With only three days left for Pakistan to transfer power to a neutral caretaker government, electioneering and ballot processes are gaining steam. A new World Bank initiative could boost the prospects of the incumbent Pakistan Peoples Party.
IHS Global Insight perspective | |
Significance | The Pakistan Peoples Party (PPP) has identified female voters as key to its re-election hopes, and much of the manifesto was tailored to their needs. |
Implications | The greatest threat to its re-election are the energy shortages that continue to plague the economy, which the PPP is attempting to blame on the former military government. |
Outlook | Assessing the outcome of the election is problematic given the lack of reliable opinion polls and the weak security situation across much of the country, which will affect the ability of voters to cast their ballots. Nevertheless, the World Bank's interestingly timed commitment of USD400 million probably helps the PPP. |
A tough five years
The ruling Pakistan Peoples Party (PPP) has released its pitch for why it should be offered another five-year term at elections, now probably due in May. The party manifesto released yesterday (14 March) began by emphasising the PPP's success in protecting democracy in the years since 2008. It noted that the government had bowed to the rule of law, even when that meant the resignation of Prime Minister Yousuf Raza Gilani (see Pakistan: 20 June 2012: Pakistan Seeks New PM After Gilani Disqualified). The manifesto depicted the PPP's greatest success as the Benazir Income Support Programme (BISP), a programme that has received international acclaim. Among other benefits, BISP supplies low-income women with pre-paid smart cards in order to purchase essential items, with initial reports suggesting the scheme has been unusually difficult for officials to exploit for corrupt purposes. The PPP would increase BISP monthly payments to PKR2,000 (USD20) and peg them to inflation, a move likely to undermine the government's already-weak budgetary position. Female voters will clearly be a core constituency in the PPP's re-election effort.
A more difficult demographic for the PPP is the 60% of Pakistanis below the age of 30. Many young adults face under-employment and their parents recall the fast economic growth rates posted under the former military regime of Pervez Musharraf. These reached a high of 7.67% in 2005 but under the presidency of President Asif Zardari, the leader of the PPP, has stagnated and is forecast by IHS Global Insight to remain below 5% until 2017. This is insufficiently rapid to reduce levels of under-employment – population growth is likely to outstrip that of GDP. The opposition Pakistan Muslim League of Nawaz Sharif (PML-N), in its own manifesto, ascribes this situation to the "inept" policies of the PPP-led government. If he again becomes prime minister, Sharif's plan will make economic revival his government's first priority, targeting an average of 6% GDP growth over the next five years. The PML-N plans to do this do this by attracting foreign direct investment (FDI) into the agriculture sector to boost exports, converting remittances into investments via new financial products, building new infrastructure, and advancing domestic extractive industries.
The PPP manifesto argued that the rapid Musharraf-era growth was due to a "bubble economy" based on easy credit, stock market speculation, non-transparent privatisations and double-digit inflation. Critically, the PPP argues, it was also based on "zero investment in energy security", which led to the chronic electricity shortages now facing the economy. The PPP's failure to tackle this problem within the past five years is the greatest hazard to its re-election prospects, alongside corruption allegations against Prime Minister Raja Pervez Ashraf that are also linked to the PPP's efforts to improve electricity generation (see Pakistan: 15 January 2013: Pakistan's Supreme Court orders PM's arrest). The manifesto claimed that another 12,000MW of electricity would come online before the end of the next government's term in 2018, based on reduced line losses (the Asian Development Bank has invested heavily in improving electricity infrastructure). The PPP said it would undertake a "massive overhaul" of the wasteful energy subsidies that are crippling the government's fiscal position and which the International Monetary Fund (IMF) demanded be cut as a condition of its 2008 loan programme. The PPP failed in this respect due to pressure from coalition partners, and the IMF cancelled the loan programme in 2011 as a result.
Looking forward
If re-elected the PPP will have seven broad priorities, although these encompass dozens of other policies. Assisting the poor, and women in particular, was mentioned first, with reproductive health – presumably intended to slow the birth rate and thereby enhance per capita income – a focus of a new Mother and Child Support Programme. Polio eradication is another priority. In May 2012 IHS Global Insight forecast that such aid programmes would face heightened security risks due to the CIA's use of a Pakistani doctor, under the guise of a vaccination programme, to harvest the DNA of Osama bin Laden's family in Abbottabad. This forecast materialised in December when the Tehrik-e-Taliban Pakistan (TTP) began an assassination programme targeting polio vaccinators, which set back the United Nation's eradication drive and ended hopes that the Pakistani scheme could soon be as successful as India's (see Pakistan: 19 December 2012: Pakistan s polio immunisation scheme threatened by attacks on staff).
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Prime Minister Raja Pervez Ashraf, centre left, and his wife visit |
The PPP would extend the Special Economic Zones it legislated into force last year (see Pakistan: 12 September 2013: Pakistan Enacts Special Economic Zones Bill). It will continue to bolster forex reserves with currency swaps of the kind that the central bank reportedly believes can insulate Pakistan against a balance-of-payments crisis this year - a view rejected by multilateral lenders who see a new IMF bailout as essential. A new PPP government will leverage its success in building the NADRA electronic database to expand the revenue base to five million taxpayers, from below one million currently (out of a population of 180 million, this makes Pakistan one of the world's most under-taxed economies). NADRA already claims to have recorded the existence of 92 million Pakistanis – almost the entire adult population – raising hopes that it can become a key tool in combating crime and extremism (see Pakistan: 14 September 2012: Pakistan Toughens Up Money Laundering Regulations).
The party also pledged itself to universal education. The PPP's re-election hopes may be boosted by the announcement yesterday (14 March) that the World Bank has approved a USD400-million programme to support education in Sindh province, the rural areas of which (as well as the violent Karachi district of Lyari) are PPP strongholds. The PPP leads the provincial government and its education and literacy department will lead the project's implementation, with a total project cost of USD2.7 billion. The commitment of such a significant sum to Pakistan and to Sindh in particular is a strong endorsement of the education drive initiated by the Sindh government five years ago. Although the funds are conditional and will not be disbursed before the election, the news nevertheless should support the PPP's election campaign in Sindh, as well as adding a new source of foreign exchange to prop-up the shaky current account. Mass education in Pakistan has lagged behind other South Asian states and religious schools have helped to fill the vacuum, a trend that has long been linked to security and terrorism risks in Pakistan and regionally. However, the timing of the World Bank's announcement leaves it open to accusations of political interference.
Outlook and implications
Whether the election is won by the PPP or the PML-N, the government will be a coalition with smaller parties. This limits the parties' ability to fulfil their most pressing pledges, such as the revision of energy subsidies. However, in terms of ideology, the PPP is easily recognisable as a Western-style social democratic party, whereas the PML-N is equally recognisable as a conservative party that will reduce government expenditure and side with business interests – the words "austerity drive" are included in Sharif's manifesto. Defining who will win the election is by no means straightforward. One leaked poll apparently conducted by the International Republican Institute suggested a Sharif victory (see Pakistan: 30 January 2012: Opinion poll points to opposition victory in Pakistan's general election). However, the PML-N is fighting a rearguard action in its northern Punjabi strongholds against the popular former cricketer Imran Khan as well as the PML-Q, which split from the main party in 2001. The PPP, by contrast, has a more evenly spread distribution of support across the four provinces.