In 2023, the optimism for positive change in Pakistan was once again thwarted. The year ended with unfulfilled promises and shattered hopes. Lingering issues, initially brushed aside, escalated into a widespread turmoil that impacted individuals across various spectrums of society. The repercussions of a lackluster economic performance reverberated throughout the nation, affecting every facet of life. As the year commenced, economic experts and political analysts voiced their serious concerns over an impending crisis, especially the looming risk of default. Delay in the International Monetary Fund’s (IMF) periodic review and consistent failure of alliance government of Pakistan Democratic Movement (PDM) to meet its commitments heightened apprehensions. This mounting pressure not only strained the economic landscape, but also cast a dark shadow over the political landmass, fueling uncertainties about the nation’s financial stability.
Prolonged uncertainties created a pervasive sense of unease, as citizens grappled with the tangible impacts of governmental shortcomings and the threatening specter of an economic downturn. The year unfolded as a testament to the intricate interconnectedness of economy and politics, underscoring the need for comprehensive solutions to address systemic challenges.
The repercussions of these challenges were nothing short of chaos, leading to unprecedented historic lows for Pakistani rupee. Amidst this turmoil, a crucial ray of hope emerged with the resumption of the stalled IMF programme, signifying a positive development for Pakistan in 2023 that not only reignited hopes for economic recovery but also helped to avert the possible risk of default. While Pakistan successfully navigated the review process, awaiting disbursement, the mere fact that the programme was back on track helped foster optimism and stability. This encouraging turn of events also paved the way for unlocking access to additional international funding avenues for Pakistan. Consequently, the country’s exchange reserves experienced some improvement, offering a glimmer of financial relief and bolstering economic standing in the global arena.
Our political history is replete with many disturbing and painful events, and 2023 would certainly constitute a pivotal juncture on this bumpy journey. 2022 witnessed the removal of Pakistan Tehreek-e-Insaf (PTI) from government through a vote of no-confidence against the prime minister, orchestrated by Pakistan Democratic Movement (PDM) calling it a historic, democratic and constitutional victory. However, what followed was an unexpected turn of events as PTI government, instead of gracefully accepting defeat, invented a narrative known as the ‘Cipher’ story that alleged a conspiracy against their elected government, by the military establishment in collaboration with United States of America.
PTI, led by Imran Khan, adopted an assertive and aggressive political stance by vehemently criticizing the judiciary and political opponents to divert attention from their own shortcomings. On the other hand, critics argue that PTI’s narrative often lacks substance and veers towards creating a smokescreen to deflect scrutiny.
Despite facing opposition, PTI has effectively maintained a cohesive narrative under Imran Khan’s leadership. Critics of opposing parties, however, contend that there is a lack of a coherent strategy to counter Imran Khan’s narrative. This strategic gap has allowed PTI to dominate the political discourse, further complicating the political landscape in Pakistan.
Although having landed in jails, PTI supporters remained engaged in a proactive campaign, openly disparaging military chiefs leveling accusations against their leadership exacerbated by a lack of verifiable facts. Relentless and methodical dissemination of this narrative took a disastrous turn on May 9, 2023 when their party leader was apprehended at the Islamabad High Court by the National Accountability Bureau (NAB), the apex anti-graft agency. The arrest, based on corruption charges related to Al-Qadir Trust marked a critical juncture, entailing the consequences of an inflammatory narrative propagated by the party and underscoring the real-world legal implications faced by their leader. The events unfolded against a backdrop of heightened political tension, emphasizing intertwining of rhetoric and legal actions in shaping the political landscape.
When NAB arrested leaders from other political parties, Imran Khan praised the agency but when he himself was arrested, his party swiftly called for nationwide demonstrations. These protests specifically targeted the military, resulting in unprecedented vandalism of military properties and installations—a scenario previously unknown in Pakistan’s history. Unlike any political party before, militants or armed factions had never carried out such actions. Pakistan Army’s General Headquarters in Rawalpindi was forcefully entered, and the house of Corps Commander in Lahore was set ablaze. In response, the government decided to address criminal elements with resolute determination, leading to a widespread crackdown on those involved in these destructive actions as the state asserted its authority against such acts.
The unfortunate incident of May 9, 2023 has further deepened existing divisions within our political set-up. Political loyalties have become so entrenched that individuals find themselves unable to see beyond their affiliations, exacerbating the already fragmented state of affairs. On the other hand, leader of Pakistan Muslim League (Nawaz)—PMLN—despite commanding one of the largest parties that held power four times either independently or through coalition alliances, appears indifferent to the country’s current state. Throughout his self-exile period, Nawaz Sharif maintained a reserved demeanor, refraining from addressing his supporters except sharing videos of his daily activities, primarily commuting to his son’s office. Since his return, he has yet to engage in any public interactions or make statements outlining his future plans to navigate the country out of its current crises.
During this crucial period demanding prudent leadership, he seems preoccupied with receiving accolades from politicians vying for party’s tickets. Throughout this process, the official Twitter account of his party has not posted any videos of him addressing ongoing challenges faced by Pakistani people, rather, the account consistently shares clips of individuals praising the leader. This raises concerns about the leader’s focus during a time that necessitates decisive action and guidance.
Incompetence and absence of a coherent strategy become more apparent when considering their approach to the upcoming elections and public perception. Despite having the establishment’s backing, amicable relations with the current judiciary and various institutions, including NAB, PMLN has faltered in releasing its manifesto and initiating a robust election campaign. This failure to provide the people of Pakistan with an alternative narrative underscores a critical lack of proactive engagement and strategic planning on their part.
While there is speculation about PMLN forming the government after elections, with or without coalition partners, there remains uncertainty regarding their economic agenda. In the current context, where efforts are being made to enhance relations and build trust with global allies like Middle Eastern states, the United States, Europe, and China, lack of clarity on the economic front is of material concern. Compounding this issue is the inadequacy of our foreign reserves, posing challenges in meeting even basic balance of payment requirements. In such a delicate situation, a transparent and effective economic agenda is essential for sustaining positive relations and ensuring the country’s economic stability.
Our sole option is to rely on the lender of last resort, that currently exhibits reluctance in releasing the second tranche of the ongoing US $3 billion 9-month Stand-By Arrangement (SBA). There are signs that this SBA might prematurely expire, mirroring the fate of US$6 billion 39-month Extended Fund Facility [EFF] Programme. In this challenging scenario, questions arise about how PMLN will negotiate with IMF and secure the necessary loan facility to maintain a certain level of foreign exchange reserves.
An alternative avenue the PMLN leadership might consider is turning to China. However, this option comes with its own set of challenges, as Chinese loans already constitute close to 30% of our total national debt. Additionally, policies adopted during the previous government of PMLN in dealing with China and executing trade agreements do not seem to favour Pakistan but rather benefit China. Furthermore, their reliance on initiating infrastructure projects in the current situation hinges heavily on IMF approval, considering the concerns raised by it in Technical Assistance Report – Public Investment Management Assessment (PIMA) and Climate PIMA, regarding such projects.
Under the current circumstances, it is crucial for PMLN to proactively share its economic agenda, allowing the people of Pakistan, especially the voters, to scrutinize and assess its effectiveness. Presently, there is a lack of clarity regarding party’s economic policies to address the ongoing situation, with the public primarily exposed to the leadership’s discussions on past events. For meeting the present challenges, Pakistan urgently requires a dependable and able leadership that can present and implement robust economic agenda that not only tackles fiscal imbalances but also prioritizes the implementation of fundamental structural reforms. While expanding the tax base is an essential step, its designing, implementation and success depend on concerted efforts to stem further depletion of our precious resources.
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Dr. Ikramul Haq, Advocate Supreme Court, specialises 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, Pakistan: From Hash to Heroin, its sequel Pakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax. Two books of poetry are Phull Kikkaran De (Punjabi 2023) and Nai Ufaq (Urdu 1979 with Siraj Munir and Shahid Jamal).
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
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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
