ISAS Working Papers

Summary

This paper presents a political economy analysis of the contemporary crisis in Pakistan. It focuses on three key issues which have been largely underexplored in the existing literature. First, it delineates the underlying political and economic drivers which led to the formation and demise of the Pakistan Tehreek-e-Insaaf-led hybrid regime. Second, it discusses the potential role of the military in the future political dispensation of the country by specifying three unique scenarios. Third, it critically assesses the likelihood of each scenario based on the political economy considerations. Historically, the military has remained the hegemonic actor in Pakistan, but the paper argues that the contemporary economic crisis has constrained the agency of the military, at least in the short run, as ‘the’ arbiter of politics in Pakistan.

Introduction

The Pakistani rupee has become Asia’s worst-performing currency in 2022, and the country is on the brink of an economic meltdown. At the same time, the tide of political instability, which is built into the prevailing system due to power asymmetry in favour of unelected state elites (top brass of the military and judiciary) vis-à-vis elected representatives of the people, is continuously gaining steam.[1] Its latest manifestation is the 27 July 2022 decision of the Supreme Court of Pakistan which led to the ouster of Pakistan Muslim League-Nawaz’s (PML-N) Hamza Shahbaz from the office of Chief Minister of Punjab.[2] The current decision of the Supreme Court is tied to its 17 May 2022 highly contentious decision which led to the disqualification of 25 ‘dissident’ law-makers, of Khan’s Pakistan Tehreek-e-Insaaf (PTI), who voted in favour of Shahbaz for the office of the Chief Minister in the Punjab Assembly.[3]

The disqualification of the ‘dissident’ lawmakers paved the way for the 17 July 2022 by-elections for 20 vacant seats of the Punjab Assembly. In a remarkable voter turnout, the PTI bagged 15 seats which implied that the PML-N’s incumbent Chief Minister at the time, Shahbaz, had lost his majority in the House. However, Shahbaz was able to hold on to the office of the Chief Minister due to a contentious ruling of the Deputy Speaker of the Punjab Assembly which discounted 10 votes cast against Shahbaz on ‘technical’ grounds by citing the Supreme Court’s 17 May 2022 decision.[4] Thereafter, the Supreme Court’s 27 July 2022 decision was a reversal of the Deputy Speaker’s ruling, and, as a result, the throne of the Chief Minister’s office is now with Pervaiz Elahi, who enjoys the full support of the PTI in the Punjab Assembly. Before the 27 July 2022 announcement of the Supreme Court’s verdict on this issue, the ruling coalition in the federal government (comprising the PML-N, Pakistan Peoples Party [PPP] and multiple regional political parties) had raised their concerns regarding the ‘impartiality’ of the Chief Justice and two other Justices of the Supreme Court bench. The PML-N and its allies have alleged that Chief Justice and his comrade judges have become partisan in favour of the PTI. This is the beginning of a new fissure between the federal government and the top judges of the Supreme Court. Thus, it would not be a hyperbole to argue that political instability and economic fragility will likely worsen in the coming weeks and months in Pakistan.

Political engineering by the military establishment and politicisation of the judiciary have been consistent features in Pakistan’s political landscape. The military establishment and the judiciary, in one way or another, have perpetuated political instability and uncertainty during every tenure of elected civilian governments. The current episode of political instability started in April 2022 when the Pakistan parliament ousted Prime Minister Imran Khan and elected a new Leader of the House, Shahbaz Sharif. Khan and his Deputy Speaker tried to bulldoze the vote of no confidence motion through quasi-unconstitutional means which were later reversed by the Supreme Court.[5] On the one hand, the ouster of cricketer turned politician, Khan, can be seen as a continuation of the recurrent feature of Pakistan’s democracy, that is, elected prime ministers are unable to complete their given tenure in the office. However, at the same time, Khan’s ouster marks a new beginning in the country’s democratic history as he becomes the first prime minister who has been removed through a parliamentary process – ‘vote of no confidence’ – rather than an overt military coup or judicial intervention.

Khan’s ‘premature’ departure from the prime minister’s office came as shocking news to many at home and abroad. Back in 2018, the PTI-led coalition government came into power with the ‘de facto’ support of the country’s powerful military establishment. To use an analogy from South Asia’s favourite sport – cricket – the PTI was provided with a flat pitch to bat and a grass cover to bowl. Therefore, the ouster of Khan points towards a recalibration and reconfiguration of the military’s role in Pakistani politics. To explain the underlying dynamics of this recalibration from the military, it is imperative to first contextualise the relationship of the military establishment with the PTI and the other two major political parties, the PML-N and the PPP.

After a long nine years of Pervez Musharaff’s military rule, ‘democracy’ returned to Pakistan in 2008. The PPP and the PML-N came into power from 2008 to 2013 and 2013 to 2018 respectively. Both are considered ‘traditional’ mainstream parties due to their dynastic style of politics, that is, the top party positions have remained with two ruling families – the Bhuttos and the Sharifs. Furthermore, both families have been accused of ‘corruption’ whenever they have a face-off with the powerful military establishment. The dynastic style of politics and the allegation of corruption has been politically weaponised by the military establishment against the PPP and the PML-N.

The PTI and the Military Establishment

During Musharaff’s dictatorial rule, the PML-N and the PPP agreed on a ‘Charter of Democracy’ (COD). In essence, the COD was a formal written agreement between both political parties to not undermine each other’s government on the behest of the military establishment in the future.[6] The COD resulted in a relative decline in the hegemonic power of the military establishment in the country’s political affairs. This is the backdrop which helps us to explain the cosiness between the PTI and the military establishment as the latter wanted to have a third political force beyond the framework of the COD. With the help of the military establishment, Khan’s PTI has emerged as an alternative political force since 2011. Khan’s successful political rise is also directly tied to three important structural changes that have unfolded since the early 2000s in Pakistan – one, the rapid urbanisation of the country; two, the demographic shift (the share of young people in the total population is steadily increasing) – the youth bulge (I will return to these two points later in the article); and three, the competition among the private media houses has resulted in a 24/7 sensationalised news cycle. Simple stories which have villains and heroes sell easily in the mainstream media. Thus, it is in the short-term economic interests of the private media houses to explain the country’s socio-economic woes by ‘blaming’ two dynastic families rather than complicating the story by discussing the role of the permanent elites which include the military establishment and landed elites.

The PTI’s message penetrated the affluent and the young folks in urban centres because of Khan’s celebrity status and meticulous branding of presenting himself as the political messiah. The PTI tends to enjoy overwhelming support among the high-income and aspirational urban middle classes, in particular, young people. The core support base of the PTI, especially in Punjab, tends to work in the so called ‘formal’ sector of the economy. One of the biggest formal sector employers of the country is the military of Pakistan. Overall, Khan is popular among military families who tend to dislike the Shariffs and Bhuttos. This backdrop is necessary to make sense of the contemporary political crisis in Pakistan because of Khan’s popularity among the military families. The military has less political leverage over Khan vis-à-vis other political leaders.

This also helps us explain why the military, as an institution, was happy to keep its autonomous and independent stature vis-à-vis the elected governments of the PPP and the PML-N between 2008 and 2018. The relative autonomy of the military from the elected government allowed its top leadership to present itself as ‘saviours’ among its own rank and file and the affluent and aspiring middle classes. However, at the same time, this military strategy did not only create political instability in the country, but it also undermined Pakistan’s effort to emerge as a robust ‘democratic’ state because civilian supremacy remained elusive despite having elected civilian governments.

To redress this contradiction, the military tried a new experiment with the PTI-led hybrid regime in 2018. The top brass of the military decided to publicly support the PTI, given that the PTI (Khan) is generally liked by the military families. The military was keen to project a ‘soft’ image of Pakistan as a ‘normal’ democratic country and it assumed (or rather hoped) that the PTI government will be able to dispel the perception of an inherent ‘conflict’ between an elected civilian government and the military. And Pakistan will be able to improve its democratic credentials at the global level.

This is the context in which the PTI government did not just enjoy the goodwill and support of the military establishment, but the latter ensured that the PTI’s main political rivals – the PML-N and the PPP – were cut to size. Similarly, the critics of the PTI government in the media were gagged, most notably the editor-in-chief of the country’s leading Urdu and English newspapers, Jang and The News International, was imprisoned based on a flimsy case of ‘illegally’ buying a property in 1980s.[7] Further, the military establishment acted as a ‘magnet’ to first pull the different political actors, such as the electables and allied parties, towards the PTI and then played the role of a ‘glue’ to keep them together.

Since 2008, the military kept the previous two elected governments, the PPP and the PML-N, at the arm’s length. In sharp contrast, they publicly owned the PTI’s political and economic performance. In effect, it diluted the military establishment’s autonomous identity in the public perception, both at home and abroad. Consequently, as the economic situation deteriorated under the rein of the PTI’s government, the discredit of the PTI’s government was passed on to the military establishment as well.

Economic Downturn and the Military’s Strategic Neutrality

The gross domestic product growth rate declined from five per cent to one per cent and inflation increased from four per cent to 11 per cent even before the COVID-19 pandemic under the PTI’s regime (see Figure 1). Similarly, the per capita income declined by more than 20 per cent (see Figure 2). Moreover, the Pakistani Rupee lost its value by more than 40 per cent under the PTI government. Prices of basic food commodities such as wheat, sugar and cooking oil doubled. And the performance of the Pakistani stock market remained well below its 2017 peak levels.

Figure 1: GDP Growth Rate and Inflation Rate (CPI)

Data Source: World Bank

Figure 2: Per Capita Income in Current US$

Data Source: World Bank[8]

As a result, the public resentment, especially among the informal sector workers, traders and peasants, grew substantially not only against the PTI, but also against the architect of the hybrid regime: the military establishment. Therefore, since late 2019, the military establishment has started to recalibrate its position by mending ways with the opposition parties, the PML-N and the PPP. For example, former Prime Minister Nawaz Sharif, who was serving his time in prison, was ‘allowed’ to leave the country for his medical treatment despite the reluctance of the PTI government. The political situation began to ameliorate for the opposition parties by the end of 2019 when the military slowly started to strategically pull back from the hybrid experiment.

Things turned from bad to worse from the perspective of the PTI in October 2021 when Khan did not agree completely with the top leadership of the military on the posting of the spymaster. Khan preferred to keep General Faiz Hameed as the Director General of the Inter Services Intelligence (ISI) but was posted to the position of Corp Commander of Peshawar by the Army chief. It has been widely believed that Khan wanted General Hameed to stay at ISI to provide him political support and in return, Khan was likely to appoint him as the new Army chief in November 2022[9]. After General Hameed’s removal from ISI, Khan felt mounting political pressure and he opted for bravado in the realm of foreign relations to keep his core constituency energised. It further irked the military’s top leadership which felt it was reckless on the part of Khan to politicise the country’s foreign relations. Collectively, these factors produced an estrangement between the military’s top leadership and the PTI government.

Eventually, the former decided to publicly declare its ‘neutrality’ – no political favourites among the mainstream parties – by the end of 2021. In other words, neutrality implies that the military (as an institution) has decided to stop going out of their way to ‘rescue’ Khan from his political opponents. This manifested in the form of a ‘vote of no confidence’ against Khan in April 2022. Military’s reluctance to rescue Khan politically has infuriated Khan and his core support base which included the affluent and young folks in big urban centres, families of the officer cadres of the state bureaucracy (including the military), show business celebrities and the overwhelming numbers of the Pakistani diaspora. The PTI’s core support base has been extremely loud and aggressive on the streets and social media platforms. Khan is counting on his core support base to force the military’s top leadership to reconsider its ‘neutral’ stance. Further, Khan has publicly accused the United States (US) of ‘conspiring’ with his political opponents to overthrow his government. The US government has denied these allegations but, more importantly, the official spokesperson of Pakistani military, General Babar Iftikhar, has publicly refuted Khan’s allegation of foreign ‘conspiracy’. However, Khan continues to double down on the foreign ‘conspiracy’ narrative which has allowed him to pivot the focus away from the ‘concrete’ performance and achievements of his government to ‘abstract’ notions of ‘pride’ and ‘ego’ of the nation. As a result, jingoist and ultra-religious overtures are gaining traction in Pakistani politics at the expense of policy-oriented discussion and debate.

On the other hand, since assuming power in mid-April 2022, the PML-N led coalition government has reversed the petrol subsidy which was introduced by Khan’s government. This decision to reduce the petrol subsidy is also one of the pre-conditions of the International Monetary Fund’s (IMF) rescue loan package for Pakistan. As a result, petrol prices are now at a record high in Pakistan which has resulted in substantial increase in prices of basic commodities and food items. In effect, the majority of Pakistanis are experiencing a sharp decline in their real wages and purchasing power. Consequently, the ‘goodwill’ of the incumbent government among the people of Pakistan has declined multi-fold in the past two months. The PML-N’s defeat in the 17 July 2022 by-elections in Punjab is a manifestation of the people’s disappointment and frustration with the incumbent government.

Historically, Punjab’s politics is often defined in terms of ‘Punjabi pragmatism’ – Punjab’s electorate tends to align itself with the ‘establishment’. However, at prima facie, it seems like a new trend of ‘defiance’ is now unfolding. During the 2018 General Election, Punjab gave its majority mandate to the PML-N when it was posturing to be anti-establishment. Now, the people of Punjab have sided with the PTI (at least in the context of the by-elections) which is being critical of the ‘neutrality’ of the military establishment. Moreover, the PTI’s rising popularity is also tied to its sophisticated multi-layered digital media strategy. It has effectively propagated its ‘narrative’ across society, especially among young people, by using new digital platforms like TikTok, Instagram, YouTube, Twitter and Facebook.

This makes the current juncture tricky for the top brass of the military as the PTI remains popular among the military families and affluent urban middle classes. The key question is what will the military’s role be in the future political dispensation? The future is generally hard to predict, but it is even more so in the case of Pakistan due to behind the door wheeling and dealing among the political parties and the establishment. Therefore, at best, we can consider broad possibilities based on the country’s history and I specifically outline the following three scenarios: a) some form of overt military intervention; b) the return of a new hybrid system; and c) the military continues to opt for strategic ‘neutrality’. In my opinion, the country’s economic situation will ultimately play a key role in regulating the military’s future role in the country’s political structure.
The Pakistani military is unique in the sense that it has direct stakes in the economy of the country; it is directly involved in diverse range of businesses such as banking, cement industry, fertilisers, cereals, and wedding halls. But of all, the biggest stake of the Pakistani military remains in the land economy, it controls the prime real estate in the country through Defense Housing Authority – an elite-centric gated housing enclave. Real estate sector (in particular land deals) allows military elites to extract ground rents and maintain a whole network of patronage in which these rents are distributed. In addition to the military, political elites and other state institutions of the country are also involved in real estate businesses. This is one of the underlying factors of the macroeconomic crisis in Pakistan, i.e., exports remain stagnant because capital is being switched from agriculture and industry to real estate activities. Thus, overall, the elites-centric real estate economy has created an ecosystem in which the buying and selling of land has become the most reliable and effective strategy to make big and quick money rather than competing in the regional/global export markets.

In fact, the existing economic structure disincentivises long-term investments in the manufacturing and agriculture sectors. Consequently, Pakistan’s exports are likely to struggle as long as cheap rents in the land economy are available. Given the elite capture of the state, reforms in the urban and rural land economy are not likely in the near future. As a result, Pakistan’s macroeconomic woes, in particular, the current account deficit, is likely to persist. Not to mention, Pakistan’s contemporary economic situation is extremely fragile – inflation and economic slowdown have resulted into economic distress for the working and middle classes. Moreover, the country faces an acute shortage of foreign exchange reserves due to high oil prices and stagnant export revenue. A new round of IMF shock therapy, a cut in subsidies and higher taxes mean inflation will likely persist in the near future.

Notwithstanding the historical fact that the military has seized power after every 10 to 12 years of civilian rule in the country, but given the acute economic crisis, I argue that the option of overt military intervention is extremely unlikely. In other words, the contemporary economic crisis is a major safeguard against the military coup because it will result in an extremely high socio-political and economic costs for the institution.

The second option – the return of a new hybrid system – is interesting. Prima facie, the PTI, the PML-N and the PPP seem willing to be a ‘cog in the wheel’ in a hybrid political dispensation. Due to a long history of authoritarianism, the ‘end’ justifies the ‘mean’ approach has become pervasive among the mainstream political parties. They do not mind interference from state institutions (the military establishment and the judiciary) in the political realm as long as it favours them and hurts their opponents. If the political parties are willing to be a part of the hybrid system, then is the formation of a new hybrid-system not inevitable? I argue that a return of a new hybrid model is unlikely in the near future because of the following two factors.

Firstly, the hybrid model leads to an overt politicisation of the military. Political actors who are left out of the hybrid system are likely to criticise the military’s ‘unconstitutional’ role in the hybrid system. In the current environment, the military needs a strategic retreat to rebuild its socio-political brand which has been damaged in the past five years. Therefore, it seems unlikely that the military will take another risk by engineering a new hybrid system, especially after the epic failure of the last one.

Secondly, the economic ‘recovery’ requires time, and it will be a painful process, especially for the working and middle classes, assuming that neoliberal logic remains dominant in economic policymaking. As a result, it is in the military’s interest to distance itself from the policies of the elected government(s) during the recovery phase of the economy. Although the probability of having a new hybrid system is much higher than a direct military takeover, it also seems unlikely in the near future.

This brings us to the third and the most likely scenario – the military’s public posturing of being ‘neutral’ in politics. This strategy can yield multiple strategic benefits to the military. One, it allows the military to stay at an arm’s length from the current and future elected civilian governments as they undertake the IMF’s prescribed economic measures which are going to further squeeze the working and middle classes of the country. Two, the military faces a dilemma at the current moment. Both the PML-N and the PTI enjoy popular support in Punjab, and both parties have shown the tendency to critique the top leadership of the military to improve their relative bargaining position. As a result, the military cannot publicly ally itself with either the PTI or the PML-N without facing public backlash. Moreover, the core support base of both the PTI and the PML-N would be less animated against the military as long as their main political rival is also out of favour with the military. Therefore, strategic ‘neutrality’ seems like an optimal way the military can avoid its vivid politicisation, at least in the near future. Three, it will buy the military much-needed time to work on other political options beyond the existing leadership of the two mainstream parties, the PTI and the PML-N. Therefore, the military is likely to exercise restraint, at least in the context of the PTI and the PML-N’s political battle in Punjab, in the upcoming political dispensation of the country.

Conclusion

At the current moment, the military establishment, the superior judiciary and the mainstream political parties are in a logjam. The contemporary socio-political and economic landscape of Pakistan can be summarised in the words of Antonio Gramsci, “The old is dying, and the new cannot be born [yet]”. This crisis also provides a potential opening for democratic consolidation, defining and establishing the basic rules of the game, that is, the supremacy of the parliament and restricting the de facto role of the military establishment and the judiciary according to the letter and spirit of the constitution and democratic norms. Historically, we have witnessed that any policies or political moves of political parties that could potentially hurt the political-economic interests of the military and judiciary’s top brass have faced retaliation through multiple means. The internal conflict between the political parties and state elites (the top judiciary and the top brass of the military) has the potential to reach an unsustainable level in the days ahead, especially if the economic downslide continues. As long as the political parties and elected appear to be hand in glove with the military, as has largely been the case with the PTI from 2011 to 2022 and the PML-N led coalition government coalition since 2022, the status quo elements within the political parties, the media and the judiciary sustain the zero-sum equilibrium. In other words, the role of mainstream political parties will remain restricted to simply taking turns on the merry-go-round that the military establishment and the superior judiciary control.

. . . . .

Dr Danish Khan is an Assistant Professor of Political Economy and Co-Director of the ‘Inequality, Poverty, Power and Social Justice Initiative’ at Franklin & Marshall College, United States. He is also an Andrew W. Mellon Postdoctoral High Impact Emerging Scholar. He can be contacted at dkhan@fandm.edu. The author bears full responsibility for the facts cited and opinions expressed in this paper.

[1]     For a detailed discussion on this issue, see a recent academic paper by Danish Khan and Aasim Sajjad Akhtar, “Transforming a praetorian polity: the political economy of democratization in Pakistan”, Canadian Journal of Development Studies, 2022: 1-19, https://doi.org/10.1080/02255189.2021.2012132.

[2]     Haseeb Bhatti, ‘Big blow to PML-N’s Hamza as SC strikes down deputy speaker’s ruling; Elahi to take over as Punjab CM’, Dawn, 26 July 2022, https://www.dawn.com/news/1701653/big-blow-to-pml-ns-hamza-as-sc-strikes-down-deputy-speakers-ruling-elahi-to-take-over-as-punjab-cm.

[3]     Haseeb Bhatti, ‘Article 63-A: SC decides defecting lawmakers’ votes will not be counted’, Dawn, 17 March 2022, https://www.dawn.com/news/1690120.

[4]     Muhammad Omer Hayat and Umar Farooq, ‘Elahi suffers shock defeat as Hamza retains Punjab CM position after deputy speaker’s contentious ruling’, Dawn, 22 July 2022, https://www.dawn.com/news/1700857.

[5]     Nasir Iqbal, ‘Suri’s unilateral ruling did not enjoy parliamentary immunity: SC’, Dawn, 14 July 2022, https://www.dawn.com/news/1699501.

[6]     For a detailed analysis of ‘Charter of Democracy’, please see Danish Khan and Aasim Sajjad Akhtar, “Transforming a praetorian polity: the political economy of democratization in Pakistan”, op. cit.

[7]     Mr Rahman was arrested by Pakistan’s National Accountability Bureau on charges of getting land on lease in 1986 from Nawaz Sharif’s government. https://www.dw.com/en/mir-shakil-ur-rehmanwhy-pakistans-media-mogul-is-behind-bars/a-53221067.

[8]     Ibid.

[9]     “They feared I would appoint Lt Gen Faiz Hameed as army chief: Imran Khan”, Geo News, 22 June 2022, https://www.geo.tv/latest/423759-they-feared-i-would-to-appoint-lt-gen-faiz-hameed-as-army-chief-imran-khan.

Pic Credit: Twitter Account @suleman932