Clashing egos
PML-N supreme leader Nawaz Sharif’s acknowledgement — that the PDM government’s decision to stay on was a response to ‘threats’ — has brought into sharp relief the genesis of Pakistan’s current political crisis.
Before Mr Sharif confirmed it to be true, the rumour was that the PDM had been ready to pack up and call a general election soon after it ousted Imran Khan through a no-confidence vote.
The situation demanded it: it had quickly become clear after the PTI’s ouster that the economy needed a strong and stable elected government to steer it out of the troubled waters it was in.
However, something changed, and the PDM alliance ended up ruling for much longer than expected. It now seems evident that Mr Khan’s threat to march on Islamabad in May 2022 was what changed the PML-N’s mind.
Mr Khan’s ‘Azadi March’ had been planned to coincide with the PDM government’s announcement of elections, and it is clear Mr Khan wished to position himself to take credit for sending the PML-N-led government home.
However, the PML-N supreme leader sensed the ploy and was in no mood to give the PTI chief that satisfaction. He directed his younger brother to continue even though the latter had been “all set to resign and had prepared his farewell speech as well”.
From Mr Sharif’s recent telling of the story, it is clear that the decision was ultimately an egotistical one — even though both Mr Sharif and his party have long insisted that they sacrificed political capital to save Pakistan from default. By Mr Sharif’s own admission, it was the ‘threat’, not concern for the economy, that had motivated the PML-N and its allies to stay on.
This clash of egos has continued since then, even as the economy imploded, the democratic order was dismantled, the Constitution trampled on, and civil rights put to the sword. Despite repeated exhortations through these pages, no party has listened to reason.
Well-meaning commentators kept pointing out that the failure to reach a political settlement was eroding Pakistani democracy from within. Today, Mr Sharif’s entire political struggle is being delegitimised as he is called the new ‘ladla’, while Mr Khan’s political prospects are being erased because no other party is willing to take his side.
For two major political leaders to be diminished in such a manner is not good for the country. Mr Sharif has to realise that an unfair win will only leave him more vulnerable, while Mr Khan must get over his disregard for political opponents and start seeing them as equals.
Both should be able to contest the next elections on equal terms, on the basis of what they can offer to the people. It is time to shut the door on the past.
Published in Dawn, November 18th, 2023
Banks’ profits
THE caretaker cabinet’s decision to retrospectively impose a one-off 40pc “windfall” tax on bank profits earned from their foreign exchange businesses in 2021 and 2022 would yield either “negligible” additional revenues in taxes for the government against its expectations of collecting Rs40bn from the measure, or end up punishing the banks. Although the provision to impose the windfall tax of up to 50pc on profits and gains arising from abrupt commodity prices, exchange gain etc was introduced under Section 99D of the Finance Act 2023 by the previous PML-N-led set-up in the budget for the present year, it refrained from implementing the decision in view of the heavy existing tax burden on the banks and other corporate entities. That the caretakers have chosen to target banks under this provision is unsurprising since they have reported a hefty profit of Rs110bn in the last two calendar years of 2021 and 2022 from the dollar trade. Besides, banks have in the recent past repeatedly been accused of making massive profits through speculative dollar trade and transactions in a highly volatile forex market, leading to large exchange rate depreciation. The SBP has already investigated and penalised the banks involved in the breach of its regulations on forex transactions.
With Section 99D of the Finance Act requiring that the further (windfall) tax should not exceed 50pc, the government stands to rake in maximum 3pc — nearly 11pc if super tax of 4pc/10pc is excluded — of further tax since the banks have already paid approximately 47pc effective tax, including super tax, on their forex income earned in the last two years. In case the government interprets the section differently and decides to collect 40pc as further tax, it will be like punishing the banks for being in this business by taking away almost entire profits on their forex transactions. Then, there is confusion around the definition of windfall profits, and the mechanism to segregate the forex income between recurring and windfall profits. Additionally, it is unclear who will compensate banks for the hit they took at the beginning of the present calendar year due to quick changes in the forex market. For these reasons many analysts expect the decision to be contested by banks. In any case, the banks are not going to produce more cash for the government, at least not without a good fight.
Published in Dawn, November 18th, 2023
Women politicians
DECADES after Pakistan became the first Muslim nation to elect a woman prime minister, women’s electoral participation in its testosterone-driven political landscape still represents their unappreciated place in society. While female candidates with party tickets are tokens to maintain progressive appearances, reserve seats, granted without election campaigns, are perceived as political favours. In both scenarios, most remain confined in operational obstacles. Hence, HRCP and the National Commission on the Status of Women have long pushed for more tickets to women so that their contribution in forming policies becomes notable. Stalwarts Abida Hussain from Jhang, Tehmina Daultana in Vehari, Balochistan’s Zubeida Jalal and many others prove that institutionalising gender centrality is imperative for the legislature to stay relevant. Moreover, first-generation and minority women politicians endure prejudice at every stage, including being sidelined within their parties. According to UN Women’s “Women in Politics 2023” Map, “the proportion of women parliamentarians has increased globally to 26.5pc from 25.5pc in 2021”, whereas, in the Women Legislators Performance Report 2017-18, Pakistan ranked 89th among democracies with 20.5pc women in the National Assembly and 18.3pc in the Senate.
There is, however, a palpable realisation that women must have agency and be heard for balanced, viable economic progress. Female leadership sensitises society with pro-women and children laws and strategies. Therefore, our political parties should field more than 5pc women on non-reserved seats in an enabling environment. The ECP has to ascertain women-only polling booths with women staffers so that resistance in conservative quarters can be managed. Besides, political campaigns must advocate modern mindsets focused on the merits of female representatives to shed stigmas attached to politics. Undeniably, age-old patriarchy cannot be taken apart in a hurry. However, sustained support for women from within parties and institutions is the path to nurture and strengthen voices of Pakistani women. For honest representation of millions of women, more mainstream parties need to field female candidates.
Published in Dawn, November 18th, 2023