Imran Khan pushes for early elections as Pakistan’s economy stumbles

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Imran Khan has vowed to dissolve two of Pakistan’s four provincial legislatures in a move expected to inflame political tensions as the country grapples with a worsening balance of payments crisis.

The former cricketer turned populist politician has said that his Pakistan Tehreek-e Insaf (PTI) party will on Friday move to dissolve assemblies in Punjab and Khyber Pakhtunkhwa provinces, where it controls the government. The two regions between them account for about 70 per cent of Pakistan’s 220mn population and Khan believes that his PTI party will increase its hold on power if new elections are held.

Prime Minister Shehbaz Sharif is next set to face voters in a national election in October 2023 but Khan has been pushing for an early poll.

“We are scared that by that time [October], Pakistan could go to a point of no return,” Khan told foreign journalists this week at his home in Lahore, where he is recovering from an apparent attempt on his life last month. “In other words, it’s facing default and the government has no road map to get out of this.”

“The worry is that our economy is tanking, it’s going into a tailspin,” he added.

If the legislatures were to be dissolved, new polls would need to be held within 90 days.

Khan, 70, was ousted from power in April in a parliamentary vote. But his popularity has surged since then in a year in which Pakistan has suffered from rising inflation and catastrophic floods and sought IMF bailout funds. He led thousands of supporters on a march through Punjab last month, during which he was shot in the leg.

“Imran Khan’s ultimate goal is to come back in the prime minister’s seat and that’s what his entire strategy is focused on achieving,” said Azeema Cheema, director of Verso Consulting, an Islamabad-based research group. “He tried civil disobedience, public protests and working behind the scenes to reason with the army; now he only has a limited set of options left.”

Analysts have warned that a prolonged political deadlock in tandem with a worsening economy could draw in the powerful army, which has ruled Pakistan for almost half of the 75 years since its independence.

The IMF has not yet concluded a review of the disbursement of the ninth tranche of its $7bn loan programme for Pakistan, prompting concerns over the economy.

Column chart of net reserves with SBP (month-end levels, $bn) showing Pakistan’s central bank foreign exchange reserves have fallen

On Tuesday, in the latest sign of growing stress on the country’s finances, Indus Motors, the local affiliate of Japanese carmaker Toyota, announced a closure of its plant for 10 days. The company cited “insufficient inventory levels” that created “an adverse impact on the supply chain and production activities”.

The decision followed curbs by Pakistan’s central bank on the import of components for several industries, including automobiles and textiles.

“There has been a selective default already because private importers can’t open letters of credit to import raw materials and spare parts and many of the multinationals operating in Pakistan have been prohibited from sending their dividends in foreign currency abroad,” said Hammad Azhar, a former minister of energy under Khan’s government.

Analysts said that Khan’s gambit to dissolve legislatures was risky, as there was no guarantee his PTI party would prevail in a new election. In Punjab, the PTI governs in a coalition with another party, the Pakistan Muslim League (PML-Q). 

Sharif and members of his ruling PML-Q party have sought the support of constitutional experts to block Khan’s move.

“No political party is equipped to deal with the challenges faced by the country,” said Huma Baqai, a commentator on political affairs. “Whoever comes [to power in future] will have to rely on a technocratic government to fix the economy. Short of that there is no solution.”

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