Books on Pakistan
Update No: 023 - (19/12/07)
Musharraf benefits from emergency, but not
Polls suggest that inflation is the main concern of the electorate and that
Musharraf and his governments are being blamed for it, even in rural areas.
Terrorism, law and order and corruption, all rank very low in terms of concerns,
with unemployment being the only other issue to mobilise voters to some extent.
Musharraf’s best chances might come from the division of the opposition
electorate among those who favour a boycott and those who want to vote, but
despite earlier strong support for a boycott, polls show that a large majority
is inclined to vote after all. Although Musharraf seems to have recovered some
support after declaring emergency rule, presumably because he showed himself to
have recovered some decisiveness, his support rate barely reaches 30%.
Among the opposition leaders Bhutto has recovered some credibility after
returning to the country in the wake of the declaration of emergency and after
having taken a more confrontational stance against Musharraf, at the expense of
Nawaz Sharif, who at the end of the summer had briefly emerged as Pakistan’s
most popular leader. The result of the forthcoming elections, assuming they will
not be rigged, seems to slightly favour the PPP, which is however expected to
barely improve on the previous elections, where it obtained 28% of the votes.
The MMA has been split by the decision of one of its key components, Jamaat-i
Islami, to boycott the poll and its electoral fortunes are seen to be in
decline. The PML-Q has recovered some support following the emergency, damaging
the prospects of Sharif’s PML-N; the two groups now stand neck and neck in the
polls. Although Musharraf lifted the state of emergency, he did so just three
weeks before the vote.
Coalition on the horizon?
While the PML-Q might in the end be able to muster a decent performance and not
altogether founder at the polls as it seemed possible in September, it is very
unlikely that it will be able to secure a majority for Musharraf, even with the
help of the MQM. Hence, either Musharraf rigs the polls or more likely he will
opt for a ‘grand coalition’. In December again Musharraf hinted that such a
coalition is possible. Will the PPP accept to form a coalition? It is unlikely
that Bhutto will make any strong statement in this direction before the
elections, considered that it would be costly in terms of popularity, but she
will likely accept to negotiate after the polls, particularly if the PPP emerges
as the strongest single party. There are also rumours that Shabaz Sharif,
Nawaz’s more liberal brother, would lead the PML-N (or part thereof) into a
Business sector only moderately affected so far
On the economic front, December registered a further worsening of Pakistan’s
trade deficit, which during the first 5 months of the fiscal year showed a 32%
increase over the same period of the previous year. Many now see the deficit as
one of the major threats to Pakistan’s economic health. The fiscal deficit of
the government has also increased to 1.6%, up from 1% last year. The forthcoming
elections probably did not help, but the biggest increase in expenditure has
been in the defence budget. Financial commentators remain however optimistic
about the safety of investment in Pakistan, believing that Musharraf will manage
to maintain the situation under control. Only sectors linked to internal
consumption are seen as vulnerable, as the future government is expected to be
forced to curb spending. However, some external investors are becoming worried
and are postponing investment plans until the situation gets clearer.