Daily Times

Nawaz Sharif seems to have
the Midas touch, as 14 years after being shunned from the corridors of power he has become the prime minister (PM) for an unprecedented third time. The transition of power has been smooth as all political forces have acted maturely and accepted the mandate granted by the electorate. Mr Sharif has displayed magnanimity by letting Imran Khan’s Pakistan Tehreek-e-Insaaf (PTI) form the government in Khyber Pakhtunkhwa. He also played a masterstroke by building a general consensus in Balochistan and granting an opportunity to the National Party’s Dr Abdul Malik to become the unopposed Chief Minister of the volatile province, making him the first middle class Baloch representative to hold this office. This goodwill was reciprocated by all political parties when Mr Sharif was elected PM in an amicable environment, and later felicitated by parliamentary leaders of all major parties. While all may seem hunky dory right now for Mr Sharif, it is worth noting that he has his work cut out as the nation faces immense challenges.

The energy crisis was the bane of the Pakistan People’s Party’s (PPP’s) government’s existence. People have now expressed their confidence in Mr Sharif to resolve the energy crisis. Pakistan will have to pay off its vicious circular debt to overcome this crisis, at least in the short run. Whether Mr Sharif does this by issuing government bonds or by printing currency notes can only be left to conjecture as no final decision has been made on this yet. However, the problem will not be solved by paying off the debt as it will start building up almost immediately. Structural changes need to be made in the energy sector to ensure efficiency in distribution, minimise line losses, ensure prompt payment of energy bills across the board and set tariffs according to the cost of production of electricity. Another measure that needs to be taken is to use cheaper fuels to generate energy. Pakistan uses imported furnace oil to produce electricity. A major reason why Pakistan’s trade deficit grew exponentially over the last few years is because of a spike in world oil prices. Although oil prices are forecast to fall in 2013-2014, there is no reason why Pakistan should be importing the most expensive fuel and not be using coal to produce energy like most developing countries. Mr Sharif has identified this, promised to extract coal from Thar, and convert existing power plants to coal. It remains to be seen how successfully he follows through with this. Hydel power needs to be further developed. Consensus should be reached upon controversial projects such as the Kalabagh Dam, which have been in the pipeline for many years. Pakistan faces grave water shortages, which are only going to get worse in the future. Unless Mr Sharif succeeds in reaching a consensus by taking all the provinces on board, Pakistan would not only be unable to produce sufficient energy but will also face grave water shortages.

An issue that needs to be addressed, and has not been by Mr Sharif, is the introduction of tax reforms. Pakistan has one of the lowest tax-to-GDP ratios in the world. With our expenditures exceeding our revenues, serious tax reforms should be implemented to make sure that everybody pays direct taxes according to their incomes and the common man is not burdened by high indirect taxes. Furthermore, Mr Sharif should introduce tax on agriculture as well if he is serious in bringing about a ‘revolution’ that he so conveniently juxtaposed against Mr Khan’s ‘tsunami’. A majority of lawmakers in Pakistan are and have been landlords and big industrialists who have prevented imposition of taxes that may cause them to pay more. Considering the grave economic situation we are in, Mr Sharif will have to break the status quo and force the rich to pay taxes. If enough revenue is not generated from within, we will continue to rely on external debt to keep afloat.

Another great test for Mr Sharif would be how he handles the civil-military relationship. His previous bouts with the army must continually haunt him. Interestingly, a new army chief is to be appointed in a few months. Although General Pervez Kayani has done a great service to Pakistan by sidelining the military from politics and confining it to the barracks, it goes without saying that the military still holds great sway, especially in foreign policy and internal security issues. There does seem to be a growing rift between the military and the political leadership over what stance should be adopted towards the Tehreek-e-Taliban Pakistan (TTP). General Kayani recently professed that Pakistan should treat the war on terror as its own war as innocent Pakistanis are bearing the brunt of it. The army, however, needs political support to carry out major operations against militants. Mr Sharif and other political leaders, on the other hand, have stressed negotiating with the TTP to bring an end to the violence and bloodshed.

The role of the army and security agencies in Balochistan and the ‘missing persons’ phenomenon has been a recurring problem that Mr Sharif would need to address as well. The army will also have to be taken on board if Mr Sharif is to establish better relations with India. Moreover, he will have to convince the military to give up its pursuit of ‘strategic depth’ as this policy has only backfired, caused further turmoil in Afghanistan and fuelled terrorism in Pakistan. Mr Sharif will have his hands full in trying to reorient Pakistan from being a ‘security state’ to a state whose primary focus is rapid economic growth. It comes as no big surprise that Mr Sharif has assumed the responsibility of heading the foreign and defence ministries himself, showing that he understands how important his relationship with GHQ will be in coming years.

The relationship with the US will prove to be a thorn in Mr Sharif’s side due to President Barack Obama’s recent proclamation that the US would continue to use drones wherever required, albeit with more transparency, and the subsequent assassination of the TTP’s second-in-command, Waliur Rehman. The summoning of the top US diplomat by Pakistan’s Foreign Office on Mr Sharif’s instructions to lodge a ‘strong protest’ against the recent drone attack is an indication that Pakistan’s shaky relationship with the US might deteriorate in the future. The Iran gas pipeline, which is important for Pakistan’s energy requirements, is not looked upon favourably by the US and Pakistan may face international sanctions for trading with Iran if the incoming government follows through with this project. Mr Sharif during his election campaign boasted about how he never wilted under US pressure in his quest to make Pakistan a nuclear power. Well, if he is to stay true to his word and stop the US from carrying out drone strikes, he would have to show similar courage in dealing with Mr Obama’s administration.

The fact of the matter is that Pakistan faces enormous challenges, a few of which have been elaborated above, and the nation has huge expectations from Mr Sharif to deliver. Not many people get second chances but luck has been on his side recently. Only time will tell if he can prove to be a messiah and remove Pakistan from this quagmire.

The writer is an intern at Daily Times