As Pakistan goes to the polls today to elect a new parliament, the grim picture it presents to the world is of a nation in the throes of a crisis of governance compounded by savage violence. In the reckoning of most observers, neither of these twin crises can be resolved by the partial democracy that the elections are supposed to consolidate (some say institute). Rather, there is fear that a rigged election might even exacerbate the problems. It has not helped that assorted ?opinion surveys? of dubious representational significance have been publicised already, an indication of how high the stakes are. The wave of suicide bombings with political leaders as targets, most notably Benazir Bhutto in December, and the haze of boycott threats have made it even harder for unbiased observers to see through the ?fog of war?, as it were. Amidst all this, can the economy possibly take precedence?
It may surprise some to find that for the past five years, Pakistan?s economy has been growing at an average 7% annually, spurred no doubt by generous US assistance since 9/11, but also in response to the liberalisation measures taken by the government. While some bold initiatives, such as steel privatisation, were sought to be stymied by opposition from an activist judiciary, other attempts to get the economy up to speed have gone relatively smoothly. Investor confidence has been remarkably high, and in 2007, the Karachi Stock Exchange?s benchmark index gained more than 40%. Yet, if it sounds bizarre that President Pervez Musharraf is not riding a popularity wave for bringing the economy back from the brink, it may partly be because sustaining the upturn has become very challenging. The Budget-day resonance, with Musharraf?s broadening out of the safety net, may have receded. Key indicators have slumped in recent months, while political unrest has grown, encouraged by the sentiment shift in response. Of late, Pakistan has had raging consumer price inflation, as the statistics show. Food prices are rising fast. Exports are droopy, unemployment is up, and the central bank has warned that Pakistan might miss its target of containing the fiscal deficit to 4% of GDP. The strife is straining the fisc, too. Though militancy in Pakistan has not been induced by socio-economic deprivation, a possible economic slowdown might worsen its woes. But does the economy really hold reasonable resonance there?
