A crippled economy, Imran Khan, Toshakhana, the Sharif duo, terrorism: Pakistan's woes

Pakistan is facing a tumultuous first quarter in 2023 and it's anticipated that the situation will worsen in the upcoming months. The economy is struggling and there's a looming threat of collapse. Additionally, large areas near the Afghan border are coming under the sway of a resurgent Pakistan Taliban. Furthermore, major political parties are in the midst of an intense conflict that may persist even if general elections are held later this year. This could potentially result in the country's return to military governance.

Recently the centre of attraction has been cricketer-turned politician, former Prime Minister Imran Khan, who is currently sheltered at his Zaman Park residence in the eastern city of Lahore. Khan is escaping graft charges against him as the Islamabad police come knocking on his door to make sure he does not miss any more court appearances. Khan has cited serious security concerns in his decision of not making it to court on the numerous cases that have been filed against him.

On top of the politcal turmoil, the South Asian country is facing its worst economic crisis since its formation in 1947. Not to forget the security crisis that has only ascended with major terror attacks occuring on Pakistani soil endangering the lives of the nation's citizens.

This was admitted by Pakistan’s Foreign Minister Bilawal Bhutto Zardari who spoke to AP saying his country was facing “a perfect storm” of troubles — an economic crisis, the consequences of catastrophic flooding, and terrorism “that is once again rearing its ugly head” as a result of the Taliban takeover of Afghanistan.

The curious case of ex-Prime Minister Imran Khan

On Monday, two non-bailable arrest warrants were issued against Imran Khan after he failed to appear in court for cases related to the Toshakhana reference and threatened a woman additional district and sessions judge. The former prime minister, aged 70, has been recovering from a gunshot injury sustained during an assassination attempt in Wazirabad last year, and has skipped hearings in multiple cases, according to Dawn news.

Khan was scheduled to attend two district and session courts in Islamabad on Tuesday, but his lawyers filed petitions requesting exemption from the hearings due to security concerns. Imran has previously missed three indictment hearings in the case, where he is accused of failing to disclose the details of gifts he retained from the Toshakhana in his asset declarations. 

On March 7, the Islamabad High Court (IHC) suspended Imran's non-bailable arrest warrants until March 13 and ordered him to appear before the sessions court. During the proceedings on Tuesday, Imran's lawyer, Khawaja Haris, informed the court that his client would not be able to attend the hearing due to security threats. The Dawn reported that the IHC had instructed the sessions court to initiate legal action against the PTI chief in accordance with the law if he failed to appear before the court on March 13.

Khan, who was ousted in a no-confidence vote in Parliament in April, was ordered to appear before a judge in Islamabad on Friday to answer charges of illegally selling state gifts he had received during his term as premier and concealing his assets.

Toshakhana case highlights all

The federal government of Pakistan on Sunday made public the record of Toshakhana gifts since 2002 for the first time in the country's history. This happened a few days after Defence Minister Khawaja Asif announced that the federal government had approved the declassification of data from the state repository that contains gifts received by public officials from foreign dignitaries and other governments.

Daily Pakistan has reported that a 446-page document, containing records from 2002 to 2003, reveals the list of gifts received by presidents, prime ministers, and federal ministers. The document shows that during 2023, the current coalition government received 59 gifts from various countries.

As per the government records that were made public, 224 gifts were received in 2022, 116 gifts in 2021, 175 gifts in 2018, and 91 gifts in 2014. Additionally, government officials received 177 gifts in 2015. The document reportedly contains records of gifts retained by former President Gen (retd) Parvez Musharraf and former Prime Ministers Shaukat Aziz, Yusuf Raza Gilani, Raja Parvez Ashraf, Nawaz Sharif, Imran Khan and incumbent President Arif Alvi.

Toshakhana is a department owned by the government and falls under the control of the Cabinet Division of Pakistan. It was established in 1978, and its primary role is to store gifts that are given to members of parliament, ministers, foreign secretaries, the President, and the Prime Minister.

It came under scrutiny when the Election Commission of Pakistan launched an inquiry against former Prime Minister Imran Khan for disclosing the details of Toshakhana gifts he had retained in his declaration.

A do-or-die situation for the Pakistani economy

Pakistan's economy has been in a state of crisis for several months, which began prior to the devastating floods that occurred during the summer of 2022. The country is grappling with high levels of inflation, a significant decline in the value of the rupee, and dangerously low foreign reserves that currently stand at just $4.3 billion - sufficient to finance only one month's worth of imports. This precarious situation has raised concerns about the possibility of default.

Pakistan experiences an economic crisis every few years due to an economy that doesn't generate sufficient revenue and spends excessively, leading to a reliance on external debt. Each crisis is worse than the previous one, as the debt burden grows and payments become due. This year, internal political instability and the destructive floods have exacerbated the situation further.

The crisis in Pakistan's economy also has a significant external component, as global food and fuel prices have risen following Russia's conflict in Ukraine. The convergence of these factors has resulted in the most significant economic challenge that Pakistan has ever faced. Despite this, the government has been embroiled in political maneuvers, and the release of a $1.1 billion loan tranche from the IMF has been stalled due to Islamabad's reluctance to agree to the IMF's terms. The government has resorted to implementing minor measures such as limiting imports and imposing early closures on malls and wedding halls, which do not sufficiently address the problem.

The IMF is not being fair to Pakistan, which is also dealing with 100,000 new refugees following the West’s withdrawal from Afghanistan and “a steady uptick of terrorist activities within our country,” Zardari told AP. The IMF is stretching out talks on a bailout when the country needs money now to help “the poorest of the poor” whose homes and crops were washed away in the floods, he said. “And they’re being told that until their tax reform is not complete, we will not conclude the IMF program.”

Pakistan may avoid default for the time being with the assistance of the IMF and loans from friendly countries like Saudi Arabia and other Gulf states. However, these measures do not address the fundamental issues underlying the economy, namely the need for a shift in the balance between production and spending. Unless such changes are implemented, there is a risk of default in the future. Unfortunately, none of Pakistan's political parties seem to have the political will or capacity to enact such changes.

To pay back the $73 billion it owes by 2025, Pakistan will require debt restructuring.

Pakistan's serious terror crisis

The Pakistani Taliban, also known as the TTP, were responsible for killing tens of thousands of Pakistanis between 2007 and 2014. With the Taliban taking control of Afghanistan, the TTP has been emboldened and has once again become a threat to Pakistan, although its operations remain limited to a specific geographic area. Last year alone, the group carried out around 150 attacks in northwest Pakistan. The TTP has found sanctuary in Afghanistan, making it difficult for Pakistan to effectively deal with the group. Previous negotiations with the TTP have failed due to the group's fundamental opposition to the Pakistani state and its constitution.

Pakistan's preferred option is to take military action against TTP targets within its borders, but the group's movement across the border into Afghanistan makes this difficult to achieve. This movement complicates matters beyond the 2014 military operation launched against the TTP. However, the Pakistani Taliban is not currently the country's most significant threat, given Pakistan's major political and economic challenges. If left unchecked, though, the TTP could become a significant crisis.

In February 2023, the United States Department of State released a report labelled 'Country Reports on Terrorism 2021' in which it summarised the numerous terrorist attacks in Pakistan in 2021 and underlined that members of religious minorities faced significant threats from terrorist groups in Pakistan. It also highlighted that Pakistan was attempting to take steps to counter terror-financing to militant group that were focused on India. 

Pakistan experienced significant terrorist activity in 2021. The number of attacks and casualties was higher than in 2020. Major terrorist groups that focused on conducting attacks in Pakistan included TTP, the Balochistan Liberation Army (BLA), and ISIS-K. Separatist militant groups conducted terrorist attacks against varied targets in Balochistan and Sindh provinces. Terrorists used a range of tactics to attack varied targets, including IEDs, VBIEDs, suicide bombings, and targeted assassinations. 

Ministers in ruling government also in turmoil

An arrest warrent was recently issued against Pakistan's Interior Minister Rana Sanaullah by a Gujranwala anti-terrorism court. 

On August 5, 2022, a case was filed at the Industrial police station against the senior politician of the Pakistan Muslim League - Nawaz (PML-N) in response to a complaint made by a leader of the Pakistan Muslim League (Quaid e Azam Group) Shahkaz Aslam for issuing life threats to the Punjab chief secretary and his family members. 

The complainant allegedly witnessed the federal minister making threats on television, according to the FIR. The Gujranwala ATC rejected the police report and instructed them to produce Sanaullah on March 7. 

The court also gave the involved officer, the DSP, and SP investigations a show-cause notice and required them to appear before it.