Shehzad Arshad
Severe instability and crisis have become the norm in Pakistan. The current political turmoil started at the beginning of April when the Opposition in the National Assembly moved a motion of no confidence in the federal government of Imran Khan. The Speaker used his authority to reject the motion on the grounds of an alleged American conspiracy against the government.
After a week of rising political tension, accompanied by the intervention of the army chief and the Supreme Court, this undemocratic manoeuvre failed, and the motion of no confidence was presented again. Khan’s party, the Pakistan Tehreek-e-Insaf, PTI, lost its majority support and the government fell. Subsequently, Shehbaz Sharif from the Pakistan Muslim League, PML-N, became the prime minister.
Struggle over Punjab
Having gained the central government, the PML-N started the fight for power in Punjab, which is the largest province of Pakistan. The contest here was between Hamza Shehbaz of PML-N and its allies on the one hand and the PTI and the Pakistan Muslim League-Q PML-Q, on the other.
During three months of conflict, Hamza Shehbaz was elected twice as the Chief Minister but, in May 2022, the Supreme Court ruled that members of the Punjab Assembly should lose their seats because they had violated the decision of their party, the PTI, by supporting Hamza Shehbaz. When new elections were held in those seats, the PTI won with a huge majority.
Despite the PTI’s victory in these seats and despite it having won a majority in the Punjab Assembly, Hamza Shehbaz was initially elected as Chief Minister again, because the Deputy Speaker rejected the votes of the members of the PML-Q based on a previous court decision. The Supreme Court, however, then rejected that manoeuvre. So, in the end, Chaudhry Pervaiz Elahi, PML-Q, was elected as the new Chief Minister by the votes of PTI and PML-Q.
Clearly, this use of dirty manoeuvres by both sides proves more than the rotten character of Pakistan’s political parties. This is more than another round of undemocratic and authoritarian measures, making a mockery even of the bourgeois constitutional framework. These struggles are themselves an expression of deep and very serious divisions within the state that the ruling class is not able to settle in the parliament.
It has reached a situation, where the political crisis has reached such proportions that the ruling class and its political leaders prove themselves unable to solve any of the pressing economic, social and political issues of the country. Indeed, the change of government in Punjab will now deepen the inner contradictions.
National repercussions, the crisis and the IMF
The defeat of the PML-N in the provincial assembly in Punjab has put the federal government itself in serious danger. The crisis of the state has become more severe and the contradictions in state institutions more intense. An expression of this was seen at a recent meeting of the Supreme Judicial Council when 5 judges nominated by the Chief Justice were rejected by other members. There are also serious divisions in the army over how to move forward after the failure of the PTI government project, which is clearly reflected in the current crisis. This and other divisions have reduced the decisive role of the army in the country in the immediate future.
The PML-N, which already had serious contradictions regarding the way forward, is now under severe pressure after its defeat in the Punjab elections. The party is now openly criticising the divided and failed state institutions again. It is blaming the military and judiciary for all the ills and presents itself as fighting for democracy and the rule of the people.
In reality, this is not a fight for democracy, as some liberals and on the left think. It is clearly a struggle for the interests and management of the system. There are contradictions on the benefits and the methodology to govern the system. One main reason for the present crisis is also the position of Pakistan in the global capitalist system.
Before coming to power in 2018, Imran Khan claimed that he would commit suicide rather than go to the IMF and accept its conditions. After a few months in office, however, he quickly forgot his words and struck a deal with the IMF, accepting extremely harsh conditions for the upcoming years, which still need to be applied today.
After the deal, he made the worst attacks on the workers and the poor in the name of combatting corruption. When covid-19 hit the country, loan repayments were delayed, and the IMF programme was suspended. The regime put trillions of rupees into the pockets of capitalists in the name of national economy. This led to a historic increase in their profits and a limited recovery of the economy, but all the structural issues remained unresolved or even worsened.
Soon the current account deficit took the economy in its grip. During that period, the Imran Khan government continued both to reward the capitalists and to attack the working people, making their lives miserable. In addition, the suspension of the IMF conditions during the highpoint of the pandemic meant that the deal itself had to be renegotiated in 2021. This led to additional requirements, such as cuts in subsidies, further privatisations, reform of the state bank. Now, the PTI leader presents himself as a friend of the people, fighting against injustice. It is a farce.
Meanwhile, Shehbaz Sharif’s government has accepted the embarrassing conditions for continuing the IMF programme by placing all the responsibility of the crisis on the previous Imran Khan government. Although taxes have increased enormously and despite the full implementation of the IMF agreement, the value of the rupee decreased by 27.2% in less than 4 months. Reserves, which were $11.425bn at the end of March, have been reduced to $8.575bn by July 22. That is insufficient to meet the forty-day needs of the country’s imports.
Despite agreement to the IMF conditions, $1.8bn from the IMF was not transferred to the country in July. Only after a call from the army chief to US deputy secretary of state, Wendy Sherman, did the IMF finally announce that Pakistan has accepted all the conditions and the programme would be restored by the end of August.
According to Finance Minister Miftah Ismail, another $4bn are expected from friendly countries (Saudi Arabia, United Arab Emirates) to stabilise foreign exchange reserves. Loans of $3.5bn will also be received from the Asian Development Bank, $2.5bn from the World Bank and $400 to 500mn from the Asian Infrastructure Investment Bank. This means that the country’s economy will stand on the basis of debt. Currently, the debt is equal to 72% of the GDP and the debt repayment share in the country’s budget is 40% and likely to exceed 50% next year.
The government has to pay $21bn in foreign debt repayment in the next financial year, while the current account deficit in the financial year 2021-2022 is $17.406 bn. Due to the increase in the value of the dollar, the current account deficit can increase again against the expectations of government.
More borrowing will be required to cover all these payments and a further increase is also possible because of the depreciation of the rupee. This means that Pakistanis are facing a dramatic economic situation. Where the economy is not threatened by immediate bankruptcy, it is still facing serious risks due to structural issues and its position in the global capitalist system.
The only solution the ruling class has is to implement the IMF policies so that the system does not collapse and continues to work in the interests of the capitalists. In order to meet the IMF and other lenders‘ demands, the government is attacking the workers, the peasants and the poor.
Currently, the inflation rate in Pakistan is 40%. This monster of inflation is crushing the life of the common people. It has become difficult for the working class, the urban and rural poor to afford two meals a day. Already people are not receiving medical treatment and having to withdraw their children from educational institutions.
Following these IMF policies means that Pakistan’s economy will further contract, meaning more workers will become unemployed or underemployed. That is, the government has decided to bury the workers and the poor alive in the name of economic recovery. In addition, it will also follow the privatisation of electricity companies and other institutions. The government has assured the IMF on such plans and a bill has been passed by the regular assembly for the sale of state-owned enterprises to the governments of friendly countries.
What to do?
What is needed now is for organisations of the working class, the peasantry, the poor and all the oppressed, the victims of the IMF and the government, to unite around a programme of action. The trades unions, left wing parties and organisations need to wage a common struggle against the attacks and for an alternative solution to the current crisis. For this we propose a series of key demands to solve the crisis in the interest of the working class.
For example, the minimum wage should be sufficient to allow a decent quality of life for workers. Workers’ wages should be linked to inflation. For every one percent increase in inflation, there should be a one percent increase in wages.
In order to impose such a demand and to fight effectively, the currently fragmented trade unions, which organise only a small percent of the 60 million strong working class, and the very weak left wing organisations, will not be enough. They need to campaign for mass assemblies and the election of councils of action in all workplaces, private or public, in working class estates, in town and countryside.
Thereby the presently unorganised can be organised and engage in joint struggle with the existing unions and left parties, rallying the workers and poor to mass demonstrations, occupations and mass strike action to repeal the IMF programme and to make the rich pay for the crisis. Such organs could also control the implementation of demands like a minimum wage and the indexation of wages and social benefits or pensions.
Instead of privatisation, state-run institutions should be handed over to the democratic control of the working class. All the institutions that have shut down after privatisation should be re-nationalised under workers‘ control. Those institutions whose management has been handed over to the private sector should be put under the democratic control of the working class, thereby reversing all kinds of privatisation.
Instead of cutting jobs, working hours should be reduced to prevent unemployment. The education and health budgets should be increased by imposing a wealth tax on capitalists, big landowners, multinational companies and other rich sections of society. New healthcare centres and educational institutions could be set up on this basis.
There must be an end to all tax exemptions and subsidies for the capitalist and landowning class. Massive funding should be directed towards increasing the productivity of agriculture, especially to meet the consumption need of the masses. The land should be expropriated from big landowners and handed over to the peasantry and rural labourers. Price control committees, linking the rural producers to the workers in the cities, should be established.
The budget for development projects must be increased on a large scale so that social facilities and free homes for the working class as well as the rural and urban poor may be constructed.
Companies that produce electricity must be taken over by the state and put under the democratic control of the working class.
Rejection of the IMF programme, including refusal to repay the debts of global economic institutions, is a precondition for the planned and balanced development of the economy but all this can never be undertaken by a government committed to capitalism.
We need a government, based on the workers‘ own organisations which need to be created in the current struggle, to deal with the existing disastrous situation and defend the interests of the overwhelming majority of the population.
Support for such a strategy will not be spontaneous, it has to be won by a determined campaign. Those who see the need for a revolutionary strategy, whether in left parties or trade unions, need to organise themselves to fight for it in all working class organisations, as well as amongst the oppressed layers of society, women, youth and the oppressed nationalities.
They need to unite to discuss the political basis for a revolutionary working class party and to work out a programme of action, linking the struggle against the IMF with the struggle for a working class revolution in Pakistan and the entire region. In this way, we can fight back against the ruling class crisis and its attacks on the working class and poor in Pakistan.