A glimmer of hope

Polls give strife-hit Pakistan a shot at stability

Pakistan's election may just give the troubled country a shot at stability. Investors will discount much of the hyperbole from political parties about the economic possibilities ahead. The question is whether the poll, the first proper democratic transfer of power in Pakistan's history, can provide stable, effective leadership that keeps the army out of politics, while uniting the country in dealing with Taliban-sponsored sectarian violence.

The parties are dishing out glorious visions of the future to attract the 18-29 year-old voters who account for a third of Pakistan's population. Former Prime Minister Nawaz Sharif's Muslim League, the favourite to lead the next government, has promised to catapult the economy, which is smaller than Nigeria's, into the world's top 10. Tehreek-e-Insaf, a party led by former cricketer Imran Khan that has gained popularity among the youth, wants a threefold increase in farm output. The People's Party, which ruled between 2008 and 2013, is promising to treble education spending to 4.5 per cent of GDP by the end of its next term. All three are confident of ending the nation's crippling power shortages.

Politicians are silent about how to finance their ambitious programmes, however. The International Monetary Fund, which has negotiated a bailout with Pakistan's interim government, will insist on improving government finances. Yet, Shahid Javed Burki, a former Pakistan finance minister, says no party has addressed this important issue in detail.

At 61 per cent of GDP in June last year, the government's debt is now five times its annual revenue. Meanwhile, the trade account is haemorrhaging, the currency has tanked, and so far this financial year (which ends in June) foreign investors have brought in just $800 million, a third of the average over the previous 10 years.

The glimmer of hope comes from an April 2010 constitutional change that took away most powers from the president and gave them to directly elected ministers, accountable to parliament. That could mark an end to the 'strong man' approach that has dominated Pakistan's politics, Burki says. Even if the next government manages to steady the economy, the task of re-establishing peace, security and rule of law will be the prime minister's real test.