It was only a matter of time before international ratings agencies began talking about the uncertainty caused by the political situation in the country. Moody’s is the first to warn that Pakistan’s credit rating of B3 Stable would be affected because the no confidence motion is “credit negative”. That’s not surprising at all, because the one thing that markets and investors despise more than anything is uncertainty and confusion about the future. It is even worse than bad news, which can be priced in, because there’s no way of telling which way the pendulum is going to swing. And since Big Money is very clear about which kind of markets it likes to dip its toes in, times like the present are not what the doctor ordered for Pakistan’s economy.
That’s why it was so important to wrap up proceedings in the minimum possible time. Instead this matter has gripped the entire political machinery in such a way that even cabinet was unable to meet for more than a month. And mainstream politics has degenerated to such an extent that there is, in effect, a mini political civil war going on in the country. It’s only natural, in such an environment, for international agencies to raise the red flag with regard to the economy. Already the rupee has fallen for 15 straight sessions and now hovers around the historic 183.5 mark against the dollar. Any more deterioration, which is virtually guaranteed, will do the dollar debt as well as the real GDP no favours at all.
Still, the political elite would rather engage in a no-holds-barred match. All sides say that they are doing all this in the interest of the people, of course, but if that were really true then they would put their differences aside at least when it comes to the real issues of the people. Right now, the people’s plight is only being used as ammunition by different political parties to sell their own brand and either cling on to or grab power. Yet in doing so they are harming the economy in a way that will cause trouble far beyond the no confidence episode. *