The Sharif legacy?

In the 1992 American elections, Bill Clinton’s strategist and adviser James Carville would get questions on what Clinton would do to beat such a popular and powerful Bush Senior.

James once replied “It’s the economy, stupid” to signify that no matter how good a politician is, if the economy is not getting better, people would automatically vote elsewhere instead of the incumbent. Pakistan’s most experienced political party, the PML-N, is facing a similar situation.

The talk of the town is that Nawaz Sharif is returning to Pakistan and his whole plan is that as soon as he lands, he will announce big news which will include Saudi, Qatari and Emirati investments/FDI in Pakistan and he will also announce completion of CPEC projects.

Nawaz Sharif and his advisers haven’t negotiated with bilateral partners and friendly Middle-Eastern countries since 2015-16 when there was an Iran conflict and low interest rates. Saudis would use dollars to increase their soft power in Pakistan while the Chinese wanted to access our ports, and low interest rates made it easier for them to give out projects and other loans to Pakistan.

Commercial banks also had access to cash and with Covid, quantitative easing made borrowing so easy that it became possible for that government to start big projects all over Pakistan. Including the PTI’s major contribution, now we have around $120+ billion of external debt. Some months, our interest payments are more than the total tax collected. The country has turned upside down in its debt profile which always keeps us on a market default alert.

Ishaq Dar’s ability to control the dollar-rupee price from 2013 to 2017 was possible because of the availability of reserves. In bull markets, there is a saying that in easy markets, the mission shouldn’t be to make money because everyone makes money in bull markets.

The mission should be to preserve capital for the future when interest rates increase. Ishaq Dar did the complete opposite. Bangladesh and India were preserving capital for the future despite having more exports than Pakistan while Pakistan was borrowing money and subsidizing imports to keep the dollar price low in rupee terms.

Sixteen months of the PDM government, with almost 11 of them of a colossal Dar-aster – should have been a signal for Mian Nawaz Sharif that he cannot repeat the 2013-2017 level of delivery in this economy but Mian Nawaz Sharif’s opinion is that Dar will fix the economy if given full freedom. He does not realize that the ingredients (liquidity, low interest rates and Gulf FDI) are just not there anymore.

Mian Nawaz Sharif’s biggest problem is not understanding what is really going on in Pakistan and who caused it. He has lived almost 80 per cent of his 21st Century life abroad where he sits on a sofa like an elder of a family and people with different agendas advise him.

He gave Maryam Nawaz the task to make the PML-N’s social media team 10 years ago and she failed to do anything. Typical of Mian Nawaz Sharif, her party elevated her and protected her by blaming others for her mistakes. Maryam Nawaz has become the chief organizer of the party and is expected to be the PML-N’s CM Punjab candidate to fill in the heavy shoes of Usman Buzdar.

In such a bad economic and political environment, Mian Nawaz Sharif’s two strongest appointees on key posts will be his family members who have completely failed to deliver anything. Due to the need for a perception of the PML-N’s infrastructure building abilities, the next government is likely to face a-lot of delays from the IMF and Gulf countries because of their poor fiscal management.

This delay will cause the government to take unpopular economic decisions, which with the combination of the impression of rigged elections, changing narratives and most importantly a repeat of poor PDM performance in the last 16 months will put a permanent dent in Nawaz Sharif’s political legacy.

The writer tweets/posts

@FarrukhJAbbasi