The 15th National Assembly of Pakistan, which remained in existence from August 13, 2018 to August 9, 2023, could not complete its constitutionally-determined period of five years and was prematurely dissolved on August 9, 2023. The dissolution was initiated just three days before completion of five years on recommendation of the Prime Minister of Pakistan, in accordance with Article 48 of the Constitution of Islamic Republic of Pakistan [“the Constitution”]. The process was completed on order passed by the President of Pakistan under Article 58(1) of the Constitution.
Following the dissolution of the National Assembly and end of Shehbaz Sharif’s government, under the Constitution, an interim caretaker setup now has the task of running the country. Anwar ul Haq Kakar, designated as the Caretaker Prime Minister with consensus of the outgoing prime minister and leader of the opposition as per the procedure laid down in the Constitution, took oath of office on August 14, 2023—the 76th Independence Day. On August 17, 2023 Kakar announced his federal cabinet that is now responsible for managing the country as part of the transition, leading to the forthcoming elections.
The power of holding general elections, including announcement of the date, rests solely with the Election Commission of Pakistan (ECP), as specified in a recent amendment made under the Constitution. Despite passing of amendment, about 10 days before the National Assembly’s dissolution, ECP has yet to announce the date of elections. According to Article 224(2), elections should be scheduled within 90 days in cases where the assembly is dissolved on the Prime Minister’s advice under Article 48 of the Constitution.
However, it appears that as before, stakeholders including ECP hardly bother to respect directions of the Constitution. The recent statement issued by ECP shows that it is not adhering to the unambiguous directions of the Constitution and there is going to be a delay in holding the general elections.
In its recent statement, ECP asserted that scheduling elections cannot proceed until the delimitation of constituencies for national and provincial assemblies is completed, which is expected to be concluded by December 14, 2023. This situation highlights a concerning level of neglect and inefficiency on the part of ECP’s Chief and all other relevant stakeholders, who could not complete this process before completion of the National Assembly’s term. It has unfortunately become a fashion for our ruling elite to disregard the Constitution.
It is unfortunate that despite the Constitution’s explicit guidelines on various matters, our ruling elite, including some judges of the higher court, sometimes exceed and/or deviate from their well-defined limits/jurisdictions under the supreme law of the land. They resort to interpretations that unduly favour certain persons/institutions. Recent events, including the government’s, ECP’s, and certain Supreme Court judges’ acts, have left the nation dismayed having detrimental impact on the overall governance.
In the current situation, when Pakistan is grappling with both political and economic challenges, holding timely elections is the need of the hour. Unfortunately, those at the helm of affairs have yet not fully grasped the precarious economic situation of both the country and its citizens. Vast majority of population is struggling to meet both ends. Certainly those who matter in the land have not learnt the necessary lessons from past mistakes—they are bent upon undertaking further experimentation. At a time when the nation requires a robust government with the people’s support to undertake reforms and steer the country toward stability, it has opted to allow caretakers to stay for a period longer than 90 days as stipulated in the Constitution.
Many in the Caretaker Prime Minister’s cabinet have previously served in various government positions, whose track records and level of competence are well known to the public. Interestingly, the cabinet is characterized by a relatively smaller presence of political figures and greater representation of technocrats.
Dr. Shamshad Akhtar has been assigned the important charge of finance, revenue, economic affairs and privatization for the second time. She earlier served in 2018 in the caretaker government of Chief Justice (retired) Nasirul Mulk. She also served as Governor of the State Bank of Pakistan (SBP) from 2006 to 2009. Successive governments have struggled to formulate and implement effective corrective measures to navigate the country out of critical economic situation and persisting chronic challenges.
The period when Dr. Shamshad served as the Governor of SBP, bears similarities to the current situation, characterized by multifaceted challenges such as external imbalances, soaring inflation, a weakened currency, and escalating debt and fiscal imbalances. Although the following excerpt from a Press Release (IMF Country Report No. 08/364, December 2008) on the Executive Board Discussion regarding Pakistan’s request for a Stand-By Arrangement with the IMF in 2008 is over a decade and a half old, the nature of these challenges has remained largely unchanged, if not worsened:
“Pakistan’s macroeconomic situation deteriorated significantly during 2007/08 (fiscal year starts July 1) and in the first four months of 2008/09. A robust macroeconomic performance through mid-2007 was affected by adverse security developments, large increases in import prices (oil and food), and the global financial turmoil. Delays in passing through higher energy prices to consumers led to an increase in the fiscal deficit to 7.4% of GDP in 2007/08, from 4.3% in 2006/07. Monetization of the higher fiscal deficit fueled inflation, which reached 25% in October 2008. Against this background, real GDP growth slowed to 5.8% in 2007/08, the current account deficit widened to 8.4% of GDP, and gross international reserves fell to a critically low level of $3.4 billion (less than one month of imports) at end-October 2008”.
Similarly, during her time as Governor of SBP, Pakistan’s economic landscape was marked by substantial challenges, and unexpected political and economic disruptions were causing significant upheaval. A volatile law and order situation, rapid currency devaluation, disruptions in the supply chain, surges in prices of oil, food, and various commodities, declining exports, and turbulence in the global financial arena, all have collectively undermined Pakistan’s macroeconomic stability. By the close of 2008, Moody’s rated Pakistan’s sovereign debt as B3, while S&P rated it as CCC, indicating the presence of uncertainty and the risk of default. Similarly, during her time as Caretaker Finance Minister in 2018, she devalued currency and getting Pakistan placed on the list of jurisdictions under increased monitoring by the Financial Action Task Force (FATF).
Considering her past performance, it seems unlikely that she will bring about any positive change in the country’s financial matters or provide relief to the people of Pakistan. Instead, it appears that there may be additional taxes, duties, and potential increases in electricity and petroleum prices that will further burden the people. She still needs to meet IMF’s standby agreement’s requirement regarding maintenance of the agreed percentage of parity between inter-bank and open market exchange rates. It is anticipated that, before commencing the next IMF review for the release of second tranche of SBA loan, there may be a further devaluation of the rupee and rise in commodity prices that will trigger further inflation.
We should realize that our challenges will continue to persist unless we initiate fundamental reforms in both governance and fiscal matters. The ineffective allocation of resources within our system not only places a heavier burden on the general public through increased taxes and duties but also contributes to rising commodity prices as a means to cover fiscal deficits. stemming from this resource mismanagement. These reforms can only be initiated and successfully implemented by a government with a fresh mandate from the people, secured through free and fair elections. Any delay in conducting elections will not only exacerbate issues for the ordinary citizen but will also have repercussions on the country’s multilateral and bilateral relations.
_________________________________________________________________
Dr. Ikramul Haq, Advocate Supreme Court, specializes in constitutional, corporate, media, ML/CFT related laws, IT, intellectual property, arbitration and international tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He served Civil Services of Pakistan from 1984 to 1996. He established Huzaima & Ikram in 1996 and is presently its chief partner as well as partner in Huzaima Ikram & Ijaz. He studied journalism, English literature and law. He is Chief Editor of Taxation. He is country editor and correspondent of International Bureau of Fiscal Documentation (IBFD) and member of International Fiscal Association (IFA). He is Visiting Faculty at Lahore University of Management Sciences (LUMS) and member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE).
He has coauthored with Huzaima Bukhari many books that include Tax Reforms in Pakistan: Historic & Critical Review, Towards Flat, Low-rate, Broad and Predictable Taxes (revised & Expanded Edition, Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary and Master Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).
He is author of Commentary on Avoidance of Double Taxation Agreements signed by Pakistan, Pakistan: From Hash to Heroin, its sequel Pakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax.
He regularly writes columns/article/papers for many Pakistani newspapers and international journals and has contributed over 2500 articles on a variety of issues of public interest, printed in various journals, magazines and newspapers at home and abroad.
Twitter: DrIkramulHaq
_______________________________________________________________
Abdul Rauf Shakoori, Advocate High Court, is a subject-matter expert on AML-CFT, Compliance, Cyber Crime and Risk Management. He has been providing AML-CFT advisory and training services to financial institutions (banks, DNFBPs, Investment companies, Money Service Businesses, insurance companies and securities), government institutions including law enforcement agencies located in North America (USA & CANADA), Middle East and Pakistan. His areas of expertise include legal, strategic planning, cross border transactions including but not limited to joint ventures (JVs), mergers & acquisitions (M&A), takeovers, privatizations, overseas expansions, USA Patriot Act, Banking Secrecy Act, Office of Foreign Assets Control (OFAC).
Over his career he has demonstrated excellent leadership, communication, analytical, and problem-solving skills and have also developed and delivered training courses in the areas of AML/CFT, Compliance, Fraud & Financial Crime Risk Management, Bank Secrecy, Cyber Crimes & Internet Threats against Banks, E–Channels Fraud Prevention, Security and Investigation of Financial Crimes. The courses have been delivered as practical workshops with case study driven scenarios and exams to insure knowledge transfer.
His notable publications are: Rauf’s Compilation of Corporate Laws of Pakistan, Rauf’s Company Law and Practice of Pakistan and Rauf’s Research on Labour Laws and Income Tax and others.
His articles include: Revenue collection: Contemporary targets vs. orthodox approach, It is time to say goodbye to our past, US double standards, Was Due Process Flouted While Convicting Nawaz Sharif?, FATF and unjustly grey listed Pakistan, Corruption is no excuse for Incompetence, Next step for Pakistan, Pakistan’s compliance with FATF mandates, a work in progress, Pakistan’s strategy to address FATF Mandates was Inadequate, Pakistan’s Evolving FATF Compliance, Transparency Curtails Corruption, Pakistan’s Long Road towards FATF Compliance, Pakistan’s Archaic Approach to Addressing FATF Mandates, FATF: Challenges for June deadline, Pakistan: Combating the illicit flow of money, Regulating Crypto: An uphill task for Pakistan. Pakistan’s economy – Chicanery of numbers. Pakistan: Reclaiming its space on FATF whitelist. Sacred Games: Kulbhushan Jadhav Case. National FATF secretariat and Financial Monitoring Unit. The FATF challenge. Pakistan: Crucial FATF hearing. Pakistan: Dissecting FATF Failure, Environmental crimes: An emerging challenge, Countering corrupt practices .
Twitter: Adbul Rauf Shakoori
The recent publication, coauthored by these writes with Huzaima Bukhari, is Pakistan Tackling FATF: Challenges & Solutions, available at: https://www.amazon.com/dp/B08RXH8W46 and https://aacp.com.pk/
This article raises important concerns about the challenges Pakistan is facing during the interim caretaker setup. The delay in announcing election dates by the Election Commission and the apparent neglect of constitutional directions by stakeholders are worrying. The need for timely elections is crucial given the country’s political and economic struggles. The emphasis on governance reforms and fiscal responsibility highlights the urgency for a government with a fresh mandate to address these issues effectively.