Since the formal announcement for Nawaz Sharif’s return on the 15th of October, speculation has been rife about the PML-N supremo’s plans. In what was reportedly a busier than usual week at Nawaz’s base camp in London, several conversations took place to discuss the roadmap for his arrival and considerations for the aftermath. Nawaz himself conducted long meetings, including direct face time with his key advisors. The major questions in consideration are whether the elder Sharif should return, and how to secure guarantees for a reform agenda that works for the common citizen.
From PML-N’s standpoint, it is abundantly clear that Nawaz’s return is crucial to boost their electoral chances. As the senior most politician and only mainstream national leader other than Imran, his contribution to the election campaign will define PML-N’s electoral chances. From hammering the infamous 5 who orchestrated to remove his government, or highlighting the PML-N’s successes between 2013-2018, Nawaz carries the image of both. Taking charge of the party also means invoking alliances with electables in Punjab, reorganizing the party structure and ensuring optimal ticket distribution. As one PML-N insider commented ‘Without his return, electoral chances do not look good.’
But while Nawaz’s return can reactivate the party voter, it is no guarantee of whether he can sway the vast majority of urban and rural middle class, or the country’s disenchanted youth for that matter. This also remains an area of grave concern, not least because a significant chunk of Pakistani voters are young -- between 18 to 35 years old, numbering around 53.8 million – and constitute the largest cohort of over 44% of total registered voters. Those in the close circles of the PML-N supremo confirm that there has been considerable debate on the matter. The magnitude of the economic and political crises that Pakistan faces merits nothing less than the overhaul of an unspoken elite contract that has come to define Pakistan’s economic and political health. For a politics and economy that does not work for the average Pakistani, it is imperative that a transformative plan is put forward. Rewriting the elite contract would require significant concessions from the military, industrial and political elite.
The magnitude of the economic and political crises that Pakistan faces merits nothing less than the overhaul of an unspoken elite contract that has come to define Pakistan’s economic and political health.
Take for example the matter of foreign policy with India. Nawaz pursued closer ties with India in both 1999 and 2014. Each time, the aim was to connect the South Asian region via Pakistan. On both occasions, his efforts were stifled by a paranoid security state. The military establishment may have realized the necessity of trading with India, but there remains potential for resistance. Reliance and dependence on a country that the militablishment views as an existential threat will raise eyebrows within the institution.
The business class is also expected to raise hue and cry over the expected loss of revenue from cheaper imports. Nawaz however views the question of India as one of significant opportunity. Opening up borders for trade will usher in a transit economy. Making Pakistan the pivot for trade between India, Afghanistan and China will create significant economic opportunity and transform Pakistan into a regional trading hub. Overtime, comparative advantage would dictate local businesses into becoming regionally competitive. Again, for this policy to be acted upon requires not insignificant concessions from the military and business class, and both will resist changes in the status quo to preserve their privileged and protected position.
Next up is the question of the economy. The devastation faced by the salaried and middle classes as a result of spiralling inflation on the back of consecutive IMF agreements has been supplemented by the disproportionate tax burden shouldered by them. Talk about adding insult to injury. Falling incomes, rising inequality and unrelenting inflation have laid bare the weaknesses of a political economy that is dominated by elite rent seeking. While liberalization of trade with neighbors is key to revive the economy, it won’t address the embedded interests of the industrial and political elite, that remains a hindrance for the economy to work for all. Widening the tax net, taxing agricultural incomes, disincentivising real estate investment are all goals worthy of achieving.
For every structural reform that is required for the economy to work, Nawaz will face a competing faction that benefits from halting that reform and letting the status quo persist.
But each of those goals represent a challenge in their own right. The political class from rural Sindh and Punjab, composed mainly of wealthy electables, continues to lobby for agricultural income to remain tax free. It is untenable to let a relatively stable and sheltered sector continue to benefit from tax breaks. Furthermore, the wealthy but uncompetitive textile and sugar industries continue to rely on mammoth export subsidies which need to be reallocated for economically prudent purposes. Restricting subsidies to key industries will lay bare fault lines in the elite consensus, considering their political and monetary stakes. Widening the tax net, an area where PML-N made progress during its last tenure from 2013 to 2018 by generating then-record high income tax revenue, still requires emboldening the FBR to ensure merchants, traders and business owners from traditional wholesale and retail bazaars and markets across Punjab comply with income tax regulation.
Again, pushing reform through would require significant changes within the FBR. Given that only a tiny percentage of the working age population, mainly salaried class, are income tax filers also reflects on the bureaucratic inefficiencies leading to economic hemorrhaging. For every structural reform that is required for the economy to work, Nawaz will face a competing faction that benefits from halting that reform and letting the status quo persist. But the descent of Pakistan’s economic order into collapse has accentuated the need for extracting major concessions from the military and industrial elite to be able to promise an electoral agenda that ensures that the average citizen can feed, house and clothe themselves. And that remains a topic under discussion among PML-N bigwigs.
Lastly, there’s the all-important question of politics. For a 3-time premier to remain silent on enforced disappearances and a rather cruel crackdown in response to 9th May would not bode well. While it is true that Nawaz has expressed serious concerns over many a high-profile missing persons case to his close advisors, it cannot be forgotten that his own party members were subjected to targeted accountability and extended periods of confinement to sustain Project Imran. Nawaz must be prepared to call out the blatant atrocities committed by the state against all political actors. Nothing less than an unflinching commitment to freedom of expression and human rights will suffice for an increasingly disenfranchised civil society and increasingly aware and well-informed youth.
As 15th October is being tipped to be the date that Nawaz returns to Pakistan, there remain many a slip between now and then. And one of those slips could be Nawaz’s demand for political space to implement his agenda.