and as long as another international crisis hits world politics.
The most ironic reality of our political and national security discourses is that our political class jumps to grab every opportunity that discontent among the masses generates without realizing how poorly we manage threats to our national security and our national survival. The Ukraine war and the crisis it has generated for Pakistan could only be ignored at a great cost. It has exposed our economic structures which are nothing more than useless tatters, built up during military governments to serve the parasitical, rent seeking classes of the rich and mighty.
The discontent that increases in oil prices have generated are being used by a group of political leaders opportunistically for achieving success in electoral politics. Assuming that they come to power on the waves of this discontent, what will happen? Another crisis and another war will generate yet more discontent and another opportunistic winner in electoral politics. But our national security threats will persist. They might even aggravate if the next war happens close to our border or close to our coast. A war close by might put our survival at stake.
How we intend to run our country in the face of another international crisis is the real question we should be trying to find an answer to.